Amazon Organizational Structure

Amazon uses a divisional organizational structure which majorly focuses on the functions of business as a base of determining the connections between components of the organization. The organizational structure of the amazon has the following characteristics: Global function-based groups, Global hierarchy and Geographic division (Hitt, Ireland, & Hoskisson, 2015).

Global Function-Based Groups

This is the main characteristic the company’s organizational structure, each and every business department has a devoted group, along with its senior manager (Hitt, Ireland, & Hoskisson, 2015). The main objective of having this structural characteristic is to enable the company to be able to expedite successful e-commerce operations management throughout the whole organization. Currently, amazon is undergoing a global expansion, which is majorly associated with its commercial structure in terms of creating operations in new markets (Nelson, & Quick, 2011).

Global Hierarchy

Even though hierarchy is an out-dated organizational structural characteristics, it is expressed as a structure of lines of command and authority which encourage the online market (Hitt, Ireland, & Hoskisson, 2015). The managers’ orders are therefore directed are therefore applied all over the organization, which affects all the relevant departments of the company all over the world. The main strategic of this feature is to enable the administrative control of the company’s whole organization.

Geographic Division

            In geographic division, different groups are based on the geographic regions and other business goals. The company consequently uses this approach to make it easier in order to manage the online marketing business, centred on economic conditions of different types of regions (Hitt, Ireland, & Hoskisson, 2015). Moreover, this characteristic enable the company to be capable of addressing issues or concerns which are relevant to each geographic region, bearing in mind the differences among regional markets. This approach has therefore allowed the company to be able to cater for its regional operations both in North America and Internationally (Nelson, & Quick, 2011).

The main problem facing amazon is shipping, due to a large number of customers that it has. This has consequently made it hard for the company to be able to deliver the goods to its clients within two business days. The main reason as to why amazon is facing shipping problems, is less investments in shipping (Hitt, Ireland, & Hoskisson, 2015). The company has therefore outsourced shipping and thus making it hard for it to be able to guarantee its customers a delivery within two days. Amazon has partnered with FedEx, UPS and US postal services in order to help in the shipping of goods. Moreover, amazon seems to be facing a follow up problem, since it never follows up the shipment of the goods to make sure they are shipped within two days.

The main job dimensions of amazon are skill variety, task significance, Feedback and task identity (Nelson, & Quick, 2011). Skill variety is very significant in the company since amazon employees are required to be smart thus being able to carry out different tasks without any problems at all. Moreover, the company allows its employees to gain different tasks through being transferred from one department to another (Hitt, Ireland, & Hoskisson, 2015). This therefore makes it for the employees to be able to deal with different tasks that they may be asked to accomplish. Task significance is also another major job dimension of amazon, amazon aims at doing jobs which are of great impact to both its employees and the customers. This therefore makes the company to strive in order to provide the best services to its employees and at the same time paying attention to the customers.

Amazon makes sure that the orders are made on time and the delivery process is also made according to the stipulated time through task identity (Hitt, Ireland, & Hoskisson, 2015). When a client places an order, the duration that the order takes is carefully calculated and thus making the employees to deal with the task at hand and make sure that they deliver within the given duration. Finally, feedback is also another significant job dimension of amazon, the company awards its employees for doing a better job, and thus making them to work even harder (Nelson, & Quick, 2011).

In order for amazon to be able to perform better, it needs to include autonomy in its job dimensions. This will really help in making the employees to be self-driven and thus making it easy for the company to be able to reach its goals (Hitt, Ireland, & Hoskisson, 2015). Furthermore, since the employees know the challenges they face, allowing them to participate in setting the goals of the company will really help in boosting their morale. The company can now be capable of beating its competitors, and it can also be able to avoid facing many challenges in the near future.

Amazon takes care of its employees through providing them with compensation packages which encourages them to work even harder. The executives of amazon receive a basic salary, and a security cover which 70% of the total basic salary. For instance, The Company’s CEO, Jeff Bezos receives a basic salary of $81,840, and a security cover of $1.63 million. On the other hand, the company pays its employees poorly, and it only allows them to purchase shares of 15% in the company only after working in the company for three years (Hitt, Ireland, & Hoskisson, 2015). This consequently makes most of the employees to work even harder in order to be able to buy shares after staying in the company for three years.

The compensation packages that the company is using is not effective, and it cannot therefore be able to motivate the employees (Nelson, & Quick, 2011). The executive compensation package is good, thus the management of the company makes sure the employees perform well. On the other hand, the employees are facing very many challenges, and the only way that the company can be able to boost their morale is through allowing them to purchase shares of more than 40% in their first year of employment. This will not only boos the turnover rates, but it will also allow the employees to provide the best services to the company (Hitt, Ireland, & Hoskisson, 2015).

Reference

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2015). Strategic management: Competitiveness & globalization : concepts & cases. Stamford, Conn: Cengage Learning.

Nelson, D. L., & Quick, J. C. (2011). Organizational behavior: Science, the real world, and you. Mason, OH, USA: South-Western Cengage Learning.