Amazon was founded in 1994 by Bezos, and the website Amazon.com came active in July 1995. “Amazon is an American global technology company that emphasises on e-commerce, cloud computing, digital streaming and artificial intelligence”. (Amazon Report, 2018). Amazon.com is known for its interference of established ventures in technological development and mass scale. (Furth and John 2018). Amazon originally began as an online marketplace for books, and advanced to sales of electronics, software, video games, apparel, furniture, food, toys, and jewelries (Amazon Report, 2018). Amazon.com, gives online retail shopping administrations to four vital client sets; consumers, sellers, enterprise, and content creators.
Amazon also renders marketing and promotional services, such as “online advertising, and co-branded credit card arrangements”. It serves customers through its retail sites with an emphasis on selection, price, and convenience (Forbes, 2019).
Amazon’s Ceo Jeff Bezos proficiently exert visionary and servant leadership styles and puts exceptional customer service at the fundamental of Amazon’s business practice (Murphy 2015). Amazon’s corporate culture drives its staff to go beyond usual limits and conventions to develop bright ideas and solution, that fosters innovation and creativity. Amazon adheres to four principles: customer obsession as competitor focus, passion for innovation, commitment to operational greatness and long-term brainstorming. The outlined principles drive innovation and creativity at all levels of the company and result to Amazon’s competitive advantage. (Amazon Report, 2018).
The Corporate Entrepreneurship Audit
Kuratko and Morris, (2018) identified that businesses often have difficulties with proper strategies to initiate innovative activities among employee in a world that has entrepreneurship and innovation as its catalyst. Burns, (2013, p. 468) proposed that Corporate Entrepreneurship Audit enables organisation’s design to be estimated against ‘best practice’ in the industry. Corporate Entrepreneurship Architecture is comprised of four components: leadership, culture, structures, and strategies. The assessment of an entrepreneurial orientation of an organization can be done with the Corporate Entrepreneurship Audit (CEA). Based on the CEA, Amazon leadership score was 88%. Subsequent sections debates Amazon’s leadership and its influence on the other component of the corporate entrepreneurial architecture.
Figure 1 Amazon Corporate Entrepreneurial Audit Assessment (Burns 2013)
Amazon.com Leadership
Leadership style and organisational structure has been talked about regularly by most researchers and results demonstrated that leadership style has a meaningful relationship with the organisational performance (Wang et al. 2010).
Burns (1978, cited Fulop & Linsted, 1999) argues and distinguishes between leadership approach of the prior and now, and calls it from transactional to transformational leadership style. While transactional leaders see change as a treat, transformational leaders embrace change. (Bass, 1985;1988).
Leading Amazon.com Through Transformational Leadership
Arguably, Jeff Bezos competently exihibit visionary and transformational leadership styles and puts exceptional customer service at the core of Amazon’s business practices. (Investors Archieve, 2018, 27:45). Jeff Bezos believes that data changes regularly as such accepting change is inevitable, and he sometimes reanalyses or reevaluates a situation prompting him to change his decisions. (Dan Croitor 2017, 3:18). Jung, (2001) also identifies that organizations cannot be innovative without a leader open to change, he further explained that leadership changes personal values, business decisions and concepts of the workers to inspire them to higher level needs and aspirations and termed it transformational leadership. Similarly, Burns (2013, ch.3 p.79) supports that an entrepreneurial organization must be able to constantly challenge its dominant logic and be able to change it quickly. This justifies amazon as an entrepreneurial organisation.
Amazon leadership style is transformational and is based on four principles: customer obsession in contrasting to competitor focus, eagerness to invent, long term thinking, and operational excellence. (Investors Archive, 2018, 15:50). Similarly, Tidd and Bessant (2018, p.92) assessed leadership behavior and included three dimensions of leadership: “concern for task, concern for people, and concern for change”. These dimensions correlate with Amazon’s principles and justifies Amazon leadership style. However, Boyatzis, (2011) grouped competencies in terms of cognitive (pattern recognition), emotional intelligence (emotional self-awareness), which Goleman (1998), defined as the capacity of perceiving our very own sentiments and those of others, for inspiring ourselves, and for overseeing feelings well in ourselves and in our relationships and social intelligence (teamwork) competencies.
Transformational leadership style has a huge effect on innovation and creativity, articulating vision, and inspiring communication (Tidd and Bessant 2018, p.93). However, Tidd and Bessant (2018, P.93) found that followers lose their self-confidence when expressing a vision unless it is complemented by an inspirational communication.
Leadership Approach
Jeff leadership approach changed overtime as the company evolves, and he sees himself as more of a teacher than a leader. (Investors Archive, 2018, 27:54). According to Jeff, Amazon decision making velocity slows the process down, therefore Amazon devised a method of teaching employee about the pitfall and traps in decision making and the ways to avoid them in other to maintain the inventiveness and innovativeness of Amazon. (Investors Archive, 2018, 21:18). A detailed study by Vargas (2015) examines the influence of transformational and transactional leadership on organization level of innovation and concludes that transformational leadership style encourages innovation and facilitates organizational learning.
However, Tourish, (2013) contends that transformational leaders have the tendency of hallucination, also an unethical leader can groom a shattered and toxic culture. Having listened to Jeff’s speech with (Investors Archive), it can be concluded that Jeff derives pleasure servant leadership and sees himself as more of a teacher, with good principles.
‘While you might find other internet firms focusing on a fun, relaxed atmosphere for their employees, Bezos is proving the potency of another model: coddling his 164 million customers, not his 56,000 employees’, (Blazek 2016).
