Transformational Leadership at Amazon Case Study

Introduction - Exploring Leadership Practices in Amazon Inc.

Amazon Inc is a multinational technology company, which is founded by Jeff Bezos in 1994. Its headquarter is in Seattle, US. The company is mainly focused on e-commerce, digital streaming, and online advertising, cloud computing and artificial intelligence (Latrubesse et.al. 2017). Amazon provides various streaming and downloadable online content through its platforms, these platforms are Amazon Music, Amazon prime video, Twitch, and Audible. The company also produces consumer electronics and books. Net profits for Amazon increased by 84% in comparison to the same time last year (Forbes, 2022).

The report is made on transformational leadership, transformational leadership encourages and motivates staff to develop original ideas and new behaviours that will help the corporation achieve organizational goals in the future. In the transformational method, management empowers dependable employees to make judgments and maintain new approaches to problem-solving. The report also includes three major topics of leadership; these are power and influence, leadership development, and sustainable global leadership (Anderson, 2017). Power and influence is the capability to control the actions of others through or without confrontation by using a diversity of strategy to drive or prompt an act. Leadership development is used for the development of leadership skills in the employees of the organization. This is a process which involves a series of activities to build confidence and prepare good-performing staff for the future leadership role.

Leadership Theory

Transformational leadership

Transformational leadership is an organisational philosophy that promotes and motivates employees to innovate and grow new behaviour to cultivate and advance the path to an organization’s future achievement. In the Transformational method, the management gives trusted workers the self-government to compose decisions and sustain new problem-solving methods (Cetin and Kinik, 2015). To bring changes to indulgence the organization, transformational leaders must display the subsequent four factors:

Figure 1: model of transformational leadership theory

• Inspirational motivation: The promotion of an evidenced by the presence, mission, and set of principles to the membership is the foundation of transformative leadership. Leaders that are transformational can communicate their vision to followers. The leader makes sure that the staff feels committed towards their goals and that their purpose aligns with originations purpose.
• Intellectual stimulation: in this leadership, leader supports their subordinates to be creative and innovative. The leaders provide an environment where everyone can easily share their idea. The leader does not criticize their follower in public, but the reward is given in public so everyone stays motivated (Berkovich, 2016). The leaders do not hesitate in adopting new practices and discarding past used systems.
• Idealized influence: this theory has the philosophy that the followers only obey the leader if the leader is a role model to them. The leader needs to earn the respect and trust of their team members.
• Individual consideration: Providing assistance and inspiration to every& follower is another aspect of transformational leadership (Ghasabeh et.al. 2015). Different approaches are taken with the followers based on their skills and knowledge. By giving each member individual attention, the organization's leaders and employees can build trust with one another.

Critical evaluation of one leadership theory

Advantages of transformational leadership

• Employees are more liberated to experiment and propose new strategies under the leadership style used by transformational leaders.
• Employees are optimistic to centre on what's excellent for the business relatively more than their interests.
• A successful transformational leader inspires the team with a mutual vision.
• Employees are more committed and diligent at the workplace because they care particularly about the organizational mission.
• Under the leadership style employed by transformational leaders, employees are more allowed to experiment and suggest new strategies.

Disadvantages of transformational leadership

• The inspiring, overarching vision of a transformational is not usually accompanied by explicit instructions on how to get there.
• Since persuasion is a component of transformational leadership, it encourages leaders to promote themselves in an immoral way.
• By nature, a transformational leader delivers change to an organisation, but in certain situations, that transformation can be too disruptive.
• If the vision is too large or aggressive, workers can burn out or become frustrated attempting to attain it. Leaders must put the organization's needs first and avoid making changes just for the sake of making changes.
• There is a danger that leaders will manipulate their followers so that they lose more than they earn.

Demonstrating how the theory relates to leadership practices occurring within Amazon

Transformational theory used by Amazon CEO Jeff Bezos

When Jeff Bezos founded Amazon, the CEO transformed an entire industry, as an internet bookseller. Transformational leadership is one of the main reasons for the success of Amazon. Further benefits have come from promoting an innovative approach-open company culture. Amazon Web Service (AWS), which was once a self-developed answer to Amazon's storage and processing needs, has contributed to the start of the cloud computing revolution.

Figure 2: Amazon Leadership Principles

Jeff Bezos and Amazon travel with each other on this journey, Amazon is the classic instance of a business that was the first to pioneer e-commerce this is the place where experts can think about two factors that define transformative leadership (BBCnews, 2018).

• Core repositioning: The key to success is repositioning the core business and actively investing in emerging business growth. While Amazon has extended its retailing platform into new segments including streaming and food In parallel, it has created the world's biggest cloud computing business (Amazon Web Services).

• Innovation and growth: successful in developing new services, products and business models. This was measured by looking at the percentage of revenue that is not part of the core that could be attributed to new growth. For instance, Amazon Web Services accounts for only 10% of the company's $150 billion in revenue but produces close to $1 billion in operating profits per quarter.

