Zappos, Case Study Example

What explains the strength of Zappos’ culture; i.e. how is it reinforced and sustained?

Zappos management places a huge emphasis on hiring employees that are a great fit to the organization’s culture. The management’s commitment to an organizational fit is so great that even very talented applicants have been passed on because they had personalities not compatible with Zappos’ culture. Zappos’ management realizes that skills can be taught but personalities cannot be changed. Zappos understands that what makes Zappos different from its competitors is its unique culture which is difficult to emulate and the survival of Zappos culture can only be ensured by hiring employees that already believe in company’s values. Thus, it is no wonder that the company not only scans applicants for their technical competencies but also their compatibility with the organizational culture.

As Zappos’ CEO Tony Hsieh pointed out, the senior management is often not committed to the organizational culture and mostly pays a lip service. Thus, Zappos’ leaders are determined to demonstrate through personal examples that Zappos culture is central to the present and future of the company. To ensure that everyone exactly knows the most important aspects of Zappos culture, the company has published a list of 10 core values that are central to the culture. These values were actually identified with the help of the employees to demonstrate that at Zappos, allegiance to culture is expected from everyone whether management or employees. Zappos believes that its culture promotes strong working relationships among the employees and the company even avoids organizational hierarchy so that everyone feels valued. The management has taken practical steps to demonstrate the importance of its organizational culture. The examples include requiring managers to socialize with team members outside of work and installing arcade games and snack machines in order to create an informal environment that shuns formalities and encourage innovation.

One of Zappos’ culture’s distinguishing features is provision of exemplary customer service to the customers and Zappos requires every single new hire to go through customer service training irrespective of their future role in the company. This is because Zappos wants every employee to share the same goals one of which is unrivaled customer service to the customers.

In what ways does its culture help and/or hinder its business success?

One of the benefits of Zappos culture is that it ensures all employees have similar personalities and enjoy close working relationship with each other. Close working relationships means there are fewer personality clashes and workplace politics and more focus on work. The culture also promotes open and frank communication between the management and the subordinates. The subordinates are motivated because they feel that the management values their opinions and ideas. Because subordinates contribute towards decision-making process, they are more likely to dedicate themselves to the decisions made by the management. Satisfied employees also mean low turnover rate and lower lay-off and recruiting costs. Zappos employees are famous for being satisfied with their work and all of this helps attract top talent to the company.

The shortcoming of Zappos’ culture is that it may lead to group-think because of similar personalities. In addition, Zappos culture values strong working relationships among managers and employees, thus, some may focus more in relationships than the work itself. Zappos doesn’t hire some employees who could help the company perform better due to incompatibility with culture which means all of this ignored talent may go to the competition. Another shortcoming of Zappos’ culture is that it trains everyone in customer service though some may never do the job which is an inefficient use of company’s resources and time.