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MGT 255-2 Group 1 Amazon's CSR Paper

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MGT 255-2 Group 1 Amazon's CSR Paper

  1. 1. Amazon’s Corporate Social Responsibility MGT 255/2 - Spring 2016 - Final Project Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page Anglo-American University
  2. 2. Page 2 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page Table of Contents 1. Introduction 2. How the company implements CSR programs, analysis of the company's ethical behavior, the quality of the programs and its impact on the external environment 3. Evaluation of the company’s communication 4. Evaluation of its actual execution of the programs 5. Critical assessment of the firms seriousness of its claims 6. Look at the organizational structures and the management involvement 7. Proposed actions which might improve the situation 8. Conclusion
  3. 3. Page 3 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page Introduction Amazon is a well-known online retailer company. The company started their sales with books in 1995 and today it is selling almost everything. They have a website for more than ten countries including: Italy, Germany, Spain, Mexico, United Kingdom, Brazil, France, India, and Australia. The company has software development centers in more than fifteen cities around the world, customer care centers in the same number of cities, and fulfillment and warehouses in more than fifty cities. Amazon.com is the producer of the Kindle, Fire tablets and Fire TV. The stock price of the company is approximately $710, but what is more interesting about the company is their controversies. The company has taken part in some anti-competitive actions: they attempted to illegally sell online books in Canada, prevented publishers from direct selling at discount from their own websites”, and committed tax avoidance in the United Kingdom (Griffiths, 2012). With all of this under their belt, Amazon has recently been working to repair their image. Whether or not their motive to be a better company is altruistic is up for debate. This essay discusses Amazon’s various failures as well as successes in regards to their corporate social responsibility. How the company implements CSR programs, analysis of the company's ethical behavior, the quality of the programs and its impact on the external environment According to Business Dictionary, CSR is "a company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates. Companies express this citizenship (1) through their waste and pollution reduction processes, (2) by contributing educational and social programs and (3) by earning adequate returns on the employed resources” (Business Dictionary, 2014). Despite the fact that Amazon has been criticized for their unethical behavior, lack of practices, and reactive approach, recent surveys show that Amazon is included
  4. 4. Page 4 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page in the list of top companies with good CSR ("CSR RepTrak | Corporate Social Responsibility Reputation", 2016) . Amazon considers itself an ethical company despite the fact that there have already been issues related to trying to unethically obtain profits. Amazon positions itself as a customer-centric company where people can find anything they might desire. To evaluate customer's satisfaction of Amazon’s services, the company implemented the rating tool on their website where customers can rate the service and write comments. The observations showed that nearly 100% of customers gave to Amazon the highest rating (Vozza, 2014). However, it was revealed that some of the negative comments were deleted and Amazon was trying to charge customers inflated prices on products, based on the country they live in and their zip code. Soon after, this was discovered and Amazon said that they would stop such dishonest behavior. Despite this fact, Amazon is trying to provide customers with high quality service and the best priced products. In regards to the working environment, Amazon also has high reviews. The company’s new campus has “energy-efficient buildings, food vendors who offer sustainable and local ingredients, and a bring-your-dog-to-work policy” (Vozza, 2014). Amazon believes that satisfying employees needs and treating them as people that are valuable to the company will lead to better services and increase the amount of customers. However, there were several issues related to the employees who created unions against the harsh working conditions at Amazon’s centers and who were dissatisfied with how they were treated at work, and the management that has no concern to the issues appearing inside the company. To stop the creation of labor unions, Amazon created anti-unions and started to expand to countries where labor unions are simply prohibited. The reason why Amazon is behaving in that way is to satisfy its shareholders that ask for higher profit, which means having longer working hours for employees. Parties involved in this issue are the employees of Amazon, the
