Zappos and Amazon organisation behaviour

Organisation Structure is essential in every company to have a framework that helps in identifying functionality of each part of the company. This helps in dividing roles and responsibilities and helps in regulating flow of command within the organisation. This helps in running the overall functioning of the organisation.

Zappos is an online shoe store and was founded by Nick Swinmurn in 1999. Zappos recently announced a change in their organisation behaviour where the hierarchical structure will be replaced by holacracy. According to this structure, Zappos will be divided into multiple circles allowing employees to have any number of roles within those circles. This will help in distributing power and would also increases trasparency within the organisation.Zappos which has 1500 employees will be the largest company until date to implement Holacracy.This change in organisation structure in Zappos has now raised a debate where analysts are trying to figure out the suitability of holacracy to Zappos

Amazon acquired Zappos in 2009.Amazon and Zappos function in very different way and have different organisation structure. Amazon has divisional organisation structure which is more hierarchy oriented and Zappos recently adopted holacracy which is a flat structure.

Amazon is headed by CEO Jeffery Bezos along with a board of eight members. The CEO is then followed by CFO and CTO who are then followed by various department managers. The organisational structure at Zappos is more static in nature and doesn’t change much. Every unit has a manager and people at various levels report to their managers. Zappos on the other hand recently adopted holacracy which is a flat structure. According to this structure the organisation will be divided in 400 circles and employees will be allowed to have multiple roles within each circle. This organisation structure is more dynamic in nature and can change based on the situation, schedule and product delivery. This structure will make the overall system more transparent and will make the employees more accountable for their work.

Leadership is important in every organisation as an effective leader helps in motivating employees which takes the company forward towards a better growth. According to very famous quote of Warren G. Bennis “Failing organisations are usually over-managed and under led”. Three basic theories of leadership are

· Personality Trait Theories- This theory deals with the fact that leader possess different quality and trait than others.

·  Behaviour Theories-This explains the behaviour and characteristics of a leader.

·  Contingency Theories- This theory explains how a leader deals with different situations.

Leaders at Amazon frame strategies for the company and all the employees are bound to follow it. Decision making process in Amazon flows in a more structured way and all the decisions are taken by designated leaders and managers. Employees of Zappos after introduction of holacracy have the flexibility of taking decisions to cater real time needs and focus of work productivity.