Unit 6 Case Study Zappos
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MBA 522: Organizational Behavior and Leadership
Unit 6 - Case Study 14.1: Zappo’s
Dr. Greg Moore
Tony Hsieh, former CEO of Zappos, a US-based online store focusing on footwear, shoes, and clothes, was a forward-thinking leader recognized for his unique business methods and dedication to organizational culture. Hsieh strongly believed in establishing a work environment prioritizing people's sense of worth, empowerment, and happiness. Zappos became well-known for its distinctive culture under his guidance, which revolved around key values such
as providing exceptional service and promoting and leading change. Hsieh's focus on customer service and corporate culture was important in Zappos' transformation from a modest startup to a
billion-dollar e-commerce giant.
Goals For Organizational Culture
Organizational culture is described as a set of shared standards, rules, values, and convictions that guides and influences the attitudes and behaviors of members of a given organization (Neck et al., 2019). It is an important aspect of the business because it influences and promotes employee morale, productivity, and involvement. Tony Hsieh's main objective as co-CEO at Zappos was to cultivate an organizational culture that promoted employee engagement and love for their work, rather than just satisfaction. Hsieh recognized the significant influence that a positive corporate culture could have on employee satisfaction, efficiency, and ultimately, the success of the organization. He sought to establish a culture focused on core values including providing exceptional service, accepting and leading change, and fostering enjoyment and uniqueness. Hsieh believes that emphasizing a strong company culture may help Zappos stand out in the competitive online retail sector and build a devoted customer following.
He saw Zappos not only as a shop but as a platform for providing happiness to both customers and staff. Hsieh is known for introducing strategies such as providing new employees
with a $2,000 incentive to resign if they believed the job was not suitable for them, highlighting the significance of cultural compatibility above qualifications alone (Neck et al., 2019, pg. 427). Hsieh intended to establish a business culture centered on honesty, transparency, and constant improvement to ensure that employees found deep fulfillment in their roles and contributions to the Zappos purpose.
Functions of Organizational Culture
The two main roles of organizational culture are external adaptation and internal integration. External adaptation refers to how an organization reacts to external factors. Internal integration, on the other hand, is the process of creating a shared identity among workers through
the use of a common language, group boundaries, agreed-upon power sharing, status, power, trust norms, rewards, and punishment (Neck et al., 2019, pg. 409). Zappos integrates corporate culture deeply into the core of its character, going beyond mere regulations or processes. One of the most noticeable ways this is shown is through their dedication to customer service and empowering employees. Zappos' culture prioritizes the concept of "delivering happiness," focusing on building authentic relationships with consumers rather than just completing transactions. Internally, individuals are encouraged to truly and artistically express themselves, creating a workplace climate that celebrates originality and creativity.
Zappos' organizational culture is defined by a flat structure and a strong community mentality. Zappos leaders are viewed as facilitators who empower employees to take ownership of their jobs and make independent decisions. “Customer service representatives have the same authority as the CEO to help customers who call in with complaints” (Holland, 2021). The flat organizational structure encourages flexibility and collaboration by dismantling conventional barriers and promoting open communication across all organizational levels. Zappos promotes a
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