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Module Handbook for Organisation Theory and Practice
Student’s Name
Institutional Affiliation
Course Number and Name
Professor’s Name
Date
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Table of Contents
1. Introduction
2. Organisational Culture
- Definition and Importance
- Current Issues at Cazoo
- Strategies for Improvement
3. Organisational Structure
- Initial Flat Structure
- Transition to Hybrid Structure
- Recommendations for Structure Enhancement
4. Leadership
- Leadership Styles at Cazoo
- Impact of Autocratic Leadership
- Leadership Development Programs
5. Motivation Strategy
- Current Motivation Practices
- Enhancing Intrinsic and Extrinsic Motivation
- Periodic Review and Adjustment
6. Critical Evaluation
- Organisational Structure
- Organisational culture
- Leadership
-Motivation
7. Implementation Plan
- Hybrid Structure Implementation
- Cultural Integration
- Leadership Development
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- Motivation Strategy
8. Conclusion
9. References
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1. Introduction
Cazoo, which was once a prominent player in the online car retail market, faces major
business issues. While the company initially thrived due to the pandemic, the company’s
aggressive growth and transition from a direct dealer to a marketplace have created significant
financial and organizational problems. Some of the emerging concerns are a sharp drop in
market capitalization, massive layoffs, and changes in management. Furthermore, the company’s
organizational culture and motivational approaches are also inadequate to cope with these
changes, and thus, the employees are not motivated, and their performance level is also low. The
purpose of this analysis is to determine the key organizational factors that have led to Cazoo’s
current issues and provide recommendations for its improvement and development. Therefore, it
is possible to define the key issues that should be further investigated to improve the
understanding of the organization's health and competitive advantage of Cazoo.
2. Organisational Culture
Organizational culture refers to the set of beliefs, values, and norms that shape the
behavior and mindset of workers within a company. It has a central function of setting the tone
of how employees should behave, make decisions, and help an organization attain its objectives
(Chión et al., 2020). At Cazoo, the strong culture established on customer obsession and
invention drove rapid growth. However, there is evidence of disparity in values and behaviors,
which leads to internal conflicts and a defective culture (Williams, 2022). This misalignment
probably led to low morale and poor performance of the organization.
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In Cazoo, the responsibilities of the employees are clearly defined, and the duties are
coordinated in a way that will assist the company in expanding and providing automotive retail
services to its clients. It has a hybrid or matrix structure that combines several crucial functions,
including marketing, operation, technology, and customer service. Each function plays a pivotal
role: marketing is responsible for the customer acquisition process, operations is responsible for
the vehicles’ management and movement, technology is responsible for the platform, and
customer service is responsible for the customers (Williams, 2022). However, for these functions
to achieve high performance at Cazoo, they must align with the organizational goals and
strategies. Integration across functions is essential for creativity and productivity so that the firm
can respond to market forces. Because of the competitive and ever-changing environment, the
organizational structure should be flexible and able to make decisions quickly. Measurable
targets associated with goals like customer satisfaction, sales, and operational performance
provide a framework for performance assessment and enhancement throughout the organization
(Nanayakkara and Wilkinson, 2021).
Organizational culture is essential for the managers at Cazoo since it influences their
management and choices. It defines what they consider crucial—customers, operations, or
employees—and how they achieve objectives (Nanayakkara and Wilkinson, 2021). Culture also
plays a role in how managers interact with their subordinates, for instance, in communication and
organizational culture. Cultural issues are complex and should be managed by constantly
assessing cultural values, declaring organizational culture openly, and demonstrating expected
behaviors. Hence, aligning functions with strategic objectives and cultivating a positive
organizational culture will enhance productivity, foster creativity, and empower managers at
Cazoo (Chión et al., 2020). Culture audits and management will continuously maintain a healthy
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culture that will support the company's productivity and growth in the face of stiff competition in
the automotive retail industry.
3. Organizational Structure
Cazoo had a flat structure at its inception to foster fast decision-making and innovation,
which are critical during the early stages of a business. This structure facilitated quick decision-
making and flexibility, which helped the company adapt to changes in the market (Chión et al.,
2020). However, as Cazoo expanded, it was understood that this structure had its challenges.
