Participative Leadership in Etsy: A Case Study Analysis

PMGT 702: PROJECT LEADERSHIP (Sec 004) Assignment : Case Study 2 Group 4 Group Members : Komal . (301421306) Linda Imobighe (301376776) Mayowa Fasheyitan (301129500) Meshack Oniera (301370165) Muhammed Hisham (301420731) Nitse Sonchhatra (301424778)

Contents Participative Leadership .................................................................................................................. 3 Etsy .................................................................................................................................................. 4 Q 1. Overview of the company ........................................................................................................ 5 Q 2. How does Etsy embrace a “Participative Leadership Culture”? .............................................. 5 Q 3. How is Etsy able to cultivate a “Participative Leadership Culture”? ...................................... 6 Etsy’s Mission .................................................................................................................................. 8 What difference does Etsy make? .................................................................................................... 9 References ...................................................................................................................................... 10 2

PARTICIPATIV E LEADERSHIP 1 Facilitate the conversati on. 2 Openly share informatio n and knowledg e. 3 Encourage people to share their ideas. 4 Synthesize all the available information . 5 Take the best possible decision. 6 Communica te their decision back to the group. Participative Leadership Participative leadership, which is also known as inclusive leadership or democratic leadership is a management process in which the leaders actively involve the employees in the decision- making process. In this type of leadership, leaders promote participation, input, and feedback from the employees regardless of the power of the employee’s position, a decision is made. Examples of companies that follow Participative leadership are:  Google  Shopify  Etsy 3

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However, the following case study includes the participative leadership culture in Etsy , which is an e-commerce platform for handmade, vintage, and unique items. Etsy  Beginning of Etsy : Robert Kalin, Haim Schoppik, and Chris Maguire are three entrepreneurs and friends who founded Etsy. The trio developed the first version of Etsy in 2005 in the space of two and a half months and officially launched the website in the same year. Etsy focuses on handmade or vintage items and craft supplies . It is home to creative goods, and extraordinary items, from unique handcrafted pieces to vintage treasures.  Market in Etsy : Etsy, Inc. Uses two-sided online marketplaces that collectively connect more than 95 million passionate and creative buyers and 7.5 million sellers around the world. Headquartered in Brooklyn, NY with approximately 2,790 employees, Josh Silverman is the appointed CEO. Etsy competes with brands like Shopify, Big Cartel, and Amazon Handmade, but has carved out a corner of the market thanks to a seller pool that is over 80% women. Etsy acts as the go-between, giving smaller, independent creators a platform to find and attract customers. It achieved this rapid and continued success not through warehouses but through its web of independent sellers.  Characteristics of Etsy :  Community and Support  Global Marketplace  Handmade and Vintage Focused 4

 Independent Sellers  Seller-Centric Features Q 1. Overview of the company. Etsy is an online marketplace set up in 2005, pivoting on handmade, vintage, and unique goods. It provides a venue for independent sellers to reach global markets and for buyers to discover unique and distinct items. Etsy emphasizes community, creativity, and sustainability, and it has grown into a remarkable e-commerce platform with millions of active sellers and buyers worldwide. The mission of the company is to “ keep commerce human .” Major works of Etsy are handmade jewellery, custom artwork and craft supplies, handcrafted home décor, vintage clothing, personalized gifts, handmade toys, and much more. The company's primary aim is to give amateur and professional artists the chance to express their creativity and make and sell handmade goods. The firm values staying committed to offering top-notch services to both buyers and sellers, and there is a powerful sense of community among members . Q 2. How does Etsy embrace a “Participative Leadership Culture”? Etsy exemplifies a Participative Leadership Culture through its commitment to embracing diversity and fostering an inclusive environment. The company recognises the strength of diverse teams and resilient cultures, believing that seeking different perspectives enhances decision- making and product development. In 2019, Etsy came up with five common principles, and one of those principles is: We embrace differences. Diverse teams are stronger, and inclusive cultures are more resilient. When we seek out different perspectives, we make better decisions and build better products. 5

