Management at Amazon | Report

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author Note

1MANAGEMENT
Table of Contents
Introduction:...............................................................................................................................3
Background of the Company:....................................................................................................4
Organizational Problem:............................................................................................................4
Application of Theory:...............................................................................................................6
Recommendation:......................................................................................................................8
Conclusion:................................................................................................................................9
References:...............................................................................................................................10

2MANAGEMENT
Introduction:
According to the comments of great scholar Peter Drucker, the importance of the
efficiently managing the business processes, is observed to be notably high in the modern
world of business (Uysal 2016). Peter Drucker mentioned in many of his articles that the
necessity faced by the modern business entities in managing the uncertain business condition,
is one of the major factors that influence the companies in incorporating scientific
management of their business operations (Uysal 2016). According to the comments of
Kaufman (2015), the mainstream business entities are facing the necessity of incorporating
efficient control procedures for the management of the business competition and in such
situation, the role of the human resource management is considered to be of great
significance. As the primary objective of the majority of the mainstream business entities, is
to enhance the financial sustainability of their companies, it becomes crucial for the
companies to control the costing associated with the management of the human resource.
Along with that, Noe et al. (2017) claimed the competence of mainstream
organizations in enhancing the quality of their business in the modern world of business, is
primarily reliant on the ability of the companies in managing their employment relations.
However, there are considerable numbers of organizations which are affected with
inappropriate human resource activities and the study is based on one such company named
as Amazon. The study evaluates one of the main threats for the selected company which was
the inaccurate management of the human resource activities in the company. The study
portrays the consequences that of the mentioned challenge which are evident in the business
actions of the company. In addition to this, the study critically analyses the challenge that the
company is facing and along with that, the study provides an effective set of
recommendations for the improvement of the condition of the chosen organization.

3MANAGEMENT
Background of the Company:
Amazon is recognized as one of the top most companies working in the global
conglomerate industry and that is visible with the growth of the company in the financial
aspect. The company was founded by Jeff Bezos, an American Entrepreneur. Primarily, the
company was introduced in the name of Cadabra Inc (Amazon.com. 2020). The organization
operates in various business industries such as the grocery stores, cloud computing, artificial
intelligence, E- commerce, digital distribution and the most important one which is consumer
electronics. Jeff Bezos established the organization in the month of July of 1994 and the
company is headquartered in Washington (Amazon.com. 2020). With the help of the efficient
distribution network and active online business arrangements, the company is able to serve a
large number of customers across the globe. With the introduction of the products such as the
Amazon Fire TV, Amazon Fire, Amazon Kindle and Amazon Echo along with the services
such as Amazon.com, Amazon Music, Amazon Prime, Amazon Prime Video and Amazon
Web Services, the company is able to conduct a moneymaking business which is visible with
the development of increased operating income of 12.421 billion US dollars in 2018 and
revenue of 232.887 billion US dollars at the same time (Ir.aboutamazon.com. 2020).
Organizational Problem:
With a precise evaluation of the business actions of the company, it is understandable
that the organization is affected with the impact of the inappropriate human resource
activities. The company is criticized by several business magazines and news agencies for
their inaccurate human resource activities. ABC News of Australia was able to deliver several
reports on the inaccurate management of human resources in the Australian workforces of
Amazon. The news agency highlighted that the company considers their employees as mere
robots which is visible with the style of operations that the company follows. The company is
observed to develop their own speed for the management of their process which is recognized

4MANAGEMENT
as the “Amazon Pace” and each and every members of the company are required to comply
with the speed for the efficient management of their operational activities (Abc.net.au 2020).
Having said that, ABC News conducted a series of interviews of their employees and
executives where it was found that, the employees working in different warehouses of the
company along with the Melbourne warehouse, reported regarding the increasing job stress
of their employees. The findings of the interview were pretty significant in highlighting the
urge of the senior management of the company in converting the employees as robots for
achieving better efficiency (Abc.net.au 2020).
In addition to this, the results of the interviews clearly highlighted the concern of the
employees regarding the continuity of their job. Amazon follows a practice where they recruit
the individuals on the basis of the casual recruitment policy and the practice is considerably
prominent in the Australian workforce of the company. The utilization of the casual
recruitment policy from the part of the company is seen to place the company in a
disadvantageous position in retaining their employees. The approach of the company in
implementing the casual recruitment policy is seen to create considerable amount of job
insecurity amongst the employees of the Melbourne workforce which is visible with the
findings of the interviews conducted by ABC News (Abc.net.au 2020). Other than this, the
company is observed to be incapable in creating an efficient working environment for their
employees which is pretty prominent with the fear that the employees have, regarding the
continuity of their job. Along with that, the lack of motivation amongst the employees is
pretty prominent with the fact that the company underpays their employees. Several news
outlets such as Business Insider, is observed to highlight multiple cases of intentional holding
of the payments of their employees and at the same time, the Business Insider mentioned that
the company was facing the consequences of creating an unsuitable pay plan for their
employees (Businessinsider.in 2020).

