Professional Documents
Culture Documents
C2P1
C2P1
21.09.2022
2
The analysis one of the world’s biggest online retailers/e-commerce giant Amazon in the
merits of its employability and its work culture based on a case study published with
reference to an article published by The New York Times. We discuss and summarize about
the pragmatic leadership style of Amazon, “The company’s founder and first CEO, Jeff
Bezos is an exceptional and proven business leader. Bezos efficiently exercises visionary and
servant leadership styles and places exceptional customer service at the core of Amazon’s
business practice” [1] its hierarchical organization structure headed by Andrew R. Jassy as the
current President & CEO and its stack ranking performance management styles.
Leadership at Amazon
1. Leadership styles of Jeff Bezos and its influence on culture and performance of
Amazon
Without a doubt in place, Jeff Bezos stands as a beacon and model of modern leadership. He
started with an online bookstore and from there he was able to transform his start-up
collective effort with employees, partner executives, and thousands of employees, Bezos can
be credited as the leader of the pack. Analysing the success and growth rate of Amazon,
There are many iconic leaders in the world who are incredibly successful, but the leadership
style can vary from person to person. Most of the great leaders have unique style of
leadership, yet similarly successful as they stand as the bests in those particular strategies.
Just like many others of his kind, Bezos cannot be described under a single conventional
leadership classification. Let’s analyse the leadership style of Jeff Bezos which transformed
a start-up into a global business mammoth, dealing around 32 sub companies including
One of the best and widely applauded parameters of Jeff Bezos is that he is considered as a
transformational leader — someone who motivates and inspires team members to achieve
more than they thought possible. Bezos ensures that everyone on his team is committed to
the vision for the organization. Amazon’s vision, to be Earth’s most customer-centric
you’re on team Amazon, you know the customer always comes first. This mindset is a
Bezos-born manifestation . His sheer determination has been the key to success for
[2]
Amazon as a company and Bezos as a leader. And this strategy is always reflected in the
culture of Amazon.
Another style influenced the culture and therefore performance at Amazon is the way Bezos
approaches the failures. He always tries to make the best out of every failure and make it as
productive as possible. In a letter to shareholders, Bezos stated that “One area where I think
we are especially distinctive is failure. I believe we are the best place in the world to fail (we
have plenty of practice!), and failure and invention are inseparable twins. To invent you
have to experiment, and if you know in advance that it’s going to work, it’s not an
experiment.” In the same letter, Bezos explains Amazon’s innovative approach through a
baseball analogy, “We all know that if you swing for the fences, you’re going to strike out a
lot, but you’re also going to hit some home runs.” From Bezos’ perspective, a business must
embrace the entire process of success and failure, as the two go hand in hand. Plus, they
usually require leaders to take leaps of faith. But once a business wins big, the success pays
for all the failures that were experienced beforehand. While amazon always wants the best
out of everything, it gives a great range of tolerance for errors. For an employ who would
like to make an impact, it is one of the best things to have. This gives the freedom for
employees to fold their sleeves up for any experiments. This approach has a huge effect in
Amazon leadership style can also be classified as pragmatist. Pragmatist leaders “set high
standards and unapologetically expect those standards to be met by themselves and by their
employees” . Bezos always wants to be the best in the business, no matter what. And to
[3]
keep this strategy active, Bezos didn’t hesitate to be a stubborn leader at times.
Amazon is so critical about the customers. Amazon places exceptional customer service at
the core of its business practice. For example, it has been noted that “while you might find
other internet firms focusing on a fun, relaxed atmosphere for their employees, Amazon is
proving the potency of another model that is, coddling his 164 million customers, not his
56,000 employees” [1]. This has been a huge success in customer attraction and retaining but
has also been criticized a lot. Jeff Bezos leadership style has been characterized as harsh,
cutthroat and demanding [4]. It can be argued that such a leadership style fitted the situation
on the onset of the business when the company had to strengthen its position on rapidly
expanding industry.
