Jeff Bezos and Amazon's Leadership

This assignment delves into the leadership style and performance of Jeff Bezos as the leader of Amazon. It explores various leadership theories like transactional, transformational, and contingency theories to evaluate Bezos' approach. The analysis covers the strategies he implemented, their impact on Amazon's growth and development, as well as any limitations or negative consequences. The assignment concludes by suggesting steps Bezos could take to address challenges affecting Amazon's performance.

EVALUATION OF LEADERSHIP OF JEFF BEZOS
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Executive Summary
Leadership and management is different concept regarding the organisational performance.
This study has presented the detailed description about the concepts of the leadership and
management. It also presents the roles of Jeff Bezos as the founder, CEO and leader of
Amazon. In order to evaluate the leadership style of Bezos, this study has presented a
detailed study of different leadership theory including transformational leadership,
transactional leadership and contingency leadership. This study also evaluated the role of
Bezos as a leader of Amazon. In examines the strategies adopted by hi8m along with their
impacts on the organisational performance of Amazon. Comparing with the performance of
other organisation, it has presented the restriction and limitation of the strategies of Bezos.
This study has presented such negative impacts of the strategies determined by Bezos. It
also presents a recommended study regarding the development of the strategies of Bezos in
the context of Amazon.
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Table of Contents
Introduction..............................................................................................................................4
Concept of leadership and management.................................................................................4
Different theories of leadership................................................................................................5
Leadership approaches adopted by Bezos..............................................................................8
Evaluation of leadership style of Bezos...................................................................................8
Negative impact of leadership style of Bezos on Amazon.......................................................9
Conclusion.............................................................................................................................10
Reference List........................................................................................................................12
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Introduction
Leadership and management is different yet valuable concept regarding the organisational
performance. In order to perform the organisational activities, institutions are required to
follow certain leadership and management theories. Based on the organisational objectives,
companies determine theories about management and leadership. Lerner has considered
Amazon as the centre of the study. Jeffrey Preston “Jeff” Bezos has founded Amazon. He is
the CEO of the organisation. He has selected different strategies and theories regarding the
organisational performance of Amazon. This study is intending to discuss the concepts of
leadership and management. Jeff Bezos has applied several leadership theories in order to
meet the organisational objectives. This study is aiming to evaluate the theories adopted by
Jeff in the context of Amazon. It will also examine the consequence of those leadership
theories along with the approaches of Jeff regarding the present market situation. This study
is willing to examine the efficiency of Jeff as a leader in Amazon.
Concept of leadership and management
Leadership:
Leadership suggest the core management of the organisation that is intending to balance
the varying interest among the employees of the organisation. As stated by Northouse,
(2015, p.49), this includes interest of employees, stakeholders as well as managers.
Organisational leadership suggests the management of organisational operations including
resource management and determination of objectives of the organisation. It has been
reviewed that many entrepreneurs are leaders of the organisation because of the foundation
of the company. Leadership demands certain trains apart from foundation of the
organisation. This includes enthusiasm, competitiveness, boldness, consciousness and self-
assurance. The skill of inspiring people is the, most important regarding the characteristics of
a leader. Leaders are required to develop the mission and vision statement of the
organisation. They also determine the objectives of the organisation.
Management:
Organisational management is an important function regarding the operation of the
company. This is depended on the managers who are likely to be the leader of workforce.
According to Hill at al.(2014, p.57), they are required to determine the policies of
organisational performance in order to meet the objectives of the company. They are also
subjected with several organisational factors including external and internal factors. Prime
responsibilities of management include planning of the work process, organising the work
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process, leading people towards objectives of the organisation and manage the resources
especially human resources.
Evaluation of Bezos as a leader of Amazon
Jeff Bezos has adopted certain approaches regarding the organisational performance of
Amazon. As a proper leader, he is most concerned about the customers instead of
competitors. This also presents the boldness of his characteristics. Leaders are required to
step in for market share in spite of risks and Bezos has not step down in this context.