  5. 5. Page 5 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page management, the CEO, the company's shareholders and stakeholders. The management defends itself that it was given the goal to be more profitable, which push them to place profits over employees. Amazon claims that by increasing its stock prices it can invest in other companies that in turn will create more permanent jobs. Although such a behavior is considered unethical, Amazon replied that it was doing nothing illegal (UK Essays, 2015). Recent research revealed that Amazon participated in a German program created for future employees to better be able to understand what kind of work suits them and for employers to understand if an employee can perform at a set level. Simply put, the process gives new employees to a company for the 2 weeks training period unpaid to get used to work, show knowledge and skills. Next, if an employee performs well and the employer is satisfied with him, an employee is given the job. Amazon took public subsidies during Christmas time (the busiest time of the year, with an influx of orders) just to have more workers with temporary contracts and get as much profit as possible. After ending the training work period, Amazon cancelled these contracts. In regards to law, Amazon is not breaking any rules, but the company is behaving quite unethically. To defend itself, Amazon said that its goal is to have long- term relationships with employees but only in case of company’s growth and that it turned some of the temporary contracts into permanent and it has nothing to be blamed (Amazon, 2016). The other important thing is sales taxes. It was discovered that Amazon is operating in 50 states, 45 of which have a sales tax law, yet amazon is only paying taxes in 5 of them. The company is trying to avoid taxes by having shell companies, subsidiaries and affiliate networks. Governments use taxes in order to build new or improve the current infrastructure of a state. It was released that Amazon is benefiting from using a state’s infrastructure and in the same time is avoiding paying sales taxes that gives it competitive advantage and leads to higher profits (Gunther, 2012). So,
  6. 6. Page 6 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page from a legal perspective, it needs to be said that although Amazon is operating within the law, it is still trying to find loopholes in the legislature. Next, Amazon was not observed in participating in any philanthropy. It has never been donating to charities compared to other company giants although it has big profits and is able to donate (Gunther, 2012). Amazon is a big and stable company that has plenty of customers and makes large profits, but many issues have appeared that damage the reputation of the company. The stock prices of Amazon are rising but there are no reports about its financial conditions, sustainability, disclosure, and CSR programs. It might be because the bad behaviors outweigh the ethical behaviors and Amazon is always trying to defend itself by arguing that it will improve the working conditions and environment, become an active company and give donations to charities (Gunther, 2012). However, now the company might have changde its attitudes and behaviors, as it is becoming involved in charitable donations, clean energy, and many more areas. According to Vibha.org, “Amazon India has picked 3 of Vibha’s projects – Vidyarambam, Bhagavatula Charitable Trust and Sikshana for their CSR initiative “Gift A Smile” (Vibha, 2016). Additionally, Amazon created a wishlist where customers can put any items they need. Customers can now give gifts toward wishlists and make a direct impact on certain projects. In regards to Amazon’s website, it allows customers to donate 0.5% of their total purchase price to charity which helps shoppers to feel that they bring some value and in the same time the Amazon can be considered as being participating in philanthropy (Amazon, 2016). As will be discussed later on in the article, Amazon uses 100% recyclable materials for packaging with no plastic-coated wires which protects the products from damaging and uncovering while retains its ability to be opened easily (McDermott,
  7. 7. Page 7 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page 2016). Amazon's head office is giant, therefore the company decided to heat it from the nearest building, using a ''district energy'' system (Amazon, 2016). In addition, Amazon created a new page on its website where customers can give the feedback, including comments and even photos (i.e., failures and successes), about packaging and rate how well their products were protected. Amazon Green allows customers to find products on Amazon's website that meet US environmental rating systems. Amazon donates electronic devices to schools and organize 'Girls Who Code' events to attract more potential labor force interesting in coding, especially with an emphasis on girls. The company also pre-pays 95% of tuition for their employees to encourage them to take courses in fields that are in great demand and might be useful for their future development, expand skills, and give new career opportunities (Amazon, 2016). In regards to charities, Amazon started to support local and national organisations with cash and product donation (Amazon, 2016). To add, Amazon has contributed a lot to global relief programs which includes the Tsunami relief in South and Southeast Asia in 2004 ($15.7 million), Hurricane Katrina relief in 2004 ($12.4 million), Tsunami relief in Japan in 2011 ($1.8 million), Hurricane Sandy relief(Amazon ,2016). Amazon rewards nonprofit authors and creative publishers which published their books on the website and encouraged discussion among readers (Amazon, 2016). During the holidays Amazon helps deliver care packages to the military children whose parents are not able to come home due to working for military service of U.S (Amazon, 2016). Amazon started to offer their employees longer breaks, shorter shifts, and increased the number of ice machines in the workplace. Through using Amazon Assistant customers can add products from other retailers to their Wish List on Amazon website. Amazon assures that it will not charge customers with additional shipping prices and will not share personal information (Amazon, 1996).
