Company Profile:    

Amazon was founded in 1994 by Jeff Bezos in Bellevue, WA under the name Cadabra, Inc. For clarity, the name has changed several times since from Cadabra, to Relentless, to Amazon. This name was chosen for the name of his company due to it being the biggest river in the world. His original intent was to create a digital market to sell books, but his focus soon expanded to items that he predicted would sell the best, such as, music, videos and computer components. (Hartmans, 2021). Originally met with skepticism from analysts in the tech world, being called Amazon.bomb. Amazon’s business plan seemed destined to fail, due to its inability to turn a profit for the first few years of its existence. It was first thought that the company would lose business to other booksellers already well established, such as Barnes and Noble and Borders. Once those companies established a digital market place it would be over for Amazon. This ended up not being true as it had gained over 180k accounts by December of the following year, and over a million by its second year. (Britannica 2020) From books, Amazon started to sell other items, using their brand as a marketplace. Other businesses would sell their items through Amazon via commission. Staying true to its original roots as a bookseller, that was first and foremost a tech company Amazon began to sell its own branded version of the e-book reader called the Kindle. This soon led to the development of a new version of the Kindle that were not only an e-reader but a small standalone tablet computer.

Because of the success of the Kindle, more entries into the digital world, via Amazon’s personal assistant, Alexa have made their way into the hands of consumers making using Amazon’s services that much easier and convenient. Amazon in 2021 is the leader of online retail selling almost every product a person could need from books, video, streaming services, clothing, and even high-quality food with their 2017 purchase of grocery chain Whole Foods. (Stevenson, 2021). Amazon is the world’s second-largest private employer with thousands of stakeholders running the company. The executive body is comprised of the CEO, president, senior vice president, and chairman of the board. The CEO of Amazon web services also falls under the top body. The list falls to officers, directors, employees, and shareholders. The officers and directors are quite a population in the organization since it runs different product segments across the world. The consumers are the largest population of stakeholders in the company since they are distributed all over the world. Consumers are the purchasers of the company’s products and they are the main stakeholders in the business. John Bezos formulated the organization to distribute products to the consumers to make profits. Numerous consumers’ purchasing power increases the revenue rate of the company due to high sales. Profit maximization generates when the sales rate is high and revenue increases. If consumers fail to purchase Amazon products, the company may face bankruptcy leading to the company’s collapse. Consumers have the power to build or destroy the company’s reputation. If the company ignores any consumer complaints, they are likely to make a public post of the scenario. The public post may ruin the company’s reputation and even make them lose customers depending on the complaint level. Clients may also post positive factors of the company and attract more clients to the company.

John Bezos, Andrew Jassy, and Jeffrey Blackburn are the company’s top shareholders in the Advisor, Vanguard, and Blackrock Inc respectively. The shareholders play significant roles both directly and indirectly. For instance, John Bezos is the founder of the Amazon corporation without him, the company would not have existed. The rest of the shareholders finance the company by investing in their shares. Shareholders also vote in directors and supervise senior officers such as CFOs and CEOs. They ensure that the company runs smoothly, efficiently, and correctly. The shareholders have the power to fire senior employees, shut down the corporate or withdraw their shares from the company. The company’s growth in revenue benefits the shareholders since they share the profit rates. If the company faces reputational or financial risks it affects the corporate but not the shareholders. Therefore, they enjoy legal entities.

The Amazon CFOs and CEOs ensure risk management in the company. The CEOs are in charge of the routine running of the business including acting as a communication channel between the board of directors and employees. CEOs also make major corporate decisions, and managing resources and operations (Smith, 2020). The CEOs have the power to fire and replace misconducting employees, cancel and appoint meetings and supervisors. The CFOs are accountable for all the accounting activities in the organization. The activities include supervising cash flows in both credits and debits and do financial planning for institutions. The CFOs moreover analyze the company’s financial strengths and weaknesses. The CFOs propose corrective action to improve financial flows and eliminate risks occurrences.