Jeff did not rule out competitors focus as he says competitors focus could work but believes that customers obsession gives Amazonians a long-term satisfaction. However, focusing on the competitors keeps you ahead in the market leaving your customers behind and dissatisfied, while focusing on your customers you meet their need and gain their loyalty (Investors Archive 2018, 16:50). Consequently, in this competitive business world, amazon as a customer centric organisation feeds on customers negative reviews to serve them better, and also invent unique products for customers to maintain their loyalty. (Dan Croitor 2017, 6:10). Jeff the Ceo of Amazon due to his customer centric nature communicates directly with customers via email and resolves their complaints in time, (Investors Archive 2018, 22:39).
Jeff also listed eagerness to invent as an element that works for amazon, Jeff explained that amazon teams had tried to invent some “me too fashion trend” but failed at it a lot of times, but tried to create something unique and different that customers would appreciate and succeeded. (Investors Archive 2018, 17:25). Tidd and Bessant (2018, ch.3, p.92,) supports that innovation and invention is uncertain and will unavoidably involve failure as well as success, and an entrepreneurial organization should be willing to take risk accept failure which then creates opportunity for organization learning.
Furthermore, according to Jeff, Amazon achieve greatness when they work in big teams, but reveals that these big teams are subdivided into smaller teams for easy communication and even distribution of information. (Dan Croitor 2017,4:07). Renko et al. (2015), identifies that the Amazon encourages teams work, strives to innovate and invent, and consistently finds approach to simplify the invention.
Amazon.com’s Culture
Cornwall & Perlman (1990) defines culture as an organisation’s essential beliefs and presumptions on what it entails, how its employee act, and how it describes itself relative to the external environment. Edgar, (2010) identifies that leadership and culture are fundamentally intertwined and foster innovation and competitive advantage. He also based his argument on three points; “leaders are the main architects of culture, the culture formed influences the leadership style, and if the culture is dysfunctional the leadership must facilitate the culture change. Burns, (2013) observes that culture changes overtime and supports Edgar by saying culture can be shaped and influenced.
According to Harvard Business Review, Bezos said, ‘The truth is that corporate cultures are unbelievably stable over time. They are self-perpetuating because they interest new people who like that kind of culture, while the people who don’t like it dissociates themselves (Kirby and Stewart, 2007, p. 80). He further states that the self-reinforcing circle that Amazon culture creates is a competitive advantage for the organisation that can’t be effectively imitated. (Cowles 2015).
Amazon.com Breeding Entrepreneurship
The Organisation culture of Amazon, the world’s biggest online retailer, is a model of versatile development, in which risk taking and experimentation remains paramount to the organization’s long-term achievement. (Holton, 2014). Amazon has built up a culture in which
honesty and sharing of conflicting perspective are the standard among staff, which has allowed the organisation to try different things with products and services outside of its core business. (Jenifer 2015).
For instance, from the start, the Amazon spark appeared to threaten Amazon’s very own legacy of selling books. However, overtime, the spark turned into a core business of the organisation, solidifying Amazon as an innovator in the commercial market for online books and e-reader technology. (Holten 2014). David agrees that a learning organization is competent at; creating, acquiring, interpreting and transferring and retaining knowledge. (Harvard Business Review 2015, 0:48).
Amazon.com’s Adaptable Culture
According to Hofstede (1981), culture has four dimensions: Individualism vs collectivism, Power distance, Uncertainty avoidance and Masculine vs feminine.
Amazon’s culture encourages collectivism. As a collectivistic culture, employees are bound to consider themselves as group members and place incredible esteem on its welfare (Triandis, 1995). Conversely, in individualistic societies, individuals are bound to think themselves as autonomous and spot a higher incentive on their singular interests (Shweder, 1990). However, Hofstede also warns against confusion with value differences at the individual levels. (Hofstede 2011).
Cowles (2015) supports that Amazon.com’s culture holds its staff responsible, and managers are able to assess subordinates for productivity surveys, which makes Amazon.com’s culture strong and more reinforcing.
Edgar (2010) concludes that culture corresponds some values leaders preach in the organization, and having a culture is vital for efficient outcome in the organization.
In a highly competitive environment, Amazon endeavors to be Earth’s most customer driven organization where persons can find virtually anything they need to purchase online. Amazon achieved competitive advantage by giving clients a greater amount of what they need (low costs, tremendous determination, and accommodation). (Cowles 2015). This is in line with the Corporate Entrepreneurship Audit score of Amazon’s Culture at 84%. (Apendix 1)
Amazon.com’s structure that supports development just as flexibility to embrace techniques that overcome environmental changes are demonstrated below.
Amazon.com’s Structure
Tidd and Bessant, (2018) observes that a developing innovative products and processes would be successful if the organizational surrounding is favorable. This involves the creation of appropriate organization structures and processes that facilitates technological change.
Burns and Stalker, (1961) argues that environment in which the organisation functions determines the ideal structure of the organisation. He also states that structure could be organic or mechanistic.
According to Ian, (1977) Organic organization structure has a more open interaction and involvement to tasks at hand, adjustable and adaptable to changes. The environment is unpredictable but because of the freedom allowed, the employees and management it is better sustained. While Mechanistic is typically rigid over processes and employees. Rules are implemented and rarely diverged from while there is also a very clear series of command to delegate responsibilities and power in the organization. Miller, (1986) also supports that an organic structure fosters effective entrepreneurial management style.
A Structure That Enhances Innovation and Learning
Amazon.com has a distinctive structure to the organization, that affects the rate at which the organisation generates and adopt innovations” (Rivet 2017). Bezos has employed a structure of team process where all groups indulge in various projects. These tasks are largely executed autonomously of each other, which foster the innovative environment in Amazon. The more diverse Amazon is with these tasks, the more innovative they are. (Rivet 2017). This correlates with Burns and Stalker, (1961) findings on the contingent upon which organization structure is based, he listed the task to be undertaken, and the environment in which it operates as part of the contingents.
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