Case Study Analysis 3
Zappos CEO Asks Employees to Commit to Teal, Or Leave
SYNOPSIS OF THE CASE
This case study focuses on relevant information related to the origin of Zappos and the comprehensive transitional stages which were implemented by the management to change the organizational structure. The comprehensive transition was carried out from the change in the hierarchy to the reporting structure as well as compensation and performance appraisal. The transition was also made in capturing data related to employee grievances. The case study also discusses the advantages and disadvantages associated with a new organizational structure which is called Holacracy. The article also emphasizes the possible after-effects of transition which includes attrition. It means how the company is being received now in the job market after the chief executive officer’s controversial memorandum. The final chapter of the case study is focused on other significant changes which were related to the chief executive officer of Zappos. This recent change related to the chief executive officer of Zappos contributed towards another significant stage of attrition from the employees working in the organization. A sense of mismatch in the organizational culture was Experienced, and mismatch related to governance and hierarchy was also experienced due to recent changes related to a chief executive officer of Zappos.
Tony Hsieh was associated with the company as a co-chief executive officer and later on, was promoted as chief executive officer of the company at the end of 2000. Jeff Bezos, Amazon successfully acquired Zappos for approximately a total of 1.2 billion US dollars in 2009. It was originally known as shoesite.com and was formulated by Nick Swinburn To capture the market of online shoes in 1999. Tony had a slightly different point of view related to management and policy implementation at Zappos. Due to his different management style, he was able to implement different organizational changes during 2012 and 2013 to shift the organizational culture at Zappos.
After reading the article, one can suggest that there were two transitions in the organizational culture of Zappos. A significant amount of organizational culture was experienced by the company during 2012 and 2013. Major organizational culture changes are due to the introduction of Holacracy in organizational structure. It is considered to be a new organizational structure that can influence the operating mechanism of the organization. Hitler’s responsible for influencing the hierarchy, reporting structure, performance as well as compensation appraisals, and techniques related to capturing data associated with employee grievances. According to the theoretical aspects of this new management style, it was based upon decentralized reporting and democratic decision-making systems. It suggests that no employee working in the organization will have any specific Boss. Employees working in the organization will work, and different groups and teams and they will be able to Transit between different teams and Groups if they believe that they are a better fit in another group or team. One of the most significant disadvantages of this new type of organizational structure is that it creates Chaos in the organization and is considered to be a time-consuming activity. After the implementation of this new organizational structure, their but different significant ambiguity is associated with performance appraisals and reporting structure. Due to this fact, this new organizational structure and management style contributed to an enhanced level of Bureaucracy and hierarchy at the ground reality within the organization.
After the implementation of the first transition associated with change and organizational culture, the chief executive officer wrote a memorandum related to the new organizational structure Holacracy. In 2015, the chief executive officer of the company of the employees working in the organization severance pay of Almost three months if they do not like to work with the new organizational structure. With the implementation of this memorandum, approximately 14% of overall attrition was observed at an organizational level. During the second stage of the transition, the chief executive officer of the company implemented a new organizational structure which is known as TEAL. This new organizational structure is based on the basic principles of self-governance and management. Chief executive officer of the company continually repeated that same prodigy during the second transitional stage of organizational culture in 2015 will be used in which employees who are asked that if they do not like to work under TEAL organizational culture, then they can leave the organization with severance pay. With the implementation of this new strategy, approximately 29% of the employees working in the organization left the organization as they were not happy with the organizational structure.
PROBLEM # 1
The first problem in this case study is that there was a significant amount of inefficiency during the decision-making process in the organization. Senior management did not involve Middle-level managers during the decision-making process.
Cause of the Problem # 1
One of the most significant reasons behind inhibition decision-making system was that the top-level management made decisions without proper analysis and consideration of facts and figures (Nelson and Quick).
Solution for the Problem # 1
To resolve such scenarios and issues, it is important for the top-level management is to make decisions after conducting proper Research and after analyzing Facts and figures properly. It is also important for the top-level management to include mid-level managers in the decision-making process as such decisions are associated with the performance of the company (Champoux).
PROBLEM # 2
The second problem is lacking pilot testing implementation of the top-level management during introducing new organizational structure in the organization.
Cause of the Problem # 2
Management was not able to properly analyze the influence of new organizational structure for actually implementing it in the organization. It is important for the management to study relevant organizations in which such organizational structure has been already implemented to analyze its influence on the company’s performance (Aquinas).
Solution for the Problem # 2
It is important for the top level management to conduct proper pilot studies and to test to implement any new change in organizational structure. Implementation of pilot studies will not only help the organization to study the influence of new changes in the organization, but will also help to analyze the influence of new changes on the performance of the organization.
Nowadays, different research organizations provide outsourcing services in which they research on behalf of different organizations. This service can be availed in which research can be outsourced to a specialized research-oriented organization. It will help the organization to analyze the influence of new changes before implementation effectively. It will reduce the turnover ratio of employees working in the organization. It will ultimately reduce the training cost of employees as well because the reduction of turnover ratio will reduce training cost associated with employees in the organization (McFarlin and Sweeney).
PROBLEM # 3
The third problem of the organization was lack of transparency in the work environment.
Cause of the Problem # 3
The lack of transparency in the work environment was mostly because top-level management was following the strategy in which they did not involve the middle-level managers. Implementation of top to bottom level strategy always helps the organizations to involve all levels of managers in the decision-making process (Nelson and Quick).
Solution for the Problem # 3
Different techniques can be implemented to enhance the transparency level at the workplace. One of the most significant techniques is that company management executives should be focused on making changes which are more transparent so that the middle level and low-level employees working in the organization could stay motivated. With the implementation of transparency in the work environment, Productivity and motivational level of employees working at every level of the organization is positively influenced. That is why it is important for the organizations to have proper transparency in the workplace despite the size of the organization or age of the organization (French).
Another significant technique which can be implemented to enhance the transparency level at the workplace is providing access to information to employees working in the organization. A delegation of authority and empowerment to employees in making different decisions positively influences the transparency level at the workplace. Open communication and Timber should be encouraged throughout the organization, and it will positively contribute to the transparency level prevailing in the workplace. Making sure that employees commit to their goals is important. This culture will help to bring transparency to the workplace (Champoux).
Work Cited
Aquinas, P G. Organizational Behaviour: Concepts, Realities, Applications and Challenges. 2. New Delhi: Excel Books India, 2006.
Champoux, Joseph E. Organizational Behavior: Integrating Individuals, Groups, and Organizations. 5. New York: Routledge, 2016.
French, Ray. Organizational Behaviour. 2. Trento: John Wiley & Sons, 2011.
McFarlin, Dean B and Paul D Sweeney. International Organizational Behavior: Transcending Borders and Cultures. 1. New York: Routledge, 2012.
Nelson, Debra L and James Campbell Quick. Organizational Behavior: Science, The Real World, and Yo. 8. Cengage Learning, 2013.
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