Assignment #2 – Amazon Organizational Structure ADMN 232 Student: Date: 03 August 2022 Amazon's organizational structure helps extensive control of operations of global ecommerce. The corporate system of Amazon determines how managers influence or direct operational activities in different business areas. Amazon.com, a leading online retail business, has to maintain an organizational structure that helps support its market reach, which is extensively expanding. The evolving cooperative system allows Amazon since the company can gradually add more products and diversify its business (Solanki, 2019, p.30). Complementation has enabled Amazon to cooperate to determine the company's ability to endure the effects of its competitors, such as Walmart and other E-commerce companies. Complementation has also reduced Amazon's competition with online businesses and operations which are not online. Due to the competition aggressiveness, structural characteristics should strengthen the company to ensure there is the success of continuing e-commerce. Organizational structure is crucial in managerial control for Amazon. The functional organizational structure of Amazon focuses on the functions of the business and determines interactions among the organization components. The strategic objective of having a structural feature in Amazon is to make e-commerce operation management successful throughout the organization. Amazon's corporate system has three characteristics: global function-based groups, geographic division, and global hierarchy. The first function-based groups in the organizational structure of Amazon include the CEO's office, business development, finance, Amazon web services, Accounting, consumer business, international consumer business, and legal secretariat (Solanki, 2019, p.30). The global hierarchy characteristic of Amazon is expressed through vertical line and authority, which influence the online retail firm. The strategic objective of the global hierarchy is to enable managerial control of Amazon's whole organization. Amazon uses geographical divisions to be able to manage the activities of e-commerce, which are based on the specific region's economic conditions. The geographical division is also involved in Amazon's organizational structure. It is based on the goals of the business and geographical areas. The strategic objective of the geographic division is to help the company address issues relevant to particular geographic regions considering regional market differences (Solanki, 2019, p.30). Some ethical issues facing Amazon's organization include high standards and expectations, which are unreasonable, where unreachable pressure and expectations felt by employees can cause distress. Amazon's organization should ensure that it sets reasonable expectations for its employees. Unhealthy competition among co-workers is another issue whereby you can't choose to work hard, extend, or be intelligent in Amazon. Organizations should ensure healthy competition by working hard, being developed, and being thoughtful. Incentive management is another issue where employees suffering from cancer, miscarriages, and other crises are judged unfairly and not given enough time to recover. Organizations should ensure that employees with problems are treated fairly. Lack of benefits is another issue where Amazon fails to provide its employee's benefits, whereas Facebook and Google do; hence Amazon should ensure that it provides its workers with benefits (Solanki, 2019, p.30). The pest analysis of Amazon entails opportunities and external environmental threats of Amazon's business. Political stability can affect Amazon's business by allowing it to expand business. Stable political governments also create the Amazon company threats and the governing laws of the electronic commerce business. Cybercrime is another external factor that can affect Amazon, hence for any government to improve the environment of e-tailing business, it has to fight cybercrime. Economic factors that affect Amazon include consumers' disposable income, which has enabled consumers to buy products of their choice (Meyer, 2019, p.16). Economic recession can affect Amazon, whereby the Chinese slowdown has affected Amazon's business. Flourishing retail industries like Walmart are trying to compete with Amazon hence changing it economically. Social factors have also affected Amazon's performance, both positively and negatively. Amazon has encouraged people to be lazy due to online shopping, but it has also encouraged more and more people globally to do online shopping. Technology has also affected Amazon, where it has made it more profitable in the world. Amazon can satisfy its consumers through technology in terms of cloud computing. For strengths, Amazon is a low structure and the largest merchandise selection with many third-party sellers. Amazon is the most significant online retailer in the world, where it has earned the right amount of money from sales of its merchandise and a lot of commission on sales of third-party sellers in online stores. The extraordinary online growth of Amazon has made it become the world's 2nd largest retailer. Amazon outperforms other online and offline retailers due to its low-cost structure, which incurs less cost related to its retail outlet's physical running. The selection has also made Amazon outperform other retailers like Walmart, where it sells different products in its marketplace compared to Wal-Mart, which offers fewer products in its market (Meyer, 2019, p.16). Third-party sellers have enabled Amazon to outperform other retailers, including sellers of the third party who offer their merchandise on Amazon sites and whose products compete against Amazon products (Meyer, 2019, p.16). The other strength of Amazon is its synergies between the marketplace, Amazon web services, and prime subscription services. Amazon's four key businesses include Amazon Prime, AWS, subscription services, and Amazon marketplace. Four of these Amazon offerings support each other and result in a benefit that could not be achieved without operating independently. Amazon's organization has three weaknesses: an imitable business model, limited mortar and brick presence, and limited penetration when developing markets. The business model of Amazon is so easy to be imitated by other companies, and this is a weakness which is allowing others to compete with Amazon. Limited penetration of Amazon in the developing markets is also a weakness that prevents Amazon from benefiting from the market's high economic growth rate. Amazon's limited mortar and brick presence have hindered it from expanding in non-online markets, which is a weakness (Solanki, 2019, p.30). Opportunities of Amazon.com include developing market expansion, mortar and brick business operations expansion, and a new partnership with other firms. Amazon has a chance to indulge in developing markets before other firms benefit from a more durable competitive edge. Amazon should also expand it’s mortar and brick stores to increase its revenue. Amazon also has the opportunity to make a new partnership to reach global e-commerce industries. Threats facing Amazon.com include cybercrime, aggressive competition, and imitation of business products and models. Amazon is facing competition from other firms like Wal-Mart, Apple, and Microsoft. Cybercrime presence has also threatened the integrity and security of Amazon, while imitation has reduced Amazon's brand value and market share. Some recommendations on how Amazon organization can lead to customer satisfaction is through following the Amazon rules where customers should understand the rules related to the customer's feedback. Amazon has selected Amazon FBA to ensure that products are shipped accurately and quickly to the customers. Improved order fulfillment is another way Amazon can fulfill customer satisfaction by offering quality products in order fulfillment (Meyer, 2019, p.16). Amazon customers are expected to monitor their products and manage their stocked items. Amazon should improve its customer services to retain them and increase its business conversation with its customers. Amazon retailers should continuously improve their customer service. The organization must listen to its customers and understand their needs and offer the right solutions and proper understandings. The organization should answer customer questions and address their concerns in a friendly manner. Organizations should also deliver appreciation for their customers after contacting the organization and enquiring whether customers need something else. References Meyer, P., 2019. Amazon. Com Inc.'s Organizational Structure Characteristics (An Analysis). Panmore Institute, Business & Management 16. Solanki, K., 2019. 'To what extent does Amazon. Com, Inc success be accredited to its organizational culture and ND Jeff Bezos's leadership style? Archives of Business Research 7, 21–40.
