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Research Paper Amazon
Dahlia Thomas
School of Business, Liberty University
BUSI 735: Understanding the Organization
Dr. Collins Mkandawire
March 5, 2023
Dahlia D. Thomas
I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to Dahlia D. Thomas.
Email: ddthomas10@liberty.edu
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Abstract
Many organizations in today's world are faced with different problems from time to time
whether it be competition from other businesses or high employee turnover or retention
challenges. The main aim of this paper is to elaborate on two to three problems that Amazon
faces. Amazon is an online electronic US-based firm that was incorporated in July of 1994 by
Jeff Bezos in his garage in Bellevue Washington. The company's headquarter is based in Seattle
Washington. The name Amazon was chosen mainly because it began the first letter of the
alphabet and because it is named after the largest river in the world. Amazon first started as a
book-selling website but later evolved and now the company's services include cloud services,
digital advertising, artificial intelligence, e-commerce operations, games, music, and so on. It is
one of the largest internet-based retailers in the United States, providing local and international
shipping services to its customers. The diversifying services that Amazon offers have allowed the
company to maximize its profits and are always one step ahead of its competitors. Amazon has
set the bar for its competitors and any other potential investors to match. Amazon is estimated to
have a net worth of $979.87 Billion.
Despite being successful, the company faces challenges, including competition from its
rivals and worker satisfaction. The first problem Amazon faces is competition amongst its rivals
like Walmart, Google, and Apple, just to name a few. Another problem is that workers who work
in the warehouse undergo difficult working conditions and most time they are not provided with
opportunities to grow within the company. Lastly, workers who spend long hours at work
eventually affect their work-life balance.
Keywords: problems, e-commerce, Amazon, customers, workers, rivals
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Amazon Background
The way how Amazon was established is considered a legend due to the fact the company
went through different transformations and still end up successful. Based on research conducted
and reported, Amazon company was incorporated in July 1994 by Jeff Bezos. Reports state that
Jeff Bezos went to Seattle after he left his role as senior vice president at one of Wall Street's
investment banks D.E Shaw. Shortly after Bezos moved to Seattle, he was able to identify a trend
in the internet market which shows a high growth rate. At that time internet growth rate was at
2300 percent so Jeff Bezos saw an opportunity and view the trend as a good investment
opportunity. Even though Jeff Bezos had no prior retail experience as it relates to E-Commerce,
he still plunged into the E-Commerce world by faith. When it was time to name the company, it
came as a challenge to Jeff especially after he first named the company Cadabra (Ceil, 2018).
Jeff later deleted the name because a lawyer misidentified the name for Cadaver. As a result, Jeff
Bezos decided later to name the company Amazon because it began with the first letter of the
alphabet and because it is named after the largest river in the world. Jeff Bezos started Amazon
as a book-selling website in his garage. However, after further evaluation conducted by Jeff
Bezos, he decided to establish Amazon in Seattle. Research showed that Seattle was a good
location since it is well-known to have a vast population of book wholesalers in Roseburg,
Oregon (Ceil, 2018).
The sale tax laws for online retailers suggested that all individuals and institutions be
charged sales taxes regardless of who they are. As a result, the evolution of the information
provided showed that all transactions regardless of the state would increase book price because
of the sales tax rate, resulting in a competitive disadvantage. In May 1997 Amazon went public
and the company was able to raise its revenues from $150 million to over $3 billion (Ceil, 2018).
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Even though Amazon first started its business in a garage and held its meetings in Barnes and
Noble stores, the company still managed to accomplish high profits while promoting its growth
and development. Because of the competition, Jeff was able to identify technology that would
allow organizations to handle online businesses. The company was able to increase its sales by
promoting sales as a result of introducing new services. The Diversifying services that Amazon
offers have allowed the company to maximize its profits. Amazon has set the bar for its
competitors as well as any other potential investors to match. Among the various services in
which Amazon includes cloud services, digital advertising, artificial intelligence, e-commerce
operations, games, music, and so on. It is one of the largest internet-based retailers in the United
States, providing local and international shipping services to its customers.
