The retail fashion industry is probably one of the most fast-moving and fickle businesses that can be imagined. The whole process of predicting next season’s colours, fabrics, styles and hemlines is partly determined by the creativity of the major fashion designers; and the reports from the catwalk shows of Paris, Milan or London are expected to set a trend six months or so ahead. The reality of what most people buy, however, is usually more mundane than the fantastic, occasionally shocking, items that parade before the assembled press and celebrities at the spring or autumn shows. On the high street, sales of a genuinely trendy item can be hit dramatically by such uncontrollable factors as the weather, and demand is easily influenced by the whims of celebrities, or even politicians’ wives (Michelle Obama is the subject of a dedicated website ‘Mrs O’ that follows her every fashion move)

Your tasks

1. Analyse Zara’s structure in relation to the ‘Interrelated levels of organisation’ diagram at Figure 14.3. How does it match, and how does it differ from the model?

2. Critically assess Zara’s structure against each of Urwick’s principles of organisation.

3. Organisations could be said to sit somewhere along a continuum between complete vertical integration, that is in-house control of all aspects of the operation, and complete outsourcing, that is externalisation of all operational aspects with the core acting as a co-ordinating agent. What are the advantages and disadvantages of each structure in terms of responsiveness, resilience and efficiency?

4. How transferable is the Zara model to non-business sectors? Discuss this in relation to either a public sector operation (such as an NHS hospital) or a not-for-profit one.

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Figure 14.13 Concept map of formal organisations and organisation charts FORMAL ORGANISATIONS AND ORGANISATION CHARTS (Principles) PREPARING AN ORGANISATIONAL CHART Agree what sub-titles mean Develop criteria to allow for appropriate span of control Agree DEPARTMENTATION - functional, geographical Beware of loose ends-'Assistant to'; Personal Assistant' ADVANTAGES OF FORMAL CHARTS Describes the ORGANISATION: Shows where authority rests ■Eliminates conflicts and overlaps Indicates numerical size Helps fix resources Clarifies formal lines of communications. Shows level of decision-making Assists in budgetary control and supervision Assists in integrating subsidiaries and newly acquired units ■Helps to determine pay levels Helps outsiders understanding and identifying people in the organisation DISADVANTAGES Constraining and rigid ■ Encourages empire building Can fail to reflect realism Cost Rapidly becomes out of date Head of Computer Services ORGANISATIONAL CHARTS all organisations are dynamic charts should be seen as a 'snapshot' and a static model of the organisation ORGANISATIONAL CHARTS may not reflect the true. importance of the area - involves narrowness of outlook -not conducive to training new. managers. -can lead to a loss of central. control FLATTER HIERARCHIES In the UK - mid 1980s onwards - stripping out of the tiers of middle managers (those who manage the junior managers) Director of Administration Head of Office Services. Avoid split relationships - individual equally LINE AND STAFF accountable to two superiors THE INDIVIDUAL: ■Depicts relationships subordinate superior ■Informs employees of their lines of responsibility and accountability ■Supports the writing of job specifications and descriptions ■Depicts status level for executives Assists in training and appraisal ■Shows employees where they 'fit in' ■Improves morale Assists in training and appraisal ADVANTAGES - Reduction in costs FUNCTIONAL -Geographical - Customer - Process - Product - Service - Equipment - Decision-making devolved downwards and closer to the customer Seeks to maximise the potential of all staff -Employees feel they have more control over their jobs FUNCTIONS - Accounting - Marketing - Computing Services Personnel - Reprographics - Catering - combines vertical and functional charts. functional experts exist only in advisory capacity ■line managers control staff in their departments use 'staff' expertise to help them ADVANTAGES - Retention of lines of responsibility and authority - Single point control at head of department level - Specialist on hand as and when needed Specialist staff supportive to communication, co-ordination and co-operation across the organisation DISADVANTAGES potential conflict between 'line' and 'staff' - 'line' managers need to follow advice given by 'staff this then wasteful, inefficient, and expensive - employees may find it difficult to understand who is in charge