Zappos leadership focuses on building a positive team working spirit and boosting socialization among employees. According to its leader, Hsieh, improving the communication system increases management efficiency and instills trust in workers (Ferrell, Fraedrich, & Ferrell, 2015). Moreover, the manager has an open office and believes that an open-door management policy does not require the presence of a door. The company has an engaging working environment. It fires individuals who perform well, but do not fit in its culture of ethicalness. The latter encourages employees to assist each other. Zappos requires every staff member to write a review of its culture to ensure that workers know their role in the organization and maintain focus on the right values, namely transparency, and trust in relations with customers (Ferrell et al., 2015). Therefore, ensuring open and honest communication relationships at all times guarantee success in clients’ satisfaction, as well as the maintenance of ethical standards and culture.
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Fostering the Culture of Ethicalness at Zappos
Zappos leadership fires hard-working employees who do not fit their culture. The core value of the company is building a positive working environment, where people work as a team (Ferrell et al., 2015, p. 480). For instance, the manager has an open cabinet among employees to ensure interaction with workers. The management culture of Zappos entails that improving its efficiency results from better socialization. Therefore, an individual who ensures customer satisfaction, but does not have good communication ethics with colleagues can be fired.
The manager of the company ensures the creation of a tightly-welded team. According to Ferrell et al. (2015), Hsieh takes 20 percent of his time to interact with workers outside work (p. 480). For instance, the manager spends time with employees hiking, attending movie shows and resting in bars. Zappos’ culture entails that improving communication ethics among employees based on developing trust and friendship results in good performance of the organization. Hsieh has developed honesty and a positive working spirit in Zappos (Ferrell et al., 2015).
To mimic such corporate culture, other companies should ensure that during recruitment, employees sign and agree to follow the organization’s culture, and in case of a failure to do this, they are fired. Such a procedure ensures that workers do not only work hard but also abide by the team culture. Another recommendable action is for the leadership to engage in an informal interaction with employees, building team spirit and instilling the core company’s values.
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The Impact of Zappos’ Ethical Practices and Leadership on Stakeholders
A 100-percent return on defect goods certifies that the company meets customers’ needs. Zappos develops open communication relationships with its clients which increases the number of sales (Ferrell et al., 2015, p. 479). Its return policy and a guarantee of clients’ satisfaction create customers’ loyalty (Kopelman, Chiou, Lipani, & Zhu, 2012, p. 27). Ethical practices of Zappos make the business more successful because clients make more purchases due to the guarantee of satisfaction that increases sales and profit. The shipping cost of products is the same despite the number of goods shipped. Furthermore, the leadership is focused on the maintenance of the organizational culture that ensures less strict control and command, but the observance of the core values, which help to create a positive image of the company.
Ethical Challenges Facing Zappos
The theft of customers’ information affects Zappos’ operations. Since it operates in the Internet server-connected computer network, hackers can cause service denial and the leak of clients’ data. For instance, according to Ferrell et al. (2015), in January 2012, the Zappos Company had to respond to the theft of 24-million critical customers’ information (p. 480). Hackers affect data availability, accessibility, and confidentiality. In the case of Zappos, the greatest ethical cybersecurity issue was privacy. For instance, the information stolen included email addresses, shipping details, last digits of credit cards and phone numbers.
Another ethical challenge is that Zappos does not maintain its core values under circumstances involving business risks. For instance, when a security breach occurred in 2012, it informed clients the opposite immediately via email. The company reported that all credit card information had been not stolen. However, the move to disconnect their call system due to overload contradicted its core values of open and honest communication (Ferrell et al., 2015, p. 480). It was a wrong means of handling a client’s needs when the hacking of the website affected their financial and personal information. The step taken by the company worsened its relations with customers.
The company faces ethical challenges of laying employees off because of shifting the organizational culture to conform to the modern management system. It has observed the primary change in its organizational structure. The transition from the traditional hierarchy entails ethical issues, such as low workers’ engagement and productivity (Collier & Evans, 2009, p. 11).
Actions Zappos’ Leadership Should Take to Address the Challenges
Maintaining open communication with clients during security breaches ensures a loyal code of ethics in business. After informing customers of the hacking issue, the company should maintain open communication and answer the questions asked by clients. Providing information about the breach and informing customers of the efforts the company is taking to ensure the threat will never occur again instills confidence and maintains a good client relationship.
The company should incorporate human resource training educating employees on how to adjust to changes in the organizational culture and prevent challenges that result from transforming the organizational management structure.
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A suitable method for solving ethical problems includes having no managers in the company that provide commands and control. Instead, Zappos should have teams of employees to promote a coaching culture and engage them in the company’s duties. The recommendation focuses on maintaining the organization’s teamwork that ensures increased productivity. Moreover, employees should not have titles. It will create equality and reduce the effect of commands and control on their engagement. Removing job titles makes every individual accountable for any activity in the organization (Collier & Evans, 2009).
Effective Core Values in Developing an Ethical Culture
Effective core values at Zappos create an ethical framework for the company. They include building a positive working team with a family spirit (Ferrell et al., 2015, p. 480). Communication among employees at all times is also ensured. Any worker can reward others for a great job. The company is committed to both the satisfaction of customers and employees. The core values in Zappos guide each activity and ensure that each employee works within the formulated objectives creating the culture of ethicalness. Such values include being humble, passionate and determined, developing an honest and open communication relationship, implementing and enhancing the drive to change, doing more with less and being open-minded and creative (Ferrell et al., 2015).
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Ways in Which Ethical Core Values Support Stakeholders
Zappos ethical core values ensure the delivery of happiness to investors. The income of the company has grown from $1.6 million to $1.64 billion from 2000 to 2010 (Hitt, Ireland, & Hoskisson, 2012, p. 18). Stakeholders enjoy the benefits of ethical standards maintained by Zappos. Such core values as honesty and open relationships have attracted clients globally. Workers are passionate and determined in achieving customers’ satisfaction through maintaining working ethics (Ferrell et al., 2015, p.476). Employees at Zappos follow ethical standards and have a free reign in the decision-making process. For instance, the code of ethics of increasing customers’ satisfaction allows workers to advise consumers on purchasing products even on their competitor’s website.
Ethical Challenges and My Response to Solving Them
Zappos’ corporate culture is built on ideas. As for the ethical challenge of laying workers off, if I were the manager at this company, I would not act differently in firing hard-working employees, who do not fit the organization’s culture. The latter attracts individuals and motivates workers to work with a passion for providing outstanding services to consumers. However, I would have resolved the hacking issue that affected the company in 2012 differently. I would have kept the call line open to ensure customers’ questions were responded according to the company’s core values (Ferrell et al., 2015).
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Ensuring customer satisfaction helps in gaining repeated purchases. Communication and ethical business standards lead to the success of business activities. However, having no job titles and diving employees into teams with core ethical values improve employee engagement and teamwork that results in increased productivity. Cybersecurity breach affects online business regularly and disconnecting the call system at Zappos during the 2012 hacking incident diminished the core value of open and honest communication with clients. However, despite this problem, the management of the company has an outstanding organizational culture and core values that will ensure its positive image.