Amazon's continuous growth and development have given small and medium companies
optimism because they act as a mentor in e-commerce. Due to its continuous growth and
development companies are trying to emulate its strategies so that they can acquire sustainable
growth. Differently, analysts have sought to analyze the various strategies behind Amazon’s
success. Amazon is among the leading companies within the e-commerce sector, with an
estimated net worth of $979.87 Billion.
Problems and Challenges Identified at Amazon
Despite being successful, the company faces challenges, including competition from its
rivals and worker satisfaction. The various drawbacks in Amazon’s environment are considered
to be potential challenges that affect its continuous growth as well as development. Research
conducted shows that Amazon's tremendous opportunities in the e-commerce sector create
various challenges for Amazon sellers (Harney & Dundon, 2020). For the company to protect its
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reputation, they are required to hire qualified people to address any issues the company might
face.
One of the fundamental issues affecting Amazon's growth and development is the high
competition from familiar firms. The first problem Amazon faces is competition amongst its
rivals like Walmart, Google, and Apple, just to name a few. According to Cattero & D'Onofrio
(2018), competition is high and fierce, especially in the nutrition supplements and electronics
industries. Companies tend to invent new ways as well as strategies to achieve a competitive
advantage over their competitors to remain dominant in the business area they are in. For
example, Microsoft Corporation accepts to partner with different businesses to sign a cloud
agreement that protects them from the rigid competition. Research has shown that high
competition sometimes results in oversaturation which makes it difficult to secure a high market
share much less enter a new marketplace. Therefore, Amazon needs to devise effective
approaches to fighting the fierce competition to protect its current market share.
Another problem is that workers who work in the warehouse undergo difficult working
conditions and most time they are not provided with opportunities to grow within the company.
The working conditions of employees in the warehouse are not satisfactory. Employees are
required to lift very heavy objects which are considered to be extremely dangerous due to the
fact they can hurt their backs if they lift wrong. The warehouse employees are also required to
handle substances that can prove to be extremely dangerous which can eventually result in
serious injuries. Also, the time that employees are allowed to take breaks is extremely short and
the distance employees have to walk from the warehouse to the breakroom is far. The
management at Amazon does not pay attention to the safety concerns brought up by warehouse
employees as well as the number of injuries that employees endure on a day-to-day basis at
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work. There are times when the warehouse is so busy that employees do not have the time to
leave the work floor as a result, they use bottles and trash cans to urinate while still trying to
meet their goal at the desired deadline. The bathroom policy that Amazon has for the warehouse
is demeaning because employees are required to use two fifteen minutes breaks within a ten-hour
shift. Employees have gotten fired for taking frequent bathroom breaks. The company
warehouses have robots installed; the pace of the robot is imposed on the warehouse employees
as testified by an undercover journalist in an Amazon warehouse (Pham et al. 2018). Amazon
requires that its employees work at the same pace as its robots, the speed at which robots go can
never be compared to humans hence this can turn into problems within the organization.
Because employees are poorly treated by management at Amazon this can in the long run
affect productivity which affects profitability. There are times when employees are unable to
report to work due to a family emergency or they are sick, and they get fired. Regardless of the
weather condition even if it is bad employees are required to report to work even in heavy snow.
Employees work extremely hard they are not given the opportunity by management to career
progression within the company which is include getting promoted. Employees on the frontline
are also subjected to working in the overcrowded area and if they get sick for whatever reason
they are not given paid time off for being sick.
Lastly, workers who spend long hours at work eventually affect their work-life balance.
The workers who work in the warehouse are required to work long hours during the peak period
as a result this affects their personal life. Because during the peak period, employees are required
to work long hours most times, and they are not given time off this can lead to employee burn
out which can most times push employees to quit their job which in turn affect the overall
production of the company. They work long hours and sometimes overtime and yet they are not
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paid for time and a half they are given the same regular rate of pay even though labor law
mandates that employers pay employees time and half when employees work holidays and
overtime. Employees as well as salary workers try to put in long hours and work extremely hard
with the hope of being recognized with the hope of landing a new promotion. There is a lack of
work-life balance for employees who work for Amazon and the management expects employees
not to take a vacation. Amazon should look into addressing these problems so that they can make
their employees happy which in the long run will improve performance as well as boost the
company's profit.