2. Impact of Change in Leadership in Amazon and the Suggestions for new CEO
In July 2021 Jeff Bezos stepped down as CEO and assumed the role of company’s executive
chairman. Andy Jassy CEO of Amazon Web Services became the new CEO of the online
retail behemoth. At has been noted that although Andy Jassy values Bezos leadership style
the new CEO is “more mild-mannered, soft-spoken and less prone to angry outbursts
compared to Bezos” . As Jassy takes over as CEO, one key challenge will be tamping
[5]
down the rougher side of Amazon's empire infusing the company what Stone calls a more
humble image.
The new CEO has a bunch of things to take care of, but primarily he is to continue training
major focus on the same areas, including AWS and Amazon Studios — which just picked
5
membership sales.
One of the major suggestions that comes to Andy Jassy is to break the ice. Amazon has
always been known for its stubborn leadership and unapologetically strict operations. This
makes Amazon a lesser preferred place for employees, taking the brand and money Amazon
provide into account. But in the business operations and customer facing, Andy should
follow his predecessor’s footsteps. Bezos and Amazon have proven the potential of ultimate
customer centric strategy they have followed so far and success rate of the same is also
visible in front of Jassy. The way Andy handles the approach of Amazon towards new
innovations would be the most anticipated points in Andy’s workbook. It would define
Amazon in the upcoming years and the success of Andy Jassy as a leader.
On a simpler note, Amazon isn’t broke, so Jassy would be wise to not try to fix it.
function-based structure and geographic divisions. While Amazon started as a lean, flat
organization in its early years, it transitioned into a hierarchical organization with its jobs
The Amazon organizational structure favours a vertical hierarchical approach with global,
function-based groups and geographic divisions. This gives the company extensive top-
down control over global operations, allowing it to increase market share and maintain
At the top of this chain is a senior management team reporting directly to CEO Jeff Bezos.
Dubbed the S Team, this small team of Amazon senior executives works with Bezos to
disseminate his ideas, solve problems, set high-level goals, and shape company culture [7].
As the company grown from a start-up to such a giant, the hierarchical structure also gets
bigger. But amazon had clear plans to execute the operations even being in the conventional
7
structure with a huge size. One key contributing factor is the Two Pizza Rule. Instituted by
Bezos, the Two Pizza Rule states that no meeting should be so large that two pizzas cannot
feed the entire group. The goal here is efficiency and scalability. Smaller teams spend less
time managing timetables or keeping others in the loop and more time doing what needs to
be done. In turn, each team has access to company resources to meet short and long-term
goals. A product team, for example, can add new product lines without having to meet with
Amazon, a firm that has always been eager on innovations, has adapted a very conventional
Is Amazon ambidextrous?
Today’s competitive and highly volatile environment calls for a new kind of flexibility and
adaptability. At the same time standardization, efficiency and scale must continue to
dominate the CxO agenda in order to deliver against margin and profit expectations.
Companies can be defined as “ambidextrous” when they continuously solve the trade-off
between being fast & creative and scale-driven & productive. As such, they establish an
Tushman, L., 2004). The vast majority of companies focus on either dimension, but those
searching for the most innovative business ideas, it strives to deliver on customers’ needs
before people realize that they require them. This approach is driven by a well-established
culture of invention, curiosity, and bias for action. Complementing its creative side, Amazon
has also proven itself to be a champion of productivity. Not only its logistics, but also its
internal processes for scaling new business models, are tailored for pure efficiency and
8
these two dimensions, Amazon has built a sustainable competitive advantage that has
Amazon is one of the leaders on the face of planet in terms of innovations, yet fast growing,
Organizations can better understand an industry's strengths and weaknesses by using Porter's
Five Forces analysis. Businesses can use it to research their rivals and ascertain the market's
long-term profitability. Five competing forces will be examined in this essay in order to
9
comprehend how competitive Amazon's business climate is. Amazon is the market leader in
the e-commerce sector, and in order to maintain that position in the face of escalating
competition, it must concentrate on building its brand. The business must continually
enhance the client experience by making its e-commerce website easier to use. It offers a
variety of goods and services, including Kindle, Fire TV, Alexa, Amazon Fresh, Amazon
Threat of substitute
Competitive rivalry
but it would be challenging for any company to compete with a monster like
a) Switching Costs: Due to the low switching costs in the market, it is simple to enter
the e-commerce industry and to gain competitors and clients. However, given the
significant investments Amazon makes in the growth of its brand and the customer
with amazon, any other brand would take years of perseverance and billions of
dollars in investment.
