Amazon Case Study Analysis on Responsible Leadership

Question

Task: Read the Amazon case study and analyze how the company leverages the principles of responsible leadership to overcome the challenges.

Answer

Executive Summary
The study expands on the learning of responsible leadership by analyzing the Amazon case study and how Amazon, leveraging the principles of responsible leadership can tackle the challenges it is facing in the present times. Responsible leadership implies that the leaders need to have a balanced approach towards the growth of the business organization as well as its employees. In theory, the concept differs from other styles of leadership such as transaction, transformational and others. However, there does exists some correlation between transformational leadership and responsible leadership owing to the change management. It has been seen that using the tents of responsible leadership such as intellect & Insight, stakeholder inclusion and technology & innovation the challenges can be resolved. It has also been suggested that the leadership of Amazon focusses on the planet, people and its profits in order to become sustainable in the longer run.

1.0 Introduction
It’s extremely hard to imagine that a company like Amazon is going anywhere anytime soon. Decades after ignoring the scoffing of the traditional book sellers and launching an online bookstore. Amazon, in the present day has become the staple of modern world that would be extremely difficult to replace, if not impossible. Yet, Jeff Bezos, the founder and CEO of Amazon continues to treat his business as a “Day One” company (Manning, 2018). The growth in the valuation of the company and its sales in the pandemic times is testament of the fact that Amazon is on its way to become the e-commerce company which has been shaping the purchase behavior of its audience, at the same time leveraging innovation and experimentation offering something new and unique to its TG. Furthermore, the company has empowered millions of seller who have made a fortune for themselves by selling products on the largest marketplace model (Manning, 2018). Amazon. However, with so much success comes a number of challenges which the company has been facing related to Anti-Trust Issues with the sellers, impact on the environment and keeping up with its growth. The report therefore intends to bring these point into notice of the stakeholders and how effective and responsible leadership can tackle the challenges Amazon has been facing.

2.0 Overview of the Case Study
In the last couple of decades, Amazon has emerged as the prominent name in the retail industry, and some consider it as the biggest retail organization in the world, despite the fact that retail behemoth, Walmart has both a click and mortar model and has been existence since long. The success of Amazon comes primarily from its cost leadership and customer obsession, both of which are evident in the business process, systems and policies of the company. However, when a company grows and becomes so big, it has to become all the way more responsible for the action it takes and has to ensure that it takes a balanced approach towards its profit, planet & people. Amazon has a global domination with presence in over 16+ countries and its good shipped across 100+ countries, and has a product catalog of over 12 million items spread across its product portfolio. However, in the recent past the company has been strong criticized for tweaking up with the ranking of the sellers on its marketplace model by pitching its own subsidiaries up the ranking, keeping up with its growth and lastly its impact on the environment (Valinsky, 2019). All of these issues lie at the core of Amazon’s problem and the company needs to act responsibly towards its shareholders and stakeholders, including the environment.

3.0 Analysis of the Case Study
3.1 Growth Concerns issues at Amazon: The company in the year 2020 took its investors by surprise by posting its lighter than expected fourth quarter guidance, forecasted between $80 Billion and $ 86.5 billion in revenue in the holiday season, on the contrary the analysts expected revenue estimates at $87.5 Billion(Venture Beat, 2020). Meanwhile the company also missed its third quarter result in terms of profit expectation by the investors. The results has been a source of concern for its investors who are now left wondering on the performance of the company both its retail empire and its cloud business. In cloud computing the company has been losing its market share to rivals such as Azure, Google Cloud and others. At the same time, Microsoft winning the bid of Pentagon’s cloud contract, can also be seen as a pain point for its investors(Gaus, 2019).

3.2 Antitrust Matters: Amazon isn’t the only company facing this issue and is on antitrust investigation along with Google, Facebook and number of other companies as well. However, in case of Amazon, the probe goes deeper than other companies owing to its dual role in in both managing the marketplace and competing with the third party sellers. This problem becomes far engraved and challenging with an increase in counterfeit products being sold at Amazon, most of which are originated from China. Amazon is considered as top 10 companies which has revolutionized the world and is a major contributor to the Industrial revolution 4.0. However, in the light of the above evidence and issue the consumers might get bored of hearing excuses from Amazon, and the same goes for sellers. This may lead customers to satiate their shopping needs elsewhere and sellers improving their own online experience. Hence, these issues needs to be tackled by the leadership and Amazon before it becomes too late(Gaus, 2019).