Leadership topics:

Power and influence

Power is the capability to control the actions of others through or without confrontation by using a diversity of strategies to drive or prompt an act. For instance, managers have the power to select persons from the workforce for promotion and pay raises. The employees will listen to the manager and request the manager to earn more income.

Influence is the capability to change how an individual develops, performs, or believes based on relationships and persuasion (Nouri, 2018). The influence is generally created because of the respect in the people.

Sources of power

There are many sources of power and every source has a different target and different impact. Some are drawn from personal characteristics and others are drawn from the feature of a company’s structure. Six types of power are given below:

• Legitimate power: This power comes from the position and role in the company; seniors have legitimate power over its subordinate. This is also named positional power, it generally engages formal responsibility and authority entrusted to the possessor of the role.
• Referent power: The source of Referent power is the capability of an individual to pull others and construct a loyalty relationship. It is based on the person in energy which is reflected in the personality and interpersonal abilities (Cullerton et.al. 2016). Because of a certain personal quality, like charisma or likeability, a person is respected by others, and this admiration serves as the foundation for social influences.
• Expert power: This power comes from specific knowledge and skills, when a person is an expert company hires them because they are potent. The authority of an expert often applies in the relevant area of the person's skill and reputation, making it more limited than most types of power.
• Reward power: This power is sourced from the capability to award appreciated material rewards or provide different positive incentives. Reward power is the degree to which a manager gives external motivation to its employees by way of gifts or other incentives. This also includes raises in pay, non-monetary incentives, sponsored vacation etc.
• Coercive power: This is a negative source of power; it is used to get things done for fear of negative results. For example, managers said employees that to come on time and pay will be cut for latecomers. This is a type of coercive power of the manager in the workplace.
• Informational power: Informational authority comes from starting access to information and facts that people find helpful or precious (McClelland, 2017). The managers who have informational power, are respected by others. Informational power presents the reward of building trustworthiness and balanced influence. It might too serve as the foundation for advantageous connections with employees who look for those facts.

All of these sources can be used by the leader of the company; the leader can combine these sources to influence people in the organization.

Principles of influence

Figure 3: Principles of influence

The balance between power and influence

Power is the capability to oblige leaders' determination on followers, while influence is the capability to extremely affect behaviors as well as beliefs. A leader needs to use their power once in a while to direct the movement. But when a leader uses influence to lead, the leader will slowly build deeper trust and loyalty with the team.

The leader needs to delegate power in the right way to the organization; otherwise, it will create many problems in the workplace (Nouri, 2018.). It may create a situation of conflict among the employees or may increase the employees' turnover rate.

Power and influence at Amazon

Amazon leaders use different types of power and influence in different situations. Jeff Bezos, the CEO had reward power in the structure of increases in salary as well as promotions. The manager at Amazon also enjoyed legitimate power, they can set time limits and staff obeys even if they believe the target was excessively ambitious (Machowski et.al. 2020).

Leadership development

Leadership development is used for the development of leadership skills in the employees of the organization. This is a process which involves a series of activities to build confidence and prepare good-performing staff for future leadership roles (Day and Dragoni, 2015). Leadership development can do in form of a program, an organization can select employees who have the potential to become leaders, and in the program employees' skills are polished. Leadership development includes improving the following list of skills of the employee:

• Team management
• Decision making
• Building of networks
• Project management
• Communication skills
• Developing strategies, etc.

The benefit of leadership development

Leadership plays an important role in the success of the organization. Leaders have a responsibility to provide training and development to the employees so they will be ready for higher roles in the organization (Clinton, 2018). Below are some ways that a leadership development program might help the company to deal with contemporary leadership issues:

• Employee retention: When a company selects prospective employees for leadership roles, staff members see prospects for advancement and a career within the company. These leadership training programmes may persuade people looking for job opportunities to spend time at a company. This will increase the employee retention rate of the organization, and reduce the expense of recruitment and selection.
• High-potential individuals: employees who have the high potential need to provide training which enhances their skills. These skills include self-awareness, self-development, cross-cultural communication, etc. Leadership development programs help in the deep training of high-potential employees in the organization (Komives et.al. 2016).
• Financial Performance: leadership development improves the qualities of the individuals in the organization. Leadership training can decrease long-term expenses, make a new stream of income and advance buyer satisfaction.

Contemporary issues related to the leadership development

Using the traditional Methods

The business environment is changing very fast; it is getting more complex and unpredictable. The ability required for leadership has too altered, at present time more adaptive and creative thinking is required. However, the techniques for leadership development are the same as a decade before. Companies need to adopt new techniques that match the new environment. Most managers learn on the job, receive training, and receive coaching or mentoring; although all of these things are still crucial.

Developing the Right Mindset

Developing the right mindset is an important part of leadership development but many companies do not focus on it. The right mindset refers to the vision and mission of the company that matches the creative thinking of the upcoming leader (Grisaffe et.al. 2016). Simply put, many businesses don't give this effort the attention it deserves or place in the basic minimum of time and money.