10
b) Economies of scale: Due to its position as the biggest internet retailer in the industry,
Although new companies can easily enter the market, they are not likely to be able to
c) Customer Loyalty: Amazon gets the advantage of being the first big player in the e-
commerce industry.
Customers generally have high bargaining power because of the intense competition
not provide its customers with high-quality service at the best price, they will go for
its substitute in the market. It is difficult for any other brand to reach this level. So, it
becomes tough for the buyers to find such level of experience elsewhere.
Amazon competes with substitutes in the online retail as well as with the offline
retail market. As Amazon does not sell unique products, and most of the products are
retail products, so giving the best customer experience becomes a necessity for the
company. And a single bad experience will drive the customers away from Amazon
Suppliers give Amazon the goods it need for its e-commerce operations. Suppliers
have a greater impact on the e-commerce industry since without them, retailers
would be unable to provide for their customers. However, Amazon dominates the
market and has the upper hand over its suppliers. As a result, the external factors
11
revealed by the Porter's Five Forces analysis of Amazon indicate that suppliers have
Amazon competes against strong competitors and, the rivalry in the online retail
industry is high. Because in recent years, the number of players entering the industry
has increased with many retailers, small scale brands, and start-ups are starting to
sell their products online. The main competitors of Amazon are Walmart, Flipkart,
Alibaba, eBay and many more. All these players give intense competition to
Amazon. Low switching cost and readily available substitutes put more pressure on
Amazon because customers can transfer from one to retailer to other at low cost.
So, Amazon invests a large amount of providing high-quality products and services
to its customers and gains advantage on other players. Because no other player in the
market can invest such a large amount as Amazon does. So, Amazon has
consistently retained its position of being the market leader of the e-commerce
industry.
SWOT Analysis
12
Let’s discuss this online retail giant in a little depth and understand the company’s business
a) Strong brand name – As a global e-commerce giant, Amazon has a strong position
innovative additions to its product line and service offerings like ambitious drone
delivery service and Withings Aura Smart Sleep System. This creates a
controls its costs and lowers its inventory replenishment time. The company has
formed numerous strategic alliances with many companies like Evi Technologies,
Thalmic Labs, Shoefitr, The Orange Chef etc. It has a strong value chain system
attracts online customers to make their majority of purchases from it rather than
other online retailers. As of 2021, Amazon has sold 75 million products in its
Amazon.com Marketplace.
13
g) Large number of third-party sellers – Due to the high traffic volume on Amazon’s
sites, a large number of third-party sellers have joined the platform of Amazon to
sell their own merchandises. The data from Fulfilment by Amazon (FBA) reveals
that there are more than 2 billion items available from third-party sellers.
h) Go Global and Act Local strategy – This strategy has benefitted Amazon the most.
Amazon develops partnerships with local supply chain companies that help it in
competing against domestic e-commerce rivals. It understands the local needs and
(AWS), and Amazon Prime are 3 key businesses of Amazon which work and
support each other. As a whole, they generate massive profits and advantages for
the company.
k) Market Leader – With over $1.6 Trillion market capitalization and above $386
billion annual revenues, Amazon is truly a market leader in online retail industry.
logistics and distribution systems. It even has fixed rates for different delivery
time periods. Thus, it executes reliable, secure, and fast delivery of goods and
m) Minimum pay raise to $15 per hour – Amazon is among the first companies in
retail to raise its minimum hourly pay to $15. In comparison, Target pays $12 per
hour, Walmart pays $11 per hour, and Costco pays $14 per hour.
a) Easily imitable business model – Online retail businesses have become quite
common in this digital world. So imitating Amazon’s business model for rival
firms is not so difficult. A few businesses are even giving Amazon a tough time.
