Amazon

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1 Amazon Inc. Affiliation Student’s Name Course Instructor Date

2 Introduction Amazon Inc. (Amazon) overtook Microsoft Corporation, Google Inc. and Apple Inc. to become the most valuable corporation in the globe in January of 2019. Amazon's founder and current CEO, Jeff Bezos, overtook Bill Gates as the richest man on the planet during the same year. Amazon said on January 31st, 2019, that its operating profits for 2018 increased to $12.4B, up from $178M in 2014, and its sales for 2018 increased to $232B, up from $89B four years ago earlier (Amazon, 2019). Several of its stockholders were pleased with Amazon's spectacular ascent and indicated their contentment with the company. However, traditional stores in the U. S. were collapsing at an alarming rate, forcing big retailers like Best Buy and Walmart to make significant investments in e-commerce platforms in order to protect their existing market share and stay competitive. Concerns that Amazon and other digitally based American companies were becoming too large and strong were fueled by the appearance that every retail industry was being targeted by competitors. Amazon's phenomenal level of success can be attributed to a number of different things. The leadership of the organization, the cultures it upholds, and the overall strategic choices it makes were some of these factors. In this paper, we will talk about some of the company's methods that contributed to its final resounding success not just in its home country but also in every other country it exists in around the globe. The Managerial / Leadership Style Jeff Bezos is a leader who is focused on getting things done in a transactional style. Stone (2013) explains that Jeff Bezos is a micromanager who has stringent standards and is frequently unconcerned about the opinions of other people. One term for this leadership approach is transactional leadership. Transactional leaders have the ability to influence their employees, as stated by Northouse (2013), since it is in the subordinates' best interest to do as the leaders direct. It is also said that transactional leaders are highly effective when it comes to accomplishing operational objectives and results and developing firms that flourish in this era of international competition. In addition to the transactional leadership skills he possesses, Bezos may also be described as a change agent who strives to innovate. He is the CEO of Amazon, after all.

3 According to research conducted by Qu, Janssen, and Shi (2015), transformational leadership leads to outstanding achievements and inspires creative thinking among followers. It is common knowledge that transformative leaders are able to develop a compelling vision of the future that wins over the minds of the people they lead as well as that of the customers. Transformational leaders are able to stimulate commitment and interest to execute the vision by tying the long- term purpose of their organization to the values held by their employees. This drives team effort beyond what is normally possible (Howell and Avollio, 1993). This can be observed in the success of Amazon.com, which is undoubtedly a result of his capacity to envision, motivate, and create even when investors and competitors alike did not feel that his innovation could produce favourable financial returns. The revolutionary approach to management that Bezos has taken as CEO of Amazon over the past two decades has been the primary factor in the company's phenomenal success. Due to Bezos' imaginative focus and unwavering devotion, the business evolved from simply being an internet commerce store to an internet commerce store that competes successfully against both offline and online competition (Stone, 2013). Indeed, the insatiable appetite for both innovation and change that he demonstrates is a quality of leadership that has culminated in tremendous sales and revenues for Amazon as well as a network of devoted customers. However, Bezos' transactional leadership traits appear to have resulted in an unpleasant work environment where the various employees do not feel well situated to caution this exceptional leader about his unattainable business planned expansions. In spite of Bezos's commendable efforts, it is possible that this may have been the case. Despite increases in both sales and revenue, Mangalindan, Schmuckler and Li, (2014) believes that Amazon's enormous losses might be attributed to the company's insatiable need to grow its already enormous product catalogue. It is logical to believe that this may be a direct consequence of Bezos's determination to expand by whatever means at a fast pace while not caring for his employees. Structure and Culture of Amazon

