Case Study Essay

2427 Words Dec 24th, 2015 10 Pages
Introduction to Management Case Study 7

Diego Estrada
Marina Rillo
Mia Taeza
Vincent Zagala

Introduction to Management Case Study 7: Zappos


1. What traits of effective leadership does Tony Hsieh demonstrates at Zappos? What aspects of his leadership can you criticize, if any? Is his approach transferable to other leaders and other organizations, or is it person and situation specific?

For Tony Hsieh, the Zappos brand is less about a particular type of product and more about providing a good customer service. This means that he largely cares about the welfare of his employees and customers. An evidence of him being such an altruist leader was when the blog search engine Land called him “the
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Despite the initial investment, Zappos quickly ran out of money. In early 2000, Hsieh, who had previously made $265 million in the sale of his startup company, LinkExchange, to Microsoft, decided that he would continue funding Zappos. Within a few on months of this decision, he joined the company as its CEO.

From 2000 through 2005, company revenue increased dramatically while Hsieh continued to invest much of his wealth into the company. He sold his San Francisco penthouse loft to fund a new warehouse in Kentucky in order to facilitate a change of Zappos’ business model from a drop-ship company to an online shoe retailer branded by exemplary customer service. Despite increasing sales revenue, Zappos did not see its first profit until 2007 when its annual revenue surpassed $840 million. In November 2009, Hsieh negotiated for Zappos to be purchased by Amazon for a reported $1.2 billion, though the terms of the agreement secured that Zappos would continue to operate as its own independent entity with Hsieh as CEO, enabling the company to maintain its unique culture and brand.

Styles of transformational leadership include envisioning, energizing, and enabling. The envisioning style entails creating both “a picture for the future with which people can identify” as well as a compelling vision with high goals or expectations. The energizing style “directs the energy and motivation to act” for employees by demonstrating excitement,

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