Written Assignment for

Zara International

Author Callum Long

SID s5176913

1101IBA – Management Concepts

Tutor:
Trimester 1, 2019

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Table of Contents

Table of Contents.......................................................................................................................... 2
1.0 Introduction and Problem Identification .................................................................................... 3
2.0 Discussion............................................................................................................................... 4
2.1 Transformational Leadership .................................................................................................4
2.2 Transactional Leadership ......................................................................................................5
3.0 Conclusions ............................................................................................................................. 6
4.0 Recommendations ................................................................................................................... 6
5.0 References .............................................................................................................................. 8

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 1.0 Introduction and Problem Identification

Zara's innovative strategies of consumer needs out ways most competition, through its cheap
pricing and high quality the company has expanded to a phenomenal 88 countries. However, the
company has only succeeded due to its management strategies ensuring that there is always
something happening, whether it be the endless production or sales, the business is always
pushing the envelope to become better (Royo-Vela, 2011). Whilst this is impressive there are
some worries concerning the increase in the consumer market from an organisational function.
Due to the ever-changing market, Zara's stock come in two shipments a week as to not overstock
on products not clicking with consumer/s. This may also cause the opposite, through an
undersupply of goods, preventing the business from having the efficiency it is known for. This is
known as an organising function of management (Conkright, 2015). With the market growing
further through new countries it is hard to know whether Zara will be able to keep up with the
demand. In its immense growth, Zara has increased its supply chains in countries such as
Morocco and Vietnam, allowing the business to become more efficient with its production in
terms of cost efficiency. Zara is close to being overworked to the point where cost and efficiency
are not attainable. Thus, the business would not be able to maintain it miniature shipments, and
in tern not reaching customer needs.

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2.0 Discussion
2.1 Transformational Leadership
Whilst impressive turnover figures have been present within the Zara organisation, there is still
plenty of room for improvement through management. The first theory of management to be
discussed is the Transformational form of leadership used by billionaires such as the late Steve
Jobs. These leaders are seen as charismatic in seeking for extraordinary performance figures
(Antonakis, 2014). Through this encouragement for high performance these leaders are able to
make employees want to work for them (Bunse, 2011). Zara could have use of this, as a means
of shaping employees to predict sales as a means of determining what products are needed for
the week to allow for a less risky delivery plan to retailers. If employees are working in an
inspirational workplace, they will be more inclined to remain at the business whilst performing at
a higher quality. This could allow for less mistakes or incorrect judgements of stock levels
needed by the business creating more balance rather then the undersupply or oversupply caused
by current methods.

Transformational Leadership, focusses on the communication between departments, of which is

integral in a company such as Zara which needs its departments to be close so that customer
satisfaction is constantly being reached. Management could solve ordering issues with
employees, as they are the people whom are stocking shelves and selling the items. This
knowledge becomes useful as it can help determine the future demands of consumers and what
the business must order. Not only does this help with the organising of the business, but it also
brings employees closer to the company, making them feel as important by the business.
Employees will take notice when a employer ‘throw themselves into a relationship with
followers,’ and by have people feel equal, they are more likely to perform task at a higher level
(Luzinski, 2011). When working at their highest performance employees would be able to
organise the business, using their knowledge of sales alongside that of the figures provided to the
managers. With the organising of stock playing such a large role in any business, it is important

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that employees are kept involved with a management team that want to hear their feedback and
want to get involved themselves.

By achieving the concept of employees wanting to work for their employers, managers will get
the most out of them on shift. Through this the customer satisfaction will rise as they will be
impressed with the employees attitude towards their jobs. In being more charismatic the
management team would ensure that stock deliveries are coming in with correct , as delivery will
become more enthused wanting to do their jobs at a higher performance level. By solving the
problem of employee satisfaction of which isn’t very high due to a current poor management
style (Indeed, 2019), Zara will see an increase of both consumer satisfaction and a fix towards
the organising of stock deliveries.

2.2 Transactional Leadership

On the other hand there is the transactional leadership in which the management staff are more
methodical in their ways of keeping employees task focussed. This is portrayed through goals of
which employees must complete in doing their jobs. This form of leader uses rewards structures
as a means of encouragement so that employees want to complete the task asked of them
(Antonakis, 2014). However, in todays workplace this form of leadership is unusable as it
doesn’t meet needs when it comes to the demands and challenges faced in a modern workplace.
If faced with store wide challenges, this form of management does not allow the employees to
work at their highest performance, where as in having a transformational leader, the charisma
can be used to increase the companies productivity.

