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Chapter 11: Zappos: Taking Steps toward Maximizing Stakeholder Satisfaction: 11-10b Acquisition by Amazon Book Title: Business Ethics: Ethical Decision Making and Cases Printed By: Toure Williams ([email protected]) © 2019 Cengage Learning, Cengage Learning
11-10b Acquisition by Amazon
In 2009 Zappos was acquired by e-commerce giant Amazon.com. Many Zappos customers were confused by the unexpected move and expressed concerns about the future of the company’s culture and customer service. Most CEOs would not feel any obligation to address customer concerns over the acquisition, but Tony Hsieh values the support of Zappos employees and customers.
Shortly after the acquisition, Hsieh issued a statement about why he sold Zappos to Amazon. In the statement, Hsieh discussed the disagreement between Zappos and Sequoia Capital over management styles and company focus. Specifically, Hsieh said, “The board’s attitude was that my social experiments might make for good PR but that they didn’t move the overall business forward. The board wanted me, or whoever was CEO, to spend less time on worrying about employee happiness and more time selling shoes.” Hsieh and Alfred Lin, Zappos’s CFO and COO, were the only two members on the board committed to preserving the company’s culture. The board could fire Hsieh and hire a new CEO who focused more on profits.
Hsieh decided the best way to resolve these issues was to buy out the board, but he could not do this on his own. After meeting with Amazon CEO Jeff Bezos, Hsieh committed to a full acquisition, as long as Zappos could operate independently and continue to focus on building its culture and customer service. Many customers were concerned Amazon was not a good fit for Zappos, but Hsieh addressed those concerns, stating Amazon and Zappos have the same goals of creating value for the customer but different ways of how to do it. He also assured customers Zappos would continue to maintain its unique corporate culture. Although consumers were not pleased with the acquisition, they at least understood why it occurred. Moreover, Hsieh’s commitment to his beliefs and management style resonated with consumers.
Chapter 11: Zappos: Taking Steps toward Maximizing Stakeholder Satisfaction: 11-10b Acquisition by Amazon Book Title: Business Ethics: Ethical Decision Making and Cases Printed By: Toure Williams ([email protected]) © 2019 Cengage Learning, Cengage Learning
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