Critical Analysis of Leadership and Management at Amazon UK

This report provides a critical analysis of leadership and management practices within Amazon UK, evaluating their impact on the company's overall performance. It begins by defining leadership and management, distinguishing between the two concepts, and exploring various leadership styles, including the pragmatist approach exemplified by Jeff Bezos. The report then delves into key performance metrics used in the technology industry, such as customer acquisition cost, revenue growth rate, and customer retention rate, and examines how Amazon utilizes these metrics to assess its success. The analysis includes a comparison of leadership and management, highlighting their differences in approach and focus. Furthermore, it explores specific leadership theories, such as autocratic, bureaucratic, and transactional leadership, as they apply to Amazon's organizational structure and employee management. The report also incorporates discussions on performance management models like 'stack ranking' and the use of feedback mechanisms to enhance employee performance. The document concludes by assessing the overall effectiveness of Amazon's leadership and management in relation to its business outcomes.

Developing Leadership
and Management Skills

Table of Contents

INTRODUCTION
Leadership is procedure of leading and motivating people to achieve company's
objectives along with employee's personal goals. Leader is one who directs, controls, motivates,
and organise group of people and lead their way to attainment of common goals. Leadership is
essential in every organisation so that workforce stay motivated and focused to succeed in
attainment of goals of organisation. Without an efficient and effective leadership employees
work aimlessly and it is not beneficial for organisation. Correspondingly, Management is a
process of organising, controlling, planning, directing, staffing of available resources of
company in a managed way(Abbas, and et. al. 2020). This process leads all resources such as
human resources, information, technological resources, financial resources for accomplishment
of organisation's objectives. Effective management can be very helpful in success and growth of
company. Resource are valuable and some resources are limited so efficient use of these
resources is only possible by better management of these resources.
Amazon is a multinational technology company, which was founded by Jeff Bezos in his garage
in Bellevue, Washington on July 5, 1994. Founder started it as an online books selling but
gradually it started selling so many items such as software, electronic items, furniture, jewellery,
food etc. Company is growing bit by bit and currently it is one of most valuable companies of
USA, firm has it's name in big five companies of country. Company's headquarter is situated in
Seattle, Washington Founder choose this location for headquarters because Microsoft is situated
there. According to revenue of company Amazon is largest internet company in the word. In this
essay reasoning is given on management and leadership along with important performance
metrics of an organisation industry as well as leadership and management performance in an
organisation is delineated in context of Amazon UK.
Analytic thinking and comparison of leadership and management
Leadership is an act of leading people or group of people towards attainment of common
goals. In a company leadership is very necessary to lead and motivate subordinates for achieving
predetermined goals or objectives. A good leader can be role model for other employees and it
affects their individual performance as well(Ayeleke, and et. al. 2018.). In amazon UK
pragmatist leadership style is followed, pragmatist style is a style of leadership in which leaders
set a very high standards and focus on achieving them with help of employees and leaders.
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Pragmatist leaders are bold thinkers and achieving high standard objectives is their first priority
and obstacles do not halt them in way of attaining those goals. Jeff Bezos who is owner of
company is also an impressive and proven business leader. Owner of Amazon is an exceptional
leader who do not focus much over relax and enjoyment of employees but focuses more over
providing best experience and services to customers of organisation in return company has
grown in market very fast. Company precede pragmatist style of leadership on basis of that Jeff
Bezos is shown as a harsh and strict leader but in favour of company's business which has helped
company in it's growth and success a lot. Firm has principles of it's leadership such as ownership,
customer obsession, leaders are right, think big, deliver results, earn trust, have stand, dive deep,
work on highest standards, frugality, bias for action, invent and simplify, hire & develop best,
and learn & be curious. Leadership of company tally on these principles of a good leadership to
attain development and growth in organisation. There are various leadership models such as
Autocratic leadership, bureaucratic leadership, democratic leadership, Transformational
leadership, transactional leadership, etc. leaders of company uses these leadership styles and
lead Amazon towards more success everyday.
Management is procedure that includes operations such as controlling, staffing,
organising, planing and directing done by administration of a company (Bunch, and et. al.
