Stephen Hill MBA522 Zappos
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Zappos Company Culture
1
Case Study 14.1: Zappos’ Organizational Culture
Neck et al. Chapter 14
MBA522
Stephen M. Hill
Park University
September 27, 2020
Zappos Company Culture
2
Co-CEO and Culture of Zappos
At the time when Tony Hsieh became co-CEO, Zappos had already established their name in the market by reaching $1 billion in sales in their eight year of operation and gaining the
reputation of being one of the most successful online retailers in history. Hsieh had a goal when he joined as co-CEO to develop his “dream corporate culture” that had a people-centered management style (Neck, 2019). Hsieh had previously built a company and sold it to Microsoft in 1999 and he sold it because he realized that he had built a company and hired employees based on how good they were at their job. Hsieh realized that his company LinkExchange didn’t
have a corporate culture and Hsieh saw this as an opportunity to make Zappos everything LinkExchange wasn’t. Neck stated that there are two main components of culture which are observable and unobservable culture, and Hsieh wanted to establish a foundation at Zappos that would impact the company in both of those areas. Hsieh wanted Zappos to be know as a customer service company that just “happened” to sell online merchandise (Neck, 2019). Happiness was a theory that Hsieh says that the company strives to provide and took an unorthodox approach to attempting to make his employees and customers happy. Although Zappos wasn’t extremely high on the pay they offered to their employees, Hsieh focused on providing things that he felt would bring his company together and provide benefits that other companies hadn’t yet offered but could be utilized by the employees.
Hsieh believed in giving his employees freedom to be the best representative of the company they cold be, and by allowing his employees to focus on the customer and doing whatever it takes to make the customer happy, allowed the employees to connect with customers and ensure the customers needs are taken care of.
Zappos Company Culture
3
Organizational Culture in Zappos
If we look at the two major functions of organizational culture which are external adaptation and internal integration and evaluate how this are implemented in Zappos, then you have to understand how these functions impact an organization. External adaptation is defined as
how an organization reacts to outside influences (Neck, 2019) which requires the executives of the company to have a strategy, goal, mission, and methods the organization needs to achieve. Hsieh knew from the beginning that he was focused on establishing a culture driven by happiness and focused on customer service and along the way become the largest online retailer. Hsieh had been able to make money with his past company, but the company had no culture. Hsieh knew that he wanted so he had the mission and the goals in mind while helping build the company by helping to establish a mission and vision for the company. Online shoe sales wasn’t
very customer interaction heavy so any contact they had with customers was an opportunity to leave an impression. Hsieh wanted to build his corporate culture around happiness and when he gave his staff the leeway to invest in the customers. Zappos customers often ordered shoes and Hsieh let his employees upgrade their shipping from ground to next day air shipping at no charge. This small action that happened repeatedly spread and this small investment in his customers helped to propel Zappos to the level of financial gain they realized. If we look at internal integration which is defined as the process of creating a shared identity among employees by adopting a common language, group boundaries, which is an accepted distribution of power and status (Neck, 2019). If you examine how Zappos operates this is a good example of internal integration. Hsieh has empowered his employees to make key decisions as it relates to customers and their satisfaction and by giving them a share in this decision shows trust in them along with providing a sense of ownership.
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