Running head: ZAPPOS AND HOLACRACY1Zappos and HolacracyCorrespondence concerning this article should be addressed to E-Mail:
Running head: ZAPPOS AND HOLACRACY2Zappos Shoes; ever heard of them? I haven’t. Not till I was assigned to examine the decision of CEO Tony Hsieh to change the company’s organizational structure to Holacracy. Changing the organizational structure? They are an online shoe store that specializes in shoes. And what in the world is Holacracy? Is Tony’s decision to see Zappos Shoes restructured using Holacracy a good decision or not?First let’s talk about organizational structure. The way companies are formed, ran, and structured have changed over the years due to factors such as innovation, social and cultural changes, the economy, successes, and failures. The infrastructure which supports a company andgoverns its employees is its organizational structure. Organizational structure is the floor plan that consists of work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization.Some examples of organizational structures are hierarchical, matrix, flat, and Holacracy. “A hierarchical organization follows the layout of a pyramid. Every employee in the organization, except one, usually the CEO, is subordinate to someone else within the organization.” [Col] It is a structure with numerous levels. This structure has a clearly established chain of command and opportunities for promotion are a couple of its advantages, while ineffective communication and increased bureaucracy are its disadvantages. “A flat organization refers to an organization structure with few or no levels of management between management and staff level employees.”[Col]It emphasizes less supervision for employees and promotes their participation in decision-making. Fewer levels of management and better communication are a couple of its advantages, while lack of a specific supervisor to report to and unclear job functions are its disadvantages. “A matrix organization structure is usually defined as one where there are multiple reporting lines – that is, people have more than one formal boss.” [Gol14] It is a structure with a lot of moving parts.
Running head: ZAPPOS AND HOLACRACY3Having effective lines of communication and the ability to share information and assets across the board are a couple of its advantages, while determining which supervisor to listen to and being that it is expensive to maintain are its disadvantages.
- Spring '14