Organizational Change and Mergers: A Comprehensive Case Study

This case study analyzes the organizational challenges faced by Amazon after acquiring Zappos, focusing on communication, cultural differences, and employee retention issues. It explores the application of horizontal and vertical merger theories, along with the changing process, including preparing for, managing, and reinforcing change. The study evaluates the outcomes of the merger, highlighting Amazon's success in expanding its product offerings. Recommendations are provided to address the challenges, emphasizing the importance of considering the partner company's rules and prioritizing employee well-being. The case study concludes that Amazon's acquisition of Zappos was successful, leading to significant financial gains and market expansion, while also underscoring the need for effective change management strategies to mitigate organizational challenges.

Managing organizational Changes

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Contents
Introduction................................................................................................................................2
Organisational challenges..........................................................................................................2
Theoretical Frameworks.............................................................................................................3
Changing process.......................................................................................................................3
Evaluation..................................................................................................................................4
Recommendations......................................................................................................................4
Conclusion..................................................................................................................................5
References..................................................................................................................................6

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Introduction
The main aim of an organisation is to achieve the success in the market. The company faced
many problems at the time of achieving the success. The problem faced by an organisation is
called the organisational challenges. At the time of merging process; the company faces the
many challenges due to different culture, techniques and quality of work like in the case of
“Amazon and Zappos”. In this report, the case study is taken into consideration to analyse the
organisational challenges. In the beginning of the report, the organisational challenges faced
by the companies will be discussed. After that, the company profit is evaluated which is
gained after merging with Zappos. To reduce the challenges; the recommendations will also
provide at the end of the paper.
Organisational challenges
Communication challenges
Communication challenges came out at the time of merging the companies which is
happened in the case of Amazon and Zappos. In this case, Amazon acquired the Zappos to
extend the business and create the better experience for the customer. Communicating with
the employees and giving them power is a major challenge for the companies. Both the
companies have a different hierarchy; after merging both the companies they did not follow
their hierarchy which is a major challenge for the companies (Vernuccio, and Ceccotti, 2015).
Culture Challenge
It is very hard for the Zappos to adjust in the Amazon’s culture. Zappos is famous for its
culture and its assets. It develops the relationship with the employees and customer and it
maintains their core values.

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Employee retention
At the time of merging of the companies; it has been seen that the companies face the
retention problem. Due to lack of leadership the employees getting demotivated and
employees have a large risk. Because employees lost their job security at the time of merge
with the other company. Thus, the employees left the organisation. So, the organisations
faced this challenge after merging with each other.
Theoretical Frameworks
Horizontal merger
The companies follow the horizontal merger just because of both the companies dealing in a
similar line. Zappos and Amazon both sell the products through the online network. The
purpose of applying this merger is reduction the competition as well as increasing the
economies of scale in production (Humphery‐Jenner, Sautner, & Suchard, 2017).
Vertical Merger
Amazon and Zappos merger follows the downstream type of merger. The companies merge
just because of reducing the buying cost of material, low cost and selling expenses.
Changing process
Preparing for change
Amazon and Zappos set their management strategies to reduce the gap which is created due
to differentiate between in the cultures of both the companies. Amazon sells their product
online, it also sale the product of the Zappos with its other products from which the way of

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marketing is similar for both the companies. For this, the Amazon maintains the management
team which is difficult for the company. According to the above analysis, it has been seen
that the companies face the challenge of employee retention. Thus, it is difficult for the
company to maintain the management team (Maetrics, 2018).
Managing change
Amazon and Zappos improved its communication plan because the company faced the
communication challenge. It provides the training to the employees by adopting the new
techniques of the company (McGuire, 2018).
Reinforcing change
After implementing the changes, the companies take the feedback from the employees for
applying more changes. As per the research, the merging process of Amazon and Zappos is
getting successful.
Evaluation
After merging the companies, Amazon achieves its goal of becoming the WalMart of the
web. It also sells every type of product with the help of Zappos. Zappos sell the clothes and
shoes through online market; the Amazon takes the advantage by using selling the Zappos
product with their product and made the website like WalMart. The company earns the
1billion plus which is the biggest acquisition in Amazon’s history. According to the research,
it can be said that Amazon achieves the success due to its selection of Zappos because after
that it sells the shoes and clothes (Lashinsky, 2018).

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Recommendations
The company should take care of its partner company’s rules and regulation or its
perspective.
It is the duty of the company to give the importance to employees and foremost. So
employee’s turnover is reducing and the company can achieve its goals and objective (Kim,
2015).
Conclusion
From the above analysis, it has been concluded that Amazon and Zappos merge with the each
other. At the time of merging, the company faced the organisational challenges. Amazon
acquired Zappos by implementing the horizontal and vertical theories. Amazon achieved the
success after merging with Zappos; it sells all types of products such as clothes and shoes. To
reduce the issues, the company follow the change management process and implement the
new communication plan. According to the analysis, it can be said that Amazon earned
millions after merging the Zappos.

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References
Humphery‐Jenner, M., Sautner, Z., & Suchard, J. A. (2017). Cross‐border mergers and
acquisitions: The role of private equity firms. Strategic Management Journal, 38(8), 1688-
1700.
Kim, J. (2015). What Increases Public Employees’ Turnover Intention?. Public Personnel
Management, 44(4), 496-519.
Lashinsky, A. (2018). Why Amazon Tolerates Zappos' Extreme Management Experiment.
[online] Available from: http://fortune.com/2016/03/04/amazon-zappos-holacracy/
[Accessed 16/09/18].
Maetrics. (2018). Mergers & Acquisitions Life Sciences (Pre- & Post-Transaction). [online]
Available from: https://maetrics.com/life-sciences-consulting/mergers-and-acquisitions/?
gclid=Cj0KCQjw_vfcBRDJARIsAJafEnGU4uSOrMvdYA9DpVODROmcjtlJYRDiayAavD
3HeU2rzwzw9Ootmg8aAteqEALw_wcB [Accessed 16/09/18].
McGuire, D., Todnem B. R., & Hutchings, K. (2007) Towards a model of human resource
solutions for achieving intergenerational interaction in organisations. Journal of European
industrial training, 31(8), 592-608.
Vernuccio, M. and Ceccotti, F. (2015) Strategic and organisational challenges in the
integrated marketing communication paradigm shift: A holistic vision. European
Management Journal, 33(6), pp.438-449.

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