Zappos Case Study: Improving Communication for Organizational Success

This case study analyzes Zappos' communication challenges and strategies, focusing on stakeholder happiness and organizational success. It identifies key communication problems, such as those arising from economic downturns, technical difficulties, marketing campaigns, and security breaches. The study proposes solutions including face-to-face communication, timely and accurate information dissemination, targeted messaging, and comprehensive crisis communication plans. By applying organizational behavior theories like Human Relations Behaviour Theory and Emotional Intelligence Theory, the analysis aims to improve Zappos' communication effectiveness, enhance stakeholder relationships, and protect the company's reputation. Desklib provides this case study and many other resources to aid students in their academic pursuits.

Running head: EFFECTIVE COMMUNICATION IN ORGANIZATION
Effective Communication in Organization
Name of the student
Name of the University
Author note

1EFFECTIVE COMMUNICATION IN ORGANIZATION
Executive Summary
The primary purpose of this report is to discuss about the main communication problems in
Zappos. It expounds on the solutions to the problems and states the recommendations that can
help in the effective functioning of the company.

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Table of Contents
Introduction................................................................................................................................3
Key Communication problems in Zappos..................................................................................3
Solutions to the Problems...........................................................................................................5
Conclusion..................................................................................................................................9
Recommendations......................................................................................................................9
References:...............................................................................................................................11

3EFFECTIVE COMMUNICATION IN ORGANIZATION
Introduction
Communication is indicative of a process by taking recourse to which information is
exchanged between the individuals by the using of symbols, signs and behaviour. The
exchange pertaining to information can take place with the help of speaking, writing or by the
using of any other medium. Effective communication is of crucial importance for the
development of an organization. Communication has to play a crucial role in relation to all
aspects of the business (Cornelissen & Cornelissen, 2017). It is of significant importance that
the communication skills of the employees are effective that can help in achieving
organizational efficiency. The communication skills whether it is in the written or in the oral
form forms the crux pertaining to all kinds of business activities in an organization. Effective
communication can act as the building block pertaining to an organization. It acts as the basic
prerequisite in relation to attaining the organisational goals. Effective communication can
help an organization in the perfect implementation of the organizational strategy (, 2017).
Communication can be beneficial in resolving doubts and removing problems in the
organization. Zappos is an online retailer that initially dealt with shoes and it helps in
delivering happiness to the different stakeholders. It offers the best service and it was named
“Zappos” after that of the Spanish word in relation to the shoes. This report throws light on
the internal and external problems pertaining to Zappos and provides the solutions to the key
problems. It also provides recommendations that can help in mitigation of the problems
related to communication in Zappos.
Key Communication problems in Zappos
Zappos is popular for being committed to the employees but the company had also to
face the brunt on account of the hard economic times. In the year 2008, the economic
downturn posed a threat for Zappos and the venture capital Sequoia Capital met with the

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company for discussing about the problems. Sequoia Capital ordered Zappos to cut the
expenses so that it results into positive cash flow for the company. At this turbulent time, the
CEO of the company had to face a difficult decision and laid off 8 % of the employees of
Zappos. Zappos tried his best to handle layoffs in a manner that is respectful. An e-mail was
sent to the employees that informed the employees regarding the decision of lay off. The
management was upfront regarding the reasons for the lay off and it even discussed the move
on that of the social platform (Wilson & Fiona, 2018). It showed the honesty along with
transparency on the part of the company but the employees could have been more
understanding had the message been delivered in a more appropriate manner.
Zappos had to face technical difficulties in the year 2011 which resulted into delays
for the orders of the customers. The upgradation of the processing system of Zappos resulted
into the delay of orders for Zappos. There were some orders that had incorrect shipping
information that led the products to be shipped to that of the wrong location. This had
resulted into upsetting different customers and Zappos assured the customers that it would try
to get their merchandise as early as it is possible. The company provided different kinds of
perks on the basis of the circumstance of the experience of the customers. Every item of
6pm.com that is one of the websites of Zappos was priced at $ 49.95 for that of six hours in
the year 2010. The website had to be shut down by the company for that of a few hours so
that the problem can be solved. It resulted into a loss of around $ 1.6 million for the
company. This had resulted into dissatisfaction for the customers and appropriate
communication could have helped in relieving the confusion that arose on account of the
mishap (Barry & Wilkinson, 2016).
Zappos was instrumental in the creation of a marketing campaign in the year 2011
that was fashioned so that it can catch the attention of the people. The company brought out
different advertisements that revealed people who were naked and doing different kinds of