Some issues that arose from the absence of a clear structure of roles and responsibilities include
management overload and the need for clarity in roles among the various teams, which affected
the ability to work efficiently and flexibly. To overcome these challenges and enhance
organizational performance, Cazoo should adopt the hybrid model of organizational structure
(Stverkova and Pohludka, 2018). This approach retains the flexibility and fast decision-making
of the flat structure and, at the same time, introduces order and transparent reporting to the
functional departments and their responsibilities in marketing, operations, IT support, and
customer relations.
Hence, adopting a hybrid structure will help Cazoo have more control over its growth
path. This will help coordinate the organization and check on all the departments to ensure they
function as required, thus improving the organization's performance (Chión et al., 2020).
Furthermore, the structured approach will help the company continue to leverage its strength in
innovation while ensuring that the structure will be fine as the company grows big, thus enabling
it to remain relevant in the automotive retail market (Stverkova and Pohludka, 2018).
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4. Leadership
Management at Cazoo is central to the company's strategic orientation and organizational
environment. In the beginning, Cazoo was led by visionary leaders who were responsible for its
fast growth and innovation. This leadership style has encouraged innovation and risk-taking,
which are essential in the ever-evolving automotive retail environment (Grayson et al., 2018).
However, some issues have emerged regarding management and employee training. The
autocratic leadership style adopted at Cazoo may have contributed to the exclusion of the
organization's growth-taking process, which is essential for its growth. This approach could have
led to demotivated employees and reduced commitment to work. According to the
transformational and transactional leadership theories, while Cazoo's leaders have been
visionary, there may have been a gap in how they have engaged and motivated the teams at
different levels (Abu-Rumman, 2021).
The following recommendations are made for Cazoo: Leadership development programs
to overcome these challenges and improve organizational performance (Abu-Rumman, 2021).
Such programs can help managers acquire the appropriate skills to help their subordinates,
improving the organizational climate. Other areas that need to be enhanced include
communication, where proper feedback between the leadership and the employees should ensure
they are on the same page regarding organizational goals and objectives and address any
emerging problems (Grayson et al., 2018). Therefore, Cazoo can enhance its employees’
satisfaction, motivation, and performance by developing a positive leadership climate. This
proactive approach to leadership development will guarantee the company’s growth and
sustainability in the automotive retail industry.
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5. Motivation
In the case of Cazoo, motivation is a critical factor that can influence the performance of
employees and the success of the business. First, the company's dynamic and innovative nature
created high motivation levels in the employees because of the company's promising growth
opportunities and vision (Vilnai-Yavetz and Levina, 2018). However, some issues have emerged
concerning the effectiveness of this motivation strategy in the long run. The motivation strategies
of Cazoo have revealed some weaknesses in the company's handling of intrinsic and extrinsic
motivation factors. Although the company offers the freedom to be creative and innovative, there
could be a need for more emphasis on extrinsic aspects like satisfaction and time management.
Suppose the organization relies heavily on extrinsic rewards (Akhmetshin et al., 2018). In that
case, the level of job satisfaction is likely to reduce, and consequently, the turnover rate is
expected to increase, thus affecting the overall performance.
Motivational theories such as Maslow's hierarchy of needs and Herzberg's two-factor
theory also show that content and process factors must be considered. Cazoo's current approach
may need to address these needs more effectively, which may negatively impact employee and
organizational performance (Akhmetshin et al., 2018). To increase motivation and create a more
effective work environment, Cazoo should undertake the following strategic actions. Firstly, it is
possible to enhance intrinsic motivation by implementing programs for job enrichment, career
development, and appropriate employee rewards. Providing career maps and acknowledging the
employees' efforts generates a sense of achievement and organizational commitment (Vilnai-
Yavetz and Levina, 2018). Secondly, ensuring that the above intrinsic motivators are
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supplemented with reasonable and appropriate extrinsic rewards ensures that employees are
appreciated and paid as expected.