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4 One of the reasons for the success of Amazon is that Bezos has driven workers to argue each other's suggestions for an effective decision-making process rather than allowing room for flawed ideas. Similarly, workers at Amazon are required to embrace the company's core beliefs and values (Schein and Schein, 2017, p.19), also referred to as leadership principles, and to break their "poor habits" as soon as they start working there. This is done to ensure that the employees have a clear understanding of the direction the company is headed in and to ensure that workers leaving Amazon are highly sought after in the job market due to the quality of their professional conduct. On the other hand, despite the fact that Amazon's company culture has played a significant part in the corporation's continued success, it is also a method of oppressing and controlling employees for the advantage of the company. This is accomplished by increasing compliance in order to ensure that workers are properly aligned with goals, a practice that hints at the presence of Unitarianism to some degree. For example, technology is used to monitor the activities of Amazon employees, and disciplinary action is taken against those who squander time on non-essential tasks. Moreover, as per recruiters, some businesses are cautious when recruiting former Amazon workers due to their work obsessiveness and combativeness, both of which are artefacts of Amazon's organizational culture (Schein and Schein, 2017, p.19). On the other hand, in its early years, Amazon had a flat structure. However, as the company grew, it transformed into a hierarchal structure with clearly defined jobs and responsibilities. Amazon is the most successful online retail company on earth, hiring over one million people in a variety of locations across a wide range of nations. The corporate structure of Amazon emphasizes a vertical hierarchical structure with worldwide, function-based groupings and regional divisions as its primary organizational components. This provides the corporation with considerable top to down control over its international operations, which in turn enables the company to enhance its market share and continue to hold the position of the market leader. There is a top management team that reports directly to Jeff Bezos, the CEO of Amazon, at the very top of this structure. This small team of senior executives works closely with Bezos to propagate his ideas, find solutions to issues, establish executive-level goals, and mould the culture of the firm. Entrepreneurial Strategy and Corporate Governance Policies of Amazon

5 The overarching entrepreneurial strategy that Amazon employs can be summed up with the term "concentric diversification." This approach is centred on using technical capabilities for commercial success and adopting cost leadership strategies aimed at giving the highest benefit to its consumers at the cheapest price. In addition, these strategies involve tying the organization around its various customers such that they find the company to be the go-to gateway for all of their online purchasing needs. The fact that Amazon is the leading internet retailer around the globe and has continually been the market leader in the categories in which it competes is clear evidence that these strategies have been successful and have resulted in positive financial outcomes. It is also important to keep in mind that cost leadership may be impacted by the law of diminishing marginal returns, which states that businesses who adopt this approach may discover that they are not able to maintain growth or boost profitability after they have picked all of the "low- hanging fruit." The Ansoff matrix can be used to provide an explanation for the entrepreneurial strategy that Amazon has been following. Amazon is positioned in the Entire Cost Leadership zone, and the first step in comprehending the company's overall strategy is to understand its unrelenting focus on reducing costs. The specific steps that Amazon CEO Jeff Bezos has taken in order to implement this strategy are as follows: providing discounted prices to Amazon Prime members who shop on a regular basis; ensuring timely and sometimes even express delivery; and, on occasion, suspending the shipping charges for its consumers. Additionally, Jeff Bezos has passed on to customers the advantages of avoiding state taxes, which has the effect of reducing the price of the product even further. Additionally, Jeff Bezos has implemented an overall strategy that focuses on providing customers with a smooth and seamless experience. Aside from this, Amazon's entrepreneurial strategy is guided by its source of competitive advantage, which is centred on innovation, accomplishing the advantages of economies of scale, and utilizing the productivity gains from the complementarities between its internal resources and external drivers have been the hallmarks of its business strategy. In addition, Amazon utilizes Big Data Analytics as a mechanism to track the behaviour of its customers. In point of fact, the corporation has shown such a strong commitment to the Big Data initiative, and as a result, it is now positioned to advertise this as yet another distinct service offering.

6 The Effects of Power, Influence and Conflict Resolution in Managing Change Because Jeff Bezos is the CEO of a prosperous and expanding company like Amazon, he is in a position to wield significant influence on the operations and policies of the company. The essence of power is the capacity of an individual to compel others or groups of people to act in a way they otherwise may not have done. The leaders of an organization have access to a wide variety of sources of power, which can be grouped into two distinct groups: informal and formal power (Luke, n.d.). These leaders utilize the power at their disposal in order to successfully manage the company. Because of the way he runs his company and interacts with his staff, Jeff Bezos possesses a unique blend of power that can be classified as both informal and formal. The power and influence that Jeff Bezos appears to have in the office setting are known as legitimate power, whereas the power that he wields in the informal setting is known as referent power. A person's formal position in the company's hierarchical system is the source of the power that gives them access to the legitimate power they wield within their organization. As a result, a person who holds legitimate power possesses the capacity and the right to control and make use of the assets of the company in order to ensure that continuing duties are finished. As the Chief Executive Officer of Amazon, Jeff Bezos is in a position of complete responsibility within the company, and as such, he is free to direct Amazon in whatever direction he sees fit. In light of the fact that Jeff Bezos possesses authority, the most fruitful course of action for him to take would be to avoid establishing dominance, which, over time, can undermine the spirit of teamwork and even culture (Lucas et al., 2010). The most effective application is to use it to push for necessary organizational change. This requires him to make use of his power to bring about events that normally would not take place in their current state. He has, to some extent, done this very successfully, taking into consideration the level he has pushed the organization to through his well-known transformational leadership style. Types of Motivation Strategies at Amazon Amazon has a performance and rewards system, according to which performers receive pay and shares, both of which increase in value rather fast; losers, on the other hand, are terminated. This specifically applies to the aspect of Behavioral Theory that is concerned with the carrot-and-stick strategy, often known as the rewards and punishment strategy. This concept