2021.). All these operations are done to manage various valuable resources of company
efficiently. Appropriate allocation of resources for completion of tasks is done by management
so that scarcity of resources do not affect day to day operations of company. A good
management can be milestone for company's growth. Management of company control, organise,
plan, direct and develop workforce of company to achieve goals of organisation. By using 5
forces managers of company gain efficiency in working of employees, projects, operations and
company as a whole. Amazon UK uses various management models performance management
model is one of them. Performance management is a process of evaluating working capacity of
any employee or organisation as a whole against benchmarking standards of company. Six
sigma is a set of techniques which was invented by Bill smith in 1986. This set of techniques is
used in improvement of any process or performance of employee and providing enhanced
customer experience at reasonable prices. Company does performance management on basis of
few principles that are explained below.
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Feedback and Ranking: At amazon, Performance management process named 'stack
ranking' or rank and yank is used for rating employee's performance against each other
biennially. Employees are ranked on basis of their performance and they are promoted or
demoted according to that. Amazon also provides feedback regarding their working capacity and
performance so that they can improve and change what is needed. Company has Anytime
feedback tool which is used in providing continues feedback to employees anonymously
regarding good or bad performance of employees. Company also uses various management
theories such as scientific management theory, bureaucratic management theory and contingency
management theory etc. Firm provides continues and annual both feedback to it's workforce.
Views of mangers and employees: Upward feedback is used at Amazon so that
employees can also provide feedback regarding their managers. Company has given rights to
subordinates to give feedback on what they think about managers or higher level management.
Benchmarking: Company is using pragmatist style so higher standards are set for
performance of employees or operations and it is expected from them to attain those standards in
planned time to match those benchmarks. Company is known for providing best possible
experience to it's consumers so firm follows strict working principles in organisation.
Leadership and Management are little similar but quite different at the same time so a
long debate is going on over this topic from a long time. Leaders and managers are both part of
an effective organisation working but they have different ways of working (Cherinet, 2018). A
brief comparison between management is given below.
Basis Leadership Management
Definition Leadership is an art of
motivating and leading
members of organisation
towards attainment of success
and growth of an organisation
they are part of.
Management refers to planning
, coordinating, organising,
controlling, and directing
people or group of people of
an company for achieving
objectives of company.
Power through Leaders evolve power with
people.
Whereas, managers exercise
their power over employees.
Focus Leaders lead people towards While managers handle or
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destination. manage work and workforce of
an organisation.
Organisation In an organisation leaders have
followers.
Managers have their
subordinates in a group or
organisation.
Style Leaders have a motivational
style of working.
In comparison managers have
authoritarian style to manage.
Risk approach Risk- taking approach Risk-averse approach towards
risk.
Important performance metrics of industry
These important performance metrics are also known as key performance indicators that
are used in measuring or evaluating company's performance and achievement against
predetermined targets of firm. All expenses of firm are deducted from revenue or turnover of
company and remaining amount determines growth of company in comparison of targets which
were fixed by company(Decman, and et. al. 2018). Technological industry is growing every day
and inventions in technology are increasing rapidly, so this is a industry which is evolving very
fast. There are key performance indicators for technology industry which includes both hardware
and software, following are KPI metrics for technology industry.
CAC ( Customer Acquisition cost): This key performance metric is used in directing
marketing and sales to achieve more success. This is calculated by dividing total marketing and
sales expenses of a period with number of customers acquired in that particular period.
RGR ( Revenue Growth Rate): Tech companies always measure their success on basis
of revenue of particular period. No tech company wants a negative revenue growth rate. RGR
can be evaluated on monthly, quarterly or yearly basis(.Hakkak, and et. al. 2019). It is calculated
by subtracting previous year's revenue from most current full year's revenue and then divide it by
previous year's revenue and multiply by 100.
CRR ( Customer Retention Rate): This rate refers to the customers who remained with
organisation for a specific time after you tried so hard to keep them with company. Customer
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retention rate can measure your customer service as well in a period as well as this can also
identify major changes occurring in market in CRR.
Burn Rate: This is an important performance indicator for any tech company because
this rate tells you the duration you have left before you go out of business, your performance gets
better or you are going to need additional capital. So basically if a company have $500k total
operating expenses for a quarter and a revenue of $150k then company has a burn rate of $350k.
Amazon is multinational technological and e-commerce giant who also deals in supermarket
business and other products. Company is following pragmatist leadership style under Jeff Bezos
who is known as harsh and strict leader so performance standards and targets are expected very
high and KPIs measure performance of company against those targets or success rate. Amazon
uses numerous key performance indicators to measure company's performance such as click-
through rate, total advertising cost of sales, average order value, ROAS, organic conversation
rate and many others. These metrics help organisation improving work efficiency and achieve
predetermined targets of company effectively. Firm is working well on all these key performance
indicators and achieving impressive success.
