Zappos Case Study: Organizational Culture, Teamwork, and Holacracy

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Organisational culture, structure, and
change
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Contents
Introduction................................................................................................................................3
1. Organizational culture............................................................................................................4
2. Teamwork..............................................................................................................................6
3. Organisational structure.........................................................................................................8
4. Change Management............................................................................................................11
Conclusion................................................................................................................................13
References:...............................................................................................................................14
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Introduction
An organisation consists of organizational culture, teamwork, organizational structure, and
change. Organizational culture is a collection of beliefs, expectations, principles, and values.
Teamwork is the cooperative and collective work of all the members of the team for the
attainment of the goals. The organizational structure of a company specifies the flow of
activities and information for the attainment of the end to end objectives of the company.
Changes usually occur in each and every organisation, and it is the responsibility of each and
every employee to adopt the changes. Zappos is an online shoe retailer and is famous for its
culture, values beliefs and holacracy organizational structure. Holacracy structure describes
that each and everyone should have some authority so that they can feel the part of the
company. in this case study, the organizational structure, teamwork culture of the Zappos
company will be analysed.
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1. Organizational culture
Organizational culture is a set of ideologies, methods, beliefs, norms, expectations and so on
that knit a business organisation together. It is a set of assumption which guides its employees
on how to cope up with the problems and how to resolve the issues. Organizational culture
teaches its employees how things are done in the organisation (Maxwell, 2013). It presents
the principles, values, beliefs, vision, and objectives of a company. Organizational culture is
helpful for the new members to take corrective actions in case they face any issue and hurdle.
Theories and concepts of organizational culture:
Organizational culture consists of expectations, philosophies, and guides the employees of
the organisation how to behave in a typical situation. Leaders and managers are the people
responsible for communicating the organizational culture throughout the organisation.
The theory and concepts of organizational culture say that each and every organisation has its
values, objectives, goals vision mission, beliefs, and expectations. Collectively the vision,
mission, values principles, etc., are called organizational culture. It helps out the employees
of the organisation to adopt the changes. It focuses on integrating the members of the
organisation.
Organizational culture is the identity of the organisation. It tells what the values and promises
of the organisation are. Organizational culture should be very strong and should be followed
by each and everyone working in the organisation.
Organizational culture at Zappos
Zappos is an online shoe retailer and organizational culture at Zappos is very strong. The
company is well known for its culture and values. Organizational culture of each and every
company shows the beliefs and values of a company. A strong organizational culture is
crucial for encouraging its employees. Organizational culture at Zappos is very good and
strong, and the company always motivates its employees to follow the rules and regulations.
Organizational culture is the unique identity of a company. A resilient organizational culture
is important for each organisation for differentiating the company from others. The
organizational culture at Zappos is very strong, and this is the only reason behind the success
of Zappos.
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Zappos rely upon that the employees should be responsible for the work so that they will
perform their jobs properly. The company provides very good work for the employees where
all the employees work as a family. For the development of the employees, the company
allows its employees to take their own decisions.
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2. Teamwork
Teamwork is the collective work of a team in order to attain the organizational goals in a
suitable manner. It is a mutual contribution of every team member for achieving
organizational goals in an efficient manner (Zhu, 2015). Teamwork means cooperation
among all the employees for the accomplishment of the work on time effectively. Teamwork
encourages unity in the workplace. Teamwork improves the efficiency and competence of
the employees. It provides learning opportunities for employees.
Factors responsible for effective teamwork are as follows:
Building trust among the employees: For effective teamwork trust among the employees is
so important. It is the responsibility of the team leader to build trust among the employees if
the trust is lacking. If the trust is lacking among the employees, then the employees will not
help out each other in completing the work on time.
Conflict resolution: conflict resolution is important in order to promote effective teamwork
among the employees. When the employees work in a group or team, usually they face
issues. It is the responsibility of a manager to resolve the issues for effective teamwork.
Effective teamwork is crucial for the attainment of the end to end objectives of the company.
Communication: Communication focuses on developing an effective team for the smooth
functioning of an organisation. The organisation should hold regular meetings so that the
employees will be aware of the goals and procedures of the organisation. By communicating
with each other, the employees will get to know the way of work of the other employees and
they will learn new things.
Encouragement of positive attitudes: The effective teamwork positive attitude is essential.
All the team members should help each other for the attainment of the organisational goals.
Positive attitude refers to the helping attitude of the team members towards others. Teamwork
fosters creativeness and learning. Teamwork is essential for an organisation for sharing the
workload among the employees.
Zappos is focused on building a positive team. A positive team plays an important role in
achieving the objectives of the company. The core value of the company is building a
positive team and family spirit. The company does numerous activities for building trust
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among the employees. The company faces very little employee turnover. Employee turnover
means the number of employees leaving the organisation. Zappos focuses on developing a
self-managed team so that the team members will have less issue and they will work
effectively. In order to effective teamwork, the company holds one on one discussion with the
employees in which they can freely share their problems and give the suggestion if they feel a
change should be happening at the workplace.
For the success of the companies, a positive team and positive attitude of the team is very
necessary. Zappos aims at encouraging the team to help out each other. The core value of
Zappos is reflected in how they work. All the employees working in the company treats each
other as a family and help out each other.
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3. Organisational structure
An organisational structure of a company specifies how the activities flow in the organisation
for the attainment of desired goals. It assists an organisation in deciding a hierarchy that
defines roles and responsibilities (Zhu, 2015). The organisational structure decides how the
roles and responsibilities will be assigned. It is a system that determines how the activities,
roles, and responsibilities will be assigned to accomplish the goals of the organisation. Every
organisation is established for the attainment of a certain goal. Organisational structure also
regulates how the information will flow internally between the different levels of the
company.
