Discuss about the Culture and Organisation for Innovative Leadership.
Organisational culture is a process of shared assumptions, values and beliefs, which are followed by the staffs of an organisation. Each of the organisations develops and maintains a specific culture, which provides advices for the performance of the employees of the company. Organisational culture can be differentiated into three different ways such as traditionalism, interpretivism and critical-interpretivism.As per the statement of Sanders (2015), it can be mentioned that organisations, which follows strong business cultures, have a clear value. A strong business culture is benefitted to the organisation to operate in the service sector efficiently. Organisations will get benefits from the development of productive cultures. The employees will be able to identify the mission, vision and business objectives, which are required to achieve the business goals. On the other hand, Kamaluddin & Rahman (2016) cited that some of the organisations aim to the concept of high employee motivation and also on the consumer loyalty approach. Therefore, it can be stated that organisational culture differs from organisation to organisation. Likewise, Zara aims to the consumer satisfaction concept in their business. Their major focus is to provide priority to the consumers. On the other hand, Zara also focuses to the product innovation in order to increase their sales (Perrott, 2014).
This study will highlight the major issue faced by Zara in their business.The use of Hofstede model will be discussed in this context. With the help of six dimensions of Hofstede model, an organisation can measure the organisational culture. According to Cadden, Marshall & Cao (2013), values of the workers of an organisation are influenced by the business culture can also be understood. This study will also demonstrate the practices, issues or events, which are faced by the mentioned retail organisation.
This study mainly focuses to identify the major cultural issue faced by Zara and also evaluate the organisational culture of Zara with the help of Hofstede’s cross cultural model.
It can be observed that the black consumers in the Spanish fashion retailer Zara’s New York outlets could be disproportionately recognised as the potential thieves. The organisation has conducted a survey on 251 employees and from the survey; it can be observed that Zara gives major focus on the white employees compared to the black employees. This proves that Zara is seeking the problem of racism. The black employees are considered as the least preferred for the promotion and also received harsher behaviour from the managers. On the other hand, it can be mentioned that this organisational behaviour also made a negative impact on the wage rate of the employees. Black coloured employees received less wage rate compared to the white skinned employees. This discrimination also made a bad impact on the consumers. In this context, it can be mentioned that black consumes are not allowed to purchase the special order. Therefore, it can be inferred that this diversification reduced the core valuation and the equal opportunity to make satisfy to their employees (Naidoo, 2015).
On the contrary, Manning & Coad (2015) argued that the management of the organisation provides equivalent opportunity to the employees. Moreover, if the individuals are not satisfied with the organisational service, then the authorities aim to follow several avenues to increase the issues, which are immediately investigated and addressed. The management of Zara also added that they tried to provide best service to their consumers and would not discriminate their consumers based on their skin tonnes. Therefore, the business has successfully expanded across 88 countries and would not tolerate disparity.
Greater organisational culture and business strategy is able to increase the revenue earning of an organisation. On the contrary, Wong, Tseng & Tan (2014) argued that wrong business approach could reduce the overall profitability of an organisation. Zara has adopted a wrong marketing strategic approach, which is not to advertise through the traditional media (Agrawal, 2015). Therefore, the consumers are not able to know about the product specification or the price of the products. On the other hand, if the organisation has launched new products in the market, consumers are not capable to know about the products. This has reduced the sale of the products. Therefore, it can be mentioned that this has a negative impact on the revenue earning. Therefore, Manning & Coad (2015) opined that marketing campaign can increase the market share of a company.
On the other hand, target segment is not ideally customer loyal in this company. As per the concept of customer loyalty, the consumers are willing to purchase the products from one organisation. This proves that if the consumers are satisfied with the products of the company, then they show their interest towards the products of Zara (Naidoo, 2015). However, it can be stated that absence of marketing is the major issue faced by Zara, because customer satisfaction comes after using and purchasing the products. Without appropriate marketing segmentation, a product cannot be marketed properly and the consumers feel reluctant to purchase the products. In this point, Barber et al., (2015) opined that advertisement can expand the market of an organisation.
Hofstede’s cultural dimension theory is a framework, which can measure the cross cultural communication of an organisation. As opined by Magada & Govender (2016), Hofstede’s cultural dimension can explain the effect of an organisational culture on the values of the stakeholders such as consumers and the employees. This theory is also helpful to discuss the factor analysis. The efficiency of organisational culture can be measured by six dimensions. These six dimensions are such as power distance index, individualism versus collectivism, uncertainty avoidance index, masculinity versus femininity, long term orientation versus short term orientation and lastly indulgence versus restraint (Sheard, 2014).