Organizational Theories, Perspectives, and Concepts
The theories that relate to the Amazon company will include the scientific management
theory, administrative theory, and bureaucratic theory. The open system, rational, and natural
perspectives will also be used to explain the organizational system. The closed rational system
applies to Amazon. Based on the problems recognized above where employees are treated poorly
on the job. Employees also work long hours, and they are given only two fifteen-minute breaks
during a ten-hour shift to use the bathroom. The company is more concerned about meeting
deadlines and getting the customers' products delivered on time rather than the needs of their
employees. The closed-rational system perspective focuses on the increase in productivity by the
employees and disregards the human aspect (Horst et al., 2015). The organization is the main
point of focus in a closed-rational system which tends to affect the employee’s productivity.
The rational system perspective is characterized by the formalization of rules that govern
employee behavior. Goal specificity helps organizational participants choose alternatives that
define the structure of the organization. Formalization provides organizational participants with
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rules that control their behavior. (Önday, 2016). Goal specificity and formalization are the main
characteristics of a rational system. The rational system applies to Amazon because the company
sets out rules and regulations which the employees are expected to follow. The theories that
apply to the closed rational system approach are the administrative theory, the scientific
management theory, and the bureaucratic theory. The administrative theory by Fayol suggests
that the management of an organization's function is to control, coordinate, plan, organize, and
command to provide the best results for the organization. The administrative theory is focused on
coordination and specialization, that is the organization’s structural level (Haque, 2015). With the
administrative theory, the employees can be monitored to ensure the resources of the company
are well utilized to yield the maximum output for the company. The Scientific management
theory applies to Amazon. Scientifically determined procedures are put in place to permit them
to work at high efficiency and receive higher wages. (Scott & Davis, 2015). With the long work
hours put in by the warehouse employees at Amazon, especially during peak seasons of the year,
they should be paid higher wages so they can feel like they are being rewarded. Management’s
objective should be to achieve maximum profits for the business while cooperating with the
employees to provide the appropriate work schedules and better wages (Scott & Davis, 2015).
The scientific management theory suggests hierarchy within an organization whereby the lower-
level employees are required to respect senior authorities of the organization. Amazon falls under
the bureaucratic theory. The bureaucratic theory provides the structure of bureaucracy which has
a traditional, rational-legal authority and charismatic authority. The bureaucracy of an
organization is based on the formation of the system and results in efficiency and effectiveness.
According to Weber, the traditional and rational-legal authority is more stable to provide
administrative structures that are permanent (Scott & Davis, 2015).
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The open system perspective suggests that an organization’s interdependent flows and
activities are influenced by the institutional environment. (Scott & Davis, 2015).
(Weber & Weager, 2017). The open system perspective assumes that the organization constantly
interacts with the environment and shapes the way the organization reacts to external pressures.
The natural system perspective takes into consideration the participant’s interests and
individual relationships that align with the goals of the organization. Goal complexity and
informal structures are the main characteristics of a natural system (Scott & Davis, 2015). With
goal complexity, the behavior of participants is not determined by the organizational goals while
with the informal structure, the participants bring informal norms and behaviors that are based on
their characteristics (Kandhro, 2015). The open system perspective can be applied to Amazon
whereby the individual behaviors, ideas, values, interests, and abilities of the employees should
be aligned with the organizational goals for the overall success of the company.
Personal Perspective
From a personal perspective, Amazon needs to take the warehouse employees' best
interest by implementing policies that are not strict when it comes to bathroom breaks. Even
though employees are given two fifteen minutes breaks that is not enough time for a ten-hour
shift. When it comes time to go to the bathroom that is something that comes naturally therefore
there should not be any cap on when employees are allowed to use it. Also, delivery van workers
should not feel like they need to use cans to urinate in because they are trying to meet deadlines.
