1. Discuss two contingency variables that should be considered in determining an appropriate structure in organisational design. Illustrate
with examples from fashion industries. (100 marks)
2. (a) Discuss the diversity of the international environment and use examples from fashion industries to support your answer. (50 marks)
(b) Identify the challenges to manage organisational activities in a global context. Illustrate with examples from fashion industries. (50 marks)
3. There is evidence that the fashion consumer is becoming more conscious of sustainability issues in the supply chain.
(a) Identify and briefly discuss the typical environmental and ethical issues that might arise in the supply chain of a mid-market fashion company. (20 marks)
(b) Discuss ways that a mid-market fashion company could respond to these issues by incorporating sustainable practices in its supply chain strategy. (80 marks)
4. Using the elements of the Business Model Canvas of Osterwalder & Pigneur (2010), compare and contrast the business models of value fast fashion retailer, H&M, and curated subscription fashion business, Lookiero. (100 marks)
Expert answer
There are a number of contingency variables that should be considered when determining the appropriate organizational structure for a company. Two of the most important contingency variables are:
1) The size of the company. For example, a small company may only need a simple structure with few levels of management, while a large company may need a more complex structure with multiple levels of management.
2) The nature of the business. For example, a manufacturing company may need a different type of organizational structure than a service-based company.
Other important contingency variables include:
3) The geographic scope of the company's operations. For example, a company with operations in multiple countries may need a more complex structure than a company with operations in only one country.
4) The level of competition in the industry. For example, a company in a highly competitive industry may need a more flexible organizational structure than a company in a less competitive industry.
5) The rate of change in the industry. For example, a company in an industry that is undergoing rapid change may need a more flexible organizational structure than a company in an industry that is not changing very rapidly.
The size, nature of the business, and geographic scope of the company's operations are the most important contingency variables to consider when determining the appropriate organizational structure for a company. However, all of the contingency variables should be considered in order to make the best decision possible.
In general, larger organizations tend to have more complex structures, with multiple levels of management and various departments responsible for different functions. This can be seen in fashion companies such as Zara or H&M, which have centralized decision-making but decentralized operations, meaning that each store has some autonomy in terms of how they display and sell items.
The industry is also a important factor to consider when designing an organizational structure. For example, fast-moving consumer goods (FMCG) companies operate in a highly competitive environment where product life cycles are short and there is little room for error. As a result, these companies tend to have very flat organizational structures, with fewer levels of management and more direct communication between different departments. In contrast, luxury fashion brands such as Louis Vuitton or Hermes are less concerned with speed and more focused on quality and exclusivity. As a result, they tend to have taller structures, with more layers of management and stricter control over how information flows between different departments.
When determining an appropriate organizational structure, two contingency variables that should be considered are the size of the organization and the industry in which it operates.
In general, larger organizations tend to have more complex structures, with multiple levels of management and various departments responsible for different functions. This can be seen in fashion companies such as Zara or H&M, which have centralized decision-making but decentralized operations, meaning that each store has some autonomy in terms of how they display and sell items.
The industry is also a important factor to consider when designing an organizational structure. For example, fast-moving consumer goods (FMCG) companies operate in a highly competitive environment where product life cycles are short and there is little room for error. As a result, these companies tend to have very flat organizational structures, with fewer levels of management and more direct communication between different departments. In contrast, luxury fashion brands such as Louis Vuitton or Hermes are less concerned with speed and more focused on quality and exclusivity. As a result, they tend to have taller structures, with more layers of management and stricter control over how information flows between different departments.
Thus, when considering an appropriate organizational structure, it is important to take into account both the size of the organization and the industry in which it operates. Depending on these contingency variables, different structures may be more or less effective.
There are a few contingency variables that should be considered when determining the appropriate organizational structure. The first is the size of the organization. A large organization may require a more complex structure with multiple levels of management, while a smaller organization can get by with a simpler, flatter structure. The second variable is the environment in which the organization operates. A stable, predictable environment can support a more centralized and bureaucratic structure, while a more dynamic and uncertain environment may require a more decentralized and flexible structure. Finally, the culture of the organization can also influence the choice of structure. A highly competitive culture may favor a structure that is geared towards speed and agility, while a more collaborative culture may prefer a structure that encourages communication and teamwork.
The fashion industry is a good example of how the environment can influence the choice of organizational structure. In the early days of the industry, when it was still in its infancy, there was a lot of uncertainty and risk involved in starting a new fashion label. This led to a more decentralized and flexible structure, with many small, independent labels competing against each other. However, as the industry has matured and become more mainstream, it has become more stable and predictable. This has led to a consolidation of the industry, with a few large players dominating the market. This shift towards a more centralized and bureaucratic structure can be seen in the rise of fashion conglomerates like LVMH and Kering.
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