Applicationof Management Theory: A Case Study of Amazon.Com’s CEO
Applicationof Management Theory: A Case Study of Amazon.Com’s CEO
Theonline shopping sector has been growing tremendously following theincrease in penetration of mobile devices and internet coverage.Amazon.com is among the organizations that have taken advantage ofthis trend. Although conditions and trends may favor organization’sgrowth, the traits as well as the leadership style adopted by the topleaders, especially the CEO may limit the organization’s ability toachieve its strategies (Ling, 2008, p. 923). This is because the CEOis expected to set strategies for the organization and providedirection for all departments (Gabrielsson, 2007, p. 28). Inaddition, individual CEOs use different leadership styles that theyfeel are consistent with their traits. These styles of leadershipinfluence the success of the organization by determining the type ofculture and values that the CEO will teach to other managers and thejunior members of staff (Jong, 2008, p. 67 and Maria, 2012, p. 123).This case study will focus on the effect of the Amazon CEO’scharacteristics on the organization and management theories that canbe applied to bring the necessary changes.
Amazon.com,simply referred to as Amazon, is an internet-based retailer companythat was started in the year 1994 with its headquarters inWashington, DC. Currently, Amazon is ranked as the leadingonline-retailer firm in the United States (Barney, J., 2011, p. 1),leading provider of streaming services (Jarvey, 2015, p. 1), and theleading in e-commerce firm (Davis, 2015, p. 1). The company dealswith different types of products, but most of them are electronics.Amazon was founded by an American entrepreneur, Jeffrey Bezos, whohave been its chief executive officer to-date (Amazon, 2015, p. 1).
However,Bezos’s characteristic as the CEO of Amazon has become a bone ofcontention, especially after the press release that was done by theNew York Times in 2015. The article highlighted several traits ofBezos that depict his autocratic leadership style. An autocraticleader is characterized by the tendency of the leader to makedecisions and announce them to followers, instead of involving thejunior members of staff in the process of making those decisions(Stefanovic, 2007, p. 106). In addition, autocracy involves the useof authority, instead of showing followers the reasons to believe incertain values or strategies (Bhatti, 2012, p. 195. These features ofan autocratic leader are consistent with the Stone’s (2015, p. 1)description of Bezos. The use of the phrase “secretive beast” inthe article “The missing leadership principles at Amazon” todescribe Amazon signifies a working place where force or authority isused to make employees deliver to the CEO’s expectations.
Thefirst characteristic is Bezos’s practice of micromanaging thecompany employees. This is illustrated by the strict staff reviewthat has forced some employees to spam the staff review tool with theobjective of eject the management out of the company (Stone, 2015, p.1). Micromanaging the members of staff reduce their motivation(Gilbert, 2012, p. 34), performance (Anand, 2014, p. 161) and stifletheir innovativeness, which in turn increases employee turnover(White, 2010, p. 74). This is confirmed at Amazon by the high rate ofturnover and the fact that only about 62 % of the current and formerAmazon employees can recommend a vacancy at Amazon to their friends(Stone, 2015, p. 1). However, Bezos have been favoring somedepartments, especially those that pertain to the engineering works.This explains the fact that engineers are less likely to leave Amazonas compared to other members of staff (Stone, 2015, p. 1). Theseengineers are responsible for the high level of innovation that hasbeen realized at Amazon, but the success of the organization as awhole requires the contribution of all members of staff and alldepartments.
Secondly,the sick employees are mistreated and put under performance checkimmediately they return from the sick leave, in case they managed toget one (Stone, 2015, p. 1). Women are more affected by theoppressions faced by sick employees, which is an indication ofgender-based discrimination in the organization. Treating employeesdifferently is associated with the lack of staff motivation (Khalid,2014, p. 39) and a decline in job satisfaction (Brough, 2004, p. 8),which has in turn been associated with an increase in job turnover(Messarra, 2006, p. 61). This implies that Bezos tendency todiscriminate against the sick women and other employees other thanengineers will increase the turnover and reduce the productivity ofmembers of staff who feel that they are discriminated against.
Third,Bezos is described as a leader, who does not condone mediocrity thatis practiced in other technology-based firms (Stone, 2015, p. 1).This is a characteristic of an autocratic leader who is not willingto create a working environment that facilitates interactions andsocialization. Although Amazon has been considered to be a uniqueorganization following its continuous growth, expansion into newbusiness lines, and constant innovation, a negative publication thatis associated with the traits of its CEO is likely to affect itsfuture performance as well as its going concern. This creates theneed for assessment of the relevant management theories that can helpBezos change his leadership style for the sake of the Amazon’sfuture.