6. Critical Evaluation
a) Organizational Structure
Cazoo had no management layers at the beginning of its functioning, aimed at flexibility
and creativity. This structure enabled the company to make decisions and be flexible, especially
when it was still young. However, as the company grew, the disadvantages of a flat structure
became more evident. This was because the organization had to have authority and
responsibility, which could only be achieved with overlapping duties. Managers were
preoccupied with their work and participated in numerous activities, which made them more
stressed and less productive. This flat structure, which was efficient when the company was
small, became a weakness as the company grew big. A transparent career model could have led
to clarity over the career paths and the roles and responsibilities of the employees, which
demotivated them and lowered their productivity. Secondly, the absence of a clear division of
functions created issues with work division and communication with other departments,
exacerbating operational performance issues (Fu et al., 2022).
b) Organisational Culture
Cazoo was customer-focused and structured for flexibility and creativity, which were
crucial for the firm's success at the initial stages. However, the urge to grow at the cost of other
aspects may have resulted in neglected elements of the culture, including the employees' well-
being and the organization's communication structures (Chión et al., 2020). The company's
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strategic objectives of innovation and customer satisfaction may have created a pressurizing and
stressful culture for employees who felt they needed to be valued more and were expected to
work longer hours. Inconsistencies in communicating core values and objectives led to the
absence of a coherent organizational culture, as different departments had different visions of the
company's mission. This division resulted in internal conflicts and a lack of coordination, which
affected the organization's performance (Hald et al., 2021). Organizational culture is a critical
component of a company that helps sustain employee motivation and direct their activities
toward achieving organizational goals; its deterioration at Cazoo contributed to its decline.
c) Leadership style
The leadership at Cazoo was more strategic, and the leaders were more visionary. They
helped the company to grow at a fast rate and fostered creativity. But this leadership style also
had its demerits. The emphasis on vision and innovation could have been achieved at the cost of
managerial support and employee training (Pathiranage et al., 2020). It is also important to note
that leaders who are mainly visionary may not pay much attention to their subordinates' welfare
and daily challenges. The lack of communication between the management and the ordinary
workers led to dissatisfaction and burnout. Employees may have perceived that their
contributions were not valued or their grievances unheard, which would demotivate them.
Leadership should be visionary and supportive simultaneously, meaning that employees should
be motivated to achieve great things while being provided with all the support they need to do
their jobs (Mehta, 2020). The absence of such balance at Cazoo may have been a critical reason
the company is declining.
d) Employee Motivation
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Initially, motivation was immense among the Cazoo employees due to the company's
dynamic and innovative nature. However, the shift in the organizational culture towards more
extrinsic rewards, such as monetary incentives and fast-track promotions, weakened the
importance of intrinsic rewards, such as satisfaction with the job, flexibility, and career
development (Kalogiannidis, 2021). External incentives can increase productivity in the short
term but are only effective in the long term if people's intrinsic requirements are met. Cut-throat
competition and failure to address the extrinsic incentives contributed to low job satisfaction and
high turnover. Workers who are motivated by their jobs will likely lose interest and dedication,
affecting productivity (Paais et al., 2020). Furthermore, focusing on growth and innovation
without adequate attention to the employees' well-being and career advancement can result in the
staff's exhaustion and decreased performance.
7. Recommendations
a) Organisational Structure
Implement a Hybrid Structure
Cazoo should consider changing its current organizational structure from a flat structure
to a hybrid model that integrates characteristics of both flat and hierarchical structures (Paais and
Pattiruhu, 2020). Such a work approach will help the company remain innovative and flexible
while establishing more definite lines of work and responsibilities. While the flat structure was
helpful during the early days of Cazoo because it allowed for fast decision-making and product
development, it is no longer beneficial. This has resulted in low productivity and demoralized
workers because of unclear structures and career paths within organizations. Hence, the proposed
hybrid structure will provide more flexibility to Cazoo. At the same time, it will bring more
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structure and order to the company and thus improve the coordination and control between
departments (Stverkova and Pohludka, 2018).
Chión et al. (2020) have established that hybrid structures are effective in dealing with
growth and enhancing organizational efficiency, especially in organizations that are expanding.
They also point out that hybrid structures are a mix of flat and hierarchical structures. Therefore,
the companies can achieve the desired flexibility while at the same time ensuring that the right
levels of control and coordination are instituted. This approach is useful when companies grow
because it is possible to have the benefits of the flat structure, such as creativity and flexibility,
without the demerits of the absence of a clear hierarchy (Paais and Pattiruhu, 2020). Therefore,
hybrid structures are useful in achieving a balance between flexibility and formality so that the
organization can respond to market forces without necessarily having to give up resources and
decision-making.
