BUSM4557 – Contemporary Management
Amazon has been one of the biggest corporations that offer online retail shopping services to customers across the world. The company was established by Jeff Bezos in 1994, initially started as an online bookstore (Amazon n.d.). Between 1996 and 1997, the firm experienced a considerable surge in the company’s profits, from around $15.7 million in 1996 to approximately $148 million in 1997, which was a nearly ten-fold increase (Wilhelm 2017). Over the past decade, it has gradually become the leader and dominated the online retail industry, mostly thanks to impressive technological adoption. However, behind a significant reputation, it is suggested in the case study that Amazon has been grappling with some severe problems that may pose a negative impact on the operation of the firm. As a result, this essay is commissioned to analyze the contemporary issues confronting Amazon and offer some optimal solutions for Amazon to eradicate the issues. There are four contemporary issues that will be further discussed in this paper, including perceived age discrimination, beuracratic leadership, ineffective performance management, and high stress in the workplace. This paper also discusses why failing to address the issue may yield unfavorable conditions for Amazon.
II> Issues and its Implications for Amazon
Issue 1: High stress and burnout in the workplace
The company emphasizes on the “always-on” culture, in which employees have to remain connected 24/7, engage in 80+ workweekes, and cannot take vacations. Moreover, white-collar employees have to absorb 50-60 pages of reports during meetings.
Such unrealistic working standards have made it difficult to maintain a high level of work-life balance, leading to a sharp drop in their performance and increasing level of stress and burnout. Tensions and associated health issues may arise if demands at work intertwined with personal lives (Abendroth & Den 2011). A large number of employees is willing to take a proportion of their time at work and place it into spending time with their families (PWC 2013). Being overloaded in work may decrease their internal motivation to work and may gradually lose essential capabilities to be creative and innovative, resulting in damaging consequences to compete with other rivals. Moreover, as parents can be emotionally and mentally exhausted due to high work demands, they may fail to properly perform their family roles and responsibilities. This may lead to higher absenteeism at work, inhibiting the workflow of the organizations.
Since employees are considered a major element in gaining competitive advantage, failure to address this issue may pose a threat to employee engagement and motivation. As employees are vulnerable to the heavy workload, they are not passionate to come to work and go extra miles with the firm.
Issue 2: Poor performance management
Amazon adopts a “Rank and Yank”performance management, in which employees at the bottom are terminated on a yearly basis. Moreover, employees are at higher risk of job termination if they go to toilet breaks and have higher off-time work. The best explanation for this problem is that blue-collar employees are measured based on the number of boxes they pack per hour (Spicer 2015).
“Rank and Yank” system is an unfair approach, forcing employees to work at unacceptable rates and promoting “an unhealthy cult-of-star culture” (Grote 2005). Employees in Amazon may develop a competitive work environment, where each individual expects to degrade their peers and let himself or herself up. This toxic environment may make employees less likely show happiness when they come to work because they may have to compete with other individuals. This unhealthy culture may also pave the way for unethical behaviors in the organizations, inflicting constant conflicts in the firm (Shirey 2009). Moreover, as automated tracking systems are implemented in Amazon, it may not be effective because these results focus solely on the tasks, not the time individuals spend. This in turn treats employees like robotic workers and requires them to constantly pack the boxes without the breaks. These tracking systems do not value the efforts of the employees, leading to the ineffectiveness in the performance management system.
If Amazon cannot address this issue, it may create a bad reputation for the firm. As a result, it may take more time and effort to attract and retain high-skilled workers to the company as they may not be willing to work and engage in such an unhealthy work culture.
Issue 3: Bureaucratic leadership
It is clear from the case that Amazon has failed to foster a positive working environment for its employees. It cannot deny that this negative culture began with the leader of Amazon himself – Jeff Bezos. As Jeff is the founder and CEO of the firm, his personality and beliefs have been closely connected to the values and the company’s operation. The most evidence is that he encouraged employees to keep their ideas for themselves.
It is clear that Jeff Bezos adopts a bureaucratic leadership style in Amazon. Delbecq (1963) points out that the bureaucratic leadership style requires the workers to follow specific rules and guidelines created by the supervisors. In Amazon, all of the workers are forced to follow Jeff’s working approach to help Amazon become the best retailers in the world. There are several characteristics that define bureaucratic leaders, which are task-oriented, great power, and dehumanization (Quasi 2015). Despite the advantages, Hersey and Blanchard (1982) illustrate that the presence of bureaucratic leadership impedes individual creativity as it does not require workers to devise and formulate new ideas, which may lead to innovation. In Amazon, workers do not seem to have a chance to speak up their opinions, but just follow what is given to them. As a result, this is a detrimental force because it may culminate in a decline in employee motivation and their engagement in work. Sigh (2013) indicates that this leadership may have an adverse effect on the productivity and performance of the firm because it is not responsive to change. To ensure high workflow and consistency, bureaucratic leaders set out specific guidelines and limit the boundaries for the employees. To avoid punishments, workers in Amazon have to follow a standardized process that works the same from time to time. Due to the increasingly changing work environment, this may be a major obstacle to adapt to different situations in the industry, leading to a dramatic drop in the firm’s performance.
