Amazon is the largest e-commerce retailer in the world, with a diversified business portfolio. It operates in multiple international locations with an employee strength of 798,000. In order to manage an organization of such massive stature, it needs to have a robust organizational structure. The organizational structure of an organization determines how the operational activities are directed in order to achieve the desired goals. It establishes the chain of command, flow of information and the hierarchical ladder. For a large-scale international company like Amazon, it needs to have a well-defined structure in order to seamlessly manage every functional and divisional units, which maintaining clear communication with every stakeholder. In this article, we have discussed about the organizational structure of Amazon, which can be used as case study for your management studies. You may also refer to this as an example when you write papers on Amazon.
The organizational structure of Amazon follows a vertical hierarchical approach, where the chain of command travels from top to bottom. While discussing about the organizational structure of Amazon, it should be noted that the company follows a bureaucratic culture, where the major decisions are made by the top management, such as the CEOs and CFOs.
The hierarchy of Amazon as shown in the chart above, clearly highlights the hierarchical structure. Jeff Bezos who is the Chairman, CEO and President of the Board, is at the top of the hierarchy and is responsible for making any major decision in the company or approving the ones made by others. He along with other top management figures, form the “S-team”. The S-team consists of global divisional heads of all the business divisions and functional departments. This team bears the responsibility to bring new ideas to the table and establishing an action plan for its implementation. Since, each of the members are head of their respective departments, they have a clear understanding of the status quo of respective divisions. During each S-team meeting, Jeff Bezos becomes of any notable changes or concerning situations in the company, take part in developing the necessary strategy for it. For a company like Amazon, which has expanded its business through diversification, it can be quite difficult for the company to have a centralized control. However, Amazon through its clearly defined structure has ensured that there is a seamless flow of information and coordination among all the stakeholders of the company.
Studying about the organizational structure for your college essay, is incomplete without mentioning the culture of the company. The organizational structure of Amazon is based on strong foundation of its culture. Amazon is highly customer oriented. It is constantly looking forward to develop new ideas to maximize the value of the customers. This is clearly reflected in its organizational structure. Even though the company prefer to maintain a strict centralized control over its operations, it also offers certain degree of independence to the international headquarters to adopt a localized approach, while catering to the target customers. A close look at Amazon’s organizational structure chart, indicates that the company has clearly defined divisions for its international operations. These international divisions are given certain level of autonomy to design its marketing mix for respective local markets. Thus, Amazon is able to offer localized services to its customers, while maintaining its global standardized brand image and organizational culture.
It should also be noted that despite of the massive employee strength of the company, Amazon believes in building small teams. Working with small teams enables the firm to become more efficient in their projects. Amazon follows its famous ‘Two Pizza’ rule, which suggests that if one cannot feed a team with two large pizza, that the team is too big. Amazon is highly focused on bringing new value propositions to its customers, and working with small teams enhances the idea generation and its implementation. Moreover, smaller teams are much easier to communicate with for a supervisor.
As mentioned earlier, Amazon is a highly diversified company, which operates in multiple industries. Each of these ventures are serrated into foundational groups, overseen by respective supervisors. The hierarchy in Amazon branches out from top to bottom, where the CEO of Worldwide consumer, Jeff Wilke oversees all the retail functions of the company and reports directly to Jeff Bezos. Simultaneously, individuals like Dave Clark, SVP Worldwide operations and Dave Treadwell, VP e-commerce foundation, report directly to Jeff Wilke. This vertical structure is present throughout the entire organization, in every functional division. This structure serves two crucial purposes. Firstly, it provides strict control over each and every operational activities of the organization, no matter how small or how localized it is. The CEO of the company, is able to monitor and supervise every activity in the organization, through the chain of command. Secondly, the company is able to maintain consistency in its organizational culture and operational practices. Amazon is highly focused on creating a standardized global brand, which is perceived equally to every customer, irrespective of the target market. This has been achieved through maintain a standardized customer-oriented culture all across the organization.
Before you start working on your professional essay writing on Amazon’s organizational structure, let us first highlight the key takeaways. Amazon follows a clearly defined vertical hierarchical structure, where the chain command flowing from top to bottom. All the major decisions are taken by the CEO and his S-team, with certain degree of autonomy to the international headquarters. It should also be noted that Amazon is highly focused on maintaining its global brand image, which is why the centralized structure of the company has proved to quite beneficial for the firm.
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