Question

Explain the unique Organizational Culture of Zappos. How does it impact their success? How does it differ from the culture at Healthsouth?

Answer 1

Zappos,an online shoe retailer is not only known for its humongous revenues but primarily for the organizational culture Tony Hseih,CEO has created and why it inspires a shift in how Human Resources ,Marketing and Finance need to be in tandem.Among their ten core values some which give a peek into their organizational culture and why it gives them a edge and are responsible for their success  are :

1) Delivering WOW through service :Whether its a $10 order or a $100 the packaging is what should ensure that customer is happy.

2) Build a Positive Team and Family Spirit :They share every success and every failure in a bulletin board and generate interest by rewarding failures wherein creativity was exercised to find a solution thereby promoting innovation

3)Create Fun and a Little Weirdness :Happy employees make successful companies.Their Haunted House or their Porta Party generates media interest but it is their team building exercise  and family spirit which creates greater cohesion in any strategic business decision.That is the reason they have been retain to the open office culture even post selling out to Amazon as a subsidiary

4)Build Open and Relationships with Communication:

With all channels of communication open right from call time to sales and profits without any marketing channel or intermediary makes the employee happy that their delivering happiness in forms of a small goods is generating so much for the company .Their culture fit hiring brings the right people mix( so much so that they pay the person $2000 who doesn't feel he can be a fit post training)The 480 page culture handbook personally written by Tony Hseih,CEO gives a clear peek on how open channels of communication always bails out and acts as a text book example responsible for their hallowed success.

5) Embrace and Drive Change :Zappos has always been diligent with market trends and practice and have never relied on single business model to succeed

On the other hand the Health South organizational culture although espouses transparency and humility their enacted values was uncovered in 2002 in a $4.6 billion accounting fraud scandal wherein their CEO Richard Scrushy kept overestimating its earnings to maintain a buy rating on the stock.In his own words he was used to a lifestyle and post a point of time they never cared how the money came.When we discuss the options of Open Relationships and Communication at Zappos and humility the Healthsouth was going the opoosite way which ultimately led to its downfall.The employees,even the department heads were being aided in the same which created a huge environment of mistrust in Healthsouth wherein ultimately led to a whisteblower reporting the fraud and this coming into the public.

From the above account we can derive that the same factors which lead to Zappos success,the absence of it created havoc in Healthsouth.This is called Value congruence in organizational culture wherein espoused and enacted values are very different.