Hence, if Amazon fails to address the issue, it may adversely affect its operation in the long-term because it only focuses on the CEO and neglects the negative influence on individuals in the company. Individuals cannot stand this inappropriate organizational behaviors. This may lead to higher turnover rate, giving rise to additional cost to replace vacant positions in Amazon.
Issue 4: Perceived Age Discrimination
Another issue facing Amazon is associated with the percevevied age discrimination. A huge number of senior workers believe that they will soon be replaced by a younger workforce. They point out that the younger generation may gain more energy and have fewer commitments to stay longer with the organization.
The notion of percevied age discrimination is directly connected to high job insecurity in Amazon. From his research, Montenegro (2007) indicates that approximately one-fourth of the people whose age fall between 45 and 55 are concerned that they may become unemployed in the next twelve months. The idea of job insecurity may likely arise in the case of organizational change and layoff periods (Hellgren & Isaksson 1999). As a result, it does not come as a surprise that the feeling of job insecurity may pose a negative impact on employees’ mental health and other detrimental consequences (Hellgren & Sverke 2003). Workers who feel that they are about to lose their jobs may demonstrate a high level of depressions and perceived anxiety. Without social support and organizational assistance, it may greatly affect their job satisfaction and also work behaviors, which are two important elements in organizational success. In such a competitive workplace environment like Amazon, older employees may gain a sense that they are less compatible with these positions than their counterparts, mostly due to their skills and innovative ideas.
This is a vital issue that need urgent reponse from Amazon because high perceived age discrimination has an unfavorable impact among employees in their affective commitments in the business (Snape & Redman 2003). They are more likely to become less attached to the organization values and missions. This issue may further enhance work tension, which may make it more difficult to show impressive performance.
Solution 1: Adopting inclusive leadership
To better deal with the perceived age discrimination and bureaucratic leadership, it could be effecitve for managers in Amazon to adopt inclusive leadership style. Inclusive leaders seek to strengthen diversity within the teams and bolster individual capacity when coming across uncertainty and threats (Hollander 2012). Inclusive leadership pays attention to facilitating relationships between employees and managers, retaining mutual benefits for both sides. With the nature of inclusion, this practice seeks to achieve great things with the people rather than ruling them out in the decision-making process. Espedido and Bourke (2019) believe that this is accomplished by building an environment in which employees feel that they are being treated fairly and with considerable respect from the management team. Since leadership style is considered the antecedents of high job insecurity (Avolio et al.2019), altering leadership style may eradicate uneasy feelings among senior leaders. Inclusive leaders may take cognizance of perceived biases as a heavy burden preventing organizations from making effective decisions. Leaders may understand that perceived biases may exert a negative impact on embracing diversity and inclusion, which are detrimental to organizational success. On the other hand, inclusive leadership may affect employee self-efficacy (Fang 2014). As managers in Amazon keep an eye on addressing the employees’ needs and seek to promote communications between managers and subordinates (Fang et al.2019), employees are more likely to become more confident and optimistic toward their work. When employees recognize that their leaders are open-minded and accessible, team members are not hesitant to seek feedback by talking directly to them. Hence, all of them may be able to work hard and achieve collective goals for the sake of the company.
Solution 2: Building a healthy work environment
The first step in facilitating a healthy workplace is to offer flexible working arrangements for employees to achieve favorable work-life balance. The primary goal of this policy focuses on allowing employees to have flexible working hours, seeking reconciliation between professional job and non-professional aspects of their lives (Felstead et al, 2002). This could be an effective way in solving the high amount of stress facing the employees in Amazon. A decline in the work hours may pose a positive impact on the employees, minimizing staff turnover, giving rise to a boost in productivity (Glass & Estes 1997). Employees can benefit from a variety of choices, better work flexibility over high work demand. These new arrangements may reduce considerable work pressure and solve work-life conflict among employees. When employees gain control over their work schedule, it may increase their organizational commitments, higher job satisfaction and employees’ retention.
The second element in building a healthy workplace is to offer physical fitness areas for employees after a long day of work to better develop their well-being. Fang, Huang, and Hsu (2019) point out that the implementation of these programs are attractive approaches to reduce the risks of several stress symptoms and decrease work stress among workers. This is a great way to transform the physical and emotional exhaustion into positive energy, helping to drive stress and burnout away.
Solution 3: Building data-driven management system
The company should eliminate the “Rank and Yank” system and replace this approach with a data-driven performance system. The data-based performance management system is an approach in which the business utilizes data to come up with important decisions Brynjolfsson & McElheran 2016). This can be done by arranging various weekly meetings with a group of workers to evaluate their performances. Building a data-driven culture may make great strides in foster collaboration among team members. After that, team members can give valuable feedback to their peers regarding their productivity and performance at the workplace. Moreover, this is an acceptable performance standard, in which employees can focus on completing their tasks without worrying about the risk of dismissal.
Despite numerous success, Amazon is confronted with some contemporary issues to become successful in such a competitive environment. To deal with high work stress and burnout, it is crucial to design a healthy workplace by facilitating flexible working arrangements and offering physical fitness programs. Moreover, it is vitally important to adopt inclusive leadership to better overcome perceived age discrimination among senior employees and the bureaucratic and hostile approach by the CEO. It may also be effective to follow a data-driven performance management system to enrich the decision-making process. Addressing these issues requires the management team to divert more attention to the employees and value their inputs to enhance its long-deserving reputation.