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Case Study - Jeff Bezos

Jeff Bezos is the founder and CEO of Amazon, which he started as an online bookstore in 1994 and has since grown into a massive online retailer. Bezos is a demanding leader who is obsessively focused on pleasing customers above all else. He grounds all decisions in data and customer feedback and expects employees to argue vigorously for their ideas. While Bezos' harsh management style is controversial, it has driven Amazon's continued growth and high levels of customer satisfaction.

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Phuong Thanh
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462 views2 pages

Case Study - Jeff Bezos

Jeff Bezos is the founder and CEO of Amazon, which he started as an online bookstore in 1994 and has since grown into a massive online retailer. Bezos is a demanding leader who is obsessively focused on pleasing customers above all else. He grounds all decisions in data and customer feedback and expects employees to argue vigorously for their ideas. While Bezos' harsh management style is controversial, it has driven Amazon's continued growth and high levels of customer satisfaction.

Uploaded by

Phuong Thanh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Jeff Bezos Is the Force of Nature behind Amazon

Jeff Bezos is a giant in management. Forbes magazine recently named him its top CEO based
on the performance of the company he founded, online retailer Amazon. Bezos started
Amazon a few years after earning a degree in computer science and electrical engineering.
Not satisfied with applying his analytic skills to finance, he started an online bookstore,
incorporating the business in 1994 and launching the website in 1995. Today, Amazon is a
retailing monster, with more than 20 million products and revenues of $48 billion. It is also a
company built on 14 leadership principles that reflect the character of the company’s founder.

Topmost in Bezos’s mind as a business leader is his passion for pleasing customers. In a
famous gesture, Bezos requires that in meetings, an empty chair be placed at the table to
represent the customer, the invisible presence everyone must be most concerned about. Even
if

a service that delights customers costs money—say, sturdier boxes that customers can reuse—
Bezos will forge ahead. He even has a publicly available e-mail address, jeff@amazon.com,
so that he can learn directly what customers love and hate. When he receives a complaint, he
is apt to forward it to Amazon managers, adding as his only comment a question mark,
implicitly demanding an investigation and explanation. Employees know they have just a few
hours to resolve the problem and report their solution.

In addition, Bezos insists that decisions be firmly grounded in data. At weekly meetings,
managers must evaluate their performance based strictly on data related to the company’s 500
quantitative goals, 80 percent of which are related to customer satisfaction. Because the data
will inevitably point to the best answer, Bezos does not shy from confrontation in decision
making. He expects employees to argue their positions, on the assumption that the best ideas
will become evident. As one of Amazon’s leadership principles state, “Leaders have
conviction and are tenacious. They do not compromise for the sake of social cohesion.
“Therefore, the employees who succeed at Amazon are the ones who thrive on conflict.

Another of Bezos’s values, frugality, partly derives from Amazon’s start-up experience. The
company was not profit- able for years, and many observers doubted it would survive, with its
strategy of charging prices below costs. Survival required limiting any expenses not
connected to making customers happy. In contrast to tech companies that keep employees
happy with fun amenities, Amazon gives employees desks made out of doors and charges
them for snacks. However, the basis for forcing employees to be frugal is not just to help the
company earn a profit; it is also to enable the company to continue pleasing customers with
the best prices.

Bezos is notoriously demanding. If employees let customers down or fail to live up to his high
standards, he is blunt—even rude—in his assessment (reported comments include “Are you
lazy or just incompetent?” and “If I hear that idea again, I’m going to have to kill myself”). If
his harsh comments hurt employees’ feelings, well, that is not a major concern of his because
the goal is to make customers happy. However, employees observe that when Bezos says an
idea is bad, his own idea almost always is the better one, even in functions outside his
expertise. The demands he places on others inspire them to improve, innovate, and make a
difference continually.

Under Bezos’s leadership, Amazon has continued to grow and eat into one product category
after another. Most remarkably, that growth is not at the cost of great service. In the
University of Michigan’s American Customer Satisfaction Index, Amazon lands in the top
spot for retailing year after year

Questions

1. Which theory of leadership do you think best describes Jeff Bezos’s contribution to
Amazon’s performance? Describe how it applies.

2. Does Bezos create an environment in which you could contribute effectively as a manager?
Explain.

3. Do you think Bezos is a better leader or a better manager? Explain.

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