  8. 8. Page 8 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page Amazon associates help sites and bloggers to make profit through advertisement on Amazon website. Through their Bounty Program, Any person that promotes Amazon Prime, Prime Video, and Prime Music 30-day trial and encourages visitors to sign up for it gets money (Amazon, 1996). Evaluation of the Company’s Communication When evaluating communication of one company one should evaluate mostly the most visible part of company’s work: marketing. In Amazon’s SEC filings, they state that “the aims of their communications strategy are (unsurprisingly) to: 1. Increase customer traffic to our websites 2. Create awareness of our products and services 3. Promote repeat purchases 4. Develop incremental product and service revenue opportunities 5. Strengthen and broaden the Amazon.com brand name” (Chaffey, 2014). Amazon sticks to delivering high quality customer service. Amazon founder, Jeff Bezos, told Businessweek in 2004 that "You earn reputation by trying to do hard things well. People notice that over time." Amazon utilizes emotional appeal. Sean Madden talked about his experience with one of the representatives of Amazon’s customer care service. In his article Sean revealed: “Barbara’s congenial but no- nonsense approach was part of what made this experience different, but more important, she had access to exactly the right data about me, and that made the favorable exchange possible” (Madden, 2012). Their communication with clients seem to be more than just solving the problems or exchanging opinions about service or products. Amazon has been collecting the information about Steve for years and years and it was not only about his shipping address, she knew all about the products he was looking at and purchased. Through this information, Amazon is trying to build a strong relationship with their customers. Amazon has large databases about each account owner, bringing to question how ethical or unethical this action is.
  9. 9. Page 9 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page It seems like for Amazon, social media is a great tool for communication with their customers. “@amazon” is considered to be quite popular on Twitter. Being a part of Twitter since February 2009, Amazon has more than 2.3 million followers on Twitter - with more than 18,000 tweets, they use twitter 4 times per day on average. The company uses Twitter to promote their products and services, while also just wishing everyone a good day. On Facebook it seems like Amazon is doing a better job: they have more than 23 million likes and are keeping the same consistency in their publications. The company understands that if you sell stuff on the internet you are supposed to be loved on the internet, and obviously Facebook and twitter help them to achieve this goal. On their official web-site, “Amazon.com”, there is a section called “press info” which is divided between: Press Releases, Images & Videos, Amazon Web Service and Devices and Content. In the “Press Release”, they publish the latest news about the company so that the customers will keep track of them, all the while being able to control what is said about them. For example, a recent article was taken from www.businesswire.com and it is called “Amazon to Open New Pickup Location at California State University, Long Beach”. It states the future plans for company. In the same section, they have the Twitter bird in the left corner which can redirect everyone directly to their official twitter account, somehow showing the importance for their business of keeping everything on Twitter. In the same corner the banner “Contact Amazon” appears, with the e-mails of the PR department. Also Amazon reminds customers to “sign up to receive Amazon Media Room e-mail alerts” on this website. For the firm, it is important that their customers stay current with the company’s update. In the Press Release department, anyone can search through all the articles that touched amazon activity. Amazon keeps it simple. If one wants to know something
  10. 10. Page 10 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page about the company, one can easily search through their website, because they claim that they have the best “searching engine out there” (PHX, 2016). When analyzing the facts, little could be said about Amazon’s real compliance program, commitment to society, and the communication of the company’s actions. In their press release on the official website, all the articles posted are more so about their innovations new settlements and less about the company’s actions to make society a better place (PHX, 2016). They are more concentrated on their money. On the same page amazon has the department: Amazon and our planet with 5 more specifications: Amazon & the Environment; Author & Writer Groups; Disaster Relief; Employee Involvement; and Tools for Non-profits. How Amazon states in Amazon's Innovations for Our Planet: “At Amazon, we're constantly looking for ways to further reduce our environmental impact. Online shopping is inherently more environmentally friendly than