Studies in Organizational Culture- Groupon Inc.

Pages: 17 (6763 words) Published: June 22, 2013
Studies in Organizational Culture- Groupon Inc.
“Groupon! Get your Groupon! Hot off the presses!” It wasn’t too long ago Groupon Inc. was the darling of Wall Street. Institutional and individual investors alike were anxiously anticipating an opportunity to buy shares of the company dubbed by Fast Company as “the most exciting thing to happen to retail since eBay.” That excitement was mirrored on November 4, 2011, Groupon’s first day of trading on the New York Stock Exchange, as the price sky-rocketed to a high of $31.14 compared to its initial $20.00 IPO valuation. However, that unbridled enthusiasm has dwindled since as the stock has plummeted to an all-time low of $3.83 as of Friday November 2, 2012 (Yahoo! Finance 2012). Let’s take a look at the history of Groupon Inc. and how has gotten to this point.

Andrew Mason didn’t always know that he would become a CEO of a company that in 2010 was referenced by the Wall Street journal to be on pace to “make $1 billion in sales faster than any other business, ever (Weiss 2010).” In fact, up until about age 25, Mason truly believed he was going to be a rock star (Steiner 2010). Unfortunately, as countless others have realized along the way, chasing your dreams doesn’t always pay your bills. Out of necessity, Mason took a job as a computer programmer and eventually recognized that he had a tremendous talent for it. In 2006, he enrolled in public policy classes at the University of Chicago and ultimately fused his passion for public policy with his tremendous computer programming ability to experiment in the world of internet startups. (Saporito 2011).

The idea behind Groupon eventually spawned from the agonizing frustration Mason endured while dealing with a common problem that many people have undoubtedly experienced at one time or another- getting out of a contract. In this particular situation, Mason was dealing with the nightmare of canceling his cell phone contract (Froelke Coburn 2010). Not only was this process time consuming but it was also emotionally draining because of the multiple transfers from department to department and continuous explanation of why the contract was being canceled. Mason felt that surely he wasn’t the only person “jumping through hoops” just to fix a problem that should be relatively easy to solve (Froelke Coburn 2010). There must have been a more efficient way to solve these types of problems… and there was. Mason however didn’t want his mission to simply stop at contract disputes. At the time, public unrest was growing due to the swelling U.S. debt from funding the never-ending Iraq war and escalating health care costs. While millions of people shared the same concerns about their bleak future, they were largely unheard because they did not have a unified voice. In an attempt to solve these problems Mason created a website called ThePoint.com (Steiner 2010). The purpose of The Point was “for people to come together over problems they can’t solve alone—an ‘I’ll do something but only if I can get 150 other people to join me’ kind of thing (Froelke Coburn 2010).” Essentially, only after a “tipping point” had been reached through the accumulation of electronic signatures would action be taken. Little did he know at the time that this decision would lead to the creation of a company that specializes in something called “social commerce,” which would revolutionize the manner in which people buy and sell products and services (Anderson). All it took was for Mason to realize that shopping was more profitable than social action.

Everyone loves a great deal. Why pay more for something if you don’t have to? This frugal mentality has become even more pronounced in the last few years as economic turmoil has resulted in unemployment levels near 7.9% (Instant View 2012). Despite the fact that consumers are more cognizant of the need to save, they refuse to lower their standard of living that they had grown accustomed to before the recession. People...
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