Contemporary Issues in Management

Subject: Management
Pages: 9
Words: 2470
Reading time:
10 min
Study level: Bachelor

Introduction

Modern companies and organizations face challenges and problems constantly throughout their existence and have to deal with obstacles that have never appeared before. In the era of capitalism and consumerism, corporations as fast as never make great profits and expand their sphere of influence all over the world. Quantity of the products started to dominate the quality, and the organizations are aiming to produce more goods in shorter periods of time. However, it has its consequences, predominantly negative, that create challenges for the corporations. Amazon is an excellent example of such a company due to its hugeness and the enormous amount of goods and services it provides. There are plenty of issues starting with unethical labor to unfair competition. Some of the problems appear naturally because of the fast progress, but in a matter of time, the management deals with them in the end.

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However, some of the issues are the outcome of the conscious and weighted decision-making process of the company with a purpose to increase the financial turnover and avoid additional costs. Consequently, Amazon neglected the well-being of the employees who regularly overwork and got involved in the manipulation of the data for dishonest rivalry. Thus, the two issues discussed in the paper are connected with precarity in the workplace and corporate political activities. Through the issues, the paper aims to identify the reasons behind them, how to prevent the company from those challenges and what measures to take to deal with them eventually.

Unethical Working Conditions for Warehouse Workers

Although Amazon is a well-known worldwide company with a particular reputation as one of the biggest online shopping platforms, it still managed not to provide decent work conditions for employees. People love Amazon and usually prefer it over other online retailers because of low prices, quick shipping, and the wide variety of assortment. Specifically, during holiday seasons, the corporations make special offers to the customers by providing them with discounts and advantages.

However, all the sales and the shipping speed have their cost, and most of the time, the employees are the ones who handle the loads. Sainato (2020) claims that warehouse employees regularly overwork while trying to form and pack all the orders so everything would be delivered to the customers in time. In addition, they are barely getting extra paid or get a significant financial bonus from the company as a reward for their hard work. Another factor worth mentioning is the buildings themselves where the warehouses are located. Some of them are in dangerous conditions that threaten the health and well-being of the workers. The management prefers to keep it the way it is without actually trying to solve the issue and provide the people with safe working conditions.

Amazon’s policy does not imply the fact that people are a valuable resource that matters to the company. In fact, the corporation, after a couple of years, encourages their workers to leave the job and offers them bonuses if they quit. The reason for this is that it becomes hard over time to keep an interest in people who perform monotonous and routine jobs. Thus, the company decided it would be much more effective and money-saving to stop raising salaries and suggest employees leave, replacing them with new and motivated trainees. Consequently, as Forbes (2021) states, the turnover is extremely high compared to some prominent organizations, and it consists of 150% of workers. The policy of close observation of the people increased the fear and anxiety among the workers in the warehouses. Newton (2021) claims that because the management watches and controls every step of the person, the lack of freedom creates tension in the workplace and results in poor performance. The fact that sometimes employees learn about the change in the schedule right at the last moment makes it even worse. Working conditions are becoming more stressful, and it is a tough challenge for workers to deal with them on a regular basis.

When the dissatisfaction with the company reached its peak, the employees began protesting against Amazon. Sainato (2020) reports that in 2019 over a million employees decided to speak about the unfair pay and the inhuman working conditions and even tried to organize the union. Nevertheless, their attempt to create the work union failed not without the action from the company that did not want the movement to grow even further. As a response to the protests and complaints, the company has created an initiative WorkingWell, as Palmer (2021) states. This project aims to support employees’ mental and physical health since, according to Euchner (2020, p.10), Amazon strives to be a healthcare assistant for its employees.

There are special body training and virtual space that the workers can access during the shift and get help in case they need it. Since, according to BBC News (2021), workers usually get bodily trauma due to the specific type of excessive physical work, the initiative is supposed to prevent and eliminate them. The program is based on scientific knowledge and research, so the nutrition and physical activity suggestions are credible. Another part of the program called AmaZen, as Gault (2021) claims, focuses on the phycological state of employees and provides them with mental exercises and practices to relieve stress and improve concentration. However, as Agnihotri and Bhattacharya (2022, p. 1) state, many workers claim that they have very short bathroom breaks, and too often, they have no time for it.

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Therefore, employees perceive the program as somewhat skeptical because due to the existing working condition, they feel like it is impossible to use the opportunity and count on its effectiveness. Moreover, when the WorkingWell was released, it accelerated even more anger and aggression from employees who considered this decision a weak attempt to compensate for the tremendous damage that has been done. Media also did not react positively to the actions that the management of Amazon has taken to improve the situation and solve the problem.

