Workplace Culture and its Impact on Organisational Efficiency

This report discusses the impact of workplace culture on organisational efficiency, with a focus on Amazon's culture and its environmental factors. It includes a PESTLE analysis and Porter's five forces analysis of Amazon, as well as recommendations for enhancing workplace culture.

Workplace Culture and its
Impact on Organisational
Efficiency

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Impact of environmental factors on the culture of Amazon.......................................................3
Promotion of ethical behaviour among the employees in organisation's culture........................8
Recommendations to enhance the workplace culture of Amazon ...........................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Organizational culture refers to the set of values and practices that are shown by the
employees in the business. The culture in the business consists of beliefs that are shared among
the employees and established by the leaders and managers of the company (Alias, 2020). If the
culture in the organisation is positive then it will enhance team building which will ultimately
contribute to the productivity and efficiency in the organisation. The company can only achieve
its mission if it is capable enough to adapt to the new changing working culture. In this report,
Amazon is considered which is a US based company majorly dealing in the field of e-commerce
and digital streaming. This report further revolves around the environment of the business and
how it influences the culture of the organisation. This report critically evaluates every aspect of
the workplace environment and the importance of a good workplace environment in the
organisation.
MAIN BODY
Impact of environmental factors on the culture of Amazon
There are several factors in the business environment that somehow impacts the
operations and culture of the organisation. The company is required to critically evaluate the
external environment and make the business strategies accordingly. This factors cannot be
directly controlled by the organisation and thus they are required to adjust their operations and
culture according to these factors (Alina, 2017). To understand the impact of business
environment on the culture and operations of Amazon, PESTLE Analysis is performed below
along with Porter's five forces.
PESTLE Analysis of Amazon
PESTLE Analysis is considered as an effective tool that helps the organisations in
critically evaluating the external factors that impact the business. This tool widely covers the
most essential six factors which, these six factors are discussed below in context with Amazon
(Amazon.com Inc PESTLE/PESTLE Analysis, Recommendations, 2019): Political factors: This refers to those factors that are influenced from the decisions made
by the government. The government has control over the policies and rules interesting the
businesses. Tax rules and regulations are important for the business as they decide the

scale of operations along with the profitability of the company. In context of Amazon,
Government highly appreciates and supports the e-commerce business and thus the laws
are highly flexible with little restrictions (Baddah, 2017). This factor positively impacts
the culture and sustainability of the organisation as they have a good support from the
government and authorities. The government also decides the import and export duty on
the products, thus if these duties are high then this will negatively impact the operations
of the business. The support of the government in the activities of Amazon can highly
influence the behaviour of the employees and managers in a positive sense. Economical factors: Economical factors are important as they are related with the
monetary terms of the business. Amazon is highly dependent on the economy of the
nation in which they are operating their business (Wiley, 2018). Economy of the nation is
influenced by several factors and thus it cannot be controlled by the company in any
manner. Economies of the countries like US and other European countries are ever
emerging which generates ample of opportunities for Amazon as their e-commerce trade
could boost up to some new levels. This factor positively impacts the profitability, growth
and culture of the organisation as opportunities bring the workforce together under one
roof. The company is only likely to face failures in case of the recession period such as
the impact on the economy due to covid-19. This plague stopped all the e-commerce
trade and activities which negatively impacted the operations of the business. Due to the
case of in operability, the company had to let go some employees which impacted the
culture of the company. Social factors: This is related with the activities that are performed by the society and
people that are somehow associated with the business. This highly influence the
operations of the business as every company in the environment is dependent on the
customers and employees. Amazon has a diversified customer base across the world and
they have their workforce set in every part in which they operate. Amazon understood the
need of e-commerce requirement of the customers, they highly promoted this concept
which positively impacted the growth structure of the organisation. The company also put
efforts in understanding the need and demands of their employees so that they can create
effective work culture in the organisation. The change in the behaviour and needs of the