Google is one of the best examples of how the hybrid organizational structure can be
successfully used. Google has always been considered innovative and experiencing a high
growth rate, and it has retained this and even strengthened it by having a flat organization. At the
same time, it has introduced hierarchical elements into its enormous activities to maintain
control. This has assisted Google in supporting an innovative strategic position while at the same
time developing the structural framework for the firm's growth and operation. In this case,
Google is an excellent example of how hybrid structures can work in the tech industry and other
industries where there are clear roles and responsibilities within functional departments while at
the same time allowing teams to innovate and develop.
b) Organisational Culture
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Foster a Unified Culture
Cazoo should ensure that the company has an excellent organizational culture that will
support the employees and align with the company's values and objectives (Paais and Pattiruhu,
2020). This can be achieved by constantly communicating organizational goals, such as
implementing health management programs for employees and other exercises promoting
diversity. Lack of a cohesive culture, especially when a constant focus on growth and expansion
without proper regard for internal integration, can cause tensions and hinder collaboration
(Williams, 2020). Cultural integration helps engage the employees, encourage teamwork, and
create a shared vision, essential for achieving long-term organizational performance.
Williams (2020) emphasizes the importance of a robust culture in improving performance
by realigning the people with the organization's culture. Schein has defined organizational
culture as a system used to influence the behavior of the employees, promote unity, and achieve
organizational goals. A strong culture means that the employees know and act according to the
company mission and values company's mission and values, which leads to the creation of a
coherent and unified decision-making and behavioral framework throughout the company (Paais
and Pattiruhu, 2020). Thus, by developing a consistent organizational culture, it is possible to
increase employees' commitment, cooperation, and organizational performance in companies
such as Cazoo.
Zappos has a strong customer and employee-focused organizational culture that enables
the employees to deliver excellent customer service and foster a healthy organizational culture.
This strong emphasis on cultural cohesion has resulted in high employee satisfaction, low
turnover rates, and high customer loyalty. Therefore, the case of Zappos, where the company
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pays much attention to cultural fit and decision-making based on values, proves that culture is
not only a source of competitive advantage but also a tool to enhance the satisfaction of the
employees and the results of the organization.
c) Leadership
Enhance Managerial Support
Cazoo's leadership should take a more strategic approach to visionary management to
ensure that the company's employees feel appreciated and encouraged. This entails offering
leadership development programs, feedback mechanisms, and leadership promotion. Leadership
is essential in ensuring that employees are motivated and that an organization's efforts are well
coordinated (Rastogi et al., 2019). Management support assists in responding to employee issues,
training, and creating a positive workplace culture.
Paais et al. (2020) has also noted that managers' support is one of the most critical factors
that can help maintain employees' motivation and achieve organizational change goals. Kotter
also emphasizes that leadership is about providing vision and direction and managing change for
employees. Leaders who offer direction, tools, and encouragement can assist employees in
coping with ambiguity and staying engaged during organizational change. Thus, managers
should show care and concern for their subordinates and ensure they are happy to go to work and
produce excellent results and ideas.
The changes that Satya Nadella introduced into Microsoft are an excellent example of
how applying empathy and learning will affect motivation and creativity among workers.
Microsoft has been on the journey of transformation since Nadella took over the company's
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leadership as the CEO in 2014. One of the changes that have been put in place is the act of
empathy, which is one of the leadership behaviors. Nadella has been concerned with addressing
the customers' needscustomers' needs, employees, and the company's affairs. It has been found to
be effective in enhancing the morale of the employees and creativity and innovation in the
organization. Thus, the example of the Microsoft Company that applies the principles of
empathy and emotional intelligence in leadership proves that people-oriented approaches
generate organizational value and ensure business sustainability in a volatile environment.
d) Motivation
Balance Intrinsic and Extrinsic Motivators
Cazoo should apply internal and external motivation to encourage employees to increase
their efforts and productivity. One must also note that motivation is not an event that occurs once
but a process that must be managed over time. It is also essential to distinguish between long-
term motivation and short-term motivation. Focusing only on extrinsic incentives may result in
lower employee satisfaction and higher turnover rates in the long run.