Power distance index:
According to Allen & Dovey (2016), this dimension describes the level and the degree in which business strategies are playing a major role within the organisation culture. In this context, the power distance index mainly aims to identify how an organisation can differentiate inequalities among the employees. Therefore, income inequalities between the employees make a negative impact on the performance of them. This will in turn reduce the overall productivity of the organisation. Therefore, it can be recommended that all employees of Zara are required to get equal remuneration. As a result, the employees will be satisfied.
Individualism versus collectivism:
In this index, Hofstede shows the degree, in which employees of an organisation are divided into groups. Herbert (2016) opined that this index shows the concept of “I” versus “We”. Individualism only focuses on a specific group of employees and their immediate group members. On the other hand, collectivism aims to a specific culture, which possesses and also considers the socio-economic wellbeing of a group. Hence, thiswill create a debate regarding the adaptation of individualism and collectivism in an organisation (Chumg, Cooke & Seaton, 2015). If Zara follows individualism in their business, then the employees will concern only about their well-being, whereas collectivism will be beneficial to improve the well-being of all of the staffs. This will in turn improve the entire organisational culture.
Masculinity represents a preference in organisation for their achievement or assertiveness, and receivesawards for success in their business. It is known that retailing industry is large and it is highly competitive. On the other hand, femininity deals with the cooperation, modesty, caring for the quality of life. Gupta & Kumar (2013) pointed that organisational culture around femininity encourages the performance of them. As a result, it can be stated that the women will get priority and there will not any gender discrimination in an organisation. Therefore, the women employees will not be discouraged.
Uncertainty avoidance index:
This index is used for avoiding the organisational uncertainty within the business. According to Bukhari & Sharma (2014), with the help of this index, the employees of an organisation will embrace or avert the unexpected things and organisational risks. Uncertainty avoidance index aims to the less tolerant of organisational behaviour, which are assumed to be rigid. However, cultures with lower rating tend to be open as well as comfortable with unknowns. In this essence, it can be mentioned that Zara will like to impose fewer rules and regulations, which are highly accustomed with the organisational environment. This would increase the performance of the organisation and the productivity would be increased. Therefore, Kamaluddin & Rahman (2016) argued that it is better to be risk averse compared to be risk lover during the business operation.
This dimension is associated with the past, current and predicted future organisational challenges. In the words of Cadden,Marshall & Cao (2013), each of the organisation requires to make a connection with the past in case of dealing with the organisational challenges along with the present and future. The organisation, whose performance is comparatively higher, will follow more pragmatic strategy. Nonetheless, Wong, Tseng & Tan (2014) criticised that lower performing organisation has adopted the short term orientation and they do not have the economic development whereas long term orientation will maintain a higher and strong development in their business. Therefore, Zara would aim to adapt long term orientation in their organisational culture. Stronger organisational culture would reflect the employees’ willingness and they would like to work with the organisation.
Indulgence versus restraint:
As per the concept of this dimension, Hofstede showed that organisational culture can be characterised by how the employees enjoy their life, which are related with the basic and natural human drives. However, Manning & Coad (2015) questioned that the poor performing organisations are associated with some strict social norms and regulations. Therefore, the above analysis shows that Hofstede’s model is helpful to identify how the employees will be affected by the differentiated organisational behaviour. In addition, Hofstede’s model is essential to quantify different dimensions of a culture to improve the understanding between the management and the employees of an organisation (Bukhari & Sharma, 2014).
Spanish clothing shop Zara has store chain in nine locations, Singapore. This also proves that the people of Singapore are showing their interest to purchase the products from Zara. As opined by Chumg,Cooke & Seaton (2015), Zara is the best known fashion destination to the consumers. It is the quick design procedure, which adapts rapidly the changing fashion trend and demand of the customers.
In order to evaluate Singaporean organisational culture with the help of Hofstede’s 6 dimension model, it can be observed that there are some good and deep driving factors of Singaporean culture compared to the other world cultures. From the figure 2, it can be noticed that the score of power distance in Singapore is 74 (Gupta & Kumar, 2013). This refers that the magnitude to which comparatively lower powerfulmembers of Zara within a nation expect as well as accept the power, is distributed unequally. Power is centralised, therefore, the managers of Zara has relied on their upper management and on their rules. Subordinates expect that they would be told what they had to do. Naidoo (2015) mentioned that attitude, behaviour of the employees towards the management is formal, and communication is indirect.
On the other hand, the score of individualism in Singapore is 20, which implies that the organisation in this country is belonging to a collective society. Therefore, they focus to the development of collectivism business culture rather than individualism. Zara also aimed to maintain employee loyalty within the organisation (Agrawal, 2015). Therefore, it can be inferred that the relationship between the employees and the managers is developed based on the moral basis.