traditional retailing. The efficiencies of online shopping result in a greener shopping experience than traditional retailing (Amazon, 2016). More than that, Amazon claims that they have the innovative Frustration-Free Packaging which according to them it is easier to open, 100% recyclable and all the goods shipped by amazon have only one box. For making sure that anything is good with their environmentally friendly packages they introduced Amazon Packaging Feedback Program where they received more than “33 million reviews” (Amazon, 2016). When disasters arise, Amazon dedicates their homepage to supporting donations, informing all their customers about it. The timeline of their donations be seen on their official website. On the same website page, Amazon describes its contribution to the community. As they state, doing their job right means contributing to the welfare of all of society. Lowering prices, expanding selection, driving convenience, driving frustration-free packaging, creating Kindle, and innovating web services, are all ways in which Amazon says they contribute to the community. It is not surprising that they did not mention anything about tax avoidance, though. Amazon
  11. 11. Page 11 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page states that they “also contribute to the communities where our employees and customers live” and that their contributions “can be seen in many ways – through our donations to dozens of nonprofits across the United States, through the disaster relief campaigns that we host on our homepage, through our employees’ volunteer efforts, through the grants that we make to the writing community, and through the Amazon Web Services credits that we provide to educators” (Amazon, 2016). After that, they give a long list with all the donations they made. Of course, such a big company could not miss any of their beneficial activity in order to strengthen their position in the mind of the consumer. But that is not the actual reality. Amazon of course, will not communicate through their website and social media platforms that they “treat their staff appallingly”, “paying zero tax in the UK despite £7.5bn of annual sales”. Additionally, it has been said that some of their charity was done for personal interest. And even though these last three facts are more and more discussed on the internet, Amazon does not comment on them - they only make sure that people get to know good things about them through social media platforms and their website, both platforms in which they have complete control. Evaluation of its Actual Execution of the Programs What has Amazon done to implement CSR programs? Amidst a lot of public criticism, Amazon has recently appointed a director of Corporate Social Responsibility. As an advocate for the company’s wellbeing, the new director Christine Bader will work to repair the company culture (Frank, 2016). If anyone can repair the company’s rapport, it is likely Bader, as she is a former United Nations advisor. Several initiatives have been taken in regards to the execution of various CSR programs. First and foremost, Amazon claims to be eco-friendly. From certified buildings in the United States and Germany, to regularly-launched environmental
  12. 12. Page 12 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page initiatives such as AmazonGreen and frustration-free packaging, the company has been consistently working to improve their environmental footprint, or at least make it appear that way (Amazon, 2016). Amazon’s buildings are LEED gold certified by the U.S. Green Building Council, meaning that the building exhibits “leadership in energy and environmental design”. Additionally, Amazon buildings in Germany are certified as environmentally friendly by the German Sustainable Building Council because the interior is energy-efficient and sustainable building materials were used. Their fulfillment centers are certified as well. As far as the regularly launched environmental initiatives, Amazon has implemented frustration-free packaging in which clamshell packages are eliminated and there are no longer plastic-coated wires. A software program has also been implemented in which the “right-sized box” for various items is chosen as to reduce packaging waste and transportation costs (Amazon, 2016). Manufacturers can send their packaged products to Amazon labs for a free analysis on how their package can be certified. Additionally, a packaging feedback program has been put in place so that customers can rate how well their purchases were protected by packaging. This program is designed so that customers’ input can be used to improve packaging (Amazon, 2016). Most notably though, Amazon prides itself on its Kaizen program, a group of Amazon employees that dive into all aspects of the company to identify waste and design more energy-efficient solutions. For example, Kaizens have worked to reduce conveyor power usage in Japan’s fulfillment centers and decrease energy consumption by 450,000 kilowatt-hours in Kentucky (Amazon, 2016). What has caused Amazon to implement such an environmentally-conscious program?
