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Write a case analysis on Zappos.com: Behavioral Dy...

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Write a case analysis on Zappos.com: Behavioral Dynamics?Cause for Concern or for Celebration? Cohesion Case PART III Zappos.com: Behavioral Dynamics?Cause for Concern or for Celebration? (C) Zappos gives its employees plenty of freedom to do their jobs. For example, employees in the Zappos call center are told to do whatever they think is necessary to solve a customer?s problems?and they don?t have to get a manager?s approval to do it. With this level of freedom, one employee observes, ?You have as much power to help a customer as Tony [Hsieh, Zappos CEO] does himself.? This empowerment to do extraordinary things is due to the company?s culture rather than specific policies or procedures. Customer service representatives (CSRs) can take as much time with customers as they need in order to ?wow? them, whether its resolving a shipping problem, helping a customer find a product on a competitor?s Web site if Zappos doesn?t have it in stock, sending flowers to a bereaved customer, or anything else. ?Although this laissez faire philosophy can cause chaos at times, the results are impressive: three-quarters of Zappos?s sales come from repeat customers and its revenues are still growing this year [2009], albeit more slowly than before.? To dissuade any doubters, Hsieh tells two stories, each about a distressed customer. According to one story, ?when the payment deadline for shoes a customer ordered came and went, a Zappos rep e-mailed the woman to remind her the money was due. The woman told the rep the reason: She had meant to send back the shoes, which were for her ailing mother, but in the meantime, her mother had died. The company rep arranged to have UPS [United Parcel Service] pick up the shoes, then actually sent the woman a flower arrangement and condolence card.? In the second story, also mentioned in Zappos.com (A), a woman?s husband ?died in a car accident after she had ordered boots for him from Zappos. The day after she called to ask for help with the return, she received a flower delivery. The call center rep had ordered the flowers without checking with a supervisor and billed them to the company. At the funeral, the widow told her friends and family about the experience. ... Not only was she a customer for life, but so were those 30 or 40 people at the funeral. ... [Hsieh says,] stories like these are being created every single day, thousands and thousands of times. ... It?s just an example that if you get the culture right, then most of the other stuff follows.? As the CEO of Zappos, Hsieh is as unique as the organizational culture that he has fostered. Hsieh is not the typical CEO when it comes to doing most anything, whether it?s developing and maintaining a quite unique company culture, encouraging unusual recruitment and hiring practices, communicating with people, or a host of other activities. Hsieh, a computer whiz and adept at writing programming code, decided to attempt a similarly algorithmic approach to creating the Zappos culture with his list of ten core values?the Zappos version of the ?Ten Commandments.? Included on the Zappos lists are values such as ?be humble,? ?build open and honest relationships with communication,? and ?create fun and a little weirdness.? These core values drive all the key decisions?from hiring to customer relations to the recent downsizing of the company. Max Chafkin, a reporter for Inc. magazine, notes that ?Hsieh is hard to know and even harder to read. He?s generous and smart, but so subdued in one-on-one conversation that it?s easy to mistake his reticence for rudeness. When he does speak, it?s in full paragraphs that sound as if they have been formulated in advance. He sometimes smiles?as he does when he?s explaining the clever way Zappos manages its call center?but he doesn?t laugh at other people?s jokes and seldom tells his own.? ?And yet, this mild-mannered fellow leads a company that is entirely uninhibited. Interviews are held over vodka shots, bathrooms are plastered with ?urine color? charts (ostensibly to ensure that employees are hydrated but also just to be weird and funny), and managers are encouraged to goof off with the people they manage.??What most of Hsieh?s admirers?and even some Zappos employees?don?t know is that this openness doesn?t come naturally. Hsieh has been exceptionally shy all his life and finds meeting strangers exhausting. (His trick to get over his shyness is to pretend he?s interviewing you for a job.)? Still he has become an accomplished public speaker, giving many talks without notes. Tony Hsieh ?is held with a regard typically afforded rock stars and cult leaders.? Frequent and transparent communication with employees and customers?and anyone else who cares to know?is a hallmark of the Zappos experience. ?Hsieh has embraced an ethos of transparency, using social networking tools such as Facebook, Twitter and blogging to share information, both good and bad, with employees, customers and anyone else interested in Zappos.? For example, in just one week, Hsieh ?had given away shoes on Twitter, sent out an open invitation to a company barbecue and solved a service problem a customer left in a blog comment,? among numerous other customer and employee interactions. Approximately one-third of the company?s 1,400 employees ?actively use Twitter to promote the company. ... The goal is to respond to customer comments and form personal connections with their Twitter followers, as well as with friends on Facebook, where employees post blogs and videos. . . . [Doing this gives] customers and other curious social network members a way to get a glimpse at the inside workings of the company.? For employees who are not Twitter users, Zappos offers classes to help them become familiar with the communications application. The frequent and transparent communication applies to bad news as well as good news. Like many companies, Zappos has been hit by the recession that started in December 2007. In late October of 2008, Sequoia Capital, the majority owner of privately held Zappos, insisted that all of the companies in its investment portfolio, including Zappos, cut costs. The Zappos management team decided to lay off 124 employees, approximately 8 percent of its workforce. But even in distressing economic times Zappos has shown that it can be great, this time with immediate communication of the bad news. CEO Tony Hsieh wanted to inform employees quickly so as to help alleviate the inevitable stress the layoffs would cause. ?He announced the move in an e-mail, on his blog, and with Twitter.? ?The quick disclosure is part of a broader culture of electronic openness at Zappos.com. . . . Our true belief here is that everything is transparent,? says Rebecca Ratner, the company?s HR director. Zappos managers are required to spend 10-20 percent of their time ?goofing off? with the associates they manage. Hsieh says that 10-20 percent is ?just kind of a random number we made up. ... But part of the way you build company culture is hanging out outside of the office.? After managers have spent time ?goofing off? with their team members, they invariably tell Hsieh that ?goofing off? has improved communication, generated greater trust, and fostered budding friendships within the team. Hsieh always asks the managers whether the activities helped make the team more efficient, and they report an efficiency increase in the range of 20-100 percent. Interviews of prospective employees are not ordinary either. They are sometimes conducted in a speed-dating format, in which applicants talk with five or six managers in fast-paced five-minute dialogues. However, if the applicant survives this initial round of conversations, then more traditional interviews are conducted to assess the candidate?s technical abilities in the specific area in which they desire to work. Finally, the applicants are interviewed by human resources professionals to ascertain whether they will fit into the Zappos culture. For better or worse, alcohol is frequently a part of the company?s hiring process. Rebecca Ratner, the current head of HR, describes her interview with CEO Hsieh: ?I had three vodka shots with Tony during my interview. . . . And I?m not atypical.? She asked Hsieh whether this type of recruiting behavior didn?t expose Zappos to unnecessary risks. Hsieh?s reply: ?It?s a risk. ... But if we?re building a culture where everyone is friends with everyone else, it?s worth the risk.? Calculated risks, unusually transparent communications, unique ways of promoting teamwork and group cohesion, extraordinary degrees of employee freedom and empowerment, and an unorthodox leader: Are these causes for concern or for celebration? Nelson, Debra L.(Debra L. Nelson Ph.D); James Campbell Quick (2010-09-01). Organizational Behavior: Science, The Real World, and You, 7th Edition (Kindle Locations 13373-13383). Cengage Learning. Kindle Edition.

 

Paper#10508 | Written in 18-Jul-2015

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