Amazon Organizational Culture: harsh, but effectively contributing to the bottom line

Amazon Organizational CultureAmazon organizational culture has been described as “breakneck-paced, and notoriously cost-conscious, as befits a company that has run only a small profit, or a loss, under generally accepted accounting principles for most of its life as a public company.[1] Amazon organizational culture has been fiercely criticized in 2015 in The New York Times article titled “Inside Amazon: Wrestling Big Ideas in a Bruising Workplace”.

Specific flaws mentioned in the article include unrealistic performance standards, the work culture based on fear and the lack of recognition of employee contribution. The article caused debates in the media and even prompted a response from Amazon CEO Jeff Bezos. Furthermore, work culture at Amazon has been described as “purposeful Darwinism” approach for employee management.[2]

Amazon organizational culture integrates the following three key elements:

 

1. Constant reinvention and optimization of organizational culture. Amazon founder and CEO Jeff Bezos “emphasizes the importance of constantly assessing and adjusting Amazon’s culture so it never loses the agility, nimbleness, and hunger for experimentation”[3]. Accordingly, Bezos constantly opposes “one-size-fits-all” culture of decision making. Moreover, Bezos uses “two pizza rule” for meetings, where the numbers of participants in a meeting are limited to a group that can be all fed with two pizzas. [4]

 

2. Customer-centricity. Amazon positions itself as one of the most customer-centric companies in the world. Amazon vision statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.” High level of customer-centricity is one of the cornerstones of Amazon corporate culture with direct implications to a wide range of organizational processes and procedures.

 

3. Diversity among workforce. Valuing diversity among the workforce is placed at the core of Amazon organizational culture. The company has GLAmazon, an official employee affinity group for gay and lesbian employees, as well as, Black Employees Network and Women in Technology groups.[5]

 

Amazon Inc. Report 2018 contains a full analysis of Amazon organizational culture. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on Amazon. Moreover, the report contains analyses of Amazon leadership, organizational structure and business strategy. The report also comprises discussions of Amazon marketing strategy, ecosystem and addresses issues of corporate social responsibility.

[1] Mullaney, T. (2017) “5 key business lessons from Amazon’s Jeff Bezos” CNBC, Available at: http://www.cnbc.com/2016/05/13/5-key-business-lessons-from-amazons-jeff-bezos.html

[2] Yohn, D.L. (2018) “Company culture doesn’t need to be “warm and fuzzy” to be effective” Quartz, Available at: https://work.qz.com/1227352/amazon-proves-company-culture-doesnt-need-to-be-warm-and-fuzzy-to-be-effective/

[3] Guppta, K. (2016) “How Jeff Bezos Maintains Amazon’s Killer Company Culture” Strategyzer, Available at: http://blog.strategyzer.com/posts/2016/6/23/how-jeff-bezos-maintains-amazons-killer-company-culture

[4] Connley, C. (2018) “Jeff Bezos’ ‘two pizza rule’ can help you hold more productive meetings” CNBC, Available at: https://www.cnbc.com/2018/04/30/jeff-bezos-2-pizza-rule-can-help-you-hold-more-productive-meetings.html

[5] Brown, A. (2017) “glamazon at Amazon: eighteen years of change” Working at Amazon, Available at: https://blog.aboutamazon.com/working-at-amazon/glamazon-at-amazon-18-years-of-change