Application of Management Theory

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Applicationof Management Theory

Applicationof Management Theory

Thecapacity of the organization to sustain its growth andcompetitiveness is associated with the competence of its topmanagement. This is because the top management, including the CEO, isresponsible for the development of strategies that the organizationshould pursue (Locker, 2014, p. 2). The long-term strategiesdetermine the direction of the organization, which implies that thetop management that is responsible for formulating these strategiesshould be blamed for the failure and acknowledged for the success ofthe organization. This paper will address the challenges that Amazonis facing as a result of specific attributes of its CEO, Jeff Bezos,and discuss how management theories (including the classicalorganization and contingent theories) can be used to address thechallenges and help Amazon achieve its strategies.

Amazon.comIncorporation is considered as the pioneer of online retail trade,not just in the U.S., but also in the entire world. The company wasstarted in early 1990s (1994), when the popularity of the World WideWeb and the internet in general was at its peak (Barnes, 2015, p. 1).This period was also characterized by the use of personal computersin offices and homes, which created a platform for a new type ofretail trade that the world had not experienced before. The companywas started by Jeff Bezos, who left a job at D.E. Shaw, where heworked as the vice president. The main factor that motivated Bezos toleave employment and venture into online retail business was a reportthat the use of the internet was expected to grow at a rate of 2,300%, which meant to Bezos that the internet would become a virtualworld where people could need almost everything, including business(Barnes, 2015, p. 1).

Amazonhas been growing over the years, in spite of the fact that newcompanies have ventured into online retail business. Bezos startedwith a list of 20 products, but the number of brands that are tradedon Amazon’s platform is almost becoming infinite because thecompany can now sell nearly everything. Reports show that Amazon isunique in that it has been growing quickly, expanding relentlessly byventuring into new areas of business, and innovating constantly(Stone, 2015, p. 1). However, Bezos, the company’s CEO, has beenaccused of using a commanding type of leadership style. This type ofleadership is characterized by strict orders from the overall leaderand with limited opportunity for the followers to use their ingenuityto help the organization achieve its strategies (Kocolowski, 2010, p.22 and Choi, 2007, p. 245).

Thereforeare four major attributes of Bezos that confirm the use of acommanding type of leadership and the weak corporate culture atAmazon Incorporation. These attributes include unnecessary emphasison performance evaluation, the lack of core values, inability tobalance between different departments and employees from differentprofessions, and poor communication skills. Bezos has beenemphasizing on strict evaluation of staff performance, which tends toreduce their motivation. Although performance evaluation is highlyencouraged in all organizations, it gives employees a negativeexperience when it is not done right (Singh, 2015, p. 37 and Dechev,2010, p. 9). For example, the use of strict performance evaluationtools by Bezos has forced members of staff to try to spam these toolsin an attempt to discourage the management from using them (Stone,2015, p. 1). Excessive evaluation of employee performance reducestheir motivation because they feel that the management does not trusttheir commitment at work and creates a perception that the managementis trying to micromanage the workforce.

Amazon’scorporate culture lacks some basic values (such as empathy) that arerequired to enhance its competence in the contemporary businessenvironment. This is confirmed by mistreatment of sick employees,especially the cancer survivors. In addition, Stone (2015, p. 1)describe the treatment of members of staff at Amazon as inhuman andthe company’s workplace as a silent beast. Mistreatment ofemployees is associated with a decline in morale of the members ofstaff and their loyalty to the company (Kahya, 2007, p. 520 andLeblebici, 2013, p. 38). Employees who have no morals and have lostloyalty to their employer are more likely to leave than those whofeel that their employer treats them fairly. Similarly, studies haveshown that the majority of employees working for Amazon leave withintheir first two years of employment (Stone, 2015, p. 1). The lack ofsuitable values in the Amazon’s corporate culture can be attributedto Bezos’ failure to balance between the needs of employees andthose of the company.

Bezoshas failed to establish the balance between different departments andmembers of staff from different professions. For example, the CEO hasbeen regarding the company engineers working for its web servicedivision more than employees working for other divisions (Stone,2015, p. 1). Discriminating against a section of employees isassociated with a high tendency to leave the company and asignificant decline in the performance of members of staff who arenot regarded (Abbas, 2011, p. 170 and Ensher, 2011, p. 53).

Thereare several instances in the article “The missing leadershipprinciples at Amazon” indicating that communication within thecompany is poor. For example, the tendency of employees to spam thestaff evaluation system and continue sobbing at their desks indicatesthat the company has failed to provide them with a platform tocommunicate their grievances. Studies have associated poorcommunication within an organization with a decline in performance ofemployees as well as the entire organization since instructions andinformation does not flow as expected (Femi, 2014, p. 1).

