Case Study: How Jeff Bezos Manages at Amazon.com

1) Factors influence the organisation of Amazon.com

Every organisation is constantly influenced by economic and social factors such as change in competition, customer confidence, religious, education and the business law. Amazon.com, as an organisation has always been facing these influences in business environment. However, there are some major factors, which significantly influence Amazon.com, lead the company to success.

Obviously, technology has been the most important factor that influences Amazon.com, in particular, the rapid increases in Internet usage and IT technology. As people become more familiar and comfortable with new features of technology, they are able to do business over the Internet and extract the value for them and share it with other customers. Customers are able to locate the book they want quickly with a few clicks of the mouse and they are also able to read opinions about the book from other customers. Furthermore, a website from Amazon.com can carry millions of titles without worrying about the space, meanwhile physical book stores limited by space to the number of titles they can carry.

The idea of a customer-based company has also driven Amazon.com to its success, this management idea has been adopted well by Jeff Bezos, the founder and CEO Amazon Group since the beginning of the business. Bezos once said that “I told people … to be terrified, but not of our competitors, be terrified of our customers. They’re the ones that send us money”. Amazon.com has focused more on its customers instead of the production process and this makes Amazon.com significantly different from a traditional business. According to Bezos, excellent customer service is the thing has built the most intrinsic value for Amazon.com. Total knowledge of its customer, getting to know the customer better and better, Amazon.com made knowing who was buying its books a priority. Therefore, Amazon.com took advantage of the fact that no one – neither publisher nor bookstore – in the traditional linear chain knew anything about end users.

2) Management roles which Jeff Bezos is performing to make him a successful manager

According to the article in case study, Jeff Bezos has been performing the following management roles:

Decisional roles: Bezos seeks to improve Amazon.com as his company expanding quickly, he created new department such as research & development department, information system department and materials management/logistics department to handle with different business issues. By doing that, Bezos exercise his entrepreneurial role to ensure the organisation structure keep up with the growth in business, as a result, Amazon.com has expand dramatically since then and become one of the most growth company, it enjoyed $3.1 billion in sales in the year 2001.

Interpersonal roles: He is outstanding in motivating his employees, he encourages employees by give all employees stock in the company, putting the benefit of the company along with the benefit of its employees. He also decentralised control, which provides the employees more freedom the their work. All of those show his trust and positive attitude toward his employees making them feel they are a part of Amazon.com. Not surprising, Amazon.com has achieved its major goal of providing excellent customer service and this reputation has been maintained successfully since the beginning of the business. Thus, this shows Jeff Bezos is performing his leader role outstandingly. Figurehead role is also performed frequently by Bezos, he works hard and closely with employees, and focus on the well-being of the employees and customers. He is also spending a significant amount of time to promote the name Amazon.com and its activities.

Information roles: Bezos certainly acts as a spokesperson for his company as he flying around the world to publicise Amazon.com. It seems he has also been successful with this role, as Amazon.com becomes one of the most famous names of dot-com companies.

3) How easy would it be for other CEO to manage like Jeff Bezos

During one of his speeches to college students in the States, Bezos said that “We were called my favorite, ‘Amazon.org,’ because we’re clearly a not-for-profit company”, for other CEOs to manage like Bezos, their goal and vision has also be similar to that. Amazon.com profits were negative numbers until 2002 but it has always grown larger and provided excellent services.

One of the distinctive attributes of Bezos is technical competence, which allows him to have a good vision about the development and implementation of the technology. It seem the knowledge of IT technologies and banking help Bezos to set up his business well. Surely, it is not easy to raise 7 millions borrowed money and open a new dot-com business.

Moreover, Bezos has been excellent in his human skills, in the way he inspires his employees. He has been able to select good people to work for Amazon.com and put his trust on them. He decentralises the organisation structure, work closely and empower his employees, which develop a solid bond among people. This also creates flexibility, the sense of freedom and responsibility within Amazon.com. Benzo said “Think of a company of 30 people where every software engineer, every marketing person, every person in the company is working until 2:00 A.M. serving customers — wrapping things, driving them to the post office, getting the postal meter refilled”. He has been very successful to create a culture that cares about the customer within his company.

Reference:

1. Mintzberg, H. “The Manager’s Job: Folklore and Fact” in Maidment F. (ed) Annual Editions, Management ½, 9th Ed, McGraw Hill, Dushkin, Connecticut.

2. Mullins, LJ, 2002, Management and organisational behaviour, 6th edition, Harlow; Financial Times/Prentice Hall, Part 3.

3. Leslie Liu, 2000, “Amazon CEO speaks about founding of his successful startup”, http://www.rice.edu/projects/thresher/issues/88/00.09.08/current/story4.html.

4. Larraine Segil, 2003, “Is Your Organization Driven by Dynamic Leaders?”, http://www.refresher.com/!lsdynamic.html