Zappos Case Study: Management Theories and Contemporary Issues

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Case Study
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Executive summary
Zappos is a company whose business trading is done online and trade in the line of shoe and
clothing material on retail business but this organization is purchased by Amazon. It means now
Amazon Company is the parental company of Zappos. This assignment contains different
management theories, contemporary issued in various departments and also find opportunities
and threats for the manager's purpose working at all level of business.
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Table of Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................4
Key management challenges...........................................................................................................5
Recommendations..........................................................................................................................13
Conclusion.....................................................................................................................................14
Reference.......................................................................................................................................15
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Introduction
The purpose of creating this report is to provide knowledge and obtain good information about
the Holacracy structure which is adopted by the Zappos organization to manage its business
structure. From this report, seen that Holacracy structure is not useful for all the organization
such as Facebook, social media company also uses the same structure but failed to adopt due to
their internal management. Holacracy structure is a structure which focuses on work instead of
focusing on people but Zappos is associated with the people.
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Key management challenges
Management theories are the bundle of general rules which aid mangers of the firm or company
to manage their organization in a better way. Theories are act as a guide, on this basis employee
of the firm are going towards the achieving of organizational objectives effectively (Fan, &
Stevenson, 2018).
There are the following theories of management which provide information regarding
contemporary practices:
 Classical management theory
 Human relation theory
 Behavioral management theory
 Administrative management theory
 Scientific management theory
The above different theories of management are to be discussed in brief in the following part:
 Classical management theory:
This is the oldest theory of management. This theory aims to concentrate on operations and the
method of creating standards to increase business productivity by increasing output. Under this
theory, any compensation is paid by the employee's employer to employee is considered as a
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primary monetary motivation for employees of the organization. Nowadays this theory is mostly
used by every organization like Zappos company because the purpose of this is to focus to
improve output by giving rewards to those whose performance is high through the paying
monetary benefits such as bonus and incentives (Nicotera, 2019).
 Human relation theory
Under this theory, it considers the whole organization as a social entity. This theory is based on
the assumptions that paying money is not sufficient to satisfy employees. Due to this to increase
employee satisfaction it focuses on increasing morale among the employees so that they can
work effectively.
 Scientific management theory
Frederick Taylor is a person behind developed this theory. This theory suggests how to reduce
wastage and production time. The need for this developed is to improve business operations
through the scientific approach. It does not consider hit and trial method but it emphasizes on
incentive who earn through the increment in performance (Miterev, et. al., 2016).
 Administrative management theory
This theory is developed by Henry Fayol who is the father of management theory. It considered
the entire organization activities that a business must need to operate its business affairs.
 Behavioral management theory
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This theory is suggesting that to include more people in the organization. The behavior of
humans and their personal needs is the aim of management to satisfy so that they work with the
proper mindset and this will become the central point which is important to meet objectives.
The above different theories are an aid in transferring information to sort contemporary practices.
There are various contemporary issues which are faced by different department's managers in the
Zappos organization. The problems faced by the managers are as
 Not able to establish good communication with employees
 Faced issue manage time
 Not able to set all goals and business expectation clearly at all level.
 Productivity increment
 difficult when change position of a co-worker to boss
The above are the issued faced by the manager while starting their professionalism in the
organization. The reason is that the first time the manager is not aware of the company policies
and employee behavior in a good manner so he can not encourage the employee to achieve and
increase productivity. The Holacracy structure is worked for the organization because it aid to
increase business productivity. This is a focus on how an organization can increase business
performance and profitability by a focus on work instead of concentrating people. The success of
this structure is because the company aim to achieving business objectives as per plans is
successful and increases its business performance.
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Culture includes the values, customs, tradition, beliefs, and rituals which have been shared by the
social group.
Organizational culture shows the values, norms, and beliefs that are followed in an organization.
the organizational culture bring all the employees together, make the organization different from
other organization, cultures helps in setting the rules, norms. and standards for the organization
(Ostroff, et. al,.2012).
Elements of organizational culture:
 Values – Values are the principles that guide the behavior in the organization. Values
show the feeling about something. The values of the organization show the important
things for the organization. All the members of the organization have to follow their
values.
 Beliefs – They are the ways that are best to achieve the goals of the organization. These
goals can be job motivation and increasing productivity in the organization.
 Norms – They are the behaviors that are accepted in the organization. The values and
beliefs are reflected by the norms in the organization. They reflect the way of
accomplishing a particular task, work environment attributes, ways of communication
with the company and leadership styles in the organization.
