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Jeff Bezos’ Managerial Philosophy Research Paper

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Updated: Jun 9th, 2021

Introduction

The current business environment is highly competitive, and thus companies have to come up with strategic plans on how to remain leaders in their industries. The failure or success of an organization depends on leadership and management styles adopted by key decision-makers. Jeff Bezos, the founder and CEO of Amazon, has come out as a transformational leader, who questions the status quo and makes timely decisions to achieve the set objectives. Bezos uses the “Day 1 Philosophy”, which has propelled Amazon to become one of the leading companies in the contemporary times. This paper explores how Jeff Bezos’ uses the “Day 1 Philosophy” to handle the four functions of management and establish a strong organizational culture through managing and motivating employees.

The Philosophy

The principles of “Day 1 Philosophy” that Jeff Bezos employs are based on the belief that Amazon should never stop acting like a start-up. Therefore, Bezos believes that results matter more as compared to processes, decisions should be timely to exploit opportunities, new trends should be embraced as they emerge, status quo should be questioned and challenged, and a person’s intuition should be nurtured to become an important part of decision-making (Roemmele, 2017).

According to this philosophy, systems restrain growth, and thus creative thinking should be used to change the conventional way of doing things. As such, habitual thinking is discouraged, as it leads to stasis. Bezos, thus, believes in agility for the company to remain competitive, innovative, and prepared for the future. Additionally, Bezos holds that decision-making should be fast by bypassing bureaucratic systems and lengthy persuasion tactics. Bezos applies the “disagree and commit” mantra whereby even if the involved parties do not agree on a certain issue, they have to commit to ensuring the success of the decisions made.

Besides, Bezos abhors insular thinking, and he insists that trends should be spotted and embraced early by looking outside the company for future success. Bezos also does not accept the status quo, and thus he keeps on experimenting with novel ideas to ensure customer satisfaction. Finally, while Bezos respects the role of market surveys and research, he relies on his intuition, taste, and curiosity to make important organizational decisions.

Four Functions of Management

Planning

Jeff Bezos’ planning strategies are ingrained in his “Day 1 Philosophy”. He plans with the customers in mind by focusing on the long-term picture. In an interview explaining what he does to keep competition behind, Bezos said

I very frequently get the question: ‘What’s going to change in the next 10 years?’ And that is a very interesting question; it’s a very common one. I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two — because you can build a business strategy around the things that are stable in time (Economy, 2018, par. 4).

Therefore, Bezos plans for the long-term by focusing on things that are likely to remain unchanged. He thus encourages his workers to anticipate and embrace trends, which are developed around the long-term strategy to ensure customer satisfaction.

Organizing

The company’s organizational structure is hierarchical with Bezos at the top as the CEO. All the senior management team members report directly to Bezos. He introduced the famous “two pizza rule”. Based on this rule, Bezos believes that meetings should be held in small teams – small enough to be fed comfortably with two pizzas. However, despite the functional structure at Amazon, Bezos micromanages most of the operations in the company, thus influencing key decision-making areas.

He speaks plainly, if the employees are not working according to the set rules. Cain (2017) notes that Bezos’ workplace tirades are known. He also criticizes workers openly, which makes it difficult to impress him. In a recap, Bezos expects a lot from his employees, and this aspect has created an eccentric workplace culture where workers have to remain on their toes and over-deliver on their assignments. This militant organizational strategy might partially explain why Amazon is always innovating to satisfy customers and stay ahead of the competition.

Leadership

According to Conkright (2015), the future, failure, and success of any organization depend on the nature of leadership in place. Bezos is an autocratic leader, thus his decision is final, and employees are expected to follow what he says. He is also a demanding leader who places the customers’ needs before anyone else’s. At one point, he told his employees it would not be easy to work for Amazon (Brad, 2013).

As a leader, Bezos uses two decision-making strategies, viz. type 1 and type 2, to avoid time wastage with meaningless meetings. Type 1 decisions are critical to the mission of the company, hence high-impact choices that directly shape the larger corporate strategy. Type 2 decisions involve choices with low stakes, which can be revised and repealed depending on circumstances. This form of leadership creates what Cain (2017) calls brutal workplace culture where employees have to be aggressive, meet the set targets, or be fired.

However, as long as employees are delivering, Bezos is supportive and motivating. According to Crouse (2018), Bezos is very proud of the company’s employee benefits program – Amazon Career Choice, which helps workers to go back to school and gain in-demand skills that are highly needed in the marketplace.

Controlling

In terms of monitoring and evaluating activities, Bezos is hands-on, and he micromanages the execution of important goals that have a huge impact on the company. However, despite his controlling nature, Bezos cannot oversee all the company’s functions, and thus he has a team of individuals who help in the running of the firm. The current corporate structure supports internal growth in the e-commerce industry. However, if Bezos is not convinced of a certain decision, he would ignore it, regardless of whether it is being supported by an expert, and use his intuition and creativity to take the route that he feels would deliver better results.

What I Admire about Bezos

One of the things that I admire about Bezos is his willingness and audacity to question the status quo. Most companies have stagnated or missed growth opportunities because the management works in a certain way. However, the current market trends are constantly changing, and thus CEOs should emulate Bezos and embrace change quickly to reap maximum benefits. For instance, the management of Nokia, which was once a global mobile phone giant, missed the opportunity to adopt Android operating system. Consequently, the company was pushed out of the market by this emergent trend, which the management ignored.

I also like Bezos’ obsession with customers’ satisfaction. I believe that customers can be considered the most important stakeholders in any organization, and thus if they are satisfied, a company is likely to succeed. The current business environment is highly competitive, and customer satisfaction might be the difference between failure and success stories.

From Bezos, I have learned several issues that I believe will make me a better manager. First, I now know that it pays to follow my intuition when making decisions. I understand that I should not use proxies during decision-making and that I should test everything that can be tested as opposed to using averages gleaned from market surveys. I have also learned that I should never accept the status quo as a manager. Customers are continually looking for something new or better experiences, and this aspect requires constant innovation and unending curiosity. Finally, Bezos has taught me that, as a manager, I should move fast and make the necessary decisions without time wastage as a way of identifying, embracing, and taking advantage of emerging trends in the market.

Conclusion

Jeff Bezos is an autocratic leader who does not respect the status quo. He believes that for a company to stay ahead of the competition, decisions should be made quickly with the focus being on the customer. He expects a lot from his employees, and thus they should over-deliver because it is hard to please him. This aggressive approach to management and leadership has created a fast-paced workplace culture where complacent employees are fired promptly. However, as long as employees are performing, Bezos knows how to reward them competitively to increase productivity and profitability.

References

Brad, S. (2013). The everything store: Jeff Bezos and the age of Amazon. Boston, MA: Little, Brown and Company.

Cain, A. (2017). . Business Insider. Web.

Conkright, T. A. (2015). Using the four functions of management for sustainable employee engagement. Performance Improvement, 54(8), 15-21.

Crouse, C. (2018). . CNBC. Web.

Economy, P. (2018). . Inc. Web.

Roemmele, B. (2017). Forbes. Web.

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IvyPanda. "Jeff Bezos’ Managerial Philosophy." June 9, 2021. https://ivypanda.com/essays/jeff-bezos-managerial-philosophy/.

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IvyPanda. 2021. "Jeff Bezos’ Managerial Philosophy." June 9, 2021. https://ivypanda.com/essays/jeff-bezos-managerial-philosophy/.

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IvyPanda. (2021) 'Jeff Bezos’ Managerial Philosophy'. 9 June.

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