by Reagan Wheeler
This is a case study on the Holacracy style of organizational management at the well-known company, Zappos. The purpose for this case study is to show how Holacracy works and specifically, how it works for Zappos. This type of management is not the typical kind of management that people usually think of in a large corporation. This new way of managing a corporation is different and intriguing.
A traditional style of management is having one person at the head of a corporation, business or organization. One head person in a department or group of people in the company who ultimately makes the final decisions no matter what another employee says. Holacracy is a style of management where everyone is the boss. Everyone has a voice and is allowed to speak their ideas (How It Works). They can hold meetings, decide what needs to be changed and change it, and even make final decisions on big things. Holacracy gives every employee the authority to do what they feel needs to be done.
Zappos began using the Holacracy style of management in 2013 in some of its departments and then had the whole company using the system in the year 2015. The company’s Chief Executive, Tony Hsieh along with most of the company’s employees, felt at one point that there was too much bureaucracy. Hsieh knew that team-building exercises would not work quite as well as he needed so he decided that Holacracy was the way to go. He felt that the new style would give each of his employees an importance that they might not have felt they had before and that it would give everyone a voice. He saw this as a really good thing to have, but some employees saw some negatives as well (Gelles).
Just like any other style of management, Holacracy comes with both strengths and weaknesses. A strength that comes from this style is it makes sure everyone’s opinions and ideas are heard. This can be very helpful when trying to keep employee satisfaction at a good level. It can also help with the all around atmosphere of the company. Everyone feels important so everyone is going to be happy. But there is also the danger or weakness of some employees thinking they have more power than they actually do. Some might become bossy, which would cause conflict. There is also the weakness of giving too much power so to say, to every employee. If anyone is allowed to call for a meeting at any time then people could be in meetings for unnecessary amounts of time. Company’s who bring in this type of management would have to be careful of that.
I believe that some of the Zappos employees are resistant to this type of management because some might like having one person who is charge or oversees everyone else. They might feel that it’s easier that way. If they are told how things should be done then they do it that way and everything is how it should be. Others might feel that if everyone is in charge then the workload might get a little hectic. Maybe they think that giving each employee permission to conduct meetings whenever they feel will cause production to slow down from everyone going to so many meetings. Since this style takes so long to integrate into an organization the employees at Zappos might just be ready to give up on trying (How a Radical).
I think a bureaucratic style of management would work better for Zappos. That way each level of the company works as their own separate team, having one person who is accountable for that team but not accountable for the members personally. Everyone can still speak their opinions and ideas but it’s just in a smaller group so it’s easier to decide what idea to go with from the whole group before passing it down to the other levels. This style along with a consultive style of communication within the company would be good for them. The consultive side, which accepts input from employees but has final decisions made by someone at the top of the company would allow Zappos to still have the open communication they want but will give it a little bit of structure.
Gelles, D. (2015). At Zappos, Pushing Shoes and a Vision. Retrieved September 23, 2016, from http://www.nytimes.com/2015/07/19/business/at-zappos-selling-shoes-and-a-vision.html.
How a Radical Shift Left Zappos Reeling. (n.d.). Retrieved September 23, 2016, from http://fortune.com/zappos-tony-hsieh-holacracy.
How It Works. (n.d.). Retrieved September 23, 2016, from http://www.holacracy.org/how-it-works.