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7 is only concerned with factors that come from the outside. Looking at Amazon, it comprises a workplace that has the ability to reward employees or punish them depending on the circumstance and how they are performing. Amazon implemented a screening process known as "Bar Raisers" to determine whether or not candidates are qualified for the various organization positions. These 'Bar Raisers' also rigorously analyze and evaluate candidates in accordance with the leadership concept of "ensuring that only the best are hired" (Kantor and Streitfeld, 2015). Because of this, new employees have an overwhelming amount of responsibilities placed on their shoulders due to the fact that Amazon "directly links their performance to the success of their assigned project" (Kantor and Streitfeld, 2015). Because of the amount of work that is the responsibility of each individual, completing individualized tasks would result in a feeling of accomplishment. However, the fact that performance is so heavily dependent on data results in motivation by fear, which is not the most appropriate motivation strategy to utilize. In this scenario, the utilization of data to evaluate the work rate of not only the various employees but also applicants push them to perform at the best possible level of their standards and go beyond their existing limits. However, this means that if a person did try their hardest but dropped below the level of effectiveness required by the company, there are consequences ranging from being fired, as indicated by an employee who worked for the company who stated in an interview that "Nearly every person I worked with, I saw cry at their desk." (Kantor and Streitfeld, 2015). This works the opposite of what motivation theories are supposed to accomplish. During meetings, workers are encouraged "to tear apart one another's ideas" (Kantor and Streitfeld, 2015). This is utilized as a motivational tool for employees because Jeff Bezos believes there is a growing habit of employees wanting approval, leading to "achieving self- worth" for some people. This is a motivational tool for employees because there is a growing habit of desiring approval. Amazon implements a "stack ranking," sometimes known as "rank and yank," when it comes time for Peer reviews and assessments (Perform Yard, 2018). At this point, employees are evaluated against one another in the course of an annual review. Additionally, an employee's performance is evaluated and ranked starting from the time they were first hired and continuing throughout their time with the company. Corporate Example

8 The management style of Jeff Bezos at Amazon encourages hazardous workplace conditions, both emotionally and physically, for the well-being of its employees and provides little in the way of assistance at work. Amazon's culture places a strong emphasis on openness regarding the identification of high-achievers and others who do not meet that criterion. The expectation is that workers will put in significant effort well into the evening, and when emails continue to arrive after midnight, they will frequently be followed by text messages that demand prompt responses. During the outbreak of tornadoes that occurred in the Midwest in December of the previous year, attention was drawn to the horrible management techniques employed by Amazon (Sainato, 2020). Amazon employees in the region have reported that they were given very minimal to no training in the event of tornadoes. Some of them have even reported that they were required to work all through storm warnings, which forced them to make a choice between the security of their jobs and their own personal safety. Six Amazon employees were killed when a violent tornado slammed a Distribution centre in Edwardsville, Illinois (Sainato, 2020). Rapidly responding to the situation, the Occupational Safety and Health Administration (OSHA) initiated a formal inquiry into what had transpired. This is just one example of how different Amazon employees, despite their hard work, are treated poorly by the company. This results in a loss of motivation, which may have a negative impact on the employees' overall working morale for the firm. Conclusion/Recommendations Amazon's company culture represents the innovative efforts made by the company in the shape of the online retail industry since it was founded on the style of leadership of Jeff Bezos, who is both the CEO and creator of the company. Elements of the company's culture have the advantage of encouraging originality, boldness, and distinctiveness, which can help the business become more efficient and productive. However, as a result of the company's recent activities, in an effort to improve employee happiness and gain a competitive advantage in the market, the policies and procedures of the organization have come under close scrutiny. Amazon might create a more positive working atmosphere for its subordinates by making changes to the overall company's working settings, implementing continuous tracking, and employing harsh "yank and

