Assessment of Amazon Is it Ready for Change

¶ … Change at Amazon

Background to Amazon

Reason for Change

Diagnostic Models

Diagnosis of Amazon

Amazon are known for providing employees with a harsh workplace environment, with a high level of attrition (Kantor & Streitfeld, 2015). Changes in the HR policies and strategies to increase the employee centric practices, such as adopting a more flexible approach to employee personal issues, management by walking around, and increasing recognition for employee hard work and achievements may result in positive outcomes. Research has clearly indicated that were employees feel that their employer cares, they will display a higher level of commitment and productivity compared to employees who do not feel their employer cares (Buchanan & Huczynski, 2011). This can enhance productivity even in harsh working conditions (McGregor & Doshi, 2015). To consider if this is available strategy the firm and its current issues may be considered along with an assessment for readiness for change.

Background to Amazon

Amazon was founded in 1994 by the current CEO Jeff Bezos, is a major online retailer operating internationally. With headquarters in Seattle, Washington, the firm has operations 17 different countries, and aggressive growth strategies which will see the firm expand further in the future (Amazon, 2016). Employing approximately 230,800 people mainly in large warehouse locations (Amazon, 2016) the firm is likely to face high HR costs, which may present high opportunity costs if the firm is not maximising the employee productivity.

It is apparent that the firm is not maximising the productivity though HR policies, although the company has developed very efficient operations with the workplace processes (Rossman, 2014). Amazon has very lean operations, particularly in the warehouses where the processes are highly automated and employees have no empowerment (Daisey, 2015), aligned with scientific management principles (Taylor, 2012). The focus of the operations is on efficiently with a task-based focus on seeking to achieve customer satisfaction (Cheng, 2015); this means employees are expected to work hard, and for long hours without taking time for sickness or family emergencies, with many employees expressing these are major difficulties working for Amazon. There are also additional workplace practices which are seen as negative be employees, such as the anonymous feedback system, where employees are encouraged to leave feedback on their peers, which is usually negative (Kantor & Streitfeld, 2015). The anonymous feedback is deemed harmful, as the content for the feedback is often used in employee appraisals and as a basis for remedial action by management (Kantor & Streitfeld, 2015). Examining Amazons approach to HR it is possible to see there are reasons for change.

Reason for Change

Amazon places the need for customers before the needs of employees (Cheng, 2015), however, this does not mean the firm should completely ignore the employee needs. Bezos has defended the corporate culture, believing that the poor HR cases cited in the negative articles were not typical for the firm (BBC News, 2015). However, it is possible that Bezos is not aware for the way his own policies are translating into practices, given the high pressure he places on management. If there is a change in HR strategy to allow employees to feel more important it is likely that they will show more positive behavioural traits in the workplace, including higher levels of commitment, increased productivity, and reduced attrition levels, all of which will create value for the employer (Cook, 2008). Therefore, the change could support value creation, increase productivity, and reduce recruitment costs.

The internal dissatisfaction has become public knowledge with the publishing of the negative articles regarding the culture (Cadwalladr, 2013; Kantor & Streitfeld, 2015). This may create numerous costs for the firm, with a poor reputation for employee satisfaction the firm may find it more difficult to recruit good quality staff (Armstrong, 2011). Fewer good quality employees may be attracted to Amazon knowing of the harsh culture.

Negative publicity may also impact on sales, decreasing demand (Kotler & Keller, 2011). Therefore, while improvements may not necessarily increase sales, it may help be seen as a protective strategy, preventing further negative articles and the associated lost sales.

Diagnostic Models

Numerous diagnostic models have been developed to assess an organizations readiness to change. Blackman, O'Flynn, & Ugyel (2013) developed a model drawing on past literature, such as Lewin (1951) looking at macro and micro environmental factors which may impact on the change process, either as barriers or enablers. The enablers were the presence of a clear mandate and central leadership, the presence of pattern breaking behaviour with shared understandings of the objectives and outcomes (Blackman et al., 2013). Barriers were the organisational focus and structure, employee turnover, decision making and capabilities, as well as the misalignment of aspects of evaluation and accountability (Blackman et al., 2013). This builds on past knowledge, but it may be difficult to apply in a short paper.

Holt, Armenakis, Feild, & Harris (2007)developed a simpler model, which incorporates many similar factors. The model has five elements which may be used to assess readiness for change along a scale, however, unlike Blackman et al., (2013) where the research was based mainly on past literature and studies, Holt et al., (2007) undertook robust primary research to develop the tool. The five factors are; discrepancy, dealing with whether or not it is believed the changes necessary; efficacy, which relates to believe the change could be implemented; organisational valence which deals with the belief that change would be beneficial to the organisation; managerial support which assesses the degree to which there is a belief organisational leaders are committed to change, and finally personal valence which is linked to the attitudes employees and the belief that the change will be beneficial to themselves. Interestingly, this model, is well supported by robust primary research, is also highly aligned with many of the models associated with change management, such as that of Lewin (1951) and Kotter (1996), where there is an emphasis of the need for the change to be seen as both necessary and possible, as well as overcoming employees fears associated with personal valence. The Holt et al. model will be used to analyse the readiness to change at Amazon. (2007)

Diagnosis of Amazon

To apply the diagnostic model, each of the different factors will be considered.

Discrepancy

With the public statements made by Bezos, it is apparent he does not believe the change is necessary (BBC News, 2015). Bezos is argued that many of the negative aspects reported in the press were singular instances, not representative of the organisational culture (BBC News, 2015). It is also stated that Amazon is not alone, many other organisations with operational efficiency have similar harsh cultures (Carney, 2015). Therefore, while there may be a recognition from some changes may be beneficial for individuals within the organisation, it does not appear to be present at senior management level, indicating the organisation is not yet ready to change on this dimension.

Efficacy

Amazon has a highly effective operational system, where any changes in practices dictated from above are implemented very quickly (Rossman, 2014). Therefore, although cultural changes can be some of the most difficult, there are already communications for processes in place which would facilitate the implementation of the changes. The organisation's characteristics on this dimension appear to indicate they could be ready for change.

Organisational Valence

One of the main issues associated with the discrepancy is the lack of belief that change will be beneficial to the organisation. The company has a strong set of leadership principles (Amzon, 2016; Rossman, 2014), and Bezos is highly committed to his existing corporate strategy, which prioritises customer needs and operational effectiveness over employee needs. Therefore, there is a low level of organisational variants, indicating that the longest dimension the organisation is not ready to change.

Managerial Support

Managerial support is difficult to assess, especially as the culture within the organisation does not encourage managers to critique the existing systems (Kantor & Streitfeld, 2015). Without undertaking direct communication with managers at Amazon, this is difficult to assess, but there may be resistance as managers will need to change the way in which they manage, although there may also benefit from the change. Therefore, this is a relatively unknown factor.