Organizational Behavior - Zappos 2009

Zappos.com is an U.S. based online footwear retailer that began selling shoes in 1999, a time when there were few online footwear-only retailers. After nearly 10 years, the company has grown nationwide to an online superstore, with sales of over US$1 billion in 20081. Besides their unconventional growth strategy, they claim that their commitment to superior customer service as well as their positive corporate culture is what made them a successful company. For instance, Zappos.com offers several customer-friendly services, such as toll-free call center with actual representatives that are available 24/7, free shipping, and a generous return policy, which have been getting customer’s attention since its foundation. In addition, their money is reinvested mostly into improving customer service rather than spending on traditional marketing. Furthermore, most of Zappos’ customer base was acquired thorough the word of mouth marketing, and its employees, who provided customers with a superior service, where responsible for creating a positive buzz about the company.

Zappos’ culture is characterized primarily by its corporate shared values which are values that, employees at all levels within the organization, truly rely on to guide their decisions and actions. In fact, the company’s 10 core values enable each and every employee to play an important role in building and supporting their organizational culture consciously, thus creating a positive relationship between the company and its customers. For example, Zappos’ CEO, Tony Hsieh, mentioned a research that found that “people were happier and more engaged in their work if they made friends on the job.”2 Consequently, Zappos’ core value 7, was developed to build a positive team and family spirit, where “managers were encouraged to spend 10% to 20% of their time socializing with team members outside of work.”3 In addition, Zappos’ inclusive culture empowers employees continuously through a positive organizational environment that motivates them to perform well. Perhaps, Zappos’ employees enjoy free lunch and no-charge vending, which alone saves them a lot of money and makes a difference down the road. Moreover, the company is service-centered and customer oriented, collaborating with and learning from customers, which makes their customers service experience one of its kinds.

Services such as free shipping and free returns are easy for competitors to copy. On the contrary, Zappos’ innovative service-focused culture, serves as its major competitive advantage, and it’s difficult for competitors to imitate. Likewise, Zappos’ corporate culture is so unique and strong, and supported by such an amazing positive environment, that makes employees want to do things well because they matter, and because it’s part of something important within the organization in which they belong. In contrast, many rivals make use of a pay-for-performance system, which not always