5MANAGEMENT
In their different news articles, Business Insider showed that Amazon does not follow
the practice of forming an industry standard pay plan for their employees (Businessinsider.in
2020). The incompetency of the organization in developing the same is affecting the interest
of the employees in continuing their service with the organization. As a result, the company
is observed to face the heat of the increasing employee turnover and the concerns of the
senior management of the company over the sustainability of their business activities is pretty
prominent with the achievement of second place in the list of the professionals in terms of
lowest possible media tenure. International Business Times highlighted the incapability of the
company in retaining their employees for a longer period of time (Ibtimes.com 2020). Apart
from this, the news article of ABC News showed that the company is incompetent in creating
a productive organizational climate for their employees and that was visible with the low
participation of the employees in the company. As the higher authority of the company was
primarily focused in achieving the high performances, the lack of consideration for the
employees of the company is a major spot of bother for them in enhancing the involvement of
the employees with the organization. As a result, the human resource management of the
company is considered to be associated with considerable amount of vulnerability.
Application of Theory:
With an insightful look at the condition of the organization, it is evident that the
company is incompetent in retaining their employees for a longer period of time in their
workforces. As a result of the increased employee turnover, the company is seen to face
considerable amount of difficulty in maintaining their sustainability and in tackling the
expenditure associated with the employee turnover. As it is evident that the incapability of
the company in retaining the employees in a professional manner is affecting their ability in
developing diversified products and services offerings, it is important to evaluate the factors
that create such context. It is evident that the employees of the organization raised their

6MANAGEMENT
concern regarding the excessive pressure of work inside the company. According to Abbas
and Raja (2015), the formation of the job stress and work pressure is observed to be
dependent on the factors such as inappropriate allocation of the tasks, lack of expertise of the
employees in managing their tasks in the least possible time along with the absence of
motivation amongst the employees.
The lack of motivation was pretty prominent amongst the employees of the company
and one of the main reason for the same, was the application of the casual recruitment policy.
The implementation of the casual recruitment policy was observed to violate the safety needs
of their employees. At the same time, the practice of such policy was seen to incorporate
considerable amount of job insecurity amongst the employees of the company. Other than the
casual recruitment policy, the company is seen to have a bad reputation of underpaying their
employees which not only demoralizes the employees of the company but also affects the
reputation of the company as an attractive employer. With a precise look at the Maslow’s
hierarchy of needs, Soni and Soni (2016) claimed that the companies are required to
formulate a pay structure that effectively meets the basic needs of the employees and at the
same time, covers the safety needs of the employees in a professional manner. According to
Bachmann, Bechara and Schaffner (2016), the ability of the companies in developing a pay
scale that meets the needs of the employees, places the companies in an advantageous
position when it comes to motivate the employees in a professional manner.
Other than this, Van de Walle, Steijn and Jilke (2015) mentioned that the ability of the
companies in formulating an attractive rewards system, enhances the attractiveness of the
company and along with that, the rewards system provides considerable amount of advantage
to the companies in motivating their employees in an effective manner. Other than this, the
compliance of the employees of the organization with the “Amazon Pace” is seen to be
dependent on the ability of the company in developing their operational activities with a