These include Barnes & Noble, eBay, Netflix, Hulu, and Oyster etc.
b) Losing Margins in Few Areas – In few areas such as India, Amazon has faced
losses. It’s free shipping to customers can be one of the reasons that expose the
c) Product Flops and Failures – Its Fire Phone’s launch in the US was a big failure
negative publicity for Amazon. President Trump criticized Amazon over taxes on
social media.
This sometimes hinders to attract customers buy things which are not sellable on
online stores.
conditions against Amazon in July 2018. Poor air conditioning, timed bathroom
breaks, and constant video surveillance are few of the negative remarks made by
for Amazon to vet each product and guarantee the highest level of safety. The
15
trust and increases legal risks. Amazon is facing antitrust charges in the European
Union for collecting and using data from third-party to compete against them. If
found in violation, Amazon can be fined up to 10% ($28 Billion) of its 2019
wide range of issues. One of its main distributors (German Logistic Group –
allege that they’re forced to urinate in bottles because of the strict delivery time
schedules and constraints. While the company has denied that they don’t force
their drivers to pee in bottles, some drivers have come forth with complaints.
developing markets.
came into light when Amazon sold a fake My Critter Catcher. The product was
driving start-up Zoox Inc for whooping $1 Billion. It can now leverage
on the environment. With this vision in mind, Amazon plans to deploy 10,000
h) Personalized Shopper Service Hits Big – Amazon recently launched its incredible
personal shopper service exclusively for Prime members. So, if you have an
Amazon Prime subscription, you can opt for the personal shopper experience
giving you access to the company’s team of professional stylists and fashionistas.
They’re going to help you select the best clothing items, accessories, shoes, bags,
wallets, etc., that suit your taste. Remember, there are millions of product options
i) Plans to Enter the Crypto Stratosphere: There are a lot of speculations and
rumours floating around the crypto ecosystem. However, there have been reports
by mainstream media outlets that Amazon does indeed plan to make a move into
cryptocurrency, stating that the company has developed a big appetite for digital
If the retail giant does step into crypto-space and accepts virtual currencies as a
payment option, there will be massive opportunities for small businesses in the
future.
a) Few controversies have caused a dent in Amazon’s brand image. People critically
reacted and boycotted Amazon sites in 2010 when they found that it’s selling the
Conduct.”
some critical countries. Amazon does not ship to Cuba, Iran, North Korea, Sudan,
and Syria.
c) Links to exploitative labour – Amazon is one of three retail giants facing scrutiny
from the US State Department for maintaining supply chains and labour sources
associated with human rights abuses. This exposes the ecommerce giant to
d) Increasing cybercrime can affect the network security system of the company.
e) Aggressive competition with big retail firms like Walmart, Target, Home Depot,
eBay can give Amazon a tough time in the future. In addition, now Amazon
f) Imitation is simple as many new entrants are coming up in the market usually with
Amazon’s profits. The company recently filed a lawsuit against New York-based
online retailer for allegedly counterfeiting Valentino shoes, a luxury Italian shoe
i) Fake reviews – Amazon has an overwhelming number of fake reviews, and the
problem has worsened in recent times due to the pandemic. Product reviews are a
According to the Financial Times investigation, Amazon has deleted over 20,000
lawmakers are on a quest to seek answers from Amazon after a recent tornado hit
company has been heavily criticized regarding poor worker safety policies and
Performance Management
19
The article Amazon as an employer gives a quick insight about the performance
employee performance and loyalty. Former and current employees have associated the
success of Amazon with its corporate culture. The set standard of this company is one that
many companies aim to emulate. The work environment at Amazon is considered high-
pressure and many employees find it challenging to keep up. However, the e-commerce
giant has shown tremendous progress over the years and CEO Jeff Bezos has its company
culture to thank. Amazon’s work culture has earned them the business capacity to meet the
reading somewhere that amazon has a 2-pizza rule wherein a team needs to be small that it
can be fed with 2 pizzas as small teams prevent information loss, has better communication
and is more accountable. Employees at Amazon are prompted to think outside the box. They
