Managing strategy – Amazon
Corporate Social Responsibility
Amazon, like any other leading corporation, pays considerable attention to corporate social responsibility (CSR). The group undertakes policies and has policies created with the goal of creating positive impact on the world (Amazon). The chief objective behind Amazon’s CSR is to pursue other pro-social goals, in addition to expanding its profits. Amazon pays much attention to its CSR initiatives because it believes that buyers will be more appealed to engage in business with brands that they consider to be more ethical (Amazon). It views the practice as providing it with an opportunity to improve its public relations. It is the reason why the multinational retailer adopts a multifaceted approach to handling its CSR program.
Amazon has invested significantly in supporting local communities, educating communities, and empowering workers. In 2020, the e-retailer formed the Amazon Relief Fund where it invested $25 million to support its provision of services and partnership with other stakeholders to mitigate the effects of COVID 19. The group also runs the Device Donation Program, which is a group of facilities that donate electronic devices and cards to learning institutions located near Amazon facilities across the U.S. (Amazon). Another initiative by Amazon aimed at helping local communities is “Girls Who Code” events, that are enacted with the goal of helping girls improve their skills in coding, an initiative that has gone a long way into empowering young girls, and turning them into productive individuals (Amazon). Another way in which the company supports local communities is that it offers immense financial aid to national and local firms with cash and donations that impact on their operations significantly. Concerning educating and empowering employees, the Amazon Career Choice Program contributes significantly towards educating and training employees (Amazon). The Program offers about 95% of the tuition fees for workers to pursue courses for in-demand areas, such as nursing and mechanic without worrying much on whether the skill is applicable to Amazon or not. The Program has assisted at least 10,000 workers globally since its inception (Amazon). The group’s Virtual Contact Centre is another initiative that has significant impact on how workers perform their duties. The platform allows the company’s customer service workers to serve from home. Based on these evidence, it is apparent Amazon has invested significantly in SCR initiatives.
The giant retailer engages in other activities that fall part of its CSR plan. Its impact on the environment is outstanding, especially in the way it tries to mitigate adverse effects. The company has invested immensely in the production of renewable sources of energy in various plants, with the objective of lessening people’s reliance on fossil fuels that contribute significantly towards climate change and global warming (Amazon). So far, Amazon manages about 125 solar energy projects and about 62 wind energy initiatives in various locations across the globe (Amazon). The chief objective of Amazon is to achieve 100% transition into renewable energy use by 2025. Regarding water consumption, the company has created various fulfilment centers that have the capacity to gather and recycle water, often tapped from rain water (Amazon). Amazon pays equal attention to reducing waste reduction using various approaches, including recycling. The firm manages packaging initiatives in various cities to reduce wastage and to safeguard the environment from inappropriate littering. More fundamentally, the company pays much attention to reducing carbon emissions. The firm’s abuse carbon emissions intensified by 19% in 2020, but overall intensity dropped by 16% (Amazon). Therefore, the analysis indicates that the company has an elaborate CSR plan that enables it to achieve its objectives in this area.
The company operates alongside political factors and influences. This aspect of the analysis pays attention to the impact the government has on its operations or on the firm’s internal and external environments. In the case of Amazon, various political factors are essential in the development of the e-commerce retailer. One of the political factors that matter to Amazon is political stability (Amazon). The group pays much attention to markets that enjoy political stability to safeguard its operations from potential harm and disruptions. Moreover, the group conducts its operations in accordance with existing federal and state regulations that are all tied to the political aspect. For example, the firm abide by taxation laws, e-commerce regulations, and cyber-security laws (Sadq et al. 65). The firm’s commitment to follow political regulations and policies shows the group’s compliance level, and suggests that the corporation is focused on continuing with its operations undisrupted.
The performance of Amazon entirely depends on the condition of the economies where the company operates its online and non-online operations. The impact of economic trends and transformations on the micro or macro-environment are diverse, and the company must pay considerable attention to each of them to avoid unnecessary disruptions (Sadq et al. 66). The economic strength of various markets, particularly in the U.S. and European nations where the firm has most of its stores improves the possibilities of success for the retailer. The economies of developing nations also matter to Amazon because the company has plans to increase its presence in these regions. For instance, the growing disposable incomes in developing markets can enhance the group’s financial outcome (Sadq et al. 66). However, cases of recession have adverse impact on how the company performs. Consequently, Amazon would target markets where the national economy is strong, and where the individual and household income is sustainable.
