George 2008 Open Case Chap 1 A

George 2008 Open Case Chap 1 Amazon
CASE STUDY 1: CHAPTER 3
VALUES, ATTITUDES, AND MOODS AND EMOTIONS: pp 102 – 103
“Here’s an Idea: Let Everyone have Ideas,”
Rite-Solutions
James R. Lavoie and Joseph M. Marino
* Co-founder of Rite-Solutions
* A software company that built advanced, Highly classified (command-and-control systems for the Navy.
They Focus on
* An internal market where any employee can propose that the company acquire a new technology
* Enter a new business
* Make an efficiently improvement. The proposals
* Become stocks,
* complete with ticker symbols,
* discussion lists and e-mail alerts Employees (marketers, accountants, and even receptionist)
* buy or sell the stocks
* And prices change to reflect the sentiments of the company’s engineers, computer scientists and project managers. Mr. Lavoie, the chief executive said
* “We’re the founders, but we’re far from the smartest people here,”
* ” At most companies, especially technology companies, the most brilliant insight tend to come from people other than senior management.”
* “So we created a marketplace to harvest collective genius.” Mr. Lavoie
* 59 years old
* A Vietnam War veteran
* An accomplished engineer who are devoted his career to million-oriented technologies.
* A successful C.F.O with decades of experience in his field. At Rite-Solutions,
* The Architecture of participation is both businesslike and playful.
* Fifty-five stocks are listed on the company’s internal market, which is called Mutual Fun,
* Each stock comes with a detailed description (called an expect-us, as opposed to the prospectus)
* Begin trading at a price of $10.
* Every employee gets $10,000 in “opinion money” to allocate among the offerings.
* And employees signal their enthusiasm by investing in a stock, and volunteering to work on project
* Volunteers share in the proceeds, in the form of real money, if the stock becomes a product or delivers savings.
Mr. Marino
* 57 years old
* President of Rite-Solutions
* Market began in January 2005, has already paid big dividends.
* One of the earliest stocks was a proposal to apply three-dimensional visualization technology.
* Akin to video game, help sailors and domestic security personnel practice making decisions in emergency situations.
* “Not a joystick jockey” but support among employees was overwhelming.
* Product line, called Rite-View, accounts for 30% of total sales.
Mr. Lavoie added,
* Another virtue of the stock market is that it finds good idea from unlikely sources.
* Among Rite-Solutions’ core technologies are pattern recognition algorithms used in military applications, as well as for electronic gambling systems at casinos, a big market for company.
* A member of the administrative staff, with no technical expertise, through that this technology might also be used in educational settings, to create an entertaining way for students to learn history or math.
Started a Stock
* Called Win/Play/Learn (WPL)
* Attracted a rush of investment from engineers eager to turn her idea into a product.
* Their enthusiasm led to meetings with Harbro, and Rite-Solutions won a contract to help it build its VuGo multimedia system, introduced last Christmas.
Mr. Lavoie called
* This innovation an example of the “quiet genius” that goes untapped inside most organizations.
* ” We would have never connected these dots'”
* “But one employees floated an idea, lots of employees go passionate about it and that led to a new line of business.
Rite-Solutions, for example
* One of the most valuable stocks on Mutual Fun us the stock market itself (STK)
* So many executives from other companies have asked to study the system that a team championed the idea of licensing it as the product
* Another unexpected opportunity.
Said Mr. Marino
* “They is nothing wrong with experiences.”
* “The problem is when experiences gets in the way of innovation.
* “The only thing we know is that we don’t know all the answer.” O’REILLY MEDIA Tim O’Reilly
* Co-founder and chief Executive
* The computer book publisher
* An evangelist for open source technologies, creativity is not longer about which companies have the most visionary executives, but who has the most compelling “architecture of participation”
* That is, which companies make it easy, interesting and rewarding for a wide range of contributors to offer ideas, solve problems and improve products?
INNOCENTIVE InnoCentive
* Based in Andover, Mass.,
* A virtual research and development lab
* Literally a marketplace of ideas.
* Has signed up more than 30 blue-chip companies, including Procter & Gamble, Boeing, and DuPont.
* Research labs are groaning under the weight of unsolved problem and unfinished projects.
* It also signed up more than 90,000 biologists, chemists, and other professionals from more than 175 countries.
* These “solvers” compete to meet thorny technical challenges posted by “seekers” companies.
* Each challenge has detailed scientific description, a deadline and an award, which can run as high as $100,000.
* Attract innovations from people who are prepare to work with the company even if they don’t work for it.
Alpheus Bingham
* President and Chief Executive.
* “We are talking about democratization of science.”
* “What happen when you open our company to thousands and thousands of minds, each of them with a totally different set at life experiences?” InnoCentive
* Overview:
Jeff Bezos has found a way to create a set of organizational behaviors that leads to a cooperative, win-win situation for the company and its employees.
Amazon.com’s employees work hard, are happy working for their company, and are less inclined to leave their jobs than employees in many other kinds of retail companies.
