Red Bull: Corporate Motivation and Culture

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Red Bull
Corporate Motivation and Culture

Table of Contents
Summary…………………………………………………………………………Page 2
Motivation……………………………………………………………….……….Page 3 Culture………………………………………………………………...…………Page 7
Conclusion…………………………...…………………………………….…….Page 11
References………………………………………………………………….……Page 12 Evaluation Sheet……………………………………………………………...…Page 16     

Summary: Red Bull, the producer of the number one energy drink in the world was founded in 1984 by Dietrich Mateschitz in Austria. Since 1987, Red Bull has sold more than 30 billion cans, 4.6 billion alone in 2011. Red Bull’s headquarters are based in Austria but the product is now available in 164 countries. They are not only an energy drink producer, but also own a variety of sports teams, their own music label and run many high profile advertising events. Currently Red Bull employs more than 8,294 people worldwide. Some of the company objectives include: * Expand the products presence among the maturing target market. * Maintain and increase market share within a highly competitive market. * Maintain excellent marketing.

Red bull is well known for their very unique advertising strategies that include high profile events. Most recently ‘Red Bull Stratos’ where Felix Baumgartner broke five world records including highest free fall jump and fastest speed in a free fall (Guinness World Records, 2012). Events like these are representative of the internal company culture as well. We will display in this report how Red Bull takes a unique approach to company culture as well as some of their motivation practices.

Motivation
Motivation is the extent to which persistent effort is directed toward a goal. This is important because motivation is directly related to employee performance. Motivation can differ at an individual level. To be able to have a successful organization you need to be able to keep employees engaged so the organization can meet its own goals. Red Bull is successfully able to motivate its employees both extrinsically and intrinsically. Red bull uses extrinsic motivation, or the ability to motivate through external factors by effective employee compensation systems. Salaries of employees at Red Bull are very competitive and for some positions are higher than the average compensation . A Field Marketing Manager at Red Bull earns an average of $70k per year including bonuses which is above market value therefore giving the employee the incentive to perform well (Glassdoor, 2012). Sales managers at Red Bull are also paid in part through commision, in this way Red Bull uses Expectancy Theory which is “a process theory that states motivation is determined by the outcomes that people expect to occur as a result of their actions of the job” (Saks, J & Johns, Gary 2011) to motivate employees. This theory works well when the company is booming, when effort and performance yield a positive expected outcome, in the form of wages. However, in times of recession employees will see a reduction in outcomes for the same amount of effort, and an equivocal reduction in wages. Red Bull has shown both positive and negative forms of extrinsic motivation. In the first case Red Bull’s newly established Formula One race team won the 2010 World Championships. In response to the win, Red Bull owner Dietrich Mateschitz rewarded all 500 plus employees of the Red Bull formula one team with a 10K GBP (roughly 15K CAD) bonus (Joseph, 2010). This relates to Expectancy Theory and proper use of Goal Setting Theory. The employees are rewarded for their high performance immediately following a strong positive outcome. This helps to make the instrumentality of increased pay very high, as a result of high performance. If the individual employee has any value for increased pay this should drastically raise the valence of high performance. This applies to the Goal Setting Theory of motivation because it fits...
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