Although the description of the new program and the benefits it promises look inspiring and might feel like the right move toward changes, the reality is far from it. AmaZen, as Ghaffary, S. and Del Rey (2020) suggest, implies the installations of the human-size cabins in the warehouse with the computers inside that show meditative video and have a fan inside of it for fresh air. Vice (2021) criticizes the policies of Amazon and states that it is not enough at all to improve the well-being of workers who overwork and get paid relatively low compared to the amount of work that they perform. When people are so busy and stressed with the work conditions that they have no time to satisfy their biological needs, a cabin with relaxing videos and a fan can hardly fix the situation.

Therefore, due to the massive success of the company and the enormous number of regular orders from the website, workers of the warehouses experienced tough times during the quick rise of Amazon’s success. While the management is showing outstanding results in generating and increasing the profit, at the same time, the human resource department demonstrates a poor performance in their field. In an attempt to widen and strengthen the market position, Amazon did not manage to take care of those who directly contributed to the working process and make it possible to keep the standards high. Although the corporation made the first steps towards the improvement after the massive criticism from the publicity, those attempts were unsuccessful. Taken measures are relatively small compensation for the damage that has been done. In order to create better working conditions for the warehouse workers, the management should make changes in the system itself.

Antitrust Violations

Another recently appeared issue in the company is connected with unfair competition and violation of the policies. Although Amazon is one of the biggest corporations in the US with a huge success despite all the failures and controversies, it still bothered with the possible or existing competitors. The company works both as an independent retailer and the electronic space for businesses and regular people to sell their items. Amazon now is suspected of taking benefits from its position as a platform that provides the population with goods from numerous sellers. Kelly (2021) claims they are convicted of searching through the brands’ data to evaluate the positions of specific organizations in the market and get a competitive advantage. Also, Amazon was studying the products the companies were producing that gained a certain success and popularity to eventually create similar production under the name of Amazon. Although such practices are forbidden, Pisani and D’Innocenzio (2021) claim there is no guarantee that employees and management will not violate the rules and use the company’s privilege to outstand the competitors.

The situation is not getting better, and the actions of Amazon attract more and more attention from the government. Despite the company’s great status, Ovide (2021) claims that the administration still aims to detect and punish the corporations that strive to dominate the market through manipulation and unfair practices. Moreover, the US government is not the only one interested in Amazon’s marketing methods. European Union also started to pay closer attention to the company’s operations and investigate its activities.

People’s interest in online shopping excessively increased during the pandemic, and consequently, more new organizations appeared in the arena ready to provide customers with all the necessary services. The European Union Commission (2019) decided to learn better about Amazon practices and ensure transparency in their business management as a preventive measure. The findings showed that the information about the sellers goes to the electronic systems that generate the marketing proposals and decisions. It means that with the help of the data, the customers will only get the offers of those products that are being sold more often and are highly demanded by the consumers. Although this is how a smart market strategy works, Amazon’s methods are unethical and violate the policy of transparent and clear competition.

The rise of online shopping and electronic platforms with the immense diversity of sellers and small businesses creates huge market competition. With the hit of coronavirus, people never prefer to buy the necessities online out of safety or pleasure because more and more buyers discover the advantages of this type of shopping. As a response to the active growth in electronic commerce, the US government began to check the biggest platforms for compliance with the law. Amazon was not an exception since this is one of the most famous and used sources for shopping in the united states and all over the world. In addition, the previous issues, such as those mentioned before, created an image of a corporation that can do an unethical act to generate profit and neglect some policies. Therefore, it was inevitable for Amazon to go through the investigation from the US government and even the European Union Commission since the population of the US also actively uses the organization’s services.

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Thus, using the sellers’ data, the company escapes participation in the equal and fair rivalry in the market. Nevertheless, this is not the only problem that corporation faces connected with antitrust laws. The European Commission (2020) also suspected organizations of showing special attitudes towards the company’s products and those brands or sellers that use Amazon’s services for shipping the production. The main issue appears due to the distribution of the goods through the “Buy Box” and Prime service. Malachard (2022) explains that “Buy Box” is a space on the corporation’s website that demonstrates to the users recommended products that they might want to buy potentially. The problem with the “Buy Box” is that not each seller can have an opportunity to get the place on the field, but those who use the Amazon logistics have an advantage over others.