Organisational Leadership and management performance
Leadership and management both are essential part of performance management of a
company. They not only improve company's performance but also help in overall growth and
success of company (McGarry 2017). Leadership is motivating people towards achievement of a
common goal while management is a process of managing resources of company with help of
organising, planning, controlling, staffing and directing.
Organisational leadership is an approach in which leaders help in setting strategic
objectives for company and motivate individuals to achieve those goals. Amazon uses various
leadership theories that impact performance of employees and organisation as whole some of
them are explained here.
Autocratic leadership: This leadership is opposite of democratic leadership. In this
leadership theory only leader have rights to take all important decisions regarding company and
other members of organisation have to follow them( Mendenhall, and et. al. 2020). In amazon,
this theory is used by leader Jeff Bezos. All important decisions are taken by leader by leader and
employees of Amazon follow those decision to achieve objectives of company. In this leadership
approach group discussion regarding taking decisions by subordinates as waste of time. This
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leadership approach can make employees feel ignored and restricted so it might decrease
performance of employees and that will impact overall performance of company. Autocratic
leadership style is applied in company very carefully so that amazon employees are not suffering
and company is growing constantly.
Bureaucratic leadership: In this form of leadership leader of company or organisation
seeks for validation regarding his decisions. Leader tries to follow example of previous
exceptional leaders so that followers can get motivated by his lead. Jeff Bezos leader of Amazon
is known for strict and harsh decisions still owner checks if decisions are right for company or
not. This leaves an motivating impact on employees and workforce try to follow their leader to
achieve best by confirming and comparing it with best. This leadership style improves
performance of employees because they have a constant pattern of working.
Transactional leadership: Transaction in simple words is give and take behaviour, for
instance somebody does a task for someone and gets something in return. This leadership style is
also called 'telling' leadership style. Leader rewards or punishes according to work done or work
performance of employees(Oplatka, and Arar, 2017). It is a direct approach of Amazon for
leading employees and improving performance of organisation as a whole. Company believes
that this leadership theory can be time saving and helpful in improving performance of
individuals because tasks and expectations are clearly assigned to subordinate by Leader.
Transformational leadership: This style of leadership refers to those leaders who
motivate their employees to change and transform existing working policies. At Amazon, Jeff
always innovate some new ideas to get technological multinational corporation to new heights of
success. Leader also motivate and lead employees of company to be creative and innovate
something better and new every time. This leadership style used by Amazon is very helpful in
improvise working efficiency of employees,
Management is a process that is used for effective and efficient use of resources by using
five forces of management which are organising, planning, controlling, staffing and
directing(Sonsale, and Bharamgoudar, 2017). Amazon uses management theories for improving
performance of organisation and organisational operations to support appropriate use of
resources and increase growth of company. Following are management theories which impact
performance of individual and organisation as a whole.
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Human relation management theory: This management theory is based on relationship
of management with it's workforce. Though Amazon has pragmatist management and leadership
style yet company believes attention paid for development of employees will support efficient
management performance and it will be helpful in improving performance of individuals as well.
Scientific management theory: Fredrick Taylor invented theory of scientific
management and according to this theory standardisation, specialization is very important and
assignment of tasks should be based on ability of employee. Amazon has an sustain and strong
management which constantly put efforts to improve performance of employees and business for
that cooperation, training and workplace environment is provided to employees.
Contingency management theory: According to this theory particular management or
leadership style should be followed by organisation that can impact performance of employees
and all organisational operations in a positive way(Stoller, 2020). Jeff Bezos leader of Amazon
follows a pragmatist style of leadership which is quite accurate for improving overall growth of
organisation by increasing customer satisfaction.
CONCLUSION
This report concludes a detailed essay on leadership and management skills. Leadership
is an art of leading people or number of people towards attainment of objectives their an
organisation or company. Whereas directing, controlling or staffing member of organisation to
achieve goals of company is called management. Basically appropriate allocation of valuable
resources of company is management. This essay summarises analytical thinking and
comparison of leadership and management along with important performance metrics of
industry. Further it explains impact of leadership and management on performance of
organisation as a whole. Various leadership theories such as autocratic leadership theory,
bureaucratic leadership theory, transactional leadership theory and transformational management
theory are evaluated in context of company. Management theories such as contingency
management theory, human relationship management theory and scientific management theory
are also delineated. Impact of all these theories on performance of organisation and its members
growth and success is concluded in this report.
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