Introduction
Amazon is an online retail company that sells different types of products online. The company handles everything from the storage, delivery, payment, and advertising of its products. Amazon considers that its biggest assets are customers.
The company has experienced multiple challenges in the past, such as low profit margins and complaints from its employees due to a poor working environment. There have also been issues with the delivery of products and customer satisfaction.
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The implementation of a continuous quality improvement (CQI) should enable Amazon to improve its services.
Thesis Statement: Amazon should engage in a CQI to create a better working environment for its employees, create a good brand image, improve customer satisfaction, and restructure its business operations to boost profits.
Definition of Continuous Quality Improvement (CQI)
Continuous quality improvement is a quality management philosophy that encourages employees, team members, management, and the leadership to continuously ask what they can do better (“Continuous Quality Improvement”).
The focus of CQI is on internal and external customer satisfaction and improving various problems caused by processes.
A CQI program is implemented in an organization to ensure that all stakeholders, team members, employees, and managers feel empowered to constantly improve their results and efforts.
The principles that should be applied to the CQI include analyzing the system and its processes, using statistical analysis to define and detail strengths and problems, engaging cross-functional teams among employees, and fulfilling the requirements of customers. The CQI approach strives to focus on improving its business processes to improve the quality of services.
Amazon’s Current Structure
Amazon’s revenues for the year 2019 were $281 billion.
The operating cash flow was $39 billion (“Amazon Annual Report”, 2020).
Amazon has a dominant position in the e-commerce market with a market share of 37% in 2019. However, it has a small share of 4% in the United States retail market.
Amazon’s revenues come from the following primary sources, online stores that contribute to 50% of its revenues, third-party seller services contribute to 19% of the revenue, and Amazon Web Services (AWS).
The 2019 Annual Report of Amazon revealed that the company has a relatively low profit margin.
One of the reasons for the low profit margin is that the company invests a lot of its earnings back to the company to improve its infrastructure. Additionally, Amazon heavily relies on third-party sellers that significantly reduce the company’s profits. 19% of the company’s revenues come from third-party sellers that sell 60% of all the company’s goods.
Program Goals
To improve the design, manufacturing, and supply process . The aim of improving the process is to improve the service delivery to its customers.
To improve the company’s work environment and working conditions . There have been complaints about the working conditions of the employees that have ruined the company’s brand image. Improving the working conditions will improve the company’s brand image.
To increase market share in the retail industry . Amazon can focus on improving its market share in both online and physical store retail.
To improve its profit margin by increasing its product offerings . Amazon should strive to reduce the percentage of products sold by third-party sellers by focusing on increasing its product offerings.
To improve efficiency and effectiveness of its employees. Amazon should ensure that employees can improve their overall performance.
Goals Measurement
Customer feedback. Amazon should implement a customer feedback program on a semi-annual basis. The average level of customer satisfaction should reveal whether the company has improved its service delivery and the level of
Employee feedback. The company should implement an employee feedback program conducted on a semi-annual basis. The feedback should be used to create a score based on the employee’s perceptions of their working conditions.
Research initiatives. Amazon should analyze its brand image by considering comments from the general public and its clients.
Performance appraisal . The performance appraisal system should be implemented to determine whether there is an improvement in the effectiveness and efficiency of the employees.
Financial statement analysis . The analysis of the company’s financial statements should provide information regarding its profit margin, revenues, and market share. A comparison should be made between the previous years to show a pattern of the company’s growth.
Program Implementation
Vision, mission, and objectives. The mission, vision, goals, and objectives should be laid out clearly.
Communication. The CQI program will be communicated to the management team and the employees through a clear presentation. They will be given a chance to provide opinions regarding the different strategies.
Program discussion. Time will be allocated for the employees and management to discuss various issues in the CQI. They can engage in formal or informal dialogues regarding the program, such as its purpose, goals, mission, and expected benefits.
Listening. The company should then listen to the needs and concerns of its employees. Engaging in an open dialogue with all the employees will encourage transparent leadership (“4 Steps Continuous Improvement”, n.d.).
Addressing any concerns. Undertaking an active approach to address the concerns should boost the employee’s participation in the activities.