This situation is unbecoming and should be looked at. Amazon should be able to set up a better
structure which will prove to be better for its warehouse employees as well as its delivery drivers
because if they are allowed to use the bathroom freely and still be able to perform their tasks this
can eventually prove beneficial for productivity. The work hours can sometimes be very long
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especially during peak period this most time prevent employees from taking a vacation which
also affects work-life balance. According to Sirgy and Lee (2018), a high level of engagement in
work life is likely to produce positive results assuming that work-related goals are important to
the individual, and the individual is successful in goal attainment. Employees at Amazon should
be able to take vacation regardless there is heavy workload because employees should be able to
balance work and families. Also, if employees work overtime then they should be paid time and
a half, they should not be given just their regular pay because they earn it. Also, when it comes to
heavy lifting of objects employees should not be allowed to lift things that might cause injuries
to them, therefore, the company should improve on safety for its workers. It would a wise choice
for the company to purchase equipment to take care of the heavy lifting. The safety of employees
should be a top priority for the company. If employees can work in an environment that is safe
and conducive then this can, in the long run, increase productivity and profitability. Management
should treat employees fairly by offering employees good health benefits, emergency leave, and
sick leave. In severe weather conditions such as snow, hurricanes, or other natural, tornadoes,
disasters, management should design safety measures that will ensure the safety of employees,
especially the warehouse employees and delivery van drivers. Employees should be offered
promotion opportunities. When employees are treated fairly then you will find that they feel
appreciated, and this will reflect in their work ethics. Open system, rational system, and natural
perspective are organizational theories that Amazon should implement to be successful in the
global market if the company incorporates its structure.
With an open system, the organization can survive any environmental uncertainty due to
adaptability. The open system perspective takes into consideration the relationship of the
participants with the external environment. Amazon can implement an open system perspective
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by improving communication with its employees. The company can resolve the problems that
employees have if they try to organize meetings with its employee union representatives and try
to discuss solutions to the problems of the employees. The employee trade union must seek to
address any organizational concerns raised by employees and try to fix them along with
management. This will help improve the working conditions of the employees and make the
company a better place to work.
With the rational system perspective, the behavior of the participants of the organization
and the organization itself is considered as being purposeful and coordinated (Scott & Davis
2015). The organizational objectives and goals are defined alongside each employee’s
responsibility. Amazon management should set goals for employees to accomplish which align
with the goals of the company so that company objectives are achieved.
The organizational structure in a natural system can adapt to conditions that are not
stable. The management of Amazon should implement incentives that will motivate the
employees and encourage them to be more productive. By so doing, the company will realize
more profitability and the employees will be happy.
Biblical Perspective
Individuals in dark situations should not be dismissed since everyone has been in a dark
situation before. Caring for individuals who are marginalized is wonderful. Valuing individuals
who are not valued is what God wants (Merida, 2015). Merida (2015) also states that the purpose
of an organization is to facilitate growth in the best possible way, and this can be achieved when
leaders use wisdom to lead people faithfully and skillfully. As Christians and children of God, we
are taught to inspire those around us. Psalm 138:8 states that "The LORD will fulfill his purpose
for me; your steadfast love, O LORD, endures forever. Do not forsake the work of your hands."
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If we give to the Lord, we may comfort ourselves where the Lord will not leave until finished.
Merida (2015) states this salvation is made possible through the work of the King who took our
judgment at the cross, rose from the dead, and opened the way of salvation for all who heed
God's call to repent and believe in Christ. The Bible teaches us to consider the interest of others.
In Philippians 2:4. “Look not every man on his things, but every man also on the things of
others. Therefore, Amazon company should not only focus on its rivals and competitors but also
its employee's needs because they need to make sure that employees are treated fairly and with
respect and dignity and this could in turn have a positive effect on the overall company
performance.
Conclusion
Amazon is a successful company that specializes in e-commerce globally for different
customers. The company allows customers to purchase products online from different sellers at
affordable prices. Organizations such as Amazon operate at different analytical degrees to
examine interactions around the organization. Different system perspectives attribute to the
assistance of success of an organization while encouraging the commands of the Lord. This
paper discussed the problems and challenges associated with Amazon, which include
competition amongst its rivals like Walmart, Google, and Apple, long working workers which
constitute a lack of work-life balance, and an unsafe working environment as well as unfair
treatment of employees by leadership. Also, organizational theories, perspectives, and
concepts with recommendations for the challenges were also identified.
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