DAM762 Strategic Operations: Zappos, Holacracy, and Lean Analysis

This presentation explores Zappos' strategic adoption of holacracy, its impact on operational performance, and its generic business-level strategy. It evaluates Zappos' customer service focus and its advantages in the online retail market, along with necessary functional-level implementations...Read More

Strategic Operational
Management
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 To encourage its employees to act more like the entrepreneurs rather than doing
exactly what the managers are telling them to do.
 To ensure that there is a presence of self-governing operating system in the
company where there absence of job titles and managers.
 To ensure that productivity and innovation is still thriving with the expansion of
the company (Eremina & Puhakka, 2017).
Why Zappos strategically adopted holacracy as its
preferred organizational culture paradigm?

How successful Zappos was by Strategically
changing their organizational culture to a
holacracy in terms of its impact on their
operational performance?
Zappos defined its corporate cultures along with its ten key values and they are:
 Pursue learning and growth
 Being humble
 Being determined and passionate
 Doing more with less
 Building honest and open relationship with the communication
 Being creative, open-minded and adventurous
 Creating fun as well as little weirdness
 Embracing and driving change
 Delivering WOW by means of service
 Building a family spirit and a positive team

Continuation…
 14% of the company has left
 Holocracy might or might not resonate with the employees and the ones that
it does not resonate with are likely to be dissatisfied with the work place.
 The company has taken several specific actions each day which reinforces fun
in its working culture and at the same time, a bit of weirdness.
 Training team of the company trains the employees in every core values
 The company takes the cultural fit very seriously and at the same time, hires
new candidates slowly.
 When any employee fails in the cultural fit interview, then he is not allowed
for the hiring process (Dolan, Makarevich & Kawamura, 2015)

What generic business-level strategy Zappos is
pursuing?
 Zappos pursue focus strategy as it is emphasised on the customer service
and therefore, it highly invests on the systems and the people in relation to
the customer service as compared to its customers (Stubbs, 2012).
 It has a key value-chain activities of purchasing, inventory, customer service
and logistics.

Does this strategy give it an advantage over its
rivals in the online shoe and clothing retail
market? If so, how?
 Yes, this strategy give it an advantage over its rivals in the online shoe and
clothing retail market
 As Zappos is more inclined towards focusing on its customer service.
 It invests more on its people and the systems in relation to the customer
service
 Customers are highly satisfied with Zappos than the rest other competitors as
they are more inclined towards products and other things, other than
customers.

In order to successfully implement its business
level strategy; critique what Zappos needs to do
at the functional level?
 In order to successfully implement its business level strategy, Zappos is required to
customize their marketing mix and product offering to the different market segments.
 The company should design the product offering which have high perceived quality on
the basis their features, functions and their performance.
 This would successfully implement the business level strategy of Zappos (Warrick,
Milliman & Ferguson, 2016)

Is Zappos currently doing these things?
 I think yes
 Zappos is moving towards right direction with its business level strategy and
this is highly depicted in their management and available stores.
 The company also never hold the sales and fact that they sell their clothing at
premium prices and this really help them in holding their revenue in the
market.

Lean production originally developed at a manufacturing
organisation, Toyota, is being applied in Case Study 2 at a hospital.
Evaluate what this tells you about strategically adopting a lean
production philosophy for managing operational performance
improvements?
 Adoption of the learn production is a fringe for the industry for managing their
strategic and operational gains and this in turn helps in reducing the waste.
 Lean management is all about operating the proficient and effective
organisation with zero waste and minimal cost and at the same time, meeting
all the customer demands (Hayes & Pisano, 2016).

Continuation..
 Lean management as a strategic importance.
 It is very important to ensure that the operational performance in the
company is continuous and growing
 It strive various tools and methods that are aimed at improving the
operational performance of a company.
 It is something that continuously strives for perfrection.

Evaluate what you perceive were the keys to the
apparently successful strategic implementation of lean
production techniques to improving operational
management performance at Virginia Mason Hospital?
 Virginia Mason Hospital cut the costs and the time and this made the process
of treating the patients and referring them to other place more efficient and
effective overall to the hospital.
 The hospital has the potential of increasing the efficiency
 The hospital increased the total quality by means of reliability and excellence.

References:
 Dolan, S. L., Makarevich, A. L. E. X., & Kawamura, K. M. (2015). Are You-And Your
Company-Prepared For The Future Of Work In Tomorrowland?. European Business
Review, 4-12.
 Eremina, A., & Puhakka, V. (2017). Comparison of organizational structures–case
Zappos. International Business Management.
 Hayes, R. H., & Pisano, G. P. (1996). Manufacturing strategy: at the intersection of two
paradigm shifts. Production and operations management, 5(1), 25-41.
 Stubbs, E. (2012). The value of business analytics: Identifying the path to
profitability (Vol. 43). John Wiley & Sons.
 Warrick, D. D., Milliman, J. F., & Ferguson, J. M. (2016). Lessons learned from Zappos on
what it takes to build high performance cultures. Organ Dyn.

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