Bezos,Amazon’s CEO can use different management theories to reform hisown leadership characteristics for the sake of the future of theorganization. These management theories can also help the CEO indeveloping a culture that will help the organization in addressingchallenges in the modern technology and the internet industries. Theclassical management theory provides a useful framework that can beused to address the current challenges that Amazon is facing. Theclassical management theory considers organizations as systems thatare comprised of cooperative units that include biological, physical,social, and personal components (Grimsley, 2015, p. 1). Although thetheory of classical management supports division of labor, one of thedevelopers of this theory, Frederick Taylor, challengedorganizational management to cooperate with employees heartily inorder to ensure that all members of staff perform their dutiesaccording to scientific principles or some pre-determined procedures(Sarker, 2013, p. 1 and Giannantonio, 2011, p. 1). This implies that,even after diving labor and allocating roles to differentdepartments, the management should demonstrate respect and value forall departments and facilitate their cooperation in order to achievethe goals of the organization as a whole.
Theconcept of cooperation as emphasized in the classical managementtheory will help Bezos value employees in all departments, instead ofjust valuing engineers, and facilitate cooperation among employeesfrom different professions. Employee cooperation enhances the senseof loyalty among employees since they feel that their employer hascreated a platform for them to share ideas and develop each other(Markos, 2010, p. 90). By valuing all employees and facilitatingcooperation among them irrespective of their professions, Bezos willbe able to reduce turnover.
Inaddition, companies should attain the system equilibrium in order toachieve the strategies set by the organization (Peters, 2012, p. 1and Ahlowalia, 2014, p. 1). System equilibrium is mainly achievedwith the help of two processes that are interrelated. The firstprocess involves the establishment of equilibrium between thecharacteristics of an organization and external environment of thatorganization. This process requires the management to ensure that thevalues as well as the characteristics adopted by the organization areconsistent with what is required in the industry in which theorganization operates in. The second process involves theestablishment of a balance between the satisfaction that thestakeholders get from the organization and their respectivecontributions (Mele, 2010, p. 1). Employees who enhance theirperformance after being subjected to excess pressure from the topmanagement are likely to feel less satisfied, which implies that thecontribution does not balance with satisfaction. This is the casewith Amazon, which has become the leading online retail firm in theU.S. after employees were subjected to pressure by the CEO, Bezos.The CEO can borrow from the classic organizational theory and enhancestaff performance by motivating them, instead of pressuring them toperform.
Amazonmay also use the principles of the systems theory to preventgender-based discrimination, mistreatment of sick patients, andenhance the satisfaction of each individual who make a contributionof any kind towards the organizations. The system theory helps themanagement see the organization as a unit that is composed ofdifferent system that depends on the contribution of each other tofunction properly. Systems that form the unit called the organizationor the company is dynamic and regulate themselves through feedback(Groth, p. 13). This means that different entities forming the systemkeeping on oscillating until they fit with each other. This explainsthe phenomenon in which employees at Amazon keep on leaving thecompany to join the start-ups, especially those that are located inthe Silicon Valley (Stone, 2015, p. 1). Therefore, Bezos can containthe issue of staff turnover by enhancing the working conditions forall of them and avoid discriminating against women and cancersurvivors who wish to return to work. Taking deliberate measures toenhance the balance between the stakeholders (including theemployees) will fast track the process of establishing equilibrium atAmazon, which will in turn reduce the employee’s intention to leaveand enhance the performance of all members of staff. In addition,Bezos will no longer need to micromanage employees since each of thecomponents in the system is self-regulating as the systems theoryholds. Bezos will only need to facilitate efficient functioning ofall employees.
Inconclusion, the specific characteristics of an individual chiefexecutive can influence the performance of an organization. This isbecause the chief executive of any organization provides and overalldirection for all organizations, which in turn determines whether theorganization will succeed in implementing its strategic plans.Amazon’s current CEO, Jeffery Bezos, has both positive and negativecharacteristics. The two characteristics have affected Amazonnegatively and positively. On the positive side, the strictness ofBezos and the use of strict performance management tools for allemployees have resulted in the continuous growth as well asinnovativeness of Amazon in a highly competitive industry. On thenegative side, Bezos has been accused of micromanaging members ofstaff and discriminating against cancer survivors as well as othersick patients. Bezos characteristics have resulted in a negativepublicity that might affect the future growth of Amazon in thefuture. Management theories can help Bezos develop a suitablecorporate culture that will result in sustained growth and innovationat Amazon. For example, the use of classical organizational theorywill help Bezos facilitate cooperation among all employees whilesystems theory will help the CEO in demonstrating value to allemployees and departments.
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