 Communication network – in an organization both formal and informal communication
network has been used. Informal channels are used for conveying both the social and
work messages and this channel is useful for not only for completing the tasks in the
organization but also for social interaction which is necessary between the employees.
Communication networks help the new members in the organization in indoctrinating
within the culture of the company (Sulkowski, 2019).
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Some other organizational cultures used in the organization are:
 Assumptions
 Rituals
 Symbols
 Taboo
 Cultural pattern
 Subculture (Alvesson, 2012)
Impact of organizational culture on business management:
Organizational culture helps the organization to stand in the competitive market. An organization
will face the competition and survive in the competitive market by following the culture of the
organization. By following the culture of the organization the innovation in an organization
increases and thi8s helps in innovating the products and the services of the company. Customer
service has also been improved by following the cultures which include the values, beliefs,
communication, etc. in the organization (Ostroff, et. al. 2012).
 The performance of the employees has been improved by following the rules, norms of
the organizations.
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 The team in the company will be more cohesive and there will be no conflicts in the
organization within the team. The teamwork will be more promoted and this helps in
increasing the productivity in the organization (Alvesson, 2012).
 The morale of an employee has been improved and the employee gets motivated to get
their task done effectively and very efficiently.
 The company will be aligned strongly with the achieved of the goals in the organization.
When the employees of the organization follow the organizational culture the goals of the
organization will be accomplished efficiently (Sulkowski, 2019).
The mangers who are working in the global-based level companies create opportunities with
some hindrances which resist moving forward on the professional level. The different
opportunities which create for the managers working at different types of organization such as
MNC, domestic, transactional and other. The opportunities which are generated for the mangers
areas:
 Through working in different types of company, it creates a mangers mindset wider that
he can able to understand different type of companies structure and use their knowledge
of business in their current organization. So that current company may increase their
business performance and this will directly aid the entire unit of the organization
including manger and employees also (Pacheco, et. al., 2017).
 Working in different types of organization like domestic, internationally aid managers to
set their vision and mission for the company according to the company plans and targets.
The targets are set by the company by seeing and analyzing different internal external
factors in the presence of mangers because managers are the person who has a piece of
good knowledge in this part.
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The global economy of the country creates a threat which discourages managers to work in such
mentioned companies like local company means based at the native place (domestic),
international (MNC) and other.
 Political factors, respective company infrastructure, company norms, tax policies, and
others are the main concern which creates a threat among the mangers to work in such
companies. Because these companies structure are different from other such as domestic
company need to work only in the domestic currency and it pay salary to the manger in
their domestic currency while if the manger is belonged other country and work in
different country in such case, it create a threat because receiving in differ currency and
reimburse in different country which may loss of money value as the change in the value
of currency value (Brooks, & Anumudu, 2016).
 The language also is the factor which creates a barrier in the communication process of
the manager to between to the other staff of the company. In the domestic company,
domestic language is used while in international companies; different language may be
used such as French, American and other. In this situation, the manager feel insure and
this would lead to creating threats in the eye of managers (Mohammad, et. al., 2018).
The environment of the team will help in collaboration, brainstorming. Working in a team will
require tact, willingness and patience in the employees for working with their colleagues (Hu, &
Liden, 2015).
Working effectively with others in diverse management: Working with others helps in
accomplishing the goals. The following points are the tips for working with others or in team:
 Goals – The goals of the team members are different, everyone has their own goal for
which they are working to accomplish that goal. By understanding this it will help in
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creating positive relationships in the organization. The employee has to try to understand
the goals of the other members of the team.
 Job – Every person has different specialization in the organization and the task assigned
to them will be depending on their expertise. For working effectively in the team one has
to understand the strengths and the weaknesses of the other members in the organization
and with the help of job description try to find out the roles of other persons in the team.
This will help in dividing the work with others; delegation will be easy, etc (Hu, & Liden,
2015).
 Be confident – One should be confident while choosing a communication style.
Communication style should be such which will help in effectively work with others.
This will help in right of prioritizing of own task, right of confidentiality and privacy and
make a request with others right.
 Example – By providing an example which clearly shows the behavior which is required
by the other employees in a team. For make the people understand something to give an
example which states that point this will help in better learning and example helps in
understanding something very easily (Hu, & Liden, 2015).
Collaboration is a process by which individual come together and they share their knowledge,
resources, experience and strengths which help in promoting growth and development. Below
mentioned are the points which help in collaboration:
 The roles and responsibilities should be defined to the individuals and they also know
their position in the team. The expectations of the team members should be
communicated to them so that they will work according to that in the organization.
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