The Amazon CFOs in most organizations is responsible for risk management. Most activities leading to risk occurrences connects to accounting activities in the firm. The CFOs ensure ethical, reputational, financial, and operational risks do not occur (Heldman, 2020). The CFO moreover ensures the organization complies with insurance coverage and regulatory compliance. They are the overseers of future events and attend great meetings in the organization to act as advisors. The CFO is the third executive seat in the organization; he ensures correct financial transactions and records. They record financial statements on time and highlight profit and loss instances monthly and annually. The CFO has the power to save the company from bankruptcy and lawsuits. The CFO in collaboration with a lawyer has the power to solve matters involving finance and ethical misconduct.

Identification of Issue:

Now it’s absolutely no surprise at all that a company as big as amazon would have problems with unsold stock. It’s not just your average company issue though. No, it’s a billion-dollar problem. Amazon was founded on July 5th, 1994. Yet it had yet to turn into a profit until 2001. Ever since 2001 Amazon has gone on to become the fourth richest company in the world, with a net capital of over 1.6 trillion dollars according to VisualCapitalist.com. Amazon’s unsold stock issue is so bad, not just because the products won’t sell, but because they just don’t have enough room to store these products. “Amazon warehouses in Britain and France routinely trash unsold products, with one facility reportedly sending 293,000 items to a local dump during a nine-month period.” This quote by Kate Gibson, and published by cbsnews.com shows how detrimental this problem is for the company. It’s eye boggling to think how much unsold stock is being destroyed, just between a few Amazon warehouses. Kate Gibson goes on to talk about what the reporters saw while filming Amazon at the dump site. Apparently, amazon employees have named the dump zone a “destruction zone”. With brand new products such as new toys, electronics, and more being destroyed. It’s almost as if these products won’t sell, then no one can ever have them, because they’ll just be destroyed by their own distributor. This quote by

Vijay Lakshmi Narayanan, and published by Medium.com shows why Amazon destroys their products, rather than relocating them to another storage facility. “The cost of occupying an Amazon warehouse shelf exceeds the cost of keeping the item. Discarding the item is a cost savings.” From a business standpoint, this makes total sense. You would obviously rather have popular items ready to sell, then ones that have been collecting dust, but I’m surprised Amazon doesn’t have more storage for less desired products. Amazon destroying unsold stock is very hard to find and read about. I completely understand why they try to keep it as far under the radar as possible. It makes Amazon look very weak. It shows the world behind this brand that we all use so much. Amazon’s own company is destroying new products, because they couldn’t sell them, but they could turn it into a positive issue. Most people are aware that Amazon destroys their products themselves, but what if they donated these products. I mean they’re already going to waste anyway, and it’s not like Amazon is losing any more money. If Amazon donated a portion of their unsold stock, then it could be a huge marketing tool for the company. Praise would be brought onto the company for their righteous acts. Amazon obviously doesn’t, because they want the future purchase of that product from a family who didn’t already have it. Overall, this issue seems to be a sustainability issue on Amazon’s end. In this case it would be how to market more sales for products that go unsold. Amazon should go through the analytics, so that they aren’t stuck with too many products that will never sell. Besides the point of unsold products, another issue Amazon has with sustainability would be damaged stock. Whether products are damaged during deliveries or in the warehouse, they are bound to have millions of damaged products a year. Amazon does take into account that the consumer receives compensation for the damaged goods, but what about Amazon themselves? Well, they seem to be out doubled the money. Paying for both the compensation, and their own good that was damaged. Amazon does sell mildly damaged goods on their website, so sometimes they get away with a clever dollar here and there. Not only are Amazon products being damaged, which is bad for both the consumer, and Amazon. Damaged products keep on getting worse for Amazon due to several lawsuits against their products being damaged. “When she lowered it back to her lap, sparks flew from the $12.30 replacement battery she’d recently purchased on Amazon. It caused third-degree burns on her arms, legs and feet, as well as burning her bed, clothes and the floor of her San Diego apartment. In the nearly four years that have passed since the incident, Bolger has had surgery to graft skin to repair the damage.” This story was written by Jay Greene, and published by washingtonpost.com. Jay Greene explains the turn of events that traumatically injured a woman who used a damaged product sold by Amazon. Jay Greene later revealed to us the outcome of her case with Amazon, when he states. “Amazon fought her lawsuit seeking to hold it liable for the injuries. The only compensation the e-commerce giant provided: a refund.” I could see how it in no way was Amazon’s desire to injure someone, but I would assume that cases similar to hers happen quite a bit. Amazon should be looking into how they can keep their products as safely protected as possible during travel and storage. Amazon hasn’t quite figured out how to safely disperse every item. As that would be almost impossible, but they have come up with a way to beat certain lawsuit cases. Certain cases where a third-party seller off Amazon has faulty goods that injured someone, Amazon will simply pay the injured 1000 dollars for compensation. “When “a defective product sold through Amazon.com causes property damage or personal injury, Amazon will directly pay customers for claims under $1,000—which account for more than 80 percent of cases—at no cost to sellers, and may step in to pay claims for higher amounts if the seller is unresponsive or rejects a claim, we believe to be valid,””. This was an announcement Amazon made, which was written about by Jon Brodkin, and published by arstechnica.com. This shows how frequent Amazon has dealt with cases similar to this one that they already have a proposition set in stone. Amazon has quite a lot of downfalls with their products, and it’s starting to cost the business more and more money. In the end Amazon is making so much steady revenue that these problems will never be a true financial threat to the powerhouse company. Some of Amazon’s tactics when it comes to managing these problems, seems to be a bit unknown. Unsold and damaged products have been a problem for the company for a while. It doesn’t seem to be taking a 180 degree turn anytime soon. Little is written about the problems happening, so it looks like Amazon is trying hard to keep their problems out of the public eye.