  13. 13. Page 13 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page Well, Amazon has not always been this eco-friendly. In fact, it all started from Amazon’s ever-so popular “Amazon Prime” free 2-day shipping. Numerous complaints had been made by critics that vendors had been shipping small items in overly large boxes, not thinking about the carbon footprint of online shopping. Perhaps in light of the numerous photos of ridiculously small items in large boxes on social media sites, Amazon implemented their environmentally friendly packaging and became committed to reducing packaging waste (MNN, 2016). Five years ago, Amazon’s sustainability reputation was not great. Recycling was not on the forefront and energy efficiency was not a part of the company’s core values (Gunther, 2016). With feedback from customers and a bad reputation in the media, Amazon made changes to become greener. Along with environmental issues, Amazon has had a lot of employee controversies. In September 2011, an employee was recorded complaining about Amazon’s work conditions, discussing the extreme heat and strenuous workloads (Soper). Amazon handled this by spending $2.4 million on air conditioning in warehouses and enacting new procedures such as increased breaks, shortened shifts, and extra ice machines. This exemplifies that the company’s response tactics are good, or at least that they care about maintaining a clean public image. In order to appear charitable, Amazon donates to nonprofits such as Red Cross, BBBS, and St. Jude’s Children’s Hospital. The company is also a big proponent of disaster relief, donating millions to global relief programs such as those used for Hurricane Katrina. Having said that, Amazon’s charitable donations are vastly skewed. In 2013, Amazon started “Amazon Smile”, an initiative in which a portion of customer’s purchases go toward a charity of their choice (Josephson, 2013). While this makes people feel like they are giving back to the community, the actual amount that Amazon
  14. 14. Page 14 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page donates is extremely low. Only 0.5% of the proceeds are being donated to the charity. The real winner here is not the customer or the charity, but rather Amazon. Critical Assessment of the Firms Seriousness of its Claims How do we feel about Amazon’s advanced SAP technology? Amazon used SAP, a German technological tracking device, to track packages, customers and employees. For years customers have been signing up for Amazon or Amazon Prime. The website always offered it directly to the customer on its website, saying how the account is free and worthwhile (Layton, 2006). I think that this a very good business technique which began in the early 21st century with the rise of online shopping. It also has made paying for items on Amazon’s website much more user friendly as it saves your credit card information on your account. However, this can pose many ethical issues regarding personal privacy. Through SAP, Amazon has access to their customers’ and employees’ bank accounts and home addresses (Layton, 2006). This is a database that can be abused, and can pose a threat to an individual’s privacy. Employees are now traced and thus may intimidate them and encourage their disemployment. People don’t like their privacy to be intruded. Packaging innovation Amazon is a firm that advocates for more environmentally friendly packaging for shipping their online products. Their long term goal is ‘to be able to sort out the worst offenders of over-packaging and we will push them to make changes’ (McDermott, 2015). This is a beneficial goal for the world, however will be hard to implement. Although Amazon is at the top when dealing with online shopping, I still don’t believe they have enough recognition to influence other world-renowned shopping websites such as Ebay and Zappos. To change a company's packaging is a time-consuming process, as the company must look into new manufacturers as well as potential new distributors. This is because some distributors may also have a segment of their
  15. 15. Page 15 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page business that deals with packaging. However, if Amazon properly markets their environmentally-friendly packaging concept, they can make an impact. This would consist of a ton of advertising, whether sponsoring events or releasing advertisements in magazines and commercials on Television. They have added a ‘packaging feedback’ segment of their website, which allows customers to rate how well their packaging protected their purchases. Additionally, ‘customers can upload photos displaying whether the packaging succeeded, or failed when they first open up their purchase’ (McDermott, 2015). This will be beneficial for Amazon as this feedback will help the company create the perfect packaging that protects the product, uses minimal material, and thus is better for the environment. However, this discredits their packaging movement as negative feedback proves their packaging isn’t perfect yet in customer satisfaction and environmental friendliness. Amazon Work Conditions Scandal In 2011, one of Amazon’s employees working in a Pennsylvania workhouse was interviewed on Pennsylvania’s Morning Call and was recorded criticizing the warehouse work conditions. He was complaining that the warehouse was far too hot, and that it was unjust to perform such strenuous work in high heat. Right after the report was published, ‘Amazon spent $2.4 million to install air conditioning in four different warehouses’ (Fottrell, 2012). In June 2012, they took the next step by beginning the installation of air conditioning in warehouses nationwide. This project consisted of ‘budgeting $52 million dollars’ (Fottrell, 2012). These actions were made to provide a better work environment for their workers. They also implemented longer break times, shortened shifts, extra ice machines and constant reminders to stay hydrated. Although this helped overall production, it took Amazon 15 years before they improved their working conditions, which makes Amazon a suspect for implementing these changes to improve the company’s name. This article damaged the company's