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daily activities like that of running and driving of a scooter. The bodies of the bodies were
blocked off by making use of a box and it bore the message “more than shoes”. The sexual
nature pertaining to the advertisement received criticism from different quarters (Gagné,
Sharma & De Massis, 2014). The subjects in relation to the advertisements were actually not
nude and they were wearing bathing suits or that of small shorts. This advertisement garnered
a lot of negative attention and Zappos brought out an apology in relation to the advertisement.
The media communication could have been done in a better manner in order to spread a
positive image within the market (Cornelissen & Cornelissen, 2017).
The computer system of Zappos was misused by the hackers and the personal
information of the customers were stolen of around 24 million customers. The data included
the names, e-mail address and details about their credit card. This incident had seriously
tarnished the image of the company in front of the public. E-mail was sent to the customers
and it notified them regarding the security breach. Zappos provided assurance to the
customers that their complete credit card information was not hacked. There were some
customers who were not happy with the manner of handling of the hacking by Zappos. The
disconnection of the call center further complicated the situation for Zapposand it tarnished
the customer service record of the company.
Solutions to the Problems
The economic downturn that took place in the year 2008 forced Zappos to lay off
many of the employees. The employees were communicated about this decision by taking
recourse to e-mail. A meeting could have helped in communicating about the economic
problem that could have helped in communicating the message to the employees regarding
why they were being laid off by the company. Face-to-face communication could have been
of immense help in communicating about the problems of the company and why such a

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decision was being taken by the company. Face-to-face communication could have helped in
building trust along with credibility of the employees in the organization (Bratton, 2015).
The relationships can grow with the help of face-to-face interaction and a meeting could have
helped in expressing the dire situation of the company. This would have proved to be more
helpful in highlighting the emergency of the current situation to the employees and making
clear to them why such a decision was being taken. It has been found that the organizations
work in the best manner when the employees feel empowered. Human relations Behaviour
Theory is on the basis of studying the employee productivity in different kinds of work
circumstances. This theory points forward that in the event of the employees feeling satisfied
at work they would be able to increase their work productivity (Voinea et al., 2015). The
employees in an organization have social and psychological needs along with that of the
economic needs. The employees in an organization should be endowed with recognition,
respect and freedom that can help in motivating them and increasing their organizational
performance. It can be stated that proper communication of the problem to the employees
with the help of the medium of face-to-face communication could have helped in maintaining
the reputation of the company. The disgruntled employees can tarnish the image of the
company in front of the world (Goetsch & Davis, 2014).
The technical difficulties gave rise to delay for the orders of the customers along with
shipments in the tear 2011. The upgradation of processing system of Zappos was responsible
for creating the technical difficulties. Service interruption is an inevitable part of the business
process and effective communication can help to a great extent in dealing with the crisis. A
significant impact can be made on the experience of the customers by laying stress on the
aspect of communication with that of the customers. Zappos could have provided with
accurate and timely information that could have been helpful in reducing the stress of the
customers (Salem & Timmerman, 2017). The customers should be informed at the first

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instance in case of the lapse of processing system. They should be made known about the fact
that the situation is being taken care of and active working is going on in relation to the
problem. An e-mail could be sent to the customers whose orders have been deleted or delayed
(Gagné, Sharma & De Massis, 2014). This would help them in informing about the current
problem in the company and their loyalty pertaining to the company would not be shaken
(Certo, 2018). The decision making behaviour theory can be applied to the management of
the company who has to take the daily decisions that has an effect on the company. On the
basis of the decision-making theory the customers should have been informed personally
about the failure of the processing system that could have been helpful in reducing the
harassment on the part of the customers.
The marketing campaign of Zappos that featured people as if they were naked and it
garnered a lot of negative remarks and comments. The advertisement should have focussed
on a target audience who would receive in a positive manner the message of the
advertisement. Appropriate information should have been provided to them that the subjects
pertaining to the advertisement were wearing shorts and bathing suits beneath the box
(Kwiatkowski, 2017). Communication to the right audience and the right message would
have surely helped in removing negative criticism pertaining to the advertisement. The
production process should have been made clear to them in the beginning instead of being
done at a later stage. The decision making on the part of the top management of Zappos can
have helped in removing the dissatisfaction of the people with this advertisement
(Yamaguchi, 2017).
The computer system of Zappos being hacked led to the stealing of important
personal information of the customers of the company. An e-mail was sent to the customers
that informed them regarding the breach of security. The disconnection of the call centre led
to discontent among the consumers. The management of Zappos had thought that the calls

