Amazon Inc., which started as a small bookselling business in 1994, became a transnational giant by 2018 with almost 50% of all US online purchases. Its renowned founder, Jeff Bezos, became Time’s Man of the Year in 1999 for raising the company’s price per share from $1.96 in 1997 to $81.13 by the moment of being awarded the title and to astonishing $1939 in 2019 (DePillis & Sherman, 2019). Such success and popularity were the result of insightful decisions and a reverent attitude towards consumers and employees of the organization. This paper aims to present Amazon Inc.’s fundamental areas of effectiveness, including leadership, planning, organizing, staffing, and control.
Jeff Bezos as an Authentic and Transformational Leader
Jeff Bezos is an authentic and transformational leader. A businessman always adheres to his ethics and moral principles, which can be traced in a series of organizational decisions. For example, in 2018, Amazon Inc. set the minimum wage for its workers at $ 15 per hour, ahead of the American government. The change affected 250,000 company employees and 100,000 seasonal workers (DePillis & Sherman, 2019). Another ethical decision was acquiring Kiva Systems in 2012, which developed robotic freight carriers, freeing thousands of employees from this hard work. Besides, when Amazon searched for its second headquarters in 2018, Jeff Bezos was determined to find the best accommodations for his employees, including building a campus. The examples show that the company’s management establishes and maintains employee motivation and morale and cares about the organizational culture.
Jeff Bezos is also a visionary leader, as he never deviated from the company’s initial concept of a bookselling operator. It is evidenced by the release of Kindle in 2007, the purchase of Audible in 2008, and the first brick-and-mortar bookstore construction in 2015 (DePillis & Sherman, 2019). It is likely that the company’s employees share its vision and perceive it as an additional advantage of their job. It’s hard to say that the head of Amazon Inc. ever developed and aligned organizational purpose. It looks like this purpose was laid down in the initial business concept and, over time, began to include new goals that arose following the current trends in the markets of books, retail, online commerce, and technology. Therefore, Amazon Inc. never changed its business approach, guided by the company leader’s vision, who always chose sustainable development.
Planning, Technologies, and Innovations
The company’s goals and standards have always been consistent with its management’s strategic vision. An important role was played by decisions related to planning and forecasting when the company took steps to keep up with the markets. Most of the solutions were effective, but some fell short of expectations. For example, the purchase of Joyo in 2004, the largest online book and electronics retailer in the Chinese market, which was renamed Amazon China, did not generate the expected sales growth as Amazon could never match rival Alibaba. The same can be said for the company’s release of the first Fire smartphone integrated with the Amazon universe in 2014, which failed, forcing the company to cease production.
On the other hand, the company has successfully implemented innovative rules and procedures. For example, introducing a technology that allows purchasing with one click in 1999, called 1-Click, determined the company’s subsequent success (DePillis & Sherman, 2019). Another practical decision was to launch a trading platform for third-party sellers, zShops, known today as Marketplace, which brought the company to a new level. In 2004, Amazon launched its hosting web service, which is now one of the company’s leading sources of income, and in 2005 it debuted Amazon Prime, a $ 79 annual subscription to Amazon that includes free shipping on all orders. Another successful innovation was the launch of the Kindle in 2007.
Organizing, Staffing, and Controlling
The company pays less attention to such important internal organizational aspects as organizing, staffing, and control. The leader makes most decisions alone, while ordinary employees are mainly engaged in current work. In this respect, Amazon is different from Google, which places a lot of emphasis on communication channels and employees’ ideas. At the same time, the company has never had a problem with recruiting new employees.
Perhaps due to safe working conditions and high wages, the company maintains high levels of retaining skilled employees. Finally, Amazon adheres to strict performance, quality, and productivity guidelines that align with its strategic vision. However, as the company’s capital turnover and value rise, Amazon is increasingly receiving criticism and calls to become a socially responsible enterprise. In response to these calls, the company recently announced that it will now devote its business to supporting the planetary ecosystem.
Thus, the paper presented Amazon Inc. fundamental areas of effectiveness, including leadership, planning, organizing, staffing, and control. Noteworthy, the most effective decisions were associated with successful leadership and planning. In particular, Jeff Bezos showed himself to be a talented business leader who made reasonable decisions related to the company’s growth and expansion. Besides, innovations in the rules and procedures for online shopping and sales have allowed Amazon to become a true retail giant. The next justifiable step would be to make a series of decisions that will enable Amazon to become a socially responsible enterprise.
DePillis, L. & Sherman, I. (2019). Amazon’s extraordinary 25-year evolution. CNN. Web.