7MANAGEMENT
precise consideration towards the expertise level of the employees. Other than this, Kadiresan
et al. (2015) mentioned that the success of the companies in ensuring that the employees are
able to manage the excessive pressure of work, is reliant on their ability in developing
diversified training and developmental activities. As per the comments of Hassan (2016), the
success of the companies in providing the scope of enhancing the skills to their employees,
will be substantial in motivating the employees for the further improvement of their
performances in meeting the excessive demands of the market in a professional manner.
Recommendation:
With a precise look at the situation of the company, the below mentioned list of
recommendations will be important for the success of the company in resolving the
challenges that they are facing.
The company is in need to develop an attracting pay policy for their employees which
includes the sufficient compensation for meeting the basic and safety needs of the employees
in an effective manner. At the same time, the company requires to create an attractive
rewards plan with the inclusion of the intrinsic and extrinsic rewards as that will be
significant in enhancing the involvement and level of motivation of the employees.
Apart from this, the company has the necessity to create provisions of developing
longer duration contracts with their employees instead of implementing the casual
recruitment policy. This will ensure the job security of their employees and at the same time,
it will motivate the employees in participating in the training activities for complying with the
excessive job pressure on a positive note.
Apart from this, the company has the necessity to introduce employee engagement
sessions for enhancing the bond between the employees. As the company is subjected to
excessive pressure of work, the initiation of the employee engagement sessions will be

8MANAGEMENT
important for the success of the higher authority in increasing the quality of the team
performances.
Conclusion:
To conclude, it can be said that Amazon has the capability to conduct a profitable
business in the conglomerate industry of 21st century, however, the detrimental impact of the
inappropriate human resource management, has the ability to decrease the effectiveness of
their business actions. From the discussion, it is visible that the organization faced
considerable number of challenges such as the inappropriate wage and rewards plan, lack of
motivation amongst the employees and job insecurity. For resolving the same, the company is
in need to introduce an industry standard wage plan, a lucrative rewards plan and initiatives
such as employee engagement activities for enhancing the involvement of the employees.

9MANAGEMENT
References:
Abbas, M. and Raja, U., 2015. Impact of psychological capital on innovative performance
and job stress. Canadian Journal of Administrative Sciences/Revue Canadienne des Sciences
de l'Administration, 32(2), pp.128-138.
Abc.net.au 2020. When you click 'buy now', this is what happens inside Amazon Australia's
warehouse. [online] Available at: https://www.abc.net.au/news/2019-02-27/amazon-australia-
warehouse-working-conditions/10807308
Amazon.com. 2020. Amazon.com: Online Shopping for Electronics, Apparel, Computers,
Books, DVDs & more. [online] Available at: https://www.amazon.com/
Bachmann, R., Bechara, P. and Schaffner, S., 2016. Wage Inequality and Wage Mobility in E
urope. Review of Income and Wealth, 62(1), pp.181-197.
Businessinsider.in 2020. Bernie Sanders says Amazon's workers aren't paid enough. Here's
how their pay stacks up to the rest of the industry.. [online] Available at:
https://www.businessinsider.in/politics/bernie-sanders-says-amazons-workers-arent-paid-
enough-heres-how-their-pay-stacks-up-to-the-rest-of-the-industry-/articleshow/
65613035.cms
Hassan, S., 2016. Impact of HRM practices on employee’s performance. International Journal
of Academic Research in Accounting, Finance and Management Sciences, 6(1), pp.15-22.
Ibtimes.com 2020. Amazon.com Has Second Highest Employee Turnover Of All Fortune
500 Companies. [online] Available at: https://www.ibtimes.com/amazoncom-has-second-
highest-employee-turnover-all-fortune-500-companies-1361257
Ir.aboutamazon.com. 2020. [online] Available at:
https://ir.aboutamazon.com/static-files/0f9e36b1-7e1e-4b52-be17-145dc9d8b5ec

10MANAGEMENT
Kadiresan, V., Selamat, M.H., Selladurai, S., Ramendran, C.S. and Mohamed, R.K.M.H.,
2015. Performance appraisal and training and development of human resource management
practices (HRM) on organizational commitment and turnover intention. Asian Social Science,
11(24), p.162.
Kaufman, B.E., 2015. Market competition, HRM, and firm performance: The conventional
paradigm critiqued and reformulated. Human Resource Management Review, 25(1), pp.107-
125.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Soni, B. and Soni, R., 2016, July. Enhancing Maslow's hierarchy of needs for effective
leadership. In Competition Forum (Vol. 14, No. 2, p. 259). American Society for
Competitiveness.
Uysal, G., 2016. Theory and professionals: Impact of HRM on economy. Uysal, G.(2016).
Theory and Professionals: Impact of HRM on Economy. Journal of Modern Accounting and
Auditing, 12(8), pp.443-446.
Van de Walle, S., Steijn, B. and Jilke, S., 2015. Extrinsic motivation, PSM and labour market
characteristics: A multilevel model of public sector employment preference in 26 countries.
International Review of Administrative Sciences, 81(4), pp.833-855.