According to Herzberg's Two-Factor Theory, there are two critical aspects of motivation
in the workplace: rewards (intrinsic rewards) and anti-rewards (extrinsic rewards). Herzberg's
theory of motivation states that inherent factors such as the nature of work, achievement,
recognition, and career advancement are the keys to satisfaction and long-term motivation( Thant
and Chang, 2021). In contrast, intrinsic factors such as salary, benefits, and working conditions
are categorized as hygiene factors because while they are essential to avoid dissatisfaction, they
do not spur employees to work harder. According to Herzberg's theory, organizations need to
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improve the quality of work and provide opportunities for growth to increase motivation and
satisfaction.
The motivational techniques used by Google are an excellent example of how it is
possible to use both types of motivation to improve employees' performance. Google's 20% time
policy means that the workers can spend one-fifth of their working week on any project they
want to work on, which encourages creativity, innovation, and self-organization. This approach
not only motivates the employees to perform their duties but also results in the development of
new concepts and solutions that are beneficial to the company. Besides the intrinsic incentives,
Google provides its employees with reasonable salaries, medical and dental insurance, and other
extrinsic incentives such as performance bonuses. Hence, Google is in a position to combine
both intrinsic and extrinsic motivation to enhance the work environment and the satisfaction,
performance, and productivity of the employees and the organization.
8. Implementation Plan
a. Hybrid Structure Implementation
Cazoo should assess the current organizational structure and task distribution. This will
assist in creating a new organizational structure that will include proper functional structures to
improve the clarity of the roles and responsibilities. Concurrently, Cazoo should take the time to
train its employees to be acquainted with the new structure and their roles (Hald et al., 2021).
This change in strategy ensures a balance between decentralization and centralization and
enhances communication and accountability between departments as Cazoo grows.
b. Cultural Integration
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To ensure that cultural integration is achieved in Cazoo, the company should undertake
several activities in the future. Such measures include regular all-hands meetings to encourage
open communication and alignment with company goals (Nanayakkara and Wilkinson, 2021).
Improving the internal communication channels will increase transparency and collaboration
across teams. Implementing wellness programs will enhance the well-being of the employees
and thus create a supportive work environment. The evaluation of the cultural integration process
through the survey and feedback will guarantee the constant improvement of the integration
process and the strengthening of the unification of the company's culture, which will lead to the
increased engagement of the employees and the overall cohesiveness of the organization.
c. Leadership Development
In the future, Cazoo should focus on leadership management to enhance managerial skills
and ensure employees are well-trained. This initiative entails the creation of specific leadership
training programs that improve managerial competencies and foster team management (Eide et
al., 2020). The leaders and the employees will be encouraged to provide feedback to each other
regularly to ensure that any issues are dealt with immediately. Leadership visibility through town
halls and informal interactions will help to build trust and cooperation (Mehta, 2020). Through
leadership training, Cazoo seeks to ensure leaders have the necessary skills to influence and
direct employees toward achieving organizational goals.
d. Motivation Strategy
Cazoo will enhance its motivation strategy to continue motivating its employees to work
hard and deliver the best results (Paais and Pattiruhu, 2020). This includes formulating and
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practicing job enrichment programs that enhance skills and promotion. Adopting a new
recognition strategy will involve intrinsic motivation, such as verbal appreciation and
constructive criticism, and extrinsic motivation, such as monetary and promotions. The
motivation strategies will be discussed and adjusted periodically depending on the feedback from
the employees to address the current needs and preferences and foster a motivated workforce for
the growth of Cazoo (Akhmetshin et al., 2018).
In conclusion, the analysis of the factors that contributed to the decline of Cazoo involves
several problems connected with the organization’s culture, structure, management, and
motivation of personnel. Initially, the key and dynamic nature of the business model and the
rapid development of Cazoo brought the company innovation and optimism. However, the
growth rate of the company and the drive for innovation overshadowed the importance of a
cohesive organizational culture and effective communication. This resulted in conflicts with
other parts of the organization, differences in goals and strategies, and poor collaboration, which
contributed to negative performance. Also, the Cazoo leadership style needed more employee
support as it focused on visionary targets instead of managerial resources, which led to staff
dissatisfaction and exhaustion. This led to an imbalance of power and poor cooperation and
support for staff members, resulting in reduced employee morale. Lack of a supportive and
communication atmosphere contributed to the decrease in the level of engagement and
productivity of the employees. Solving those problems by providing a moderate level of
leadership, unifying culture, and improving communication can improve Cazoo’s condition and
future development.
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