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would overload the system and hence they had disconnected the call center. This gave rise to
suspicion on the part of the customers and they would start doubting about the reputation of
the company. The customer service record of Zapoos was blemished owing to this act and it
lost the element of credibility (Tracy & Donovan, 2018). A comprehensive plan should have
been created by Zappos that could have helped in reaching different audience- employees,
customers and the business partners. The withholding of key information can prove to be
disastrous for the image in relation to a brand and the information should have been shared
publicly that could have helped in protecting the customers. The questions should have been
anticipated by the Zappos call centre and they should have answered the questions in order to
provide the customers with reassurance. Clear along with plain language answer on the part
of the employees of the call center of Zappos could have helped in addressing the concerns of
the customers. The emotional intelligence theory pertaining to organizational behaviour and it
talks about how the factor of emotional intelligence can prove to be more important as
compared to the technical skills (Pearson, 2016). The people in the management of an
organization should be equipped with the right amount of emotional intelligence that can help
them in understanding the reactions of the customers. This can prove to be an important
element for the success of the organization and this can create engagement on the part of the
consumers of a company. Emotional intelligence theory can be used in an organization for
discriminating between the different emotions and for guiding the process of thinking of the
customers. Emotional intelligence exhibited by the leadership in an organization can help him
in navigation of the social environment and controlling the responses of the customers. This
can help in building the brand value in relation to an organization. Emotional intelligence
being displayed by the leaders of Zappos could have helped them in understanding the
gravity of the situation from the point of view of the customers ( et al., 2016) It would have
helped them in addressing the situation in the right manner. The queries of the customers

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should be addressed upfront instead of being avoided that can prove to be an important step
in increasing the loyalty of consumers towars Zappos.
Conclusion
The economic problems that forced Zappos to lay off employees could have been
communicated with the help of a meeting and it could have helped in reducing dissatisfaction
among the employees. Lapse pertaining to the processing system of Zappos should have been
informed at the very first instance to the customers that would have helped in resolving a lot
of difficulties. The customers should be able to know the fact that action is being taken to
resolve the crisis of Zappos. The advertisement of Zappos that showed people who were nude
received a lot of negative criticism. Production process in relation to the advertisement should
have been made clear to the audience that would have saved it a lot of trouble. In the event of
the computer system of Zappos being hacked the call centre of the company was
disconnected. This was a bad move on the part of the management of the company as it
created panic among the customers of Zappos. Suspicion was created among the customers of
Zappos on account of the faulty move taken by the management of the company.
Management of Zappos had thought about the fact that too many calls would pave the way
for overloading of the system. This move taken by Zappos created a lot of dissatisfaction
among the customers of the company. Comprehensive plan made by Zappos that would have
helped in reaching a huge range of audience could have helped the company in getting over
the crisis.
Recommendations
Over-communication of a message can prove to be of great help for Zappos. This can
help in removing a lot of doubts pertaining to the decisions taken by the company. All kinds
of available forum can be used- e mail, news letter and social media for communicating about

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any problems in relation to the company. The employees along with the customers of the
company should be able to know the reasons behind the decisions of the company. The
management of Zappos should communicate to the employees why a particular decision is
being taken and how it will of benefit for the company. The employees would only be able to
support the goals along with organizational strategy in the event of them knowing in a
detailed manner about the decisions of the company.
Key Recommendations
1) All kinds of available forum should be made use of for communication of important
message
2) The employees along with the customers should be made known the reason behind the
decisions of the organization

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conception of employee voice as a pro‐social behaviour within organizational
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Bratton, J. (2015). Introduction to work and organizational behaviour. Palgrave Macmillan.
Certo, S. C. (2018). Supervision: Concepts and skill-building. McGraw-Hill Education.
Cornelissen, J., & Cornelissen, J. P. (2017). Corporate communication: A guide to theory and
practice. Sage.
Gagné, M., Sharma, P., & De Massis, A. (2014). The study of organizational behaviour in
family business. European Journal of Work and Organizational Psychology, 23(5),
643-656.
Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence.
Upper Saddle River, NJ: pearson.
Kwiatkowski, C. (2017). Effective Communication as a Major Key to Successful
Organizational Change. Journal of Quality and Environmental Studies, 7(2), 22-29.
Paul, G. D. (2017). The Influence of Communication-and Organization-Related Factors on
Interest in Participation in Campus Dialogic Deliberation. Journal of Public
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Pearson, R. (2016). Beyond ethical relativism in public relations: Coorientation, rules, and
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