Zappos' Holacracy: Reasons, Impact, Business Level Strategy, and Functional Level Strategies

This presentation discusses Zappos' adoption of Holacracy, a self-sufficient approach to management, and its impact on operational performance. It also covers Zappos' business level strategy, functional level strategies, and lean production philosophy. The presentation includes references to studies and articles on these topics.

Strategic and Operations
Management
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Reasons why Zappos chose Holacracy
Zappos began with this approach in order to
make it a self sufficient company.
Developing a one to one communication
system (Antosz & Stadnicka, 2017).
Division of the responsibilities so that the
work can be carried on smoothly
Lead link, compensation appraiser and the
mentor, were the three main posts that were
established.

Impact on the operational performance
They wanted to empower their employees so
that they can smoothen the way of their
operating system (Yugendhar,& Ali, 2017).
In order to smoothen their operating system
they had to involve the employees in their
decision making process as well.
Developing an unorthodox company culture .
As per the opinion of Jeff Bezos, “I’ve seen a lot
of companies, and I have never seen a company
with a culture like Zappos.” (Leite & Vieira,
2015)

Business level strategy of Zappos
Customer centric strategy and a weird
culture
365 day free goods return policy
Fast delivery of products
A proper well developed communication
policy

Success over the online shoe and clothing
retail market
Zappos has been able to win over the rivals in the fields of
online retail shoe and clothes industry.
As they have started following all these strategies they have
been a ear them a respectable position in the industry. They
have been able to develop a brilliant customer centric
approach.
However there is the risk that employees can pass through. As
they were given total freedom they had to carry on all the
researches and the work on their own. Thus, it was a very new
kind of responsibility and all the employees might not be able
to do the entire work on their own.
The Downtown project incident where the entrepreneurs
committed suicide also shows that Zappos was not fully
successful in attaining success

Strategies at the functional level
Helped in creating about 800 direct employments.
Zappos has realized that there are several risks that I
can face in the ongoing scenario. It is for this reason
that they are trying their level best to deal with these
issues (Delago et al.,2016).
Zappos has to develop a proper feedback system so
that the employees can actually share their valuable
feedbacks along with then management.
The auditing tam of this company must be given a
boost so that they can actually comprehend about the
losses and the profits of this place.
Investing in critical mass of small business.

Lean production philosophy
 improving operational management
performance
Lean production helps in minimizing the
chances of delay with the operational
performances, thus increasing the efficiency.
Increased satisfaction of the customers.

Key to strategic implementation of lean
production techniques
 Removing the middlemen or the secretaries
from the between the doctors and the
specialists.
This speeded up the rate of referrals and thus
lowered the dissatisfaction of patients.
Unnecessary time waste in the Oncology
department was also reduced.
Fred up about space of 77 full time
employees that caused a huge delay in the
treatment of the patients

References

 Antosz, K., & Stadnicka, D. (2017). Lean philosophy implementation in SMEs–study
results. Procedia Engineering, 182, 25-32.
http://www.scielo.br/scielo.php?pid=S0103-65132015005079012&script=sci_arttext
 Bicheno, J., & Holweg, M. (2016). The lean toolbox: A handbook for lean
transformation (Vol. 5). Picsie Books.
 Burke, J. R. (2016). Zappos Company Profile.
www.jamieraeross.com/uploads/8/2/9/2/82927634/com250_company_profile_paper-2.p
df
 Delago, L. C., Machado, M. E., de Brito, F. O., Landgraf, G. C., de Andrade Schroeder,
M., & Torezzan, C. (2016, December). Learning lean philosophy through 3D game-
based simulation. In Proceedings of the 2016 Winter Simulation Conference (pp. 3385-
3392). IEEE Press.
 Graban, M. (2016). Lean hospitals: improving quality, patient safety, and employee
engagement. Productivity Press.
 http://www.indianjournals.com/ijor.aspx?target=ijor:ijemr&volume=7&issue=5&articl
e=027
 https://dl.acm.org/citation.cfm?id=3042514
 Leite, H. D. R., & Vieira, G. E. (2015). Lean philosophy and its applications in the
service industry: a review of the current knowledge. Production, 25(3), 529-541.
https://www.sciencedirect.com/science/article/pii/S1877705817312432
 Yugendhar, A., & Ali, S. M. (2017). Evaluation of Implementing Holacracy, A
Comprehensive Study on Zappos. International Journal of Engineering and
Management Research (IJEMR), 7(5), 163-171.