Essay on Amazon and Leadership Profile
Number of words: 3126
Introduction to Amazon and Leadership Profile
Established in Washington in 1994, Amazon.com Inc launched its Amazon.com site in July 1995 transforming into the world’s largest digital retailer in under twenty years. Between 2016, 2017, and 2018, the digital retailer cum cloud computing giant recorded an operating revenue of $4.2 billion, $4.1 billion, and $12.4 billion (Amazon, 2020). The organization is listed fourth among the most valuable brands on Forbes, boasting a networth of $97 billion, while BrandZ ranks Amazon.com as the world’s most valuable brand valued at $315,500 billion. The e-retailer mogul has about 647,500 employees both full-time and part-time it calls Amazonians (Amazon, 2020). The company announced its devotion to four values, including an obsession for customers instead of focusing on competition, an appetite for invention, an obligation to excellence in operations, as well as long-term thinking. It is these philosophies that maintain Amazon at the helm of the competition curve.
Amazon.com employs a business strategy that could be defined as a combination of business diversification and cost leadership. Likewise, the e-commerce retailer profits from supporting communication throughout the various aspects of its ecosystem whilst promoting its leadership principles highlighted in this report (Amazon, 2020). Amazon blends rationalist, visionary, and autocratic leadership styles throughout its hierarchical organizational structure. Still, the organization remains flexible in terms of adapting to constant changes in the exterior market conditions as embodied through its organizational culture founded on the philosophies of consciousness to costs, relentless reinvention, plus improvement of the business culture, including customer obsession (Andre, 2017). As with any successful enterprise, Amazon has a few major weaknesses such as the seasonality of the trade, minimal profit margins, as well as non-existent focus on specific product categories. In addition, the Amazon Fire Phone has a weak competitive position and harm to its brand image owing to the UK tax avoidance scandal could qualify as some of its weaknesses.
Current Amazon Leadership Styles Relative to Covid-19 Crisis Management
In terms of leadership style, Amazon has been found to employ pragmatist approach. According to Murphy (2016), pragmatist leaders are known for setting standards that are very high and boldly expecting attainment of such standards by themselves and workers (Murphy, M. (2015). Jeff Bezos, Amazon’s founder and Chief Executive Officer, is both a proven and accomplished business leader. He efficiently blends the application of both innovative and servant-based leadership styles with exceptional service to customers at the core of Amazon’s business culture. Yet again, the style of leadership espoused by Bezos is distinct in numerous ways. A good instance is advanced by Blazek (2016), who notes that unlike other e-commerce firms that focus on a fun, easy atmosphere for workers, no-nonsense Bezos is demonstrating the efficacy of another leadership model, charming his 164 million customers instead of his 56,000 workers.
The ethos of contingency theory of leadership could be used to analyze the leadership style of Jeff Bezos. As advanced by McKenzie and Love (2016), the contingency leadership theory is where the effectiveness of a leader depends on how their style of leadership fits the situation. In that regard, Cain (2017), characterized the leadership style of Jeff Bezos as strict, fierce and demanding, which can be claimed was a perfect fit for the organization’s starting condition, when it had to solidify its presence in the rapidly growing industry. The leadership principles envisaged on the official organizational website comprises elements: obsession for customers; ownership; innovate and simplify; leadership autocracy; learning and discovery; employ and nurture the finest; no-compromise for high standards, thinking big; action biased; frugality; win confidence; dive deep; be resilient; disagree with commitment; as well as deliver results.
Similarly, the firm’s has a Board of Directors comprising 9 members, each defined by their extensive experience in business leadership across multiple industries. To support the executive are three committees, consisting of the Audit Committee, Nominating and Corporate Governance Committee and Leadership Development and Compensation Committee. While this leadership style has been effective in managing the organization’s operations thus far, it can be argued that it is not sufficient in managing the current Covid-19 crisis. To begin with, the company has come under sharp criticism for non-promotion of workplace diversity and inclusivity. To be precise, Kim (2019), notes that nearly all the top leadership at Amazon’s consumer-facing operations, such as hardware, retail, and cloud, are solely white men, with only four out of its forty-eight top executives being women. Consequently, its leadership faces the tough challenge of sustaining the business given the present slim profit margins. To date, Amazon has handled handling the problem by innovation of processes, leveraging maximum human resources benefits, and constantly venturing into new business niches.
