Posted: April 12th, 2015

case study

case study

Please read the Zappo case first. And then please address all the following questions listed in the files in the case study paper. The questions are(I also upload the questions in the word file):

1) What signals does Zappo’s send to its prospective employees and new hires to help socialize them into the organizational culture? How are newly hired workers socialized so they will learn the norms and values that Zappo’s wants workers to internalize?

2) Look at exhibit 7, listing the 10 organizational values. Pick 3 that you think are demonstrated in the case as “living values” (rather than just words on paper). What symbols and artifacts are used to remind employees of those values? Are there any espoused values that you don’t think are practiced? How would you know? Living vs. espoused values.

3) The work environments in customer service and in order fulfillment are quite different. How would you compare and contrast those two subcultures? Focusing on the 3 values, how are they represented differently at the two locations?

4) What surface symbols and artifacts are used in each of the two work environments? Are there different values at the forefront in the two work environments?

Zappos.com 2009: Clothing, Customer Service, and
Company Culture

On July 17, 2009, Zappos.com-a privately held online retailer of shoes, clothing, handbags, and
accessories-learned that Amazon.com, Inc.-a $19 billion multinational online retailer of books,
electronics, toys, and other merchandise-had won its board of directors’ approval to offer to merge
the two companies. (See Exhibits 1, 2, 3, and 4 for selected financials for both companies.)

Amazon had been courting Zappos since 2005, hoping a merger would enable Amazon to expand
and strengthen its market share in soft-line retail categories such as shoes and apparel-categories
the company considered strategically important to its business growth.1 While Amazon’s interest
intrigued Zappos’ CEO, Tony Hsieh, and chairman, COo, and CFO, Alfred Lin, the two senior
executives had not felt the time was right until now. Amazon’s offer-10 million shares of stock
(valued at $807 million),a $40 million in cash and restricted stock units for Zappos’ employees, and a
promise that Zappos could operate as an independent subsidiary-was on the table. Zappos’
financial adviser, Morgan Stanley, estimated the future equity value of an initial public offering to be
between $650 million and $905 million; this estimate skewed the Amazon offer-at least in financial
terms-toward the high end of Zappos’ estimated market value. (See Exhibit 5 for market values of
comparable online and footwear retailers.) Hsieh and Lin knew that much of Zappos’ growth, and
hence its value, had been due to the company’s strong culture and obsessive emphasis on customer
service. In 2009, they were focusing on their three Cs-clothing, customer service, and company
culture- the keys to the company’s continued growth. Hsieh and Lin had only a few days to consider
whether to recommend the merger to Zappos’ board at their July 21 meeting.

Zappos and the Rise of Online Footwear Retailing

In late 1998, Nick Swinmurn, a 26-year-old marketing manager for an online car-buying service,
went to a San Francisco-area shopping mall to purchase a pair of Airwalk shoes but could not find
any in the color, style, and size he wanted. Swinmurn turned to the Internet but was frustrated by the
a Stock value based on the average closing price of Amazon shares for the 45 trading days ending Iuly 17, 2009.

Professors Frances X. Frei and Robin ]. Ely and Senior Researcher Laura Winig, Global Research Group, prepared this case. HBS cases are
developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of
effective or ineffective management.

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