Running Head: Org. Understanding, Whitman
Organizational Understanding: Meg Whitman, eBay
Sara Richards
McDaniel College
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Running Head: Org. Understanding, Whitman
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For my first Organizational Understanding submission, I chose an educational entry
based on an artifact from my Organizational Theory and Behavior course. It is a case study of
Meg Whitman and how she turned eBay into a power house. In this project, we were asked to
review eBay’s organizational culture, and consider how well Meg Whitman understood this culture
and made company decisions based on this understanding. This overview of eBay demonstrates
my ability to dissect organizational understanding effectively, and also applies to my own
competence in applying intervention strategies to alleviate potential human resources problems.
A major aspect of a human resources professional’s role is to focus on the internal
workings of a company and its employees. When applied properly, human resources
management allows a company to focus energies on understanding its culture, to ensure it
makes the best hires, setting priorities for the company, and to help cultivate growth in
employees. All of these actions are important, and in review of the analysis of Meg Whitman’s
tenure at eBay, I uphold the original assessment of Whitman’s use of Behavioral Theory in her
leadership at eBay. In addition, I also found her application of a unique approach to making what
are known as “non-programmed decisions” to be very valuable, and will explore that concept as a
part of my more in depth research on my original submission. It is clear that Whitman and her
management team were acutely aware of the role that culture, in particular, played in an
organization’s development and ability to adapt, and she utilized that culture to promote growth.
When joining eBay, Whitman demonstrated a heavy concern for eBay’s people and
culture (Hill & Farkas, 2005, p.5). In a brief examination of Whitman’s transition to a new
leadership style, I reviewed a previous concept studied as a part of my graduate studies and
sought to apply the Myers-Briggs/Jung Typology to Ms. Whitman. Initially, Whitman was a selfadmitted autocratic leader in her previous leadership role at Stride Rite. When taking over at
eBay, she demonstrated her own ability as a leader to adapt to a situation and play to the
strengths of an organization, recognizing the successes of eBay’s employees. In reviewing the
changes she made at eBay, I would place her as a leader that demonstrates qualities in the
Extraversion, Intuition, Thinking, Perception (ENTP) category of personality traits. This
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leadership style is specifically beneficial in situations that require breaking an organization out of
a certain mold by initiating change (Based on Myers Briggs, 2011).
Whitman also completed a very admirable transition from being an autocratic leader, or
one that makes many decisions for an organization, to becoming a democratic leader. One of the
main advantages of a democratic style is that employees are able to buy in and feel as though
they are integral to any decision-making process (Democratic Leadership, 2005). Her new
leadership style enabled the people at eBay to collaborate and create solutions that were
thorough and enabled the company to achieve its current level of market dominance. The
democratic style has drawbacks as well, including the length of time necessary to make
decisions, and the fact that employees aiding in the decision processes must be familiar with
those processes (Democratic Leadership, 2005). Whitman could afford to utilize a more
democratic approach due to the experience of eBay’s employees and the fact that the company
was well-positioned at the time she assumed leadership.
She showed a high level of concern for eBay’s people and culture but also realized that
the company was growing. Whitman used her behavioral approach to get the organization to
accept new ways of doing business without personnel feeling as though their old practices were
invalid by incorporating them in every phase of development. In learning the internal corporate
culture at eBay, Whitman also learned a very valuable lesson: the internal culture of eBay was a
mirror image of its external culture. Employees, like eBay’s users, were encouraged to speak
openly and to propose new ideas without fear of reprisal. The company was arranged in a nonhierarchical manner, much like its relatively anonymous group of users. Finally, eBay’s
management allowed for a great deal of democracy within the then 35 person organization, a
reflection of the freedoms that eBay’s users enjoy in being able to selectively bid or post products
on the auction site (Hill & Farkas, 2005, p.2).
This approach worked well for eBay, but Whitman was brought in to manage the changes
happening to eBay and its explosive growth. As a tech heavy company formed by a small core of
very dedicated employees, Whitman must have found it very difficult to balance implementing a
more rigid organizational structure with eBay’s culture. I found her ability to learn eBay from its
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employees to be exceptional and found her ability to change leadership styles to be admirable.
once again particularly resonant with my employment at Harkins. Advocacy, Inquiry, and
Initiative, key elements of the Managerial Grid theory are some of Whitman’s greatest strengths in
dealing with management and employees (Blake & Mouton, 1964).