Employee motivation is another aspect regarding the characteristics of the leaders of an
organisation. As opined by Stone, (2013, p. 69), Jeff Bezos has put emphasis on the
recruitment of employees and retained the talented one. He also puts importance on the
diversity in the workforce. He has started with 158 employees who have been increased up
to 230,000 and yet aiming to introduce more employees. Development of the organisational
culture is also an important factor regarding its performance and determines the
characteristics of the leader. Analysis of the characteristics of organisational leader as well
personal traits Jeff Bezos has presented him as a leader of Amazon.
Different theories of leadership
There are several leadership theories, which are applied, in different organisational context.
Every theory has certain characteristics that influence the organisational performance from
different perspectives.
Theory of Transformational Leadership:
Transformational leadership theory suggests certain traits of the leaders including visions,
employee motivation, risk-takers, bold and analytical. This leadership theory applies to use
impression management. It is actually a combination of different theories. It is dependent on
four factors in order to get success. These are inspirational motivation, intellectual
stimulation, idealised influence and individualised consideration. These factors are related
with certain organisational functions. Inspirational motivation is related with the development
of organisational mission, vision along with the values to the members. As suggested by
Breevaart et al. (2014, p.147), leaders under this theory of leadership are required to
perform enthusiastically. Leaders also encourage the flowers to be creative and innovative.
Transformational theory allows the leaders to solve a certain problem instead of researching
the blaming part. Third factor of this leadership theory is the idealised influence that believes
that the leaders could influence their followers only when they practice their own
conceptions. Hence, this guides the leaders to act as a role model and the source of the
motivation of the employees. Transformational theory also guides the leaders to be the
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mentor of their employees. In the context of organisational instability, theory of
transformational leadership allows the organisation to achieve the satisfied performance
from the employees.
Figure 1: Theory of Transformational Leadership
(Source: In the perspective of Breevaart et al. 2014, p.147)
Transactional Theory of leadership:
Theory of transactional leadership concentrates on the process of controlling, planning, and
organising in the context of organisational performance. This theory suggests the
involvement of the leaders to motivate the employees and direct them towards their
individual interest. According to Chemers, (2014, p.59), leaders under the theory of
transactional leadership are based on the responsibility within the organisation. Leaders
determine the direction for the followers, which they have to follow. Leadership under this
theory promote the conception carrot and stick theory. The ultimate aim of this theory is to
meet the organisational objectives. This interaction depends on four dimensions including
contingent rewards, active management, passive management and laissez-faire. Contingent
rewards suggest the exchange of rewards upon the achievement of organisational goals and
successful performance. Active management suggests the involvement of the leaders by
monitoring the employees. On the other hand, passive management suggests the
involvement of the leaders only because of low level of performance. In the dimension of
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Laissez-faire, leaders are expected to develop an effective environment for the employees to
perform regarding the objectives of the organisation.
Contingency Model:
Contingency theory of leadership is based on the wide range of efficiency and effectiveness.
It also considers the relationship between the performance of the organisation and style of
the leaders. Application of this theory helps the organisation to improve the effectiveness of
the leadership. Hence, as suggested by Spisak et al. (2012, p.279), it is important to analyse
the characteristics of the leaders in this context. Fiedler has developed a scale, LPC in order
to analysis the traits of the leader based on the particular situation towards the employees.
Application of this theory is depended on three specific factors. These are relationship
between the leader and employees, structure of the task and power of the leader. Based on
these factors, effectiveness of the leadership can be determined in the organisational
context.