  16. 16. Page 16 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page reputation and name, and thus the company had to fight back and protect their reputation as the world’s greatest online shopping website. “On My Way” Program Amazon has recently considered new, cheaper ways to deliver products to customers. One of these programs consists of enlisting everyday people to pick up and drop off packages for customers. Amazon would be ‘hiring retailers in urban areas to store packages and pay regular people a small fee to make deliveries’ (Reilly, 2015). This would be a cheaper option, and can potentially employ many urbanized people. However, this program can damage the company, as there are many risks. This casual style of delivery can cause many packages to be lost or products damaged, as Amazon would also have to implement new insurance plans to counteract these risks. Everyone trusts a postal worker caring for their mail, but how many customers would feel comfortable with a complete stranger overseeing their packages? This is a good idea, but is something that causes more obstacles rather than financial benefits. In 2013, Walmart tried to implement a similar delivery program. They would give ‘customers discounts on their bills if they signed up to deliver online purchases on their way home from the store’ (Reilly, 2015). However, this success was short lived as this crowdsourcing program did not last. Is Amazon the next company to attempt a crowdsourcing delivery system? Organizational Structures and the Management Involvement in Amazon Because of the large amount of products and services that they operate, Amazon contains different organizational structures. Amazon became one of the biggest retailer shops in the United States because it is known as the “everything” store. When it comes to the structure, the head of the company is the CEO and founder, Jeffrey Bezos. He is followed by twelve other people, forming the board of
  17. 17. Page 17 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page directors. The CEO has absolute power, followed by the Chief financial officer. The 8 divisions that make up Amazon are: 1. Business development 2. E Commerce platform 3. International retail 4. North America retail 5. Web services 6. Digital media 7. Legal and secretary 8. Kindle After these main divisions, the chain of command spreads. This is because after the CFO controls the real estate and control department, each of these 8 departments take control of other responsibilities. Because Amazon is one of the most popular names in the Internet world, we have to know that this company operates sites in different places of the world like France, Germany, Japan, Spain, China, and The United Kingdom. Because Amazon spreads all over the world, it can be seen that Amazon is one of the companies that it the most customer-centered in the world, as evident through the company’s successes. Even though Amazon Headquarter is in Seattle, Washington, Amazon works on a worldwide scale. The company has 150,000 employees. These workers work in different segments of the company around the world and those segments are: 1. Software development 2. Retail product management and merchandising 3. Information technology 4. Operations and customer service 5. Finance and administration 6. Human Resources
  18. 18. Page 18 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page 7. Legal operations The basic hierarchy of Amazon Corporation consists of 4 important people: 1. Chief Executive Officer - the first in the company and his mission is to reach the results are being set by the stakeholder of the organization. He is responsible for the strategic roles and operational roles of the company. 2. The Director - he is elected by the stakeholders or by employees. He is responsible for taking part on the meetings of the board of directors and look for any governance issues. 3. Chief Financial Officer (CFO) - he plays a really important role in Amazon organization. His main objectives are to provide adequate financial resources for the accurate development of the company. 4. Chief Technology Officer (CTO) - his role is to report directly to the CEO for the status of the technical operations within the company. Interestingly enough, Amazon is known as a male-dominant company when it comes to hierarchical positions. When it comes to the hierarchical structure of the company last year, from 120 senior managers that were hired only 18 of those were women (Garside, 2014). So as we can see, the organizational structure of Amazon has a really high male dominance on leadership positions. Gender inequality does not just stop there, though. In fact, the Board of Executives is made up of twelve males (Garside, 2014). A fact from a reliable source said that the company even said that they don't feel comfortable with a woman in the board of executives and they are not willing to hire one. As a company is known to have a glass ceiling for women that attempt to progress above executive decisions. Management Involvement in Amazon When it comes to management involvement, let’s start with the leader and the owner of the company, Jeffrey Bezos, because as the leader, he is responsible for the failures and the successes of the company. When we mention Mr. Bezos’ name, we
