Managing Organizational Change: Case study: Amazon & Zappos

Running head: Managing Organizational Change
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Managing Organizational Change: Case study: Amazon & Zappos
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Case Study: AMAZON & ZAPPOS
In this case, the main issue to be discussed is organizational challenges/concerns/issues.
Company overview
Amazon Company is a customer-centric organization focusing on consumers, sellers and
enterprises. Amazon serves its consumers through the retail website with a major focus on
product selection, price and convenience. On the other hand, Zappos is a leading online seller of
consumer shoes. The company stocks more than 3 million pairs of shoes, handbags, apparel and
accessories. Additionally, the company specializes in more than 1000 unique brand (Engleman,
2010). Through its website, Zappos is able to distribute stylish and affordable footwear. In 2008,
the company reported a total of $ 630 million in revenue.
Amazon and Zappos had a merger deal. The reasons why Amazon took the merger deal
include; Amazon saw a growth opportunity of growing through acquiring the Zappos brand.
Secondly, Zappos was interested in keeping its brand and culture whereas Amazon supported its
vision as a self-governing company (Wind & Rhodes, 2017). Lastly, Zappos had the feeling that,
it was in the best interest of the shareholders to sell according to the present valuations being
paid by Amazon. The merger between Amazon and Zappos is the biggest acquisition for
Amazon. In the first quarter of their merger, there has been a reported increase in sales valued at
$ 3.5 billion. This has surpassed the $ 3.43 billion sales of products for Amazon Company
(Lashinsky, 2010).
Theoretical framework
Amazon acquired Zappos in 2009 for a total of $847 million. The two organizations have
been having controversial organizational approaches that has pushed the staff to work in unusual

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and creative manner. There were certain conditions which were to be reached before the merger
was signed. For Amazon, the condition that was to be met is that Zappos was to retain an
independent organizational culture and the normal ways in which it has been conducting its
organizational activities. After the first quarter of the merger, Amazon was able to reach its
objective. As an illustration, the $ 1 billion acquisition of Zappos was a major achievement for
Amazon because Zappos return rate increased above the normal value. There were certain
interesting aspects of the acquisition. An example can be given by the increased uncertainty
regarding revenue.
However, there had been certain organizational challenges being faced in regard to the
merger acquisition. One of the organizational challenges/issues that had been affected by the
merger includes the adoption of a single organizational culture to create harmony when it comes
to organizational practices and operations. As an illustration, Zappos and Amazon are two
different organizations. Zappos considers its culture and brand to be an important asset. This also
applies to Amazon. However, a merger could not function properly with two different
organizations having two different beliefs and vision. This would be difficult to penetrate the
market. Some of the key organizational values in Zappos include the creation of “fun and little
weirdness” and establishment of a positive team and family spirit.
Zappos practices an organizational culture that can be described as the ten-commandment
culture. It is considered to be one of the biggest cultures in the organization. The success of the
culture could be affected due to the new management. This kind of organizational culture is
different when it comes to Amazon. As an illustration, Zappos was transparent to their
employees about their financial statements. The company shared its financial information such as
operating profits, performance metrics. The sharing made all employees express themselves