OrganizationalManagement: Case of Yahoo

OrganizationalManagement: Case of Yahoo

Basedon its artifacts, norms and values, I would describe Yahoo’sculture as a Hierarchy. This is because it shares a lot with otherlarge bureaucratic organizations. Its value matrix includes internalfocus and integration, stability and control. Chief Executive MarissaMayer comes out as the leader chosen by the company due to her visionand her ability to organize, coordinate and monitor people towardsthat vision to save the company and turn it to making profits. Inother words, from the moment she was hired, she was to be looked uponas the single most important figure in the turnaround process.

ForYahoo, it gave Mayer a lot of freedom and trust to operate thecompany from the top because apart from just trusting her on thebasis of her past knowledge and skills from Google. Inc, Yahoo alsotrusted her ability to almost single handedly pull the companythrough the mud from the moment she was hired in June 2012. As aresult of this culture, from the moment she was hired, she was lookedupon as the one who would save the company and some things regardingher management style were overlooked as she seemed like the personwho came bearing gifts and the magic to pull the company out oftrouble.

It’sdue to this belief in Mayer that there was a lot of optimism despitethe fact that the company still continued to lose advertising dealswith other emerging online companies and users. Five years later, shestill believed she could reinvent Yahoo to the core as depicted byher tedious hours in the office. It seemed like everything was hingedon her more than any other thing such as teamwork or talent. In fact,she also tried to live up to the expectations of a magician bybringing the fresh energy to the company that employees were fleeingfrom as demonstrated by her building a nursery in her adjoiningoffice after giving birth to her first born.

Everything,including the plan to acquire dozens of mobile startups, smartphoneapps and re-investments in web search seems to hinge on her aura andYahoo trusting that everything she was doing was to turn the companyaround. In fact, it was more than two years into her job thatStarboard first raised a finger about the bloated cost structure.Moreover, her underhand tactics to keep Mr. Smith at bay by makingmajor concessions paint the picture of a company with the chiefexecutive making almost all the major decisions touching on thecompany.

Shewas able to almost single handedly make and execute major decisionsbecause she was given the blank check by the company with only a fewother executives in the company. Therefore, despite the steadilyrising costs and dwindling revenues, she survived for long withoutmajor and sustained complaints from anyone because the culture atYahoo allowed. The culture of hierarchy at the company allowed her toconsolidate all the power and control of the entire company that gaveher the ability to make decisions unchallenged in hope that theculture would turn the company around.

It’sdue to that power and control that she was able to pay more thanthree times the market value of Polyvore, overruling Jackie Reses,the chief deal maker of Yahoo. Jackie was one of Mayer’s mosttrusted lieutenants and she still overruled her and paid more thantriple the cost of the deal to acquire Polyvore. Organizationaltheory describes Yahoo as a case of classical organization theory.Its approach to managing the people was one characterized byworkplace bureaucracy from the moment that the then new CEO Mayersent the memo for “get to work.”

Insteadof people working from home and working remotely, a strategy that wasbeing taunted as the solution to job seekers, especially those in thetech industry, Mayer chose to overturn the work-at-home policy atYahoo by calling everyone to their cubicle in the office. Thatdecision alone demonstrated here ability to make decisions andexecute them with minimal consultation, something that came naturallyto her and also something that the company gave her.

ForMeyer, this bureaucratic classical case of employee management wouldbring back the morale to the company, but was criticized by playersin the industry as well as the employees themselves. The move angeredmany employees who had been used to the previous flexible policy ofworking at home. Despite the fact that many of them were working athome, those who were working from the office complex came to workearly and left late. However, after the introduction of the policythat did not go down well with the employees, the morale died.

Maybe,one of the things she claims that the company was slow in doing wasin adopting the work-at-home policy again that other tech companiesin the industry were adopting due to its flexibility that suitedworkers in the industry. This policy is said to bring out theinnovativeness among the workers. It’s no wonder that employeesstarted flocking out of the company, from the lower managementemployees to the top executives. As the article outlines, it becameeasier over time to find a parking space, something that was almostimpossible during the normal working hours. This is primarily due tothe way that the employees felt that they were being treated. It isnot hard to see why because it was a complete turnaround from thegood deal that they were used to working from home and coming to theoffice when necessary.

Insteadof building morale by the new bureaucratic style of managing theemployees, it killed the little morale that had been left because theemployees were coming late to the office and leaving early. Herrequest to have the senior executives pledge to stay with the companyfor at least three more years is proof that this new management stylewas not going to do well with the employees those who could get awaygot away and those who remained were trying to get away. There was nomorale anymore due to the new approach to managing people that wasgoing against the trend in the tech industry.

Takinginto account the organizational momentum, the leadership stylepermeating in the organization is one of coercive leadership style.In this kind of setting, the leader demands compliance immediatelyafter taking charge. This is exactly what Marissa Mayer did aftercoming in. Some of her initial decisions such as calling everyoneinto the office complex and her decisions to buy several startupswere meant to instill this compliance and build bonds between theworkers. This kind of leadership style is very effective during timesof crisis and Yahoo had been going through a crisis having seen thetop management change rapidly in the last five years prior to herarrival. The fabric that held the company together had slowly beencoming undone due to the lack of permanent figurehead and it needed acoercive leader to put everything together again.

Assuch, the company needed some stability first so that it could besteered towards the turnaround that Meyer promised. For a deeplytroubled company, she had no option but to adopt this model ofleadership so that she could control the company. It was due to hercoercive leadership style that she was able to determine the methodsthrough which Yahoo would cut costs and also the means of attractingrevenue at a time when revenues were dwindling while the costs weresteadily increasing. However, this leadership style has its uniquepitfalls in that stifles inventiveness and flexibility and alienatespeople. It is no wonder that after taking office, criticisms startedflowing from both inside and outside of the company regarding herleadership.

Fromthe onset, she alienated herself with the workers as depicted bytheir movement out of the company and those who remained did not havethe morale needed to turn around the company as she required.Moreover, without the flexibility that in turn produces theinventiveness that drives the tech industry, the company had beenunable to catch up with her competitors such as Google and FacebookInc and there are indications that the company will continue to lagbehind in the foreseeable future without any real hope of aturnaround.

Toa large extent, I foresee conflict in the organization because thechief executive has lost faith among the employees and theshareholders too. It is almost impossible for any top executive torun a company without the support of both these two important camps.The shareholders are likely to stop supporting her after years thathave seen the company continue making less and less profits and thecosts keep on piling. If this goes on in the coming years, herpromises alone will not keep her out of trouble. This is then boundto cause conflicts between Meyer, who is the face of the company andthe shareholders.

Withoutthe support of the employees who are increasingly losing faith in herability to turn the company around, she is also likely to startfacing conflicts from within from the employees just like she isfacing external pressure and conflict from the shareholders. Herability to deal with conflicts has also been questioned due to theway she has handled the pressure from Mr. Smith. Striking secrettruces with potential sources of conflict does not seem wise for acompany that is facing turbulent times ahead and Mr. Smith maybe oneamong a lot of other challenges to come. Consequently, I see conflictin the organization becoming the norm, because the shareholders andthe employees do not have faith in her ability to turn the companyaround and her ability to deal with conflicts also seemsunsatisfactory given her previous dealings.