An organisational structure helps the business organisation to allocate the roles and
responsibilities between the employees. It is a proposal that outlines who will report to
whom. It uses two approaches centralization and decentralisation (Maxwell, 2013). Under the
centralised structure, the power and authority lie in the hands of the top management. In the
decentralised structure, the powers and authorities distributed at the lower level.
Holacracy
Holacracy is a new method handling the company which focuses on the decentralisation of
powers and authorities. The aim of this structure is to build self-managed teams. The goal of
this structure is to hold responsible the people for their work. It leads to bringing transparency
in the system. It is essential that each and every person should be responsible for the work.
Holacracy provides a flat management structure in which each and everyone has the authority
and power.
A flat management structure is provided by the holcarcy structure that distributes authority.
The aim of the structure is to improve employee engagement. Employee engagement means
the involvement of the employee in the organisational activities. This structure promotes the
effective working of the organisation by decentralizing power.
Types of traditional organisational structure
There are four types of organizational structure which are as follows:
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1. Functional: The functional structure is based on dividing the organisation into smaller
groups. For example, the whole organisation is divided into groups such as the finance
department, marketing department and so on. Each group or department has a manager who
leads the members of the group and resolves their problems. The manager or leader is
responsible for the effective operations of the company. This structure is used by a lot of
companies. The advantage of this structure is that employees of the same skills are grouped
and they all can focus on achieving better results. The disadvantage of this organizational
structure is the lack of inter-department communication.
2. Divisional: This structure focuses on dividing the company into semi-autonomous units.
The mostly larger organisation which performs multiple functions adopts this type of
structure First-time general motors used this structure. This type of structure is also known as
the multidivisional structure. The advantage of this type of structure is that each division can
perform their duties effectively. This structure provides flexibility to its employees as they
report to a middle-level authority instead of reporting to a higher authority.
3. Matrix: In this structure, employees have to report to two or more bosses. This structure is
complex. However, the focus of this structure is to achieve organizational goals in the best
possible manner.
4. Flatarchy: it is a flat organizational structure, and it is very useful for small companies.
The advantage of this structure is that it allows business organisations to be more innovative.
It encourages employee productivity and efficiency. This structure encourages organisations
to be more transparent.
How Holacracy is different from other organisational structure:
Holacracy is different from the other organisational structure as it provides power and
authority to each and everyone working out in an organisation. In other organisational
structures, the authority and power lie on the hands of management. By decentralizing the
power, holcarcy structure is playing a major role in the growth of the organisations. The
benefit of this structure is it provides transparency and promotes employee engagement. The
other organisational structures do not provide transparency and do not hold the employees
responsible for the work done by them.
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It is the best organisational structure as it provides the power to each and everyone and
people can take their own decision. This structure focuses on providing employee efficiency
and overall development of the employees by achieving the organisational goals.
Holacracy experiment at Zappos
Zappos is a very large online shoe store, and the holacracy organisational structure is adopted
by this company. The company is still using this structure, and it has no plans to change this
structure. This structure is implemented across the whole organisation. The company is using
this structure since January 2014. This structure was adopted by the company to focus on the
work instead of focusing on the people. The company is using this structure to build self-
managed teams and make everyone responsible for their work. This structure is effectively
working at the company. This structure is assisting the organisation in the proper delegation
of the responsibility and roles. By adopting this structure, the company is expanding its
business across the world. The experiment of adopting a new organisational structure is
working effectively.
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4. Change Management
Change defines the renovation or transformation of the organization goal or plans to achieve
the organizational goal. For any organization or an individual change according to time is
essential to a refresh or boost up the employee's energy (Warrick et al., 2016). Change
Management is a processor decision taken by the higher authority of an organization for
growth and development according to the time after the change. It manages the change or
transformation of something which is hoping for an event or achieving the success quickly
and efficiently by the organization.
Change Management is one of the critical factors which help for adaptability, for directing
and controlling the change positively, change management has an active role. The importance
of change management is to manage and taking effective decisions for the business strategies
for the organization. After changing the rate of employees turnover is high because there are
some people who cannot handle pressure or change, they feel problems and suffer from
confusions it takes some time to takes place, so the change management motivate and make
them believe that by this change they only have to bear problem from sometime after it settles
it will be useful and develop the organization employees both. The difference is a kind of a
ladder which helps both the company and employee to get the success.
It is essential to learn new skills and knowledge to explore which create new opportunist for
the employees. It helps to shows the innovations, creativity, and talents of the employees.
Change Management manage, control, direct the organizations' problems occurs due to
change; the team of change management lead and direct the employees training and motivate
them to be effective.
The resistance of Change is essential because people have this psychological thinking not to
adopt new thing; they scared of taking the risk which and affect the people negatively. New
or change in policies or techniques is not acceptable by everyone, so the change management
tries to give their 100% to make them believe that change will be success won't be a loss for
the employees and organization too. There is a different type of resistance which includes
Logical, Psychological, Sociologically resistance. Logical strength refers to when people on
time try to adjust and adapt the change according to the process. For example, the technology
develops, and people adopt it and transfer from the paperwork to digital works.
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Psychological Resistance refers to when mentally and purely accept and adapt to the change.
Individuals often resist changes for different reasons like scared of the unknown, less
tolerance power to adopt the change. Sociological Resistance is not to individuals with shared
values and behaviour of groups (Duobiene, 2013). As it is mention that due to change
management the Zappos an online footwear company is suffering from employee turnover as
it discussed by the researcher before they are losing 14% of employees and the
transformation is a holocracy experiment which will take five years to complete. And the
higher authority is trying to solve the problems which occur due to change management.
Some headlines say that the company free getting rid of bosses—that is not right. The media
is giving their wrong and thoughts to the news which affects the company badly.
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