Netflix Case Study Analysis Essay

For a company that was started because its CEO was frustrated when forced to pay obscene late fees for a rental movie, Netflix has come a long way. It has become a cultural phenomenon, even going as far as becoming a verb commonly used amongst it younger user base. Operating in an industry that was dominated by giants such as Blockbuster and Walmart, this startup company was able to be successful largely due to how it was able to create and uphold a corporate culture unlike any other. Technological advancements continually change the way a company operates and its ability to adapt and remain at the forefront ultimately determine whether or not it will be successful. This is especially true in the entertainment industry, Netflix started simply as a DVD distribution company but since evolved into the dominant force in internet consumption. CEO Reed Hastings, prides himself on …show more content…
The potential for insider trading is an issue that must be considered; this is one area that Netflix has a traditional policy on and makes it clear that employees are restricted from trading on information that is not public. An additional benefit of the compensation strategy utilized by Netflix is how it relates to performance reviews. Annual performance reviews have been eliminated in favor of 360-degree reviews that are conducted on a regular basis. This works for the company because the total compensation amount is determined by the market and not based on performance, a view that is shared by Samuel Culbert who believes that pay for performance is an outdated process. Since the Netflix workforce is composed of fully formed adults, each employee is expected to give honest feedback on their constituents and change their own behavior based on what others have