Introduction
Organizational culture shapes all aspects of a business – from functionality, contract terms to employee benefits. Leaders aremore concerned with ensuring employees’ beliefs and attitudes align with the culture of the organization. This, as explicated in Dewiand Wibow’s (2020) study, makes sure they feel valued, supported, and respected. It is imperative to note that every organization has a unique culture, developed through employees’ characteristics, behavior and personality. However, this paper seeks to provide an analytical overview of organizational culture effects on Amazon.
Organizational Culture Defined
Organizational culture is the bond that connects and holds organizations together. Although organizational culture has been defined differently by scholars, they all agree that it is connected to employee beliefs, values, visions, norms, perceptions, and behaviors. All these elements drive employees to act to the realization of the set goals and objectives (Karapancheva, 2020; Kumari and Singh, 2018).
In their study, Kumari and Singh (2018) defined organizational culture as “a set of assumptions which should drive what happens in the company, defining the best behavior for various situations” (p. 34). Karapancheva (2020), on his part, described organizational culture as a means through which organizations achieve their strategic objectives, attract the right talents, and motivate them to become better. However, this paper defines organizational culture as a reflection of the company’s core values demonstrated through the organizational leadership.
As evidenced above, organizational culture can be defined through the lens of core values. For instance, Amazon’s core values include “customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking”(Sharma, 2020, p. 34).
Therefore, Amazon’s organizational culture can be defined along these core values. The company’s organizational culture is one that pushes employees to explore ideas and take risks. Its culture empowers people to go beyond the traditional conventions in an effort to come up with competitive and unique ideas and solutions.Sharma (2020) characterized these core values as the condition behind the company’s capability to look for new opportunities, utilize the latest technological advancements and rely on data-driven technologies to drive productivity. Amazon is often described as itself as a company of pioneers. The word pioneer is symbolic for its highly dedicated employees.
Types of Organizational Culture and Why it is Important
Although there are many types of organizational culture, this discussion will focus on just four of them which were developed through the Competitive Values Framework (CVF). CVF holds that “there are four basic competing values within every enterprise: Collaborate, Create, Compete and Control” (Warrick, 2017, p. 395). This framework guided Kim Cameron and Robert Quinn in categorizing organizational culture into four: clan culture, adhocracy culture, market culture and hierarchy culture (Singh, 2019). Some organizations consider integrating two or more of these cultures.
Clan Culture
Clan culture works well in small or family-owned businesses which places more emphasis on teamwork and togetherness. Organizations with this type of culture offer their employees a friendly working environment where relationships are forged – members feel respected and valued. Besides teamwork, clan cultures are founded on the principles of mentorship and apprenticeship where values are shared across different generations. According to (Warrick, 2017), clan culture is important because it improves employee engagement, which, in the end, translates to high level of efficiency in customer service. High employee engagement helps reduce turnover and costs associated with hiring and training new employees.
Hierarchy Culture
Hierarchy culture is one of the most common types of organizational culture, especially in the U.S. This culture is characterized by “structure, established procedures, and levels of authority” (Warrick, 2017, 400). Employees working in organizations with hierarchy culture have clearly defined duties and responsibilities – they also know their place in the chain of command. Activities undertaken in this culture are guided by existing procedures as opposed to innovation and critical thinking. Hierarchy culture is common in financial institutions, Oil and Gas Company and health insurance companies. This type of culture is important because it ensures proper management of risks. Similarly, it offers employees clarity in communication and a higher sense of security.
Market Culture
Market culture, also referred to as “compete culture”, is concerned more with results– it is a result-oriented type of culture. This culture is driven by profit margins as well as the desire to retain a competitive advantage (Warrick, 2017). Employees in market culture are highly goal-oriented – leaders are tough and demanding. In some instances, employees tend to work under pressure but end up being rewarded for their efforts. There is a demand for creativity and innovation in order to create top-notch products. Therefore, market culture is important because it encourages and reinforces competition leading to creativity and innovation. It allows employee to compete among themselves for reward and recognition.
Amazon is a good example of how market culture is developed and reinforced. Amazon, in advancing market culture, states, “We’re a company of pioneers. It’s our job to make bold bets, and we get our energy from inventing on behalf of customers. Success is measured against the possible, not the probable” (Okpaku, 2021, p. 29). Boldness in this case emphasizes the need for employees to take risks by considering new ways of doing business.
Adhocracy Culture
Adhocracy culture is guided by the principle of “move fast and break things”. Organizations with this type of culture approach work and innovation by emphasizing more on speed and experimentation. This philosophy encourages employees to take risks even if they end up making mistakes along the way. The outcome, as explicated by Warrick (2017), is to disrupt technologies as opposed to playing it safe. Similarly employees in this type of culture are encouraged to think beyond the obvious. Consequently, companies expand and grow fast due to innovation and learning. This type of culture is important, especially to those companies that are valued and characterized by cutting-edge technologies.
How Companies Create Organizational Culture
The process of creating an organizational culture requires time – it develops overtime. Baek et al. (2019) noted that organizational culture is shaped by the organizational leadership. For instance, Amazon’s former CEO, Bezos played an important role in developing and shaping the company’s culture (Sharma, 2020). His philosophy of “customer obsession and start with the customer and work backwards” has helped shape the company (Sharma, 2020, p. 34). It is also critical to note that organizational culture tend to get reinforced by the values and actions believed to instigate earlier success.
As indicated in Figure 1, organizational culture, especially during its early years are tied to the personality, background, vision and values of the founder. As the founder continues to shape the culture, industry demand forces the leadership to focus on creating similarities among the prevailing cultures. As the organization continues to mature, cultural values get refined and strengthened. In the case of Amazon, they are driven by the need to satisfy their customer through innovation, critical thinking and high level of operational efficiency. Attraction-Selection Attrition as indicated further indicated in Figure 1, works by bringing on-board members who are committed to meet the set organizational goals. Overall, leadership plays an important role in creating and reinforcing organizational culture.
Organizational Culture and Employees Identify
Organizational culture is powerful and influential – it affects and shapes how employees identify with the organization. For instance, a great organizational culture attracts employees who want to be part of the success. Despite Amazon’s work environment being considered high pressure, many employees both current and former cited they will recommend the company to a friend (Piercy and Carr, 2020).
Amazon also ranks high on Glassdoor on many areas including CEO approval, culture and values, work-life balance, benefits, and career opportunities (Piercy and Carr, 2020). Companies with strong organizational culture tend to create a sense of identification among employees. Such companies have low employee turnover because they feel they are part of the organization. They tend to represent the organization at different level both in their professional and personal capacity. Karapancheva (2020) noted further that organizational culture “affects actions, interpretation, and decision making of organizational members and the management” (p. 42). Besides this, organizations with well-developed organizational identity encounter little to no resistance from employees. They understand that change is inevitable and is bound to occur at any time.
Overall, organizational culture affects how employees with an organization through shared understanding. In fact, shared understanding is critical in teams as it ensures they are effective. People who identify with the organization are able to anticipate or predict the behaviors of the team and the management. This is critical in ensuring tasks are undertaken and completed within the specified time-frame. Such members are able to justify their behavior because they reflect and fit with the culture.
References
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