Open Systems perspective of organizational effectiveness views organizations as complex organisms living within an external environment. Zara’s Effectiveness in the fast fashion business is due to its permeable boundaries where information and resources flow both in and out. There is an exchange in the environment which is essential for the health of the system.
• Organization-Environment Fit
Due to sudden changes in customer preferences, the fashion industry has limited predictability. Zara maintains a close fit with external environment by responding to rapid and rich feedback to match the current demand. The environment is scanned in order to adapt and align with the needs of the customers. Zara also thrives because of its quick response to the feedback by producing and delivering new or revised styles to make their products more appealing which in turn attracts more customers back to the stores.
• Internal subsystems Effectiveness
Zara’s subsystems within the organization are interconnected so they interact to transform input to various outputs. This way it maintains a good fit by anticipating changes in the environment and therefore reconfiguring their subsystems to be more consistent.
Zara’s headquarters in Spain has a long line of facing desks where regional managers are in contact with the company’s various outlets in 86 countries. Sales staff are trained to communicate with customers regarding their products and reports the customer comments back to the headquarters. Both sides of the room has designers and other staff who use this continuous store feedback to revise existing styles and deliver new designs.
• Comparison with other retailers
Compared to various other fashion retailers Zara produces a large variety of designs based on global trends and customer reactions, but makes them in limited quantities. This way the company can sample a wider array of market preferences while minimizing the problem of having too much inventory. Retailers rely on independent manufacturers in distant countries that require several months’ time to produce a garment. Zara on the other hand sources from low cost manufacturers as well but most garment are made in close proximity by its own manufacturing facilities in Portugal, Turkey and Spain. Even though it costs more, but it takes less than three weeks for a new design from nearby factories to arrive in stores, where the new stock is received twice weekly.