Bezosneeds to consider two major theories in order to achieve Amazon’sstrategies. A classical organizational theory is a representation ofthe merger of bureaucratic theory, scientific management, andadministrative theory (Basharat, 2012, p. 512). The classical theorycan help Bezos address three of his weaknesses as the CEO of Amazon.The first weakness is the unnecessary focus on the process ofevaluating the performance of each employee, including the sickmembers of the staff who return to work. From the case study, it isevident that Bezos focus more on what employees of the company cancontribute to the organization, but he is not concerned about whatthe organization can do to employees in order to enhance theircapacity to contribute towards the company’s strategies (Stone,2015, p. 1). The classical organizational theory holds thatorganizations should recruit their employees using the scientificprocedures, teach, train, and develop them in order to deliver to theexpectations of the employer (Groth, p. 10). To this end, Bezosshould stop pressuring the members of staff to perform and startempowering them to perform by training them instead of justevaluating their performance. Training the members of staff ispositively associated with a significant increase in their jobperformance because it equips them with the skills that are requiredto accomplish the tasks assigned by the employer (Hameed, 2011, p.224 and Dabale, 2014, p. 63).

Theclassical organizational theory can also help Bezos avoid theindividualistic approach and focus more on cooperating with otherstakeholder especially employees in helping the company achieve itsstrategic objectives. Some of the key factors indicating that Bezoshave not been collaborating with employees include the inhumantreatment, poor working conditions, and a notion that theorganization cannot condone mediocrity (Stone, 2015, p. 1). Theclassical organizational theory encourages management teams to adoptcooperative as opposed to the individualistic approach in themanagement of affairs of their organizations (Groth, p. 10). Thistheory requires the management to organize employees into differentclasses and assign them with responsibilities according to theirhierarchies, but cooperation should be fostered in each and betweenlevels. By facilitating cooperation Bezos will be able to create anenvironment for all employees to share information as well as ideas,which will give Amazon a range of new ideas to that will help itpursue its innovative strategies.

Bezoscan also apply the principles of the classical organization theory toenhance communication within the organization. Well definedcommunication channels should be part of the organization and shouldbe utilized to share information vertically as well as horizontallyat all times (Banihashem, 2014, p. 14 and Husain, 2014, p. 2). In thecase of the Amazon, the CEO invites the feedback of employeesfollowing a media publication about their oppression and poor workingconditions that the CEO has subjected them to (Stone, 2015, p. 1).Chester Barnard, one of the contributors of the theory of classicalorganization, held that the establishment of communication channelsis among the key functions of the executive (Groth, p. 11). Barnardrecommended that the channels of communication should be kept asdirect and short as possible. Bezos can adopt this idea to ensurethat employees are able to communicate with the top managementwhenever there is a need, instead of waiting for a negative publicityto occur. Therefore, effective communication and openness at alllevels of management should be part of the corporate culture.

Bezosmay also use the contingency theory to create a culture and anenvironment that considers the interests of employees at all levels.The contingency theory is based on the notion that each of thechallenges that organizations face have unique solutions that is inturn determined by prevailing circumstances (Groth, p. 14). TornBurns, one of the contributors of the contingency theory held thatorganizations are made up of cooperative systems that formed bypeople with different aspirations (Groth, p. 10). A group of peoplewith different aspirations form or join organizations with objectivesof finding solutions to challenges that they face in theirenvironment. This implies that an organization that fails to give itsemployees an opportunity to find solutions to their personal problemswill in turn limit their capacity to develop solutions for theiremployer. In other words, an organization that discriminates againstwomen and oppresses the sick patients, like Amazon does, limitsefficiency of its employees. The success of the organization isjudged depending on the extent to which the needs of members aresatisfied through some planned transactions with the organization’senvironment (Abbah, 2014, p. 2 and Dobre, 2015, p. 2). Therefore,Bezos should focus on satisfying the needs of employees, instead ofoppressing and pressuring them to address the needs of theorganization.

Inconclusion, Bezos traits have a direct impact on the morale as wellas the job satisfaction of Amazon’s employees. Although Amazon hasenjoyed a period of continuous growth and innovation, the fact thatmost of the employees feel that they are forced to work under poorconditions by their oppressive CEO will increase the staff turnover.With a high turnover rate, Amazon will continue losing itsexperienced employees to competitors, which will reduce the company’scompetitiveness in the long-run. Bezos should apply the principles ofthe classical organizational theory to enhance collaboration,communication, and the consideration of the contribution of membersof all professions and departments. The contingency theory can alsohelp Bezos in satisfying the interests of employees as a means ofmotivating them to pursue the strategic goals of the company.

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