Almost the same situation is happening with the Prime loyalty program. Those who purchase the membership of Amazon Prime get special benefits such as quick delivery or the shipping of specific goods like pharmacies. Once again, it seems like on the list of products for Prime users go those sellers whose production meets the criteria of high demand and who use Amazon shipping services to deliver their products. As Soper and Brody (2019) claim, this inequality is a notable example of unfair competition because consumers with the Prime loyalty programs tend to order more and spend twice more money as regular consumers. Therefore, the possibility of cooperating with the most profitable segment of buyers can only have those sellers that can bring additional revenue to the company. However, the practice itself has nothing wrong, but like in the case with “Buy Box,” if it was not achieved by the unjust manipulation with data, then policy regulators would not have issues with Amazon.

Although the investigation continues, some problematic facts about the company’s work were already identified. The central issue refers to the corporation’s access to the vulnerable data of the small businesses that use the platform to sell their products online. Employees can openly see the information and statistics about the sellers’ turnovers, sales rate, income, and other confidential records. Access to the vulnerable information and its usage by Amazon creates unfair competition and disadvantage in the market and the brand’s exposure to the corporation that holds power over them. Thus, it is highly possible that the management uses the information to generate profit and for marketing purposes.

Conclusion

Overall, Amazon is a fast-growing corporation that tries to adapt to new circumstances and generate more profit out of the situation. Nevertheless, management fails to consider all the possible consequences, such as poor working conditions in the warehouses. The company has made several attempts to deal with the situations, but they were ineffective and caused even more criticism from the publicity. As a response to the existing problems, the company should take more profound and practical measures to regulate the situation with the terrible working conditions and the overuse of power. Amazon could expand the number of warehouses and hire new people to redistribute the work among more employees. The hiring process should also be modified because a high turnover requires more expenses than a stable and loyal percentage of employees.

In addition, Amazon has to make some corrections in the organization’s privacy and security of the data. Firstly, the data from the sellers should be strictly confidential and unable to the observation and use of the employees. Secondly, all the sellers ought to have an opportunity to be included in the Prime loyalty program and “Buy Box,” and decisions have to be made according to the publicly available data, not internal sources. Most importantly, the changes regarding the well-being of employees or market competition Amazon should begin from the corporate system and work structure to avoid dishonest practices and employee dissatisfaction in the future.

Reference List

Antitrust: Commission Opens Investigation Into Possible Anti-Competitive Conduct of Amazon’, European Commission, (2019). Web.

Antitrust: Commission Sends Statement of Objections to Amazon for the Use of Non-Public Independent Seller Sata and Opens Second Investigation Into its E-Commerce Business Practices’, European Commission, (2020). Web.

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Amazon warehouse injuries ‘80%’ higher than competitors, report claims’, BBC News, (2021). Web.

Euchner, J. (2020). ‘Innovation and the Coronavirus’, Research-Technology Management, 63(5), pp. 10-11. Web.

Agnihotri, A. and Bhattacharya, S., (2022). ‘Addressing Poor Working Conditions at Amazon, Inc.: Challenges Before, During, and After COVID-19’, London: SAGE Publications, Inc. Web.

Gault, M (2021) ‘Amazon introduces tiny ‘ZenBooths’ for stressed-out warehouse workers’, Vice. Web.

Ghaffary, S. and Del Rey, J. (2020) ‘The real cost of Amazon’, Vox, Web.

Kelly, J. (2021) ‘Amazon prime day offers great sales – here’s what workers suffer through to make this happen’, Forbes, Web.

Malachard, V. ‘5 Things You Need to Know About the Amazon Antitrust Probe’, Nozzle. Web.

Newton, C. (2021) ‘Amazon is finally realizing it has a labor problem’, The Verge, Web.

Ovide, S. (2021) ‘The big deal in Amazon’s Antitrust Case’, New-York Times, Web.

Palmer, A. (2021) ‘Amazon warehouse workers injured at higher rates than those at rival companies, study finds’, CNBC, Web.

Pisani, J. and D’Innocenzio A. (2021) ‘The biggest challenges for Amazon’s New CEO’, Manufacturing.Net, Web.

Sainato, M. (2020) ‘I’m not a robot: Amazon workers condemn unsafe, grueling conditions at warehouse’, The Guardian, Web.

Soper, S. and Brody B. (2019) ‘Amazon probed by U.S. antitrust officials over marketplace’, Bloomberg, Web.