are pushed to providing answers and not letting issues hang around. Employees are
encouraged to come up with new ideas and solutions that put a problem to a conclusion. The
company hires talents that monitor the trend and desires of customers as they change over
time. The change in customer demand is duly addressed, helping them gain the trust and
employees are called, the article described a despotic workplace filled with “a pattern of
demands. The more searing anecdotes include a woman pressured to return to work after a
miscarriage, a recent mother being unfairly evaluated and edged out, and an employee
The financial growth at amazon has various metrics.’ Our average starting hourly wage is
$18 per hour—more than double the federal minimum wage—for full time, part time, and
seasonal employees and contractors. In addition to fair pay, employees have opportunities to
own Amazon stock, participate in 401(k) plans with company match, and enrol in paid life
and accident insurance. Financial counselling and estate planning services are also available,
upskilling programs for employees and pay for college tuition fees for front-line employees
amazon. The organization functions like a start-up. Amazon positions itself as one of the
most customer-centric companies in the world. Amazon vision statement is “to be Earth’s
most customer-centric company, where customers can find and discover anything they
might want to buy online.” High level of customer- centricity is one of the cornerstones of
processes and procedures. Valuing diversity among the workforce is also placed at the core
Some readers and former employees called the retailer a workplace bully. But others came
to Amazon’s defence, notably some existing employees. Many commented on the thrill of
working in such a fast- paced environment, on how much they learned in a short time, on
how grateful they were to be pushed to excel, and on the pride, they felt achieving
Summary
There are mixed opinions about Amazon’s Leadership policy. While some of the policies
are widely regarded as great, some other have always been questioned. For example, the
ultimate customer centric policy of Amazon was the key behing it's huge success. They have
21
always been open to innovations and the failures in the way of building something new.
These things are pretty much appreciated by the whole world. At the same time there are
principles which are on the point of criticism at least for some. Unlike many existing IT
firms, Amazon is not that keen in caring about the employees. Amazon's principle is clearly
based on customers, which in one way, lead Amazon to such a giant, but a gray shade in
their culture.
But no matter what, no one has a question the effectiveness of the policies of Jeff Bezos's
Our team believes that for a leadership to be successful, the vision of the leader and his
approach to translate that vision to reality are important. He must be a mix of pragmatic,
democratic, a strategic thinker who can analyse and respond to the external and internal
forces with the ability to make the right decisions at the right time. When it comes to his
should be an active listener who can communicate clear messages with clarity.
22
References
https://research-methodology.net/amazon-leadership-visionary-leadership-focusing-
customer-service-2/
https://topicinsights.com/leadership-management/jeff-bezos-leadership/#:~:text=Jeff
%20Bezos%20is%20widely%20recognized,the%20vision%20for%20the
%20organization.
3. Would Your Leadership Style Fit at Amazon; Mark Murphy; August 18, 2015.
https://www.forbes.com/sites/markmurphy/2015/08/18/would-your-leadership-style-
fit-at-amazon/#5d1674c3ebef
4. 9 Shocking anecdotes that reveal Jeff Bezos’s Cutthroat management style; Aine
https://www.inc.com/business-insider/amazon-ceo-jeff-bezos-leadership-
management-style-work-culture.html
5. Jeff Bezos Built Amazon 27 Years Ago. He Now Steps Down as CEO At Critical
https://www.npr.org/2021/07/05/1013166252/jeff-bezos-built-amazon-27-years-ago-
he-now-steps-down-as-ceo-at-critical-time
2022
https://fourweekmba.com/amazon-organizational-structure/
23
2022.
https://research-methodology.net/amazon-organizational-structure-2-2/
https://www.adlittle.com/en/insights/prism/ambidextrous-organizations-
%E2%80%93-how-embrace-disruption-and-create-organizational#:~:text=Amazon
%20is%20a%20prime%20example%20of%20the%20new%20breed%20of
%20ambidextrous%20organizations.
https://blog.grovehr.com/amazon-company-culture
10. The significance of Amazon's work culture — and how the Times article may impact
https://www.retaildive.com/news/the-significance-of-amazons-work-culture-and-how-
the-times-article-may- i/404192/
11. https://www.aboutamazon.com/workplace/employee-benefits