customer towards the e-commerce is one factor that could negatively impact the working
of the business. Technological factors: Technology is one of the major component in advancing the
business and its culture. Advancement in the field of technology has enabled businesses
to reach new heights. Technology has always been effective in getting a competitive edge
in the business and thus the inclination towards innovation is essential. Amazon is one of
those company that is highly dependent on the technology as majority of their operations
are performed and dependent on the technology (Chernikova and Zvyagintseva, 2017).
The adaption of new technology in the field of e-commerce activities such as order
booking and supply chain would positively impact the operations and culture of the
company. Culture is enhanced due to the field of technology as the employees develop a
good relationship with the co-workers. The negatively impact of the technological factors
in Amazon is too much dependence. The company will face severe issues in case the
technology fails to deliver the sole purpose of the business. Legal factors: Legalities in every country is different and the organisations are obliges to
meet these legalities anyhow. There are several laws in the country that are enforced by
the government regarding the business and operation of these respective business.
Amazon is a multinational company whose operations are wide spread in a lot of
countries and thus they really need to understand and work upon the legal factors that
interest the organisation. There are several legal laws regarding the code of conduct
followed in the culture, these laws also state the treatment of employees in the company.
Amazon strictly follows these laws which positively impact the organisation in setting up
a healthy work culture environment. Any kind of breach in these laws would directly
impact the goodwill and social image of the company. If the company is unable to
maintain the working culture stated in the laws then the organisation will face legal
complications which will negatively impact the business.
 Environmental factors: The company operates in the environment and thus has some
responsibilities towards it. These factors are derived from any kind of influence that the
environment has on the working of the business (Chomicki 2017). Amazon must be able
to sustain in this environment along with sustaining the environmental factors. The
company stopped the usage of plastic bags in their order shipment which helped the

business in maintaining an ecological image in the market. This positively impacted the
culture as the employees are taught to sustain the environment and avoid the usage of any
kind of material that may harm the environment. Stopping the usage of polythene bags
negatively impacted the revenue of the company as they need to purchase the cardboard
boxes which are costly as compared to the polythene. This increased the expenditure of
the company and ultimately lowering the revenue.
From the above application of PESTLE framework in Amazon, it can be analysed that there are
several factors in the environment which directly influence the internal factors of the
organisation. Thus the company need to adjust and enhance their working according to the
factors discussed above.
Porter's five force analysis of Amazon
This model helps in identifying and analysing the five competitive forces that helps in
shaping the business and determining the strengths of the business. This structure is frequently
used by various companies in order to determine the areas in which the company has its major
strengths in. Amazon is a market leader in the e-commerce industry and thus need to evaluate
these factors as they impact the growth strategy of the company. Further the five forces and
aspects are discussed below in context with Amazon (Porter's Five Forces Analysis of Amazon,
2020 ): Threat of new entrants: The company is majorly leading in the e-commerce sector and
their scale of operations is spread across the world. Thus, it would be really difficult for
any business to compete with such a big company (ElKelish and Rickards, 2018). The
new entrants would require a lot of investment into sectors such as warehousing,
marketing, distribution, logistics and customer services. The threat of the new entrant for
Amazon is low, few more reasons to support this statement are discussed below:
Switching cost- E- commerce industry in general requires not much of the resources but to
compete with such big giant in the industry as Amazon, the competitors require a lot of
resources.
Customer loyalty- Amazon has a huge customer base who is highly dedicated towards the
company. Customers highly trust the processes that are followed by the company and thus to
compete with such industry becomes difficult (Etejere, AWODIJI and Raji, 2021). Amazon is

known for its brand loyalty and the experience that they give to the customers. Therefore it is
really difficult for the new organisation to enter and dominate a company like Amazon.
Economies of scale- Amazon enjoys advantage on economies of scale over the other brands as
they have the reputation of the largest retailer on the internet in the whole world. New entrants
won't have this advantage in favour and they won't be able to potentially use the factor of
economies of scale to the extent at which Amazon does. Bargaining power of Buyers: Amazon's major factor of operation is to provide the
customers with the best services which will satisfy the needs and wants of the consumers.
They run an approach of customer centric business which assists them in topping the list
of e-commerce companies around the globe. Though Amazon is a leading business but
there are several competitors who aims to take the position at which Amazon is currently
standing. The competitive factor can only be effectively achieved if the other companies
have a better price range to offer (Khan, Memon and Ramayah, 2018). Therefore
Amazon also needs to adjust their pricing model according to the industry
otherwise they will starting loosing their customers to the business who are offering the
same line of products and services at a lower cost. The bargaining power of the customers
is therefore high in the industry, to support this statement few more aspect are discussed
below:
Low switching cost- The customers does not have to spend much in order to switch to other
brand in fact there are competitors who are offering exciting offers if the customers join their
company. The customers can easily switch to other business dealing in the e-commerce industry,
therefore Amazon is expected to provide the best of quality at minimum pricing.
High availability of substitutes- The e-commerce industry is filled with competition as there are
several competitors in this field and it is easy for the customers to find substitute for the product
and services provided by the Amazon. Amazon's services should be attractive enough so that the
customer's prefer their services over other substitutes in the market. Threat of substitute: The online retail business faces high competition which gives the
scope of substitute products in the business. The industry has a lot of competitors which
provide the exact services which Amazon is providing. Therefore, the threat of substitute
products is high in the business environment of Amazon. Few of the aspects that support
this statement are:

Low cost of substitute- The other companies dealing in e-commerce is trying to take the place of
Amazon and thus they are offering the same services at a lower cost. This highly effect the sales
of the Amazon as the customers always look for the cheaper substitute in the market.
Easy to provide the substitute service- The e-commerce services does not have much regulations
and therefore it easy for the competitors to come into this industry and provide the same services
at a low cost. Bargaining power of suppliers: Suppliers provide Amazon with the stuff that is needed
to deal in the e-commerce industry. There are several suppliers in the industry who are
really willing to work with a giant company such as Amazon. The company has enough
of the resources and thus they have a good power over the supplier. The bargaining
power of the supplier in case of Amazon is low, few of the reasons are covered below to
support this statement:
Easy to switch- There are huge number of suppliers in the industry who supplies the raw material
required by Amazon in their services. The company can easily switch if the supplier is asking for
more money to provide the raw material to the business. Amazon won't have to work much in
order to acquire a new supplier for their organisation.
Brand image- The company has a good brand image in the market which influences more and
more suppliers to get into touch with the business. There are a lot of willing suppliers in the
market. Competitive Rivalry: Competition is one of the major factor that contributes to the
growth and expansion of the industry. The business which is able to survive in the
competitive market can easily sustain and aim for a long term growth. In case of
Amazon, the company faces high threat of competition and rivalry as there are a lot of
industries who deal in e-commerce.
Promotion of ethical behaviour among the employees in organisation's culture
The culture of the organisation must be healthy so that every employee working in the
organisation believes in the principles and ethics (Liunome, 2018). This can only be achieved if
the work environment is regularly monitored by the managers and leaders of the company. The

businesses who establish a good working culture in the company are more likely to succeed.
Amazon has a set standard of ethical behaviour that needs to be followed in the organisation. The
leaders and managers ensures that the this behaviour is continued and maintained in the
organisation. Amazon follows the method of cultural web in the organisation and thus the
elements of cultural web are discussed below: Stories- The story behind the successful people associated with Amazon is effective in
establishing a good culture in organisation (MBEBA, 2018). The people working in the
company should talk about the past events that has happened in the favour of the
employees working in the business. This helps in establishing great values in the prospect
of the business. Rituals and Routines- The management of Amazon has set up a specific routine for the
employees which help in determining the course of action they are expected to perform
(Peretz, Fried and Levi, 2018). This helps the business in removing chaos and confusion
among the employees and managers and ensures smooth flow of work in the business. Symbols- The logo and symbols associated with the company are important as they help
in maintaining a good image of the company. Amazon has specific dress codes for the
employees which helps the firm in maintaining the decorum of the company which
further helps in establishing a god working culture. Organizational Structure- This structure defines the flow of information and power
between the employees and managers working in the organisation (McMurray, de Waal
and Etse, 2019). The power of decision must be provided in the right hands or it will ruin
the organisation culture. Amazon follows a concept of decentralisation and centralisation
of authority and responsibilities which ensure effective decision making. The decision
which are urgent are taken by the middle level management where as the decision with
high priority is taken by the top authority of the business. Control systems- The right controlling of the tasks in the organisation is necessary as the
financial system is based upon this aspect. Amazon has distributed their controlling
system to the finance department and the managers. This helps in avoiding any conflicts
among the employees and the peaceful behaviour is maintained in the business.
 Power structures- This refers to the people who has the highest power in the company,
they are the ones who decide on what grounds the company should work. Amazon's pwer

structure is fairly open where the managers of the branch are liable to the company's
performance and thus take all the important decisions.
Recommendations to enhance the workplace culture of Amazon Create and communicate meaningful values: The employees must convey good set of
values to each other. The company is recommended to increase the process of interaction
between the employees as this will establish good grounds of values in the organisation.
Amazon should follow a set schedule for this activity and the employees should be asked
to tell the importance of the values learnt in the today's session (Novak and et. al., 2017).
These values will build a god bond between the employees and they will learn to
communicate and help each other. Employees must be engaged in different activities all year round- Amazon is
recommended to conduct various activities, sessions and games that support the
behaviour of oneness among the employees. Engagement in the activities on a regular
basis will enable the employees to communicate effectively. Every employee would be
able learn new things from their subordinates. Recognition and rewarding valuable contributions- Amazon is recommended to reward
the employees who are giving their best in order to achieve the goals given to them. This
will help in establishing a good working culture as the rewarding procedure would
motivate other employees to give their best in the work. Communication of purpose and passion- The managers should be able to effectively
communicate the purpose behind the task allotted to the employee. This will help in
clarity of work which will enable a good flow in the organisation (Odongo and et. al.,
2019). This also enhances the productivity of the working culture. Regular feedback from the employees- Amazon is recommended to take regular
feedback from the employees regarding the ethics and culture followed in the
organisation, this will help the managers in knowing if the strategies are applicable or
not. Feedback also helps in knowing the loophole in the whole process and thus the
company would be able to fix the bad aspect of this situation.
 Providing autonomy to teams- Amazon is recommended to provide enough autonomy to
the teams. The teams distributed by the managers must be given enough authority and