  19. 19. Page 19 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page know that he has been a great leader because he was able to found a new company and start from a home garage, creating one of the most well- known and the most used company of the 21st century. When it comes to working, Jeffery Bezos is a really good leader because he is a simple man, and his requirements from the workers are really high. Amazon is a company that pushes the limits of each employee. Bezos require a high amount of involvement from the management because of the company’s huge growth. The management involvement is also really high because each worker has to fill reviews monthly and the managers have to analyze those reviews and make decisions for the working system. Because the CEO of the company and the other managers are really involved in the work process, this has led to better work inside the company, creating a really efficient business. This is why Amazon’s revenue reaches around $90 billion annually (Impraise Blog, 2016). Proposed Actions Which Might Improve the Situation In the whole, it can be seen that the bad or unethical behavior of Amazon outweighs most of the company’s good behavior. However, Amazon is currently looking for opportunities to improve its ethical behavior by adding new programs, donating, and caring more about their employees. Nevertheless, the question of whether they will do because they have to, or because they really care about improving remains. One way for the company’s situation to improve might be to disclose more information about their ethical compliance or CSR. Secondly, they should not only be profit-oriented company, but try to reach a balance between caring about people, improving working conditions, being environmentally friendly and open to the public, and making profits. The company should follow the three elements or 3 P's: people, planet, profit. There is no need for Amazon to wait until it receives critiques about its CSR; the company needs to be more proactive. Using loopholes in the legislature is not illegal, however, it is considered to be bad behavior. Therefore, we recommended
  20. 20. Page 20 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page that Amazon focuses more on following the law rather than looking for ways to evade it. The following steps would help in utilizing the stakeholders’ framework to manage responsibility and business ethics: ● Assessing the corporate culture ● Identifying stakeholders groups ● Identifying stakeholders issues ● Assessing organizational commitment to social responsibility ● Identifying stakeholders resources and determining urgency ● Gaining the stakeholders feedback To ensure that Amazon is doing everything right in the future, the company should be more publicly open about its activities and report more about CSR and sustainability. Conclusion Amazon is a booming corporation. With headquarters in Seattle, Washington and global offices in more than 30 countries around the world, the company seems to be everywhere. The male dominant company has been accused of having a glass ceiling for women and having very centralized power in the hands of higher authorities like Jeffrey Bezos and the Board of Directors. Some say that this centralized power is sexist, while others claim that it is an efficient way to run such a highly involved company. From eco-efficiency and mass production, to working conditions and charitability, the company has received numerous complaints that span across many aspects of their operations. Yet with energy-efficient buildings and frustration-free packaging, the corporation is making strides to become more economically-friendly. They are also donating more and becoming more of a leader in the welfare of society. Having a lot more needs to be done, as this is new territory for them. Keeping the goal of employee satisfaction in mind, the company is becoming more receptive to their
  21. 21. Page 21 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page workers’ needs. Having customer satisfaction services online provides the company with the opportunity to monitor their target audience’s needs, too. All in all, the company’s corporate social responsibility is imperfect. It needs work, like many other companies of this day and age. They have already made strides by hiring a director of Corporate Social Responsibility. With the right resources and more transparency in their media coverage, the company can easily step up its game.
  22. 22. Page 22 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page Appendix Amazon.com. (2016). About Amazon - In the Community - Device Donations. [online] Available at: http://www.amazon.com/p/feature/c42oqt7m3t5w5ac?ref-=aa_bx_8 &pf_rd_r=1GJZJFB84X4QY5QE71XN&pf_rd_p=0a651e20-917f-4cf2-b9cd-f68c1 293cc69 [Accessed 17 May 2016]. Amazon.com. (2016). About Amazon - In The Community - Amazon Smile. [online] Available at: http://www.amazon.com/p/feature/dw8gr4bwe6h43mk?ref_ =aa_bx_2&pf_rd_r=1GJZJFB84X4QY5QE71XN&pf_rd_p=0a651e20-917f-4cf2- b9cd-f68c1293cc69 [Accessed 17 May 2016]. Amazon.com. (2016). About Amazon - Our Innovations - Career Choice. [online] Available at: http://www.amazon.com/p/feature/fsp92a2bhozr3wj?ref_=aa_bx_7 &pf_rd_r=017QEBQ09B54GKYRYK03&pf_rd_p=e97e4cd5-147f-4011-8507- 8aa86874b006 [Accessed 17 May 2016]. Amazon.com. (2016). Amazon.com: Amazon & Our Planet. [online] Available at: http://www.amazon.com/b/ref=amb_link_355977762_1?ie=UT8&node=1378632 1&pf_rd_m=ATVPDKIKX0DER&pf_rd_s=left1&pf_rd_r=0XD3FYDTZ6KTX8Z31Y QS&pf_rd_t=101&pf_rd_p=1309686422&pf_rd_i=13786431 [Accessed 17 May 2016]. Business Dictionary. (2014). What is corporate social responsibility? definition and meaning. [online] Available at: http:www.businessdictionary.com/definition/cor porate-social-responsibility.html [Accessed 17 May 2016]. Chaffey, D. (2014). Amazon.com case study - Smart Insights Digital Marketing Advice. [online] Smart Insights. Available at: http://www.smartinsights.com/digital-marke ting-strategy/online-business-revenue-models/amazon-case-study/ [Accessed 17 May 2016].