3.3 Fixing the Issues of Climate Change: There are no two doubts on the fact that increasing level of CO2 is the major contributor to climate change, and it has been accelerated by incessant use of non-renewable energy to power the business operations at Amazon, its production and the pollution emitted from the vehicles used in the delivery. In the month of April in the last financial year, as many as 3500 years signed post which urged Jeff Bezos to lay out the company’s plans to tackle the issue of climate change and how the company looks forward to reduce its carbon impact on the environment, at the same time its initiatives towards the circular economy model. Another thing which is worth highlighting here is that consumers wants to associate themselves with the brand which has long term sustainability goals and objectives and is not just keeping a focused approach on its profits, however has a keen eye on the interest of planet as well as the people. Amazon has signed the Paris Climate act and has pledged to become carbon neutral by end of year 2040(Manning, 2018).

4.0 Conclusion
The issues highlighted in the above case study are quite relevant and have the capability to create a negative impact on the business of e-commerce behemoth. This requires the need for Jeff Bezos to step up its game of innovation and experimentation and take full ownership for the actions of the company, and responsibly lead the company towards its sustainable business goals and objectives, while keeping the interest of its shareholders on priority, along with that of other stakeholders. Simon Sneek, the famous Youtuber and an self-proclaimed optimist in his video mentions that leaders need to get away with the limitation of seeing business as a finite game, and see it as an infinite game where there is no concept of winning and losing, but the focus lies on the development and sustained growth of the organization and its people. This is an important concept in responsible leadership, which has to be implemented by Jeff Bezos and his team using transformational leadership and carrying out positive changes in the organization to tackle the issues mentioned above.

4.1 Technology & Innovation: One of the tenets of responsible leadership is that the organization serves the need of the stakeholders while considering the genuine and legitimate interest of others(Marques, Reis & Gomes, 2018). Leveraging this tenet, Amazon and Jeff Bezos in particular can solve the issue the company has been facing by the combined levers of innovation, technology and responsibility. Using innovation the company can come up with various mechanism through which the company can have a tougher checks on the products that are being sold on its website/Application. This will help the company to further build the trust with its customers. Amazon can take it a step ahead by further integrating AI & ML in its marketplace model and track down the seller who are involved in fraudulent and counterfeit activity on its platform and also posting fake reviews of the product. Thus by doing this, Amazon can present a strong face in front of its stakeholders and shareholders who are filled with doubt on the intentions of the company. By owning up to its mistake and make amend in its system and policies will project Amazon and is leadership as truly responsible which cares genuine for the interest of its stakeholders(WItt & Stahl, 2016).

4.2 Intellect & Insight: Another important tenet of responsible leadership which deals with finding ever improving paths to success by embracing continuous learning and knowledge exchange. Amazon does this wonderfully for its sellers by empowering them to start their own business by providing them learning through its AWS platform. This is also seen as one of the CSR strategies of the company, which has helped the company to earn a lot of praise for its stakeholders. Continuing on the same path and taking cognizance of the fact that it need to continuously build on its learning and knowledge base for its employees will result in sustained growth for the business(Miska & Mendenhall, 2018). Especially in times which are so volatile, uncertain, complex and ambiguous, this will particularly help the organization become far more resilient that what it is now. Amazon has an effective and a rigorous recruitment strategy and before hiring a candidate it looks for their intellect, ability to clearly see and resonate with the vision of Amazon, and lastly their contribution to the talent pool of the company. Thus, the company by being more responsible towards its recruitment can hire the best of the best candidates who have the right intellect, the right insight and are standing tall and firm with the intentions of Amazon to become a truly global organization with sustainability as its core objective(Greige Frangieh & Khayr Yaacoub, 2017).