Social factors have significant impact on how Amazon conducts its operations. The aspect of the PESTEL analysis identifies and determines the effects of sociocultural transformations or trends on the firm’s outcome as a leading online operator and provider of IT-based goods and services. Taking into account such factors in the micro and macro-environments, the company faces sociocultural issues such as escalating wealth disparity, which is an evident threat, growing consumerism in developing nations, which is an opportunity, and growing online buying behavior, which is also an opportunity (Sadq et al. 66). The widening wealth disparities refer to the widening gap between the rich and less unfortunate in many nations. Higher consumerism is a social factor that impacts on how the company operates because this marks a social transformation in the way consumers in developing nations conducted themselves in the past.
Technological advancements directly impact on Amazon, taking into account the primary role technology plays in the company’s operations. One of the major concerns for Amazon, and which acts as a threat is the rapid rate at which technology grows, thus forcing the firm to constantly update its applications and innovations (Sadq et al. 67). Other retailers are equally developing their structures and any reluctance in this area could derail Amazon’s attempts to maintain its lead. The cost for developing, acquiring, and maintaining emerging or needed technology is high and unless the company pays considerable attention to how it would generate the needed revenue it may be unable to venture as effectively as it desires in this area. Another technological factor that really matters to Amazon is the expanding efficiencies of IT resources that comes as an opportunity (Sadq et al. 67). The company uses such innovations to expand its practices and to come up with effective solutions to some of the challenging issues. Finally, the increasing incidences of cybercrime is a major technological concern for Amazon that is continuously improving its systems to avoid being a victim of cyber-attack. Thus, technological factors impacts significantly on how the corporation performs its activities.
The company pays considerable attention to environmental factors, while paying much attention to safeguarding the natural environment. Even though the firm’s operations happen online, its activities are subject to the impact of the environment. One of the major environmental concerns for Amazon is the growing interest that businesses have on environmental programs, an aspect that the group views as an opportunity (Amazon). For instance, more groups have renewed their interest in developing renewable sources of energy to minimize reliance on fossil fuels. Another environmental concern for Amazon is to comply with the increasing desire to achieve business sustainability, which entails being able to operate over and over again in an environment that replenishes itself. More fundamentally, the company has much interest in embracing a lifestyle where rate of carbon emission is low, and the rate of climate change is insignificant (Amazon). The company pays attention to all the factors knowing very well the influence they have over business practices.
Amazon conducts all its operations with the objective of adhering to legal directives. The firm understands that non-compliance could have adverse effects on the firm, and how it conducts its activities (Amazon). Consequently, management takes time to understand all legal aspects before taking any measures or decisions that could influence how the company acts or relates with clients and other key stakeholders.
Mckisny 7s Model
Mckisny 7s model identifies the seven key elements that help Amazon to attain its objectives and execute change. The first three hard elements that impact on the company’s operations, and which the management can directly influence are the organizational strategy, structures such as its reporting lines and organization charts, and systems such as IT systems and formal processes. The strategy refers to Amazon’s plan for developing and upholding a competitive advantage over its rivals. Structures, on the other hand, refers to how the firm is organized, particularly in the way the teams and departments are structured, encompassing who reports to the various units. Systems in this case refer to the daily actions and procedures that employees use to perform their duties. The four remaining soft elements are share values, skills, style, and staff. The shared values reflects the firm’s general work ethics, style refers to the approach leaders take to conduct business operations, staff are the workers and their general strengths and weaknesses, and skills are the needed competencies of the retailer’s workers. The group while applying the McKinsey 7-S model follows the recommend steps to achieve the targeted goals. For instance, it begins by focusing on the hard elements before progressing to the soft elements.
“Amazon Sustainability 2020 Report: Further and Faster, Together.” Amazon, 2020, https://sustainability.aboutamazon.com/amazon-sustainability-2020-report.pdf. Accessed 3 Apr. 2022.
Sadq, Zana, Hawre Sabir and Vian Saeed. “Analyzing the Amazon Success Strategies.” Journal of Process Management – New Technologies, International, vol. 6, no. 4, 2018, pp. 65-70. doi:10.5937/jouproman6-19264