  23. 23. Page 23 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page Fottrell, Q. (2012). 10 Things Amazon Won't Tell You. [online] MarketWatch. Available at: http://www.marketwatch.com/story/10-things-amazon-wont-tell-you- 1340298990486 [Accessed 17 May 2016]. Garside, J. (2014). Amazon employs 18 women among 120 most senior managers. [online] the Guardian. Available at: https://www.theguardian.com/technology/2014/apr/25/amazon-employs-18- women-among-120-senior-managers [Accessed 17 May 2016]. Griffiths, I. (2012). Amazon: £7bn sales, no UK corporation tax. [online] The Guardian. Available at: https://www.theguardian.com/technology/2012/apr/ 04/amazon-british-operation-corporation-tax [Accessed 17 May 2016]. Gunther, M. (2012). Amazon's no show on sustainability. [online] the Guardian. Available at: http://www.theguardian.com/sustainable-business/amazon [Accessed 17 May 2016]. Impraise Blog - Employee performance management, reviews and 360 feedback. (2016). Amazon's Performance Management Mistake: What the NYTimes found out.. [online] Available at: http://blog.impraise.com/360-feedback/the-amazon- controversy-what-is-missing-in-its-performance-management-360-feedback [Accessed 17 May 2016]. Josephson, B. (2013). [online] The Huffington Post. Available at: http://www.huffingtonpost.com/brady-josephson/why-amazon-is-smiling- and_b_4360405.html [Accessed 17 May 2016]. Layton, J. (2006). How Amazon Works. [online] HowStuffWorks. Available at: http://money.howstuffworks.com/amazon.htm [Accessed 17 May 2016]. McDermott, A. (2016). Amazon's CSR. [online] prezi.com. Available at: https://prezi.com/ih2-sci2wm8j/amazons-csr/ [Accessed 17 May 2016].
  24. 24. Page 24 of 24 Study Group # 1 Jesse Antin, Leart Berisha, Valeriya Fateeva, Elena Livadaru, Anastasiya Neskoromna, and Amanda Page Phx.corporate-ir.net. (2016). Amazon Media Room: Product Images. [online] Available at: http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-imageproduct52 [Accessed 17 May 2016]. Reilly, D. (2015). Amazon ponders crowdsourcing deliveries with ‘On My Way’ program. [online] Fortune. Available at: http://fortune.com/2015/06/16/amazon-crowd- source/ [Accessed 17 May 2016]. Reputationinstitute.com. (2016). CSR RepTrak | Corporate Social Responsibility Reputation. [online] Available at: http://www.reputationinstitute.com/research/ CSR-RepTrak [Accessed 17 May 2016]. Soper, S. (2015). Inside Amazon's Warehouse. [online] themorningcall.com. Available at: http://www.mcall.com/news/local/amazon/mc-allentown-amazon- complaints-20110917-story.html [Accessed 17 May 2016]. Vibha.org. (2016). CSR - www.vibha.org. [online] Available at: http://www.vibha.org/csr [Accessed 17 May 2016]. Vozza, S. (2014). Why Amazon And Coca-Cola Have The Best Corporate Reputations. [online] Fast Company. Available at: http://www.fastcompany.com/3030357/bottom-line/why-amazon-and-coca- cola-have-the-best-corporate-reputations [Accessed 17 May 2016].