Many organizations face circumstances in which the public challenges their legitimacy. S. Prakash Sethi labeled these situations as legitimacy gaps and Bob Heath and Michael Palenchar claimed they are caused by issues of fact (misperceptions of the company’s actual behaviors); issues of policy (disapproval of one or more of the organization’s policies); and issues of value (discrepancies between the values displayed by the organization and the values of its constituents). The fallout from these situations is further exacerbated when they receive increased attention in the media. Tales of corporate wrongdoing, whether they are anecdotal accusations or substantiated claims, have a tendency to become hot issue topics that can cause reputational damage
A recent article in the New York Times criticized Amazon, one of the largest retailers in the world, for some of the behaviors and policies that have allegedly emerged out of the execution of its core values – or what Amazon labels as its “leadership principles.” These guiding principles (i.e. customer obsession; ownership; invent and simplify; [leaders] are right, a lot; hire and develop the best; insist on the highest standards; think big; bias for action; frugality; learn and be curious; earn trust; dive deep; have backbone; disagree and commit; and deliver results) are enforced as stringent standards of behavior throughout the organization as they collectively represent Amazon CEO Jeff Bezos’ vision for success.
According to the New York Times article, the successful implementation of Amazon’s leadership principles forced employees to work in an ultra-competitive, unforgiving and cliquish environment characterized by open confrontation with colleagues and frequent incidents in which employees are challenged and ridiculed to the point of crying at their desks. Additionally, the article accuses Amazon’s management of more severe infractions against its employees that include using hostile and threatening language, discrimination, hindering attempts at maintaining any form of work-life balance, and threatening to demote or fire employees who need time away from work while suffering from life threatening diseases.
While it is evident that Amazon is currently facing a threat to its legitimacy, one has to question whether it is facing an issue of fact, policy or value – or all three.
For example, an article in Forbes Magazine provided readers with a memo written by Bezos that denied the facts presented in the New York Times article. In the memo, Bezos treated the situation as an issue of fact by arguing, “It [the New York Times article] claims that our intentional approach is to create a soulless, dystopian workplace where no fun is had and no laughter is heard. Again, I don’t recognize this Amazon and I very much hope you don’t either.” Additionally, Nick Ciubotariu, a current Amazon employee, defended his company by providing a line-by-line rebuttal on his LinkedIn page where he either denies or addresses several of the allegations presented in the New York Times article.
The situation Amazon is facing can also be viewed as both an issue of value and an issue of policy, bringing all three of the issues into play in this situation. If the allegations against Amazon are found to be accurate, some of its leadership principles may be resulting in inappropriate behaviors and policies as they are being enacted throughout the organization. Members of the general public, most of whom are likely Amazon customers, support a company that is attempting to place “customer obsession” as a top priority. However, is being overly fixated (i.e. obsessed) with the customer hindering Amazon’s ability to focus on the well being of its employees? Does the successful implementation of frugality as an organizational value result in policies that are viewed by the public as stingy and inconsiderate of its employees? Finally, does adherence to the notions of innovation and productivity, both of which are common values among most technology-based companies, lose its luster with the general public when those values conflict with values like fairness and caring?
Amazon’s issue may, in part, be a result of its reluctance to consider the human price of innovation, competition and profitability. However, before we chastise Amazon for its business practices, we must consider the fact that we, the individuals who comprise its customer base, have set the very expectations that have led to the development of its culture. We want inexpensive products and we want them to arrive to our doors NOW. We want to do business with companies that provide more, faster, better products and services. Companies that fail to meet these expectations simply wither into nonexistence.
Have the public’s desires for innovation led to the legitimation of practices like those described in the New York Times article? Cass R. Sunstein, legal scholar and author of the Harvard Business Review article “Amazon Is Right That Disagreement Results in Better Decisions,” claimed that Amazon’s unremitting focus on conflict and disagreement is appropriate and in alignment with “decades of research in behavioral science… that has shown that many groups, including businesses, do poorly, at least less well than they should, because they do not take advantage of the information and the creativity of their own staffs.” In his article, Sunstein concludes by arguing, “it’s crucial to see that good companies can encourage internal disagreement, and reject the supposed virtue of harmony, while also treating their employees with courtesy.”
Amazon has established one of the most effective internal communication campaigns to date, as its employees appear to eat, sleep and drink its values. Amazon may, however, need to determine if it is operating according to a utilitarian view of corporate culture where its managers may be guilty of using questionable means to achieve results. Even though they continue to dispute the claims made in the New York Times article, and their organizational values may be congruent with the values of some of its employees, a part of Amazon’s extensive data collection procedures need to be redirected toward identifying if those outside the Amazon culture see its behaviors as being appropriate and congruent with socially responsible values.
John Brummette, Ph.D., is an associate professor at Radford University. Follow him on Twitter @brummette1.