9 rank" tactics that are meant to intimidate staff. If the company wants to maintain its level of success, it must put the needs of its employees before those of its shareholders. In order to ensure this, it can also take into consideration the following recommendations:  The enhancement of the well-being of workers in addition to the implementation of diversification practices. The culture of Amazon will help the company boost its innovative ways and efficiency. In the end, the organization will find that it is helpful to its overall longevity and the general contentment of its working personnel if it listens to its employees and enhances the conditions under which they work.  When it comes to employee and workplace motivation, the strategy that is being used right now is motivation by fear, which is functioning properly now but can only reach its intentional outcome for a limited amount of time. The implementation of benefit compensation systems that empower employees, such as "Employee of the month" or "Longer holiday/time off time," for people who work hard individuals would, as a result, increase the motivation levels of employees because they have something more to work toward and accomplish in exchange for their good work.  In addition, the company needs to strike a balance between its existing cost leadership approach and the focused differentiation that is premised on diversification. This will allow Amazon to become capable of covering more markets and attracting larger groups of consumers in the event that competing companies apply techniques that are similar to their own.

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10 References Amazon (2019). Amazon Announces First Iowa Fulfillment Center . [online] ir.aboutamazon.com. Available at: https://ir.aboutamazon.com/news-release/news-release- details/2020/Amazoncom-Announces-Fourth-Quarter-Sales-up-21-to-874- Billion/default.aspx. Howell, J.M. and Avolio, B.J. (1993). Transformational leadership, transactional leadership, locus of control, and support for innovation: Key predictors of consolidated-business-unit performance. Journal of Applied Psychology , 78(6), pp.891–902. doi:10.1037//0021- 9010.78.6.891. Kantor, J. and Streitfeld, D. (2015). Inside Amazon: Wrestling Big Ideas in a Bruising Workplace. The New York Times . [online] 15 Aug. Available at: https://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in- a-bruising-workplace.html. Lucas, P., Melo, R., Management, Mendes, F. and Program, B.P.-B. (2010). ENTREPRENEURIAL STRATEGIES AND THE USE OF STRATEGIC IMPLEMENTATION MECHANISMS: A SURVEY OF MICRO-AND SMALL ENTREPRENEURS. [online] (2), pp.137–154. Available at: https://www.revistafuture.org/FSRJ/article/download/22/87 [Accessed 30 Aug. 2022]. Luke, B. (n.d.). A THEORY OF STRATEGIC ENTREPRENEURSHIP . [online] Available at: https://researchbank.swinburne.edu.au/file/16789672-e22b-49c4-879c- 5030d4284018/1/PDF%20(Published%20version).pdf. Mangalindan, D.M.J., Schmuckler, M.A. and Li, S.-A. (2014). The impact of object carriage on independent locomotion. Infant Behavior and Development , 37(1), pp.76–85. doi:10.1016/j.infbeh.2013.12.008. Northhouse (2013). Leadership: Theory and Practice. The Leadership Quarterly , 9(4), pp.530– 533. doi:10.1016/s1048-9843(98)90015-7.

11 Perform Yard (2018). Resources | PerformYard . [online] www.performyard.com. Available at: https://www.performyard.com/resources. Qu, R., Janssen, O. and Shi, K. (2015). Transformational leadership and follower creativity: The mediating role of follower relational identification and the moderating role of leader creativity expectations. The Leadership Quarterly , 26(2), pp.286–299. doi:10.1016/j.leaqua.2014.12.004. Sainato, M. (2020). ‘I’m Not a robot’: Amazon Workers Condemn unsafe, Grueling Conditions at Warehouse. The Guardian . [online] 5 Feb. Available at: https://www.theguardian.com/technology/2020/feb/05/amazon-workers-protest-unsafe- grueling-conditions-warehouse. Schein, E.H. and Schein (2017). Organizational Culture and Leadership . 5th ed. [online] Hoboken, New Jersey Wiley. Available at: http://www.untag- smd.ac.id/files/Perpustakaan_Digital_2/ORGANIZATIONAL%20CULTURE %20Organizational%20Culture%20and%20Leadership,%203rd%20Edition.pdf. Stone, B. (2013). The everything store : Jeff Bezos and the age of Amazon . [online] New York, Ny: Back Bay Books/Little, Brown And Company. Available at: https://prachititalathi.files.wordpress.com/2014/04/the-everything-store-jeff-bezos-and- the-age-of-amazon.pdf.

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