responsibilities so that they can effectively manager their operations and task. This will
develop a feeling of trust and responsibility in the company which directly contributes to
the healthy culture of the organisation.
CONCLUSION
From the above report it can be concluded that workplace culture is an important aspect
in the business and it must be maintained. The companies are exposed to several external
environment that will impact the operations and culture of the organisation. There are several
factors in the industry which can be analysed with the help of models such as PESTLE and
Porter's five forces. Working culture can be maintained by the leaders and managers with the
help of cultural web where several important factors are covered.

REFERENCES
Books and Journals
Alias, R.A., 2020, December. Affecting Factors in Information Security Policy Compliance:
Combine Organisational Factors and User Habits. In International Conference of
Reliable Information and Communication Technology (pp. 826-836). Springer, Cham.
Alina, S., 2017. Organisational culture and its improvement.
Baddah, A., 2017. The Influencing Factors of Organisational Change Management: A Literature
Review. Ahi Evran Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi. 1(1). pp.42-
58.
Chernikova, L. and Zvyagintseva, O., 2017. The role of organizational culture in personnel
management. Экономические исследования и разработки, (4)pp.143-148.
Chomicki, M., 2017. The Influence of Organisational Culture of Polish Companies on Their
Cooperative Relationships. International Journal of Contemporary Management. 16(3).
pp.93-106.
ElKelish, W.W. and Rickards, R.C., 2018. Organisational culture's impact on management
accounting and control practices in the United Arab Emirates. International Journal of
Accounting, Auditing and Performance Evaluation. 14(1). pp.24-46.
Etejere, P., AWODIJI, O. and Raji, S., 2021. Organisational Factors as Correlate of Non-
Teaching Staff Job Performance in Kwara State Colleges of Education, Nigeria. The
Journal of Management Theory and Practice (JMTP). pp.64-70.
Khan, S.K., Memon, M.A. and Ramayah, T., 2018. Leadership and innovative culture influence
on organisational citizenship behaviour and affective commitment: The mediating role
of interactional justice. International journal of business and society. 19(3). pp.725-747.
Liunome, F.Y., 2018. The influence of organisational climate and culture on employees’ work
motivation: A case study at Kupang State Agricultural Polytechnic. International
Journal of Research in Social Sciences. 8(4). pp.442-460.
MBEBA, R.D., 2018. Essence of a Flexible Organisational Culture to Influence Change in the
21st Century Organisation. Journal of International Cooperation and Development,
1(1). pp.13-13.
McMurray, A., de Waal, G.A. and Etse, D., 2019. Frugal innovation: Organisational climate and
culture. In Frugal Innovation (pp. 215-227). Routledge.

Novak, J., and et. al., 2017. Do effective workplace relationships with management and an
effective maintenance culture affect organisational safety outcomes?. Reliability
Engineering and System Safety Journal.
Odongo, N.H., and et. al., 2019. Dimensions of organisational performance: a review.
International Journal of Manufacturing Technology and Management. 33(1-2). pp.114-
129.
Peretz, H., Fried, Y. and Levi, A., 2018. Flexible work arrangements, national culture,
organisational characteristics, and organisational outcomes: A study across 21 countries.
Human Resource Management Journal. 28(1). pp.182-200.
Wiley, A.M., 2018. Culture and Information Security Awareness: Examining the Role of
Organisational and Security Culture (Doctoral dissertation).
Online:
Amazon.com Inc PESTLE/PESTLE Analysis, Recommendations. 2019. [Online] Available
through: <http://panmore.com/amazon-com-inc-pestel-pestle-analysis-
recommendations>./
Porter's Five Forces Analysis of Amazon. 2020. [Online] Available through:
<https://www.marketing10.in/porters-five-forces-analysis-of-amazon/>./