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Mitika Mahajan
APPLICATION OF LEADERSHIP THEORIES TO AMAZON 2
Abstract
Leadership is the key commodity in current dynamic business environment. The organizations
can drive sustainable growth if the leaders possess the skills to transfer the knowledge into
workable solutions, and learn to convert the problems into opportunities. This paper analyzes the
leadership theories and its application in the ecommerce giant, Amazon.com. The leadership
theories and management theories are feasible to implement in practice. Amazon follows the
Introduction
the current turbulent business environment. The concept of leadership has been evolved over
time, and with the evolution, the definition and focus have been changing. Even today, there is
transformational process, or even addressed from a skill perspective. From different definitions,
four components of leadership can be identified. (a) Leadership is a dynamic process; (b)
Leadership has influence, (c) Leadership occurs in groups and (d) Leadership works for common
Leadership theories are generally classified into trait theories, behavioral theories,
contingency theories, and alternative views of leadership (Champoux, 2011). Leadership and
management are distinguished on the basis of the approach. Management is often considered as
are classified under the classical approach, behavioral approach, quantitative approach, and
contemporary approach (Champoux, 2011). In this report, the application of leadership theories
and management theories are critically evaluated to Jeff Bezos, Founder, Chairman, CEO and
president of Amazon.com.
computing, Artificial Intelligence, and digital streaming. It is the world’s largest online retailer
and prominent service provider of cloud services. Amazon has a hierarchical organization
structure that contains 12 levels. Though it has a hierarchical structure, Amazon has a flat
hierarchy (Outlook, 2017). The teams are relatively small, usually 5- 6 members in each team.
APPLICATION OF LEADERSHIP THEORIES TO AMAZON 4
Amazon is famous for its performance-oriented culture, which is considered as pressure culture.
application of critique to the leadership and management practices at Amazon, and evaluation of
Trait theories are based on the concept that leaders are born, not created. This approach
has identified traits of great leaders and considers drive, desire to lead, honesty, self-confidence,
cognitive ability, and knowledge of the business as major traits of great leaders (Champoux,
2011). Jeff Bezos clearly reflects the traits such as drive, desire to lead, self-confidence,
cognitive ability and knowledge of the business. As per Jeff Bezos, customers hate delay, defect
and out-of-stock products. This reflects that Jeff Bezos has knowledge about the business. 0.1
Second delay in webpage loading can translate into 1% drop into customer activity. This metrics
shows hoe the organization is led by cognitive ability of leader (Anders, 2012).
The behavioral approach considers the leader behavior as the basis of classification. The
University of Michigan classified leadership on the basis of the leader’s behavior as production
centered and employee centered. On the other hand, Ohio State University founded two
Jeff Bezos is a production centered leader. He continuously run and visits Amazon with the same
intensity as he had earlier to ensure the productivity of the employees (Anders, 2012). Jeff Bezos
has translated his style to the Amazon culture which focuses on being fast, cheap, and efficient.
Trait theories and behavioral theories did not provide satisfactory orientation, so the new
approach called contingency theory which advocates that the leadership is based on the leader’s
situation. The theories of this approach suggested a different leadership style for a different type
of followers and tasks. New theories of leadership are authentic leadership, Servant leadership,
leadership on the basis of care, authenticity, mutual trust, and charisma of the leader (Champoux,
2011).
Early management theories are based on the production and work-study, so the objective
of these theories was to identify the methods to reduce time and increase productivity. In the
contemporary world, quantitative theories are used, which focuses on quality management.
The leadership style of Jeff Bezos can be viewed as combination of different leadership
theories, but the path-goal theory is the most suitable. Jeff Bezos has created the rule that internal
teams should be small enough that two pizzas can satisfy them. This rule is popularly known as
‘Two Pizza Rule’ (Hern, 2018). This leads to fewer conflicts and fast decision making.
The employees in PIP (Performance Improvement Plan) are given the opportunity to
learn from the in-house trainers who are called Career Ambassadors (Kim, 2017). This shows
that the leader identifies the follower characteristics to lead them. Moreover, the employees are
encouraged to learn new courses for their development (Hess, 2018). At Amazon, the employees
need to write a six page long memo before the meeting. This memo is read in the meeting. This
APPLICATION OF LEADERSHIP THEORIES TO AMAZON 6
practice is followed to make employees realize that to write a great memo, they need time and
through a simple act, one can improve the results (Umoh, 2018).
From the analysis of various management and leadership theories and practices at
Amazon, it is observed that theories are applicable in real business world. The vision, drive, self-
confidence, knowledge and other skills are reflected in the leader. The leader implements the
production oriented culture in the organization with focus on employee empowerment and
development. This reflects quality management approach of management. The old techniques of
Conclusion
From the analysis it can be concluded that it is possible to implement leadership and
management practices, and lead an organization. An organization can be customer centric and
employee development. The leadership and management can drive an organization in the way it
References
Anders, G. (2012, April 4). Jeff Bezos Reveals His No. 1 Leadership Secret. Retrieved July 7,
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Blanding, M. (2018, May 14). Amazon vs. Whole Foods: When Cultures Collide. Retrieved July
https://hbswk.hbs.edu/item/amazon-vs-whole-foods-when-cultures-collide
Hern, A. (2018, April 24). The two-pizza rule and the secret of Amazon's success. Retrieved July
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Hess, A. (2018, April 19). Amazon will pay up to $12,000 for employees to study these 4 fields.
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Kim, E. (2017, January 20). Amazon just created a new training program to help employees in
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https://www.businessinsider.in/Amazon-just-launched-a-new-training-program-to-help-
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Umoh, R. (2018, April 23). Why Jeff Bezos makes Amazon execs read 6-page memos at the start
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