In view of the above, I would recommend transformational leadership, adaptive leadership style, and situational leadership style as discussed in the next section.
Leadership Styles Adaptable to Amazon
Adaptive Leadership Style
Hitt and others, (2001) define leadership as the ability to foresee, envisage, maintain flexibility, while empowering others to create necessary strategic change. Having seen the image that image creates, it is easy to recognize why it is one of the most intrinsic aspects of an entrepreneur. According to Peter F. Drucker, named the father of modern management, in his work advanced that a businessperson always looks for change, acts in response to it, and explores it as an opportunity (Drucker, 1985). Looking at the common denominator between leadership and business management, it can be deduced that bringing about change is the method applied in both scenarios, often using an innovative approach (innovative/adaptive leadership) to realize their goals. The Schumpeterian perspective on creative destruction is an appropriate reference to this. In his advancements, Joseph Schumpeter notes how situations arise during creative destruction where many organizations may have to die that otherwise would be able to thrive vigorously and practically if they were able to withstand a particular storm (Schumpeter & Swedberg, 2003). As such, Amazon can continue surviving the current Covid-19 crisis that comes with numerous restrictions by constantly adapting to the changes that the virus continues to pose to business operations.
Transformational Leadership Style
Drawing from the above leadership content, a leader should have the capability to adapt through the entire change process, creation, as well as whenever necessary to transform the organization, which explains a transformational leadership style. Thus, to sustain control and balance as is the case with Amazon’s small profit margins, it means taking the appropriate steps in the process of making decisions. Similarly, in such situations, the leader should be ready to employ all of the available resources with rational usage (Puiu, 2016) while motivating their subordinates to their best possible potential. As such, it can be concluded that a leader requires specific traits for the to perform better.
However, before analysing the traits of a decent leader, it is vital to consider the multiple styles and approaches to leadership. Checking diverse academic sources, we encounter James M. Burns, who is famed for his prowess in leadership studies. He categorized leadership in two opposing groups in 1978 to include transactional and transformational leadership (Burns, 1978). In the first category, we have transactional leadership style whose leaders try to establish a form of cooperation with his followers basing on an exchange while monitoring this relationship as it grows. On the opposite side is the transformational style of leadership whose proponents encourage and inspire their followers to see beyond individual self-interest so as to realize a greater vision (Gao, et al., 2020). In respect to this, the Amazon Fire Phone which has a weak competitive position could see a resurgence of the product by redefining the phone to meet the changing needs of consumers in the telecommunications industry.
Situational Leadership Style
Leaders should be flexible and seamlessly switch between leadership styles to satisfy the dynamic demands of the organization and employees. It means that a good leader should when and how to switch their leadership style to match every situation. Today, leaders cannot afford to lead exclusively by asserting power. Instead, as advanced by Kloefkorn (2017) in his definition of situational leadership, they need to adapt to different styles based on the organizational, employee, and environmental circumstances. To support this perspective, Singh and others (2013), advance that some leaders have used the organizational agility strategy to cope with the need to implement constant change, defining the agility strategy as a blend of suppleness, litheness and speed, while Saha (2017), adding that it enables them to prevail and realize their competitive lead. Roux and Härtel (2018) illustrate how this approach has led to higher levels of success through a study done by the Massachusetts Institute of Technology showing that agile organizations created revenue 37 percent quicker and produced 30 percent more profit compared to less agile ones. The authors further underscore the benefits of applying a leadership style that promotes initiative throughout the organization while behaving like a leader to realize optimal potential. Through applying situational leadership, Amazon could reverse the harm to its brand image owing to the UK tax avoidance scandal.
