Strategic Lens

Strategic Lens Amazon:

Grouping:

With a mission “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices,” . There are three things that can be inferred form Amazon’s mission statement, one is their extremely consumer centric business strategy, secondly to strive to enter into new markets and thirdly to achieve it through the least amount of resources. However there are two more aspects to Amazon’s strategy, which are absent from the mission statement – focus on Innovation and Operational excellence.

The Strategic Grouping at Amazon is by Expertise/Function. There are seven major business groups under their CEO
According to the theory, more communication requires more coordination; hence they are more cost and time consuming. It is interesting to see how this has been percolated down the management hierarchy into different linking mechanism in the organization:

1.) S Team: Is a senior leadership team, which sits in to discuss high impact problems at Amazon. These rare cases are discussed in meetings where the team comprising of senior leadership from different functions coordinate and provide accountability to the issues at hand.
2.) Informational technology Systems/ Application Programming Interface: Amazon employs its IT system as a part of its strategic linking in the most interesting ways. They expose their data and functionality though this. Different functions are only allowed to communicate with each other through this interface. The problem with this kind of information sharing can be seen when besides information flow, support is required among teams/groups. Groups feel that once the information is shared their responsibility is over. Besides this not much importance is given to how this information may be used in the most efficient way by the unit that needs
Their responsibility is to make sure that the business and technical parts of the team are in tandem with each other and most importantly are focusing on what the client needs. They coordinate the two sides of the team and make sure tasks are completed in consensus in preset amount of time and resources.

Strategic Alignment:

Organizational Performance Management: The 14 management principles at Amazon are the backbone of organizational performance management. They are general guidelines adopted for hiring, performance measurement and promotions. Work rating is provided through personal feedback, peer review and manager review. Peer review is given the most importance, as at Amazon teamwork is essential. Employee’s impact on the team is one of the leading criteria.

Fitness Function: At Amazon each “pizza team” is asked to represent it performance through a fitness function. The team assigns a business metric, which acts as a standard for performance. This function has to be approved by the S-Team who makes sure it is in alignment with the organizational strategy. So teams are made to given their own criteria for performance