Amazon.com, Inc.: Big Ideas in a Bruising Workplace

Abstract

On August 15, 2015, The New York Times published the results of an investigation, entitled “Inside Amazon: Wrestling Big Ideas in a Bruising Workplace.” The article denounced a brutal working culture at Amazon.com. Having consistently outperformed its competitors, Amazon is now recognized as the most valuable retailer in the United States, enjoying the biggest market capitalization in its industry. Against the backgrounds of Amazon’s impressive business expansion, this case examines the relationship between a growing social discontent toward Amazon and an aggressive corporate culture long favored by the company.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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Resources

Exhibit 1: Amazon Leadership Principles

1. Customer Obsession

Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.

2. Ownership

Leaders are owners. They think long term and don’t sacrifice long-term value for short-term results. They act on behalf of the entire company, beyond just their own team. They never say “that’s not my job.”

3. Invent and Simplify

Leaders expect and require innovation and invention from their teams and always find ways to simplify. They are externally aware, look for new ideas from everywhere, and are not limited by “not invented here.” As we do new things, we accept that we may be misunderstood for long periods of time.

4. Are Right, A Lot

Leaders are right a lot. They have strong business judgment and good instincts. They seek diverse perspectives and work to disconfirm their belief.

5. Hire and Develop The Best

Leaders raise the performance bar with every hire and promotion. They recognize exceptional talent and willingly move them throughout the organization. Leaders develop leaders and take seriously their role in coaching others. We work on behalf of our people to invent mechanisms for development like Career Choice.

6. Insist on the Highest Standards

Leaders have relentlessly high standards – many people may think these standards are unreasonably high. Leaders are continually raising the bar and driving their teams to deliver high quality products, services and processes. Leaders ensure that defects do not get sent down the line and that problems are fixed so they stay fixed.

7. Think Big

Thinking small is a self-fulfilling prophecy. Leaders create and communicate a bold direction that inspires results. They think differently and look around corners for ways to serve customers.

8. Bias for Action

Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking.

9. Frugality

Accomplish more with less. Constraints breed resourcefulness, self-sufficiency and invention. There are no extra points for growing headcount, budget size or fixed expense.

10. Learn and Be Curious

Leaders are never done learning and always seek to improve themselves. They are curious about new possibilities and act to explore them.

11. Earn Trust

Leaders listen attentively, speak candidly, and treat others respectfully. They are vocally self-critical, even when doing so is awkward or embarrassing. Leaders do not believe their or their team’s body odor smells of perfume. They benchmark themselves and their teams against the best.

12. Dive Deep

Leaders operate at all levels, stay connected to the details, audit frequently, and are skeptical when metrics and anecdote differ. No task is beneath them.

13. Have Backbone; Disagree and Commit

Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.

14. Deliver Results

Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle.

Source: Amazon Leadership Principles. http://www.amazon.jobs/principles

Exhibit 2: Jeff Bezos’s letter to employees after publication of the New York Times article

Dear Amazonians,

If you haven’t already, I encourage you to give this (very long) New York Times article a careful read:

http://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html

I also encourage you to read this very different take by a current Amazonian:

https://www.linkedin.com/pulse/amazonians-response-inside-amazon-wrestling-big-ideas-nick-ciubotariu

Here’s why I’m writing you. The NYT article prominently features anecdotes describing shockingly callous management practices, including people being treated without empathy while enduring family tragedies and serious health problems. The article doesn’t describe the Amazon I know or the caring Amazonians I work with every day. But if you know of any stories like those reported, I want you to escalate to HR. You can also email me directly at jeff@amazon.com. Even if it’s rare or isolated, our tolerance for any such lack of empathy needs to be zero.

The article goes further than reporting isolated anecdotes. It claims that our intentional approach is to create a soulless, dystopian workplace where no fun is had and no laughter heard. Again, I don’t recognize this Amazon and I very much hope you don’t, either. More broadly, I don’t think any company adopting the approach portrayed could survive, much less thrive, in today’s highly competitive tech hiring market. The people we hire here are the best of the best. You are recruited every day by other world-class companies, and you can work anywhere you want.

I strongly believe that anyone working in a company that really is like the one described in the NYT would be crazy to stay. I know I would leave such a company.

But hopefully, you don’t recognize the company described. Hopefully, you’re having fun working with a bunch of brilliant teammates, helping invent the future, and laughing along the way.

Thank you,

Jeff

Source: Geek Wire http://www.geekwire.com/2015/full-memo-jeff-bezos-responds-to-cutting-nyt-expose-says-tolerance-for-lack-of-empathy-needs-to-be-zero/

Exhibit 3: Amazon Results of Operations 2014

Figure

Source: Amazon 2014 Annual Report. United States Securities and Exchange Commission, Form 10-K. Page 3. https://www.sec.gov/Archives/edgar/data/1018724/000101872415000006/amzn-20141231x10k.htm

Exhibit 4: Amazon Sales Division Performances 2014

Figure

Source: Amazon 2014 Annual Report. United States Securities and Exchange Commission, Form 10-K. Page 3. https://www.sec.gov/Archives/edgar/data/1018724/000101872415000006/amzn-20141231x10k.htm

Exhibit 5: Amazon Operating Expenses 2014

Figure

Source: Amazon 2014 Annual Report. United States Securities and Exchange Commission, Form 10-K. Page 3. https://www.sec.gov/Archives/edgar/data/1018724/000101872415000006/amzn-20141231x10k.htm

Exhibit 6: Amazon Income Statement 2014

Figure

Source: Amazon 2014 Annual Report. United States Securities and Exchange Commission, Form 10-K. Page 3. https://www.sec.gov/Archives/edgar/data/1018724/000101872415000006/amzn-20141231x10k.htm

Exhibit 7: Amazon Balance Sheet 2014

Figure

Source: Amazon 2014 Annual Report. United States Securities and Exchange Commission, Form 10-K. Page 3. https://www.sec.gov/Archives/edgar/data/1018724/000101872415000006/amzn-20141231x10k.htm

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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