The Role of Agile Leadership Strategy in Managing the Impact of Covid-19 at Amazon
With the rapid transformations in technology, regulations, market demand, as well as exterior trends, it is vital for organizations to have responsive strategies that allow them to quickly adapt by encouraging faster innovation than their competitors. Salo (2017), states that organizations are more likely to achieve their goals by encouraging close relationships with their clients and adjusting to shifting conditions through team structures that are flexible and agile. Not only are agile teams small, but also comprise of multidisciplinary employees whom, according to Rigby, Sutherland, and Noble (2018), are workers in job groups outside of their own and usually comprises technology-based and non-tech workers disintegrate huge, multi-faceted issues into controllable modules while building solutions for individual elements before being incorporated into a detailed whole.
In managing the impact of the pandemic, Amazon has incorporated a lean “two-pizza team” model, helping it keep close contact with the customer, keep off distractions or conflicting interests, and to be quick at making decisions (Galetti, Golden III, & Brozovich, 2019).
The model is founded on the idea that no team should exceed the size of what two pizzas can feed, which about six individuals. In that regard, Amazon has empowered small teams to innovate solve problems on their own, which has helped it to withstand the Covid-19 storm. de Rond (2014) offers a pertinent practical reference to the above perspective through studies to show that smaller and agile teams often comprising between four and six workers are more innovative and make quicker decisions relative to larger teams. Steiner (1972) attributed the plus side of smaller teams to higher drive and impetus levels among employees along with improved coordination. Supporting Steiner’s claims is de Rond (2014), who found that motivation among employees drops as the team gets larger and they feel less responsible for the output. Still, Mueller (2011) advances that larger teams come with more coordination because it involves mastering information gathering in an organized and efficient way. Taking cognizance of the drawbacks of larger teams, Amazon’s two-pizza team incorporates agile strategy to manage the effect of the coronavirus crisis through being engineered to allow for the most efficient workflow using small, closely joined groups of employees.
In order to fathom various features and outcomes of organizations taking advantage of agile teams,
McKinsey & Company did a study across multiple full-fledged companies, industries, and sizes. Over 80% of respondents in the study leveraging agile organizational structures created novel products and services through establishing close contact with their target customers as well as quickly field-testing fresh ideas and prototypes to collect information and speedily augment the product. Agile organizations were 1.5 times more likely to record better financial performance than and 1.7 times more likely to perform better than their competitors in terms of nonfinancial aspects.
Leaderships Styles for Adapting Amazon to Current Covid-19 Pandemic
As a leader at Amazon, I would look to acquire democratic leadership skills to deal with the current and potential challenges and to lead the organisation towards achieving sustainable competitive advantage. Since democratic leadership brings everyone on board using a participatory process, a democratic style often goes together with participatory leadership style because there has to be collaboration between the leadership and their followers or those they guide (STU Online, 2018). John Gastil is a Penn State University professor who is well known for his works in democratic leadership. In his 1994 article, he offers one of the most clear definitions of democratic leadership as, “Distributing responsibility among the membership, empowering group members, and aiding the group’s decision-making process” (Gastil, 1994). Thus, one conclusion drawn from this perspective is that a participative or democratic style of leadership places substantial responsibility on both the leaders and their employees. To achieve such levels of cooperation between leaders and employees, several leadership skills are required on the part of the leader. Effective communication and interaction are integral to granting everyone a chance to express their ideas and thoughts. Nurturing the ability to trust and respect all ideas would also help team members to feel that they are trusted and respected by all as they participate in an all-inclusive decision-making process. Since creativity and innovation are part of an employee’s role, I would ensure every worker gets time for creativity and innovation. Last but not least, competence and fairness are essential skills that would enable a leader solve any uncertainty.
Studies done through the wide and topical leadership field provides a long-standing business culture. It is an area that entails various styles and multiple different approaches (Toma, et al., 2019). As the world transforms rapidly and with it posing new challenges to the business environment, organizations, firms, researchers, institutions, as well as stakeholders are faced with a simple yet intricate problem of finding appropriate solutions to address these challenges with adaptability at the core plus the right employee for the job. From the perspective of leadership, the principal concept in this paper, one method that is coming out as efficient is the identification and fitting the right employees to the context of the organization so that their roles would enhance the work of the company. One way to go around this issue is gaining awareness of the fact that there are multiple approaches an organization can use to tackle new challenges such as the current Covid-19 global crisis.
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