Realizing the nature of her business, Whitman stated that it was almost a foregone
conclusion that eBay’s internal values would reflect those of its customers. When bidders on
eBay started facing risk from sellers not sending the products they on auctions they had won,
Whitman used her understanding of eBay’s external culture to develop a solution. “To solve this
problem, rather than formally enforcing contracts, eBay has established an innovative reputation
system, which allows winning bidders to post ratings of seller’s auctions that are publicly
viewable” (Livingston, 2010).
Culture is never stagnating; it is constantly changing and evolving. With eBay’s business
model based on Internet transactions, its external culture has always been cutting edge. An
example of Whitman trying to stay in step with eBay’s changing culture is when in 2005 eBay
purchased Skype. “Back when they bought Skype, eBay had helped to include it as a
communication tool for its community of buyers and sellers. Skype is a free telephone and text
service that resides on the Internet, and eBay wanted to set up a community dialogue enabled by
a click-to-comment function that would run on Skype. It never caught on,” (Castelluccio, 2009).
In hindsight, this business decision was not a profitable one, but it demonstrated Whitman’s ability
to use a Team Leadership Approach, seeking out different opportunities that would continue to
enhance eBay’s core community culture.
Throughout her tenure, Whitman continued to develop as a behavioral leader and
continued to utilize team leadership approaches as much as situations would allow. As with
every CEO, Whitman had to remain consistent but there were times when she was required to
alter her leadership style within the behavioral model. Whitman found it necessary to establish a
clear vision for eBay, something the company had previously not formalized. She also
implemented changes to the structure of the company’s engineering and communications
systems, and brought in a seasoned management team to provide a formalized leadership (Hill &
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Farkas, 2005, p. 9). Whitman shared her visions as a leader and utilized her ability to act as a
Democratic Leader to get people to eventually “buy in” on in several instances, such as her
decision to purchase a large auction house for company stock. The decision was not popular
among users but ultimately allowed for greater corporate growth (Hill & Farkas, 2005, p.17).
Whitman also utilized her power to affect other changes internally such as scaling the
organization to fit its new found growth and faced losing the values of eBay’s community.
An example where I must understand the need for different leadership styles as they
relate to organizational understanding in my current employment was Harkin’s recent
implementation of a high-deductible health benefits package. I knew that Harkins was losing
money through unnecessary health claims, and a solution would be to implement a system where
people were more financially accountable to their own actions. “Produce or Perish” would have
brought me to the point of mutiny within Harkins since there is a family atmosphere and many of
the employees simply would not have taken the initiative to understand a high-deductible plan.
Consequently, I relied on Team Leadership and a Democratic Leadership style to communicate
the benefits of my idea to employees and management, meeting individually with those having
the greatest concerns, and achieving buy-in for the plan at all levels. As an ESOP company, all
employees ultimately benefit from these savings and I consider my use of Team Leadership in
this endeavor to be one of my greatest successes to date.
Human Resources professionals are often very good at understanding the factors that
make their companies excel. We understand our company’s mission statements, which
departments get along with each other and which do not. We work hard to make sure our new
hires not only have the appropriate skills but also are the right fit. We talk about the importance
of internal branding and we push teambuilding events. But if we ever want to be seen as true
business partners, we must also work to understand those external factors and cultures that
sculpt the business environments in which our companies operate. I believe that Whitman’s true
strength, and consequently the strength of eBay and its continued users, lie in her ability to keep
this in mind throughout all facets of the company’s growth.
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References
Based on Myers Briggs/Jung Typology. (2011). Retrieved from
http://www.teamtechnology.co.uk/leadership-styles.html
Blake, R. & Mouton, J. (1964). The Managerial Grid: The Key to Leadership Excellence.
Houston: Gulf Publishing Co.
Castelluccio,M. (2009). eBay liberates Skype. Strategic Finance. Retrieved
from http://www.imanet.org/PDFs/Public/SF/2009_10/10_09_tools.pdf
Democratic Leadership. (2005). Retrieved from http://www.money-zine.com/CareerDevelopment/Leadership-Skill/Democratic-Leadership/
Hill, L. & Farkas, M. (Rev. 2005). Meg Whitman at eBay, Inc. Harvard Business School.
Nov 2005, 9-401-024.
Livingston, J. (2010). The nature of competition between online suctions. The Selected
Works of Jeffrey A Livingston. Retrieved from
http://works.bepress.com/jeffrey_livingston/12
Robbins, Stephen P. (2005). Essentials of Organizational Behavior, 8th edition.