Social change model of Leadership development

This model was formed by the higher education research institute in 1994. These model efforts put together previously recognized leadership development ideas and this is used by people who do not want to use traditional approaches but want to create a positive impact. The main concept of the model is that leadership is a procedure. The goal of the model is to produce a manager who will take on measures to assist the society or community to perform more efficiently and kindly.

Figure 4: Social change model of Leadership development

Leadership development at Amazon

The Leadership Development & Training team at Amazon makes various classes programs and tools to assist employees in the development of leadership skills. Amazon provides all resources to its employees so they can learn and acquire all the skills to be better leaders.

Amazon is dedicated to budding leaders by assisting employees to recognize the required skills in the changing environment and providing all the means to get those skills. This is done by giving more challenging work and assignments to the employees. To fast-track capacity development, Amazon measured the arrangement of a structured education program and the company is partnered with an education institution.&

Sustainable, global leadership

Global leadership is an interdisciplinary research of the most important factors that future leaders from every aspect of personal experience need to acquire to fully comprehend the physiological, psychological and geopolitical sociological and anthropological consequences of globalization (Athayde et.al. 2017).

Leadership for sustainability refers to an updated and broad definition of leadership. It refers to acting on sustainable values, guiding using a living process paradigm and establishing an open, collaborative and reflective leadership model.

Leadership for Sustainability

1. Sustainability Leadership: Sustainable leadership is about taking an ethical and responsible approach to how leaders lead and taking time to think about the bigger consequences of actions for the society and the natural environment. This could mean looking at larger stakeholders and the natural systems in which organization operates, and their limitations.
2. Responsible Leadership: The need for responsible leadership rose when leaders are engaged with stakeholders in an ever-complicated, volatile, uncertain and uncertain (VUCA) global context (Coccia, 2015). Responsible leadership can be described by the way it manages a company's interactions with society, geared towards solving the company's diverse stakeholders' concerns while contributing to the various bottom-line results of its social, economic as well as environmental sustainability. The leader is the one who facilitates and manages interactions with all stakeholder groups of the business.
3. Conscious leadership: Conscious leadership means guiding others in a full-on awareness of self and fostering growth within organizations by assisting the people within them. Instead of having an egocentric approach, a mindful leader embodies all the elements of an inclusive "we" mindset. Conscious Leader Global was founded by Jeremy Klein, and Poonacha Machaiah to help expand the reach of conscious leadership around the world (Osland, 2017). Conscious leaders facilitate positive change and help keep the company in the direction of its ultimate goal by guiding, motivating, developing and inspiring employees in the company to create worth for all of the stakeholder groups within the company. They also function as an energetic and unifying force to develop and strengthen conscious culture through values that are based on authenticity, trust care, authenticity, transparency, learning and empowerment.

Spirituality and sustainability in the global leadership

Spiritual leadership in organizations focuses on interactions between leaders-followers or follower-leader as well as peer-peer that are active and reciprocal over time. It is acknowledged that leaders, through behaviour-modelling, role-modeling and other actions influence the self-concepts, expectations, goals and values of their followers (Fry and Egel, 2017). Through the interactions of group members, an emerging process takes place where individuals' perceptions of themselves over time shape groups and eventually the perceptions of leadership in the organization. When this process is in progress the leaders and followers within the group begin to create similar mental models of hope and faith in a mission of helping key stakeholders through charity. As members of the group who are in spiritual leadership connect and strengthen the spiritual leadership among themselves as well as the group. This in turn enhances the sense of purpose and participation which ultimately helps and influences the other members towards a sustainable mentality and a determination to work together to enhance the triple bottom number.

While there are many definitions of spirituality all of them are the need to transcend oneself and the feeling of being connected to everything in the universe. Self-transcendence is the state of consciousness in which one strives to transcend self-interest towards an external and broadened perspective of life or call. It is founded on an identity and community where people see themselves as connected to all responsive beings and nature. Leaders are not separate from the company members, employees and communities or the world at large; Leaders are incredibly interconnected with fellow humans in search of a common cause.

Spirituality's are the two main characteristics of self-transcendence, interconnectedness and self-transcendence is also essential to sustainability. Sustainability is defined as a condition of life in which people's well-being and quality of life are maintained without compromising the ecological systems on which our present and future lives depend (Dyer and Dyer, 2017). As a pair, the sustainable and sustainability goals strive to achieve to find a balance between various environmental, economic and societal forces and focus on the relationships between social and economic fairness, and the quality of the environment.

Figure 5: model of sustainable global leadership

Conclusion

The report is concluded that there are various modern issues faced by the companies related to leadership development, sustainable global leadership, and power and influence. Power and influence are used by the leader at Amazon to direct or compel the conduct of employees, either directly or indirectly, by employing a variety of tactics. Amazon uses various programs and methods for leadership development; it helps the organization's for personnel development and their leadership abilities. The leadership style used at Amazon inc. is transformative leadership, and the company is managing contemporary issues very well.

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