Figure 2: LPC scale of Contingency theory
(Source: In the view of Spisak et al. 2012, p.279)
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Leadership approaches adopted by Bezos
Jeff Bezos has adopted several leadership approaches in the organisational context of
Amazon. Bezos determines the organisational strategies based on the factors, which cannot
be regulated from the perspective of the organisation. He has put major importance on the
customers while determines organisational strategies. He also considered the profit of the
organisation at initial stages even for a period of five to seven years in order to make the
brand more familiar among the customers. He was ready to be misunderstood for that
particular period (cnbc.com 2017). His approach was to be considered as an organisation
who offered quality service as less charge instead of following those who cause more
charges. While determining the organisational strategies, Bezos put importance in the
requirements of the customers. He was ready even to move backwards in order to satisfy
the customers. As a leader of Amazon, Jeff Bezos has developed a friendly culture within
the organisation but he was ready to settle with the intense culture regarding the push for
shove. Leadership style of Bezos encourages initiatives towards the inventive approaches
and he was even ready to accept failure for inventive approach. In his style of leadership,
Bezos has changed his approaches regarding the earlier one. He has determined to spend
more time and resource to develop the quality of the service, which was inversed to the
earlier concepts. As the prime concern of Bezos regarding the organisational strategies was
revolving around the customer satisfaction, hence he was serious about the approaches of
the employees towards the customers. He has determined to improve the empathy and
humility of the employees regarding customer service. Another approach of Bezos's
leadership was unending learning spirit to develop- the performance.
Evaluation of leadership style of Bezos
Bezos’s leadership style helps Amazon to determine the organisational strategies. He has
put importance on the customer service in order to develop the organisation. All the
strategies of the organisation as determined by Bezos are depended on the customer and
customer relation. This helps the organisation to develop customer base. His strategies also
help the organisation to offer quality service to the employees. This has been reflected in the
market share and share value of Amazon. Bezos has considered the culture of the
organisation as important factor regarding the organisational performance and development.
Hence he has consider this factor while determine the strategies of the organisation. Initially
his strategies cause some challenges for the organisation. Bezos was tireless to try new
things in the organisation. Share price of the organisation has been developed from 1.54
USD to 1,161.27 USD within last 17 years (yahoo.com 2017). This suggests the success
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and efficiency of the strategy of Bezos. Bezos’s strategy was intending to provide the quality
service to the customers for minimum charges. This influences the organisational
performance in the context of valuation of stock market and growth of revenue. A recent
strategy of Bezos regarding the sale of Kindle series also presents the impact of his
leadership theory that presents a $60 billion sale along with large range of feedbacks from
the customers. His leadership style has made Amazon leading organisation in the e-retailing
industry and the stock value and organisational revenue suggests its effectiveness.
Leadership style of Bezos helps the organisation to develop customers’ base and its brand.
His strategy has reflected in the culture of the organisation. Bezos has adopted a rational
approach towards the organisational strategy. He has determined the long-term strategies
for the organisation, which has been performed in the context of the organisational profit and
sales. Bezos’s long-term strategy determine that the organisation will kept the profit potential
secret from the investors. This strategy helps the organisation in the context of long-term
issue. The long-term period has been ended at 2007 when the profit of the organisation
become double and there was 38% incensement in sales.
Negative impact of leadership style of Bezos on Amazon
Bezos has determined the organisational culture and strategies of Amazon that has been
reflected within the organisational performance of the company. Along with that strategies
and approaches adopted by the leadership style of Bezos, there are certain controversies.
These are raised revolving the weaknesses of the strategy and its reflection on the
organisational performance. Strategies of Bezos have considered customers as the prime
factors regarding the organisational performance and development. He has not consider the
individual demand of the employees while determining the organisational; strategies. In
order to provide the customers quality service at minimum charges, he has compromised
with the organisational facilities. This suggests the cheap policy regarding the assets and
objects applied in the workplace of the organisation. There is no incentive or compensation
in the strategy of Bezos. This influences the satisfaction of the employees along with their
performance.
Comparison with other organisations, strategies of Amazon has faced certain drawbacks.
Bezos puts importance on the offering of products at minimum price where as Apple was
offering quality product as high price. This influence the margin of operating of the
organisation as it was recorded as 31% for Apple whereas it as 2% for Amazon for the year
of 2011 (amazon.com 2017). Organisation's profit has also influenced by the strategies of
Bezos. Apple offered their product at high profit. On the other hand, Amazon sells their
products at minimum profit and even without any profit. This affects the developments of the
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organization. Market trend suggests the development of innovative ideas. Most of the
organisations invest to develop new ideas regarding the organisational performance. On the
other hand, Bezos took reserved step regarding the innovative ideas. He was not ready to
follow the conceptions of the other organisations. New ideas could help an organisation
regarding their sales and profit. Bezos only asses competitors of the organisation but did not
follow the trend. As a result, the organisation loses investment regarding the social living.