When it comes the organising of Zara’s stock, a Transactional leadership isn’t at the standard
needed for employees to want to work with high performance patterns and instead will feel left
out, not only dropping their satisfaction but also that of the consumer. This is the leadership
standard that Zara currently runs under. As management are put in control of stock deliveries
without input by the employees whom know what consumers are liking and what they are not. A
company like Zara, that likes to keep up with modern trends on a consistent basis, must be able
to acquire the right amount of stock at anytime without creating a surplus of unwanted clothing
(M.van der Velden, 2017).

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However, this form of leadership allows for the criticism of employees so that they are able to
improve on what they have done wrong and hopefully allow for it not to occur again in the
future. This could help Zara improve its organising as to not miss order, but instead inform the
employee of their mistake to ensure that it doesn’t have another occurrence (Antonakis, 2014).
Through the use of stores, Zara can break it down to what leadership is needed where. In most
stores with part time or casual workers it is easier to use criticism and rewards programs to get
the employees to work in the way that management wish. This form of leadership can become
helpful when it comes to organising stock in that the setting of goals allows staff to see what is
needed of them and how this can provide results for them in the future. Zara, could use this as a
means of ensuring that the smaller stock runs are used effectively and aren’t creating surpluses.
If each person knows what is expected of them they are able to focus on the task provided whilst
also learning what can be done for improvement on doing said task in the future. So, in using a
transactional leadership, Zara could provide direct instructions on the goals that employees must
reach whilst rewarding them for the work that they are doing.

3.0 Conclusions
Whilst both methods of leadership are different, it doesn’t mean that they are mutually exclusive
as a transactional form of leadership can be used as a beginning for a transformational leaders.
With organising playing such a large part in any organisation, it is important to follow the
standards of other similar companies. In said companies it is quite common that a
transformational leader is found with parts of transactional leadership imbedded within. Zara is
in need of an update when it comes to the organising of stock as to never have a surplus or
shortage on clothing items at anytime. It is well known that a leader that people want to follow is
one that will achieve the most out of their employees when needed. This is what a
transformational leader does, in the creation of employee relations allowing everyone to feel
important and part of a team. However this isn’t enough, as without the use of goals employees
don’t receive enough information of their task, along with the criticism that helps them improve
their skills as seen in the transactional form of leadership. So a conclusion can be drawn that to
solve the area of organising stock, Zara must implement parts of a transactional leader into a
transformational leadership style.

4.0 Recommendations

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From the research presented it can be conceded that Zara must change its leadership theory
towards something that gets all employees and employers to work together whilst using a goal
system to identify to the staff what is expected of them and how they go about doing it. It would
also help to add employee constructive criticisms that will allow the employee to not only fix
their mistakes but work harder in the future. Leaders of Zara stores should be charismatic in the
work environment to influence others to work harder. With employees wanting to work harder
less mistakes would be made and more knowledge introduced about the sales of products. This in
tern will allow Zara to use sales knowledge when decided what consumers are liking and what
they are not without basing it on sales alone.

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5.0 References
Conkright, T. A. (2015), Using the Four Functions of Management for Sustainable Employee
Engagement. Perf. Improv., 54: 15-21. doi:10.1002/pfi.21506

Royo‐Vela,, M., Casamassima, P., (2011), "The influence of belonging to virtual brand communities
on consumers' affective commitment, satisfaction and word‐of‐mouth advertising: The ZARA
case", Online Information Review, Vol. 35 Issue: 4, pp.517-542, https://doi-
org.libraryproxy.griffith.edu.au/10.1108/14684521111161918

M.van der Velden, N., G. Vogtländer, J.,(2017), Monetisation of external socio-economic costs of
industrial production: A social-LCA-based case of clothing production, Journal of Cleaner Production,
Volume 153, Pages 320-330, https://doi.org/10.1016/j.jclepro.2017.03.161.

Bunse, K., Vodicka, M., Schönsleben, P., Brülhart, M., O. Ernst F.,(2011), Integrating energy efficiency
performance in production management – gap analysis between industrial needs and scientific literature,
Journal of Cleaner Production, Volume 19, Issues 6–7,Pages 667-679,
https://doi.org/10.1016/j.jclepro.2010.11.011.

Liao, S., Wu, C., (2010), System perspective of knowledge management, organizational learning, and
organizational innovation, Expert Systems with Applications, Volume 37, Issue 2, Pages 1096-1103,
https://doi.org/10.1016/j.eswa.2009.06.109.

Antonakis, J., J. House, R., (2014). Instrumental leadership: Measurement and extension of transformational–
transactional leadership theory, The Leadership Quarterly, Volume 25, Issue 4, Pages 746-771, Retrieved
from https://doi.org/10.1016/j.leaqua.2014.04.005.

Luzinski, C. (2011). Transformational leadership. JONA: The Journal of Nursing Administration, 41(12),
501-502. doi:10.1097/NNA.0b013e3182378a71