Etsy's participative leadership is clear in several key characteristics : Open Communication and Transparency: Etsy prioritizes transparent communication by openly sharing information about business strategies, goals, and challenges with employees. This commitment to transparency sets up trust and inclusivity within the organizational culture. Emphasis on Innovation and Creativity: Etsy values and promotes creativity and innovation among its employees. Team members are actively encouraged to explore innovative ideas and solutions, aligning with the participative leadership model where diverse perspectives contribute to the company's overall success Flat Organizational Structure: Etsy supports a flat organizational structure, minimizing hierarchical barriers. This structure eases enhanced communication and ensures that employees at all levels feel a sense of ownership and impact within the organization. As a result, Etsy stands as an exemplary example of how participative leadership can positively influence organizational culture and success. Q 3. How is Etsy able to cultivate a “Participative Leadership Culture”? Etsy's unique structures and business approach provide a rich ground for cultivating a 'Participative Leadership Culture.' The key factors leading to this culture are listed below:  Company Values: Etsy's commitment to values such as transparency, authenticity, and craftsmanship aligns with the principles of participative leadership. These values serve as a foundation for fostering a culture where employees feel empowered to contribute. 6

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 Communication Channels: The company sets up effective communication channels that enable open dialogue between leadership and employees. Regular updates, town hall meetings, and platforms for feedback contribute to a culture of transparency and participation.  Empowerment of Employees : Etsy empowers its employees by encouraging them to take ownership of their work and providing opportunities for professional development. This empowerment creates a sense of accountability and engagement among team members.  Specialized Focus: Etsy's emphasis on handmade goods and unique products aligns with a participative culture where input from various stakeholders, including small businesses, crafters, and artisans, is valued. Participative leadership involves seeking input from team members, and Etsy's focus on diverse creators reflects a collaborative and inclusive approach.  Supportive Community: Participative leadership thrives in environments where collaboration and teamwork are fostered. Etsy's supportive community creates an atmosphere of shared goals and mutual aid. The collaborative nature of the community encourages open communication, another hallmark of participative leadership.  Professional Online Store Development: At Etsy, there is a strong focus on developing professional online stores. This helps to promote a participative leadership culture by making effective tools available to everyone and encouraging collaboration among sellers. Etsy has simplified the process of creating an online store so that anyone can create a professional-looking storefront, regardless of their technical expertise. This 7

approach promotes participative leadership by giving equal opportunities for all sellers to highlight their products in a polished and attractive manner. By combining these elements, Etsy has been successful in cultivating a participative leadership culture that values the input and involvement of its employees in various aspects of the business. Etsy’s Mission Etsy is the marketplace we make together. Etsy: https://www.youtube.com/watch?v=NbbnzxzVMz8 8

What difference does Etsy make? Etsy is diverse from other companies in a few ways, especially since it works as an internet commercial centre specializing in high-quality, vintage, and one-of-a-kind products. It is worth noticing that while Etsy has its special characteristics, it also faces competition and continues to advance. Other e-commerce stages may embrace the highlights or target comparable markets, but Etsy's unmistakable centre on high quality and special things is a characterizing figure in its nature of operation. Etsy's unique business model and focus contribute to the creation of a participative leadership culture by valuing collaboration, inclusivity, and the active involvement of stakeholders in decision-making processes. Although conflicts arise often in the workplace, what sets this organization apart is that they are not allowed to change the organization's structure. Unlike Amazon and Walmart, everything on the site is made, collected, curated, and sold by its sellers. These independent business owners not only produce their goods but manage their orders and inventory, too. Etsy acts as the middleman, giving smaller, independent creators a platform to find and attract customers. 9

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References:  Everything you need to know about participative leadership . IMD Business School for management and leadership courses. (2024, February 6). https://www.imd.org/reflections/participativeleadership/#:~:text=What%20is %20participative%20leadership%20and,and%20participate%20in%20decision %2Dmaking .  Etsy. (n.d.). About Etsy. Retrieved from https://www.etsy.com/about/  E. (n.d.). Etsy store vs eCommerce website: a comprehensive review . https://www.eurodns.com/blog/etsy-store-vs-ecommerce-website-a-comprehensive- review  (n.d.). Etsy.com. Retrieved February 6, 2024, from https://www.etsy.com/news/evolving- the-way-we-work?ref=news.  (n.d.). Businessinsider.com. Retrieved February 6, 2024, from https://www.businessinsider.com/guides/tech/what-is-etsy 10

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PMGT702-004_Group04_Case Study-2

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