4.3 Stakeholder Inclusion: This implies that safeguarding trust and positive impact for all by standing in the shoes of its stakeholders while making business decisions and creating an inclusive environment where every voice is heard and taken cognizance of(Schinzel, 2018). Amazon is a decentralized organization, which implies that the decision making is not concentrated and in the hands of few, but is distributed across the company and managers and executives have their own decisions to make for which they are truly accountable. Responsible leadership is all about taking sustainable business decisions which take into account the vested interest of its stakeholders. Thereby using this approach, the company can create an organization fabric wherein each of the stakeholders has a critical role to play, and the company hears to each one of its stakeholders and complies with the triple bottom line model approach. This way, Amazon will be able to make better business decisions, keep the interest of stakeholders at the priority, minimize its impact on the environment, as well as increase its business profits and revenues. Jeff Bezos, being a transformational leader has to move forward with this change in the organization, if the company wants to become sustainable and resilient. Jeff Bezos and the entire management has to align the strategic goals of the organization with its vision and mission to accomplish its envisioned future(Liu & Lin, 2018).

5.0 Recommendation
5.1 Transparency and Empathy: Being a company listed in the public domain it has been established that it is not only under the purview of various legal regulations, government agencies and most importantly its customers and suppliers(Haque, Fernando & Caputi, 2019). The issues listed above have mostly to do with its stakeholders and shareholders who either doubt the growth concerns of the company, its anti-trust matters related to role in marketplace model and counterfeit product and lastly climate change. In order to address these challenges effectively and clear its intention to its various stakeholders, the company has to take an approach of transparency in its business policies and systems and showing empathy towards the concerns of the stakeholders. By being transparent the company allow to build a high level of trust and cooperation with its stakeholders and this trust is reciprocated by the stakeholders by increased buying activity, positive share of voice on the social media and in general increasing the Net promoter score of the company. Likewise, by being empathetic towards the needs and concerns of the stakeholders and showing cognizance for their concerns, the company can create a sustainable organization which is highly responsible for its action and takes full accountability for it. Lastly, Jeff Bezos has to ensure transformational change management at Amazon and drive the organization towards its goals of leadership by acting as responsible leader and considering business as an infinite game, whose goal is to become sustainable and caring for the needs of its profit, planet and people.

6.0 References
Gaus, A. 2019. Amazon's 3 Biggest Challenges for 2020. Retrieved from: https://www.thestreet.com/investing/amazons-biggest-challenges-for-2020

Greige Frangieh, C., & Khayr Yaacoub, H. (2017). A systematic literature review of responsible leadership. Journal of Global Responsibility, 8(2), 281-299.

Haque, A., Fernando, M., & Caputi, P. (2019). The Relationship Between Responsible Leadership and Organisational Commitment and the Mediating Effect of Employee Turnover Intentions: An Empirical Study with Australian Employees. Journal of Business Ethics, 156(3), 759-774.

Liu, C., & Lin, C. (2018). Assessing the effects of responsible leadership and ethical conflict on behavioral intention. Review of Managerial Science, 12(4), 1003-1024.

Manning, Q. (2018). Innovation a Problem? Go Back to 'Day One' the Way Amazon Constantly Does. Retrieved from: https://www.entrepreneur.com/article/320564

Marques, T., Reis, N., & Gomes, J. (2018). Responsible Leadership Research: A Bibliometric Review. BAR - Brazilian Administration Review, 15(1), 1-25.

Miska, C., & Mendenhall, M. (2018). Responsible Leadership: A Mapping of Extant Research and Future Directions. Journal of Business Ethics, 148(1), 117-134.

Schinzel, U. (2018). Responsible leadership and corporate social responsibility (CSR) in Luxembourg. International Journal of Organizational Analysis, 26(3), 415-431.

Valinsky, J. (2019). 9 challenges Amazon faces on its 25th birthday. Retrieved from: https://edition.cnn.com/2019/07/04/business/amazon-25th-birthday-challenges-trnd/index.html

Venture Beat. (2020). Amazon reports $88.9 billion in Q2 2020 revenue: AWS up 29%, subscriptions up 29%, and ‘other’ up 41%. Retrieved from: https://venturebeat.com/2020/07/30/amazon-earnings-q2-2020/#:~:text=Amazon%20today%20reported%20earnings%20for,of%20%245.22%20in%20Q2%202019).

Witt, M., & Stahl, A. (2016). Foundations of Responsible Leadership: Asian Versus Western Executive Responsibility Orientations Toward Key Stakeholders. Journal of Business Ethics, 136(3), 623-638.