A high score of masculinity refers that organisational culture will be driven by competition, achievement and also by success. On the other hand, lower score of femininity indicates that the dominating value in an organisation is very high. Singapore scores 48, therefore, this implies that Zara in Singapore is at middle scale but more on the court of feminism.
On the contrary, Sheard (2014) argued that the score of uncertainty avoidance in Singapore is very lower and the value is 8 in Singapore. This refers that the organisation has identified their organisational practice is fine and the organisational risk is comparatively lower in this country than the others. Therefore, they will like to accept new business challenges in future due to the presence of lower risks. Singaporean abides many regulations as they require for restructuring due to the higher Power development index. (Herbert, 2016).
Moreover, the score of long term orientation in Singapore is 72. This higher score refers that cultural qualities support the long term investment in the business. They believe that long term investment can make a business successful. Lastly, the score of indulgence is 46. In this essence, Naidoo (2015) cited that comparatively weak controlled is known as “indulgence” whereas relatively strong control is referred as “restraint”. However, it is noted that it is not possible to regulate a preference on this dimension, as the intermediate score in Singapore is 46.
There are three levels under the Schein model. These three levels are such as Artifacts, Espoused values and basic underlying assumptions. As per the level of Artifacts, Schein highlights that Artifacts are assumed as the surface. These aspects are easily discerned and also hard to understand. This level of Schein culture mainly aims to the dress code of the organisation. Beneath artifacts are assumed as espoused values and these are concerned about the organisational strategies, business goals and philosophies. The basic underlying level highlights that the core valuation of the business culture. This approach is completely missing in the Hofstede model. Hofstede model mainly highlight whether an organise have faith on the teamwork or on the individualism. This model also highlights the power of feminity within an organisation. However, these cultures are cannot be determined by the Schein model. With the help of basic underlying valuation, one can identify the human relationship, reality, truth of the organisation. Therefore, in a synopsis, it can be mentioned that the basic assumption of Schein model is to highlight the organisational behaviour and the leadership style.
The score this culture power distance in Spain is at 57, which refers that the hierarchical distance can be accepted. In addition, it can be mentioned that employees expect that their senior would control them. Adverse feedback of the employees do not considered as lightly, therefore, it can be hard for the workers to challenge their senior with the difficulties they have faced. Therefore, the score of power distance is comparatively much lower than Singapore. In this point, it can be inferred that the seniors of the organisations in Singapore would be able to control their subordinates efficiently than Spain.
The score of individualism in Spain is at 51, which proves that the organisational culture of the country is collectivist. Nonetheless, a lot of employees of Spain are considered as individualist. As the score of individualism in Singapore is 20, therefore, the organisational culture of Singapore is not like Spain and they mainly aims to the teamwork.
The score of masculinity of Spain is 42; this implies that the organisational culture of Spain is of feminist type. According to Gupta & Kumar (2013), it can be mentioned that dominant values within the organisational culture are caring for the others as well as the quality of life. The score of masculinity in Singapore is 48, which proves that the organisational behaviour is equal in Singapore as Spain from this point.
Spain scores very high in uncertainty avoidance and the score is 86. Therefore, this implies that Spaniards would like to have rules for everything; however, they don’t make their life and organisational behaviour highly complex. Therefore, Spaniards do not consider the ambiguity in case of having an organisational plan. Nevertheless, the score in Singapore is 8; this implies that Singapore is comparatively risk averse country compared to Spain.
The score of long-term orientation in Spain is very lower and it is 19. Quick outcomes are highly preferable regarding the long-term critical thinking. Therefore, the Spaniards are not the future oriented when it comes to daily life style. The score of long-term orientation in Singapore is very high and the score is 72. As they are assumed to be risk averse, therefore, they are highly conscious regarding the future uncertainty.
Conclusion
The main concern of this study is to find out the major issue faced by Zara in their business. The employees of Zara have been facing the problem of racism within the organisational culture. In this context, it can be observed that without proper advertisement, Zara is not able to market their products in the market. Market segmentation and advertisement is essential to occupy the larger market share over the competitors. In addition, the consumers can identify the comparative advantage of Zara in their business. On the other hand, with the help of Hofstede’s six dimension model, the organisation culture of Zara in the country like Singapore has described in this study.
Therefore, in order to improve the organisational culture, it can be recommended that Zara does not require to make any employee discrimination, otherwise this will make an adverse impact on the subordinates. They will not willing to work with the organisation and this will reduce the performance of the organisation.
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