This favorable work situation has been created because Amazon.com:
Strives to increase employees’ skills and knowledge and encourages them to take responsibility and to work in ways that lead to fast, helpful customer service.
Provides employees with rewards to encourage high performance and makes sure that employees’ contributions are recognized.
Creates a work setting in which employees develop a longer-term commitment to their organization and are willing to cooperate and work hard to further their company’s goals.
As Amazon.com’s approach suggests, creating a favorable work situation in which people at all levels want to behave in ways that result in customers’ receiving a high-quality product does not happen by chance.
It is the result of careful planning and a solid understanding and appreciation of how people behave in organizations and what kinds of things cause them to behave the way they do.

OPENING CASE: CHAPTER 1
HOW JEFF BEZOS MANAGES AT AMAZON.COM: pp 2 – 3
In 1994, Jeffrey Bezos, a computer science and electrical engineering graduate from Princeton University, was growing weary of working for a Wall Street investment bank.
His computer science background led him to see an entrepreneurial opportunity in the fact that Internet usage was growing at an accelerating pace.
Bezos decided that the online book-selling market offered an opportunity for him to take advantage of his technical skills in the growing virtual marketplace.
Determined to make a break, he packed up his belongings and drove to the West Coast, deciding while on route that Seattle Washington — a new Mecca for high-tech software developers, and the hometown of Starbucks’s coffee shops — would be an ideal place to begin his venture.
Bezo’s plan was to develop an online bookstore that would be customer friendly, easy to navigate, and offer the broadest possible selection of books at lower prices.
Bezos realized that, compared to a real “bricks and mortar” bookstore, an online bookstore could offer customers any book in print; his task was to provide online customers with an easy way to search for and learn about any book in print.
Working with a handful of employees and operating from his garage in Seattle, Bezos launched his venture online in July 1995 with $7 million in borrowed capital.
Within weeks he was forced to relocate to new, larger premises and hire additional employees, as book sales soared.
The problem facing him now was how to best motivate and coordinate his employees to best meet his new company’s goals.
His solution was to organize employees into small groups and teams based upon the work tasks they needed to perform in order to satisfy his customers.
First, Bezos created the information technology (IT) team to continue to develop and improves the proprietary software that he had initially developed.
Then he formed the operations group to handle the day-to-day implementation of these systems and to manage the interface between the customer and the organization.
Third, he created the materials management/logistics group to devise the most cost-efficient ways to obtain books from book publishers and distributors and then to ship them quickly to customers.
As Amazon.com grew, these groups have helped it to expand into providing many other kinds of products for its customers such as CDs, electronics, and gifts.
By 2006, Amazon.com had 24 different storefronts, with operations in eight countries, and it sold its products to customers around the globe.
To ensure that Amazon.com strived to meet its goals of providing books quickly with excellent customer service, Bezos paid attention to the way he motivated and controlled his employees.
Realizing that providing good customer service is the most vital link between customers and a company, he decentralized authority and empowered employees to search for ways to better meet customer needs.
Also, from the beginning, Bezos socialized his employees into his company by encouraging them to adopt his values of excellent customer service; he also established strong norms about how employees’ first task is to satisfy customers.
All Amazon.com employees are carefully selected and recruited; they are then socialized by the members of their work groups so that they quickly learn how to provide excellent customer service.
Also, to ensure his employees are motivated to provide excellent service, Bezos gives all employees stock in the company — today employees own over 10% of Amazon.com’s stock.
Finally, as a leader, Bezos is a hands-on manager who works closely with employees to find innovative, cost-saving solutions to problems.
Moreover, Bezos acts as a figurehead, and he behaves in a way that personifies Amazon’s desire to increase the well-being of employees and customers.
Indeed, he spends a great deal of his time flying around the world to publicize his company and its activities and he has succeeded because Amazon.com is one of the most well-recognized of any dot.com company.
At Amazon.com, Jeff Bezos behaves in ways that help to improve employees’ work attitudes and increase their performance, which improves the well-being of employees, customers, and his company.
Overview:
Jeff Bezos has found a way to create a set of organizational behaviors that leads to a cooperative, win-win situation for the company and its employees.
Amazon.com’s employees work hard, are happy working for their company, and are less inclined to leave their jobs than employees in many other kinds of retail companies.
This favorable work situation has been created because Amazon.com:
1 Strives to increase employees’ skills and knowledge and encourages them to take responsibility and to work in ways that lead to fast, helpful customer service.
2 Provides employees with rewards to encourage high performance and makes sure that employees’ contributions are recognized.
3 Creates a work setting in which employees develop a longer-term commitment to their organization and are willing to cooperate and work hard to further their company’s goals.
As Amazon.com’s approach suggests, creating a favorable work situation in which people at all levels want to behave in ways that result in customers’ receiving a high-quality product does not happen by chance.
It is the result of careful planning and a solid understanding and appreciation of how people behave in organizations and what kinds of things cause them to behave the way they do.