Gradual implementation. The program will be implemented in a gradual and step-by-step process. Employees will be required to undertake the necessary training to help them adapt to the required changes.
Reviewing. A constant review of the program should be undertaken, and necessary changes implemented to keep the employees motivated.
Company Structuring
Certain parts of the company’s structure will remain through the company’s organization of different departments. Every department has specific roles and responsibilities.
The focus of the company’s structure in every department should be on creating a network of teams. A team-based approach is different from a hierarchical structure. The organization will benefit from the approach as members of a team have shared values and cultures and are transparent in their goals and projects (Bersin, 2016), leading to an improvement in their overall performance.
Employees “Buy-in”
Monetary rewards . The company can make use of rewards for employees that go to lengths to ensure that the program is successful.
Employee promotions . The use of employee promotions for employees that successfully implement the CQI and improve their performance.
Provide autonomy, purpose, and master. The focus on implementing the different parameters can boost employee motivation. Employees will be highly motivated when they engage in meaningful work that has a strong purpose (“4 Steps Continuous Improvement”, n.d.).
Role of Leadership/Management
The organization leadership should strive to lead by example. Everyone should be involved in the vision of the CQI, especially the leadership and management team (“Changing Organizational Culture on a Large Scale”, 2021). Having department managers embrace the program ensures that they can influence the employees positively.
They can handle various aspects of the program, such as decision-making, handling of conflicts, and communicating the progress of the program.
Amazon makes use of various leadership principles that will be critical for the success of the program. The specific leadership principles that should facilitate the continuous quality improvement program include: invent and simplify, learn and be curious, insist on the highest standards, deliver results, and dive deep (“Leadership Principles”, n.d.).
The leadership should continuously ask multiple questions regarding the best approach to do the task, something that they need to be doing, and something that they should not be doing (Healthfield, 2020).
Implications for Organizational Culture
Organizational culture is a deep and complex aspect of the organization. It can be defined as the values and norms held by the organization (Champoux, 2010).
The CQI may require a change in the organization’s culture,
The result is that it could lead to resistance from employees.
Lewin’s Change Model of unfreezing, moving, and refreezing can be applied to manage the change (Hussain et al., 2018). Unfreezing involves raising awareness of the change, moving involves decreasing forces that negatively affect the change, and refreezing by creating a new equilibrium to the system.
Conclusion
Amazon should engage in a CQI to create a better working environment for its employees, create a good brand image, improve customer satisfaction, and restructure its business operations to boost profits.
The recommendation for implementing the program is that it should be done through a step-by-step approach.
The overall outcome of the CQI is that Amazon will improve its services.
References
Amazon Annual Report. (2020). Amazon. https://s2.q4cdn.com/299287126/files/doc_financials/2020/ar/2019-Annual-Report.pdf
4 Steps Continuous Improvement. (n.d). Celplax. http://www.celpax.com/4-steps-continuous-improvement/
Bersin, J. (2016). New research shows why focus on teams, not just leaders, is key to business performance. Forbes . https://www.forbes.com/sites/joshbersin/2016/03/03/why-a-focus-on-teams-not-just-leaders-is-the-secret-to-business-performance/?sh=56e4d73424d5
Champoux, J. E. (2010). Organizational behavior: Integrating individuals, groups, and organizations . Routledge.
Changing organizational culture on a large scale. (2021). Ariel Group. https://www.arielgroup.com/changing-organizational-culture-on-a-large-scale/
Continuous quality improvement (n.d.). Smart Sheet https://www.smartsheet.com/continuous-quality-improvement
Heathfield, M. S. (2020). How do leaders inspire continuous improvement by employees? The Balance Careers. https://www.thebalancecareers.com/how-to-inspire-continuous-improvement-at-work-4582913
Hussain, S. T., Lei, S., Akram, T., Haider, M. J., Hussain, S. H., & Ali, M. (2018). Kurt Lewin's change model: A critical review of the role of leadership and employee involvement in organizational change. Journal of Innovation & Knowledge , 3 (3), 123-127. https://doi.org/10.1016/j.jik.2016.07.002
Leadership principles. (n.d.). About Amazon. https://www.aboutamazon.com/about-us/leadership-principles .