Analysis and Recommendations

             Our team finds that several things would have to happen for Amazon to rectify its issue concerning the storage of its stock, the availability of the stock, the quality of the items stocked, as well as the disposal of unsold or damaged goods. The biggest issue is the need for storage and constant availability of items 24 hours a day, 7 days a week. Keeping items in stock all the times means that the items themselves will always be taking up space in the supply chain. In Amazon’s early days, they would not keep more than 2,000 book titles in stock, but rather most orders were placed directly from wholesalers. (citation) Too few items means that Amazon will be out of stock, and unsatisfied customers would result. Too many items means that anything that has an expiration date, or finite life span could be unsold, and then would have to be disposed of properly.

(Make separate paragraphs for each issue, and what could be done to rectify)

The outbreak of the covid-19 pandemic has uncovered the poor working conditions of Amazon workers working in various warehouses. May workers have protested the lack of protective equipment and the failure of the company to pay attention to the spread of the disease among the workers. Although Amazon’s labor issues have been exposed during the pandemic, the complaints go way back before the pandemic.

Over the years, Amazon workers have been fighting to join workers’ unions to advocate for higher wages and improved working conditions. Such a move would stall the growth of the company and lead to limited efficiency. Amazon has continued to claim that it does not need a union to come between the company and its workers, claiming that it offers wages above the federal minimum wages, alongside other health benefits like dental and vision benefits (Dumaine, 2020).

Amazon faced scrutiny over the past two years for its poor working condition amidst the pandemic. At the beginning of the pandemic, workers raised concerns stating that the company was not paying attention to their safety in the facilities, leading to many workers testing positive for covid-19 (Glaser, 2021).  Amazon was reported to have fired workers who raised their grievances against the company’s continued business activities without considering worker’s safety. Other workers were subjected to disciplinary write-ups due to their continued protests (Ferrell et al. 2020). These events attracted the attention of public authorities, forcing the company to employ safety measures in response to workers’ safety.

Distance assistant is one of the strategic responses innovated by Amazon to help the workers maintain the required social distance. This solution applies machine learning and artificial intelligence and the camera footage indicating the distance from one worker to another. The workers should walk six feet apart, and those who fail are alerted by the sensors (Glaser, 2021).