Some of Bezos’s strategies were certainly tough to be adopted in the context of the
organisational development and growth. Those strategies help the organisation to develop a
work culture and customer base for the organisation. On the other hand low profit offer and
cheap policy regarding employee facilities, stand in the way of the development of Amazon.
As result of such strategies, Amazon faced a loss of $274 million in the context of 2006.
Jeff Bezos has developed Amazon and as a leader of the organisation, he has determined
the organisational strategies. Such strategies help the organisation to develop the
organisational culture along with its customer base. These strategies help the organisation to
improve its market share and familiarity. There are certain limitations in the strategies of
Bezos that restricts the organisational performance of Amazon. He may require reviewing
his strategies in order to continue the organisational performance in a profitable way. Certain
factors including the facilities for the employees and organisational profit are required to be
introducing in the organisational context of Amazon. Another important factor is the
investment in innovative and creative ideas that could offer certain advantages to the
organisation. Hence, Amazon is required to review strategies of Bezos instead of replacing
him as a leader of the organisation.
Conclusion
Leadership and management is different concepts yet both of them are related with
organisational performance. This study has discussed the concepts of leadership as well as
management. In that context, it has evaluated the contribution and role of Jeff Bezos in
Amazon to determine his performance. As a leader of the organisation, he has determined
the organisational strategies of Amazon. The study has presented a detailed analysis of the
leadership theories that helps an organisation regarding its performance. This includes
transactional theory of leadership, transformational theory of leadership and contingency
theory. This theories have been evaluated with its features and related factors that influence
the organisational performance. Along with that, it also analysed leadership styles and skills
of Bezos in the context of Amazon. This presents the strategies he has adopted in order to
manage the organisational performance and development of Amazon. The study has
evaluated the impact of the strategies determined by Bezos. It has presented the
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development of Amazon based on the strategies developed by Bezos. It also presents the
limitations and negative impacts of those strategies in the context of the organisation. With a
detail and rational analysis, this study has presented the performance of the Bezos as a
leader of Amazon. It also presents the required step that Bezos could adopt in order to
mitigate the challenges that are restricting the performance of the organisation based on the
strategies determined by Jeff Bezos.
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Reference List
amazon.com (2017), About US Available At:
https://www.amazon.com/p/feature/rzekmvyjojcp6uc Accessed On: 25th Nov 2017
Breevaart, K., Bakker, A., Hetland, J., Demerouti, E., Olsen, O.K. and Espevik, R., (2014).
Daily transactional and transformational leadership and daily employee engagement. Journal
of occupational and organizational psychology, 87(1), pp.138-157.
Chemers, M., (2014). An integrative theory of leadership. UK: Psychology Press.
cnbc.com (2017), 5 key business lessons from Amazon's Jeff Bezos Available At:
https://www.cnbc.com/2016/05/13/5-key-business-lessons-from-amazons-jeff-bezos.html
Accessed On: 25th Nov 2017
Hill, C.W., Jones, G.R. and Schilling, M.A., (2014). Strategic management: theory: an
integrated approach. Boston: Cengage Learning.
Northouse, P.G., (2015). Leadership: Theory and practice. UK: Sage publications.
Spisak, B.R., Homan, A.C., Grabo, A. and Van Vugt, M., (2012). Facing the situation:
Testing a biosocial contingency model of leadership in intergroup relations using masculine
and feminine faces. The Leadership Quarterly, 23(2), pp.273-280.
Stone, B., (2013). The everything store: Jeff Bezos and the age of Amazon. New York City:
Random House.
yahoo.com (2017), Sharevalue of Amazon Available At:
https://finance.yahoo.com/quote/AMZN/history/ Accessed On: 25th Nov 2017
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