VINCENT A. KWARTENG
MBA 617: ORGANIZATIONAL THEORY
ORGANIZATIONAL COMPLEXITY
1. How complex is your organization internally?
Zara is a leader in the fast fashion industry which entails constantly scanning the fashion industry
to find out what in style on current and immediately duplicating and making it available in stores
within the shortest period possible. Because of the nature of the fashion industry and more so for
fast fashion, Zara has highly specialized teams and the organizational structure is highly complex
internally.
Zara operates with a lean organizational structure, which emphasizes high performance. The lean
organizational structure also works to reduces the number of managerial hierarchy levels and
decentralize decision-making. Zara’s headquarters is a huge airplane-hangar-size open space,
with regional sales managers sitting at a line of desks running down the middle, designers on
either side of them. This illustrates the strong horizontal linkages implemented at Zara.
Zara also own all the process from manufacturing to retailing of the goods, which gives it a
competitive advantage. Zara is a vertically integrated company with horizontal linkages. This is
because Zara has control over all of the production and distribution steps involved in the creation
of their product. Zara operates with a vertically integrated demand and supply chain.
Zara operates under the conglomerate Inditex which has 8 other line of business with Zara
producing majority of its revenue.
Zara is owned by Amancio Ortega Gaona, who used to be the Chairman of the company. Pablo
Isla Alvarez de Tejera is currently the Chairman and CEO, Carlos Espinosa de los Monteros is
the Deputy Chairman, Francisco Luzon Lopez, Irene Miller, Juan Manuel Urgoiti Lopez de
Ocana, and Jose Luis Vazquez Marino are all Ordinary Members of the company, and Antonio
Abril Abadin is the Secretary.
2. Locate your organization on the figure, what is the complexity?
Zara is located in the “Symmetric” quadrant of the figure. Zara has a high horizontal
differentiation, since the employees are divided into highly specialized teams. Zara also has a
high vertical differentiation. Even though they try to streamline the layers of management the
organization is still too large and that has high vertical differentiation.
3. Does your organization’s complexity fit its structural configuration?
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Organizational Complexity: Type 4 – Symmetric
Configuration: Type 4 – Matrix
Environment: Type 4 – Turbulent
Strategy Types: Type 4 – Analyzer with Innovation
Organizational: Type 4 – Efficiency & Effectiveness
Yes, the organizational complexity does fit Zara’s configuration.
4. Is there “fit” across the organizations components? What do we know now about how
our organization aligns across these categories? What would make them more effective?
Should your organization change its structure based on its complexity?
No, I don’t think there is a fit. Zara is involved one of most turbulent industries. The fashion
industry in itself is a turbulent; however, the fast fashion is even more volatile. Zara has up till
now performed very well with its innovative and unique approach to the fashion industry.
Zara should not change its organization structure since it has stood the test of time and has been
very effective and efficient at meeting the organization’s goal. Since the goal of an organization
is to maximize shareholders’ profit and Zara is maintain the current structure.
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