Over the past few months, Amazon has launched a policy to ensure that all employees and the community have access to covid-19 testing and vaccinations. Amazon has help launch pop-up clinics, helping vaccinate thousands of people. The company has a fast-moving response team responsible for covid-19 testing for the employees (Glaser, 2021). Under covid-19 strategic responses, Amazon launched covid-19 at-home test kits for employees and customers. The company invested billions in building in-house covid-19 testing programs, ensuring the workers have access to free and regular testing with timely diagnostic reports from the laboratories. This approach has made Amazon Inc. the leader among companies testing their workers for covid-19.

According to my assessment, the responses given by Amazon show that employees are the company’s greatest assets. I agree with the approaches launched by Amazon to protect both the employees and the community. The company has millions of workers, but it has not tire of helping them will the testing, vaccinations, and the supply of safety equipment. After receiving backlash from public authorities for ignoring their workers during the pandemic, the company went all out to support the workers and the community. Amazon has continued to donate large sums of money to kick-starts covid-19 testing for the vulnerable.

To protect the customers shopping in the retail stores, Amazon has launched safety measures like regular cleaning procedures and on-site testing to protect both the workers and the customers. Amazon launched a no-rush shipping approach, allowing them to serve the customers in critical needs first. The customers have been supporting each other with this procedure. The ones with essential items receive fast delivery, while those with non-essential orders receive their products later.

The covid-19 pandemic causes an immutable impact on workers and communities all over the world. However, online businesses like Amazon continued to flourish while ignoring workers’ safety until the public cry forced them to take action. If only the pandemic responses had been implemented before the thousands of workers were infected, Amazon would have improved its reputation and gained its employee’s loyalty.

Nevertheless, Amazon has proven to be the best multinational company when responding to the pandemic despite the delay. The company profits have risen during the pandemic, and in return, Amazon has invested billions in workers’ and customers’ safety. Collaborating with the federal government and Nongovernmental organizations would be a better approach to improve the situation beyond what the company is currently doing. Collaborating with other organizations to ensure the safety of the community will lessen the burden and increase efficiency.

Amazon can carry out collaborative actions where they train each other to conduct their business at prime rates. If all employees know exactly what to do and when to do it, it becomes easy for the supervisors to control them. Work quality also improves since everyone is working towards the same goal. Amazon should also involve consumers in their adverts or even ask them to create buzzes to aid in marketing their products. Collaborative actions will help in improving market sales and increase profit levels.

Relationship to Course

Competitive advantage (due to size, availability of items over other retailers, speed of shipping, no real major competitors outside of Walmart/Costco for bulk items, Hulu/Netflix for streaming services,) – Many services exist in one place which means customers did not have to spend time going between different businesses., Sustainability (due to poor response in disposal of unsold stock). Employees are the backbone of any institution especially when it comes to consumer services and loyalty. When a company has both loyal and skilled labor, they are likely to prosper than a company with just one of the properties. Skilled labor produces quality products and services which lure and attracts clients. The more clients a system attracts the more sales and profit levels. Employee loyalty matters a lot since providing insider information to a competitive firm may lead to the fall of the company. If Coca-Cola had disloyal employees, all the soft drink firms would have overlapped it by now. The competitive firm would have gotten the ingredients Coca-Cola uses to make their drinks leading to stiff competition to the company. Hardworking and committed employees help in increasing the productivity rate of products in the company. The supply team will therefore have sufficient products to distribute across the globe. The company, therefore, maintains its clients due to continuous product supply. Employees have the power to increase the company’s revenue, product quantity, and quality and offer quality consumer services.

Conclusion

Our team has concluded that Amazon due to its immense market share sets an example as the leader in many fields, in the case of specifically sustainability. Their business practices set a precedence of what is considered acceptable. “Everything is done differently today because of Amazon…” (Stevenson, 2021).