You're In or You're Out : An In-Depth Study of Zara Sweden's Foreign Liability

Sammanfattning: Recent media articles have illustrated different human resource management problems within Zara Sweden and the retail industry in Sweden. In these articles numerous employees speak about mistreatment and abuse at Zara Sweden. A union official states that Zara is not a unique case, but more so a representative case of the retail industry. Adding to this Zara Sweden has not performed well financially and they state that they are still trying to adapt to the Swedish market.   There is plenty of research explaining the relationship between human resource management and performance. Furthermore, a lot of research urges international companies to be locally responsive especially in their people management. To understand the level of local responsiveness it is important to first examine the cultural disparity between the organization and the employees, for this Hofstede’s cultural dimension was used. With this background the study explores Zara Sweden’s level of local responsiveness as well as their general human resource management practices from three perspectives. Semi-structured interviews have been used to understand the employee perspective. The two other perspectives come from the Annual reports produced by both Inditex and Zara and media articles.   Our findings demonstrate that media perspective and employee perspectives comply well with each other. However, there is a great disparity between the annual report perspective and the other two perspectives. The results show three major HRM liabilities, the sole use of internal promotion, general employee dissatisfaction and the lack of local responsiveness. Our aim is that this study will benefit the Swedish retail industry, to perhaps understand performance issues through study. Also, benefit Zara and Inditex if they have similar problems in other countries and the study might explain their lack of financial performance in the Swedish market. In general, this research could assist companies that are expanding into the Swedish market, seeing it emphasis the importance of regional adaption.