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Reed Hastings – Netflix Add in library

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Question :

1. Analyse the following questions based on the case scenario. You need to present and EVALUATE the facts and explore the hidden leadership principles behind these facts.
o How did Hastings change his use of communications in sending and receiving messages from Pure Software to Netflix?
o How did Hastings change his use of feedback from Pure Software to Netflix?
o How did Hastings change his use of coaching guidelines from Pure Software to Netflix?
o Which conflict management style did Hastings tend to use at Pure and Netflix?
o In making a deal with Epix, which conflict management style was most likely used by Netflix?
2. How would you improve Netflix’s product offerings (i.e., what things can’t you watch that you would like to watch) or processes (i.e., how can it improve its delivery or service)?
3. Which level or levels of analysis and leadership paradigm are presented in this case, and did Hastings use the management or leadership paradigm?
4. How did Hastings Big Five model of personality leadership traits change from Pure Software to Netflix?
5. Which University of Iowa leadership styles did Hastings use at Pure Software and Netflix?
6. Explain how power, organizational politics, networking, and negotiation are, or are not, discussed in the case.

 

 

Answer :

Executive Summary

There are a number of organisations in the current societies around the world operating in various industries, which have their business model set up around a number of organisational goals and objectives. Most of these organisational goals and objectives require the organisations to have more sales and profits than the other organisations in the same industry. This forces each of these organisations to have an effective and efficient strategy placed along with the business model to maximise sales by having competitive advantages over the other organisations in the same industry. The case study of Netflix allows understanding and analysing such strategies designed and implemented by Reed Hastings to maximise the sales and profits along with the leadership styles (Smith, 2011).

Introduction

The battle for the competitive advantages in the various industries in the world is getting fiercer day by day. This is causing the organisations to have various types of business strategies included in the respective business models. These business strategies of the organisations focus on various aspects of the business operations of the organisations, which in turn lead to increase in the sales of the products and services sold by the corresponding organisation. The increase in the sales of the various products and services of the organisations also allows the organisation to have a stronger consumer base along with stronger brand image (Gallaugher, 2008). The stronger brand image also allows the organisations in the various industries to make the people in the societies to have more confidence and trust in the products and services of the organisation. This also leads to the increase in the repeat purchase of the products and services of the organisation. In this report we will analyse the various business strategies implemented by Reed Hastings in the workplaces of Netflix and Pure Software (Jeyakumar, 2014). The report also focuses on the various leadership styles and strategies used by Reed Hastings in the workplace of Netflix to allow the organisation to reach the successful stage that it holds now in the market. The provided case study, allows us to analyse and understand the entire journey of Reed Hastings from founding Pure Software to making Netflix one of the biggest success in the market (Vance, 2013).

 

(1) Hidden leadership principles

This section of the report focuses on the various leadership principles hidden behind the various facts provided in the case study regarding the success of Netflix in the market.

Change in use of communications

We could see a clear change in the use of the communications by Reed Hastings in Netflix’s workplace in comparison to the workplace of Pure Software. Hastings used to have a strict exterior in the workplace of Pure Software which caused him to communicate with the employees in the workplace in a rude manner (Keller, 2011). The communication style used by Reed Hastings to send and receive messages with the employees in the organisation included a bit of an informal way of communication. Reed used to react to the opinions of the employees of the organisation in a rude and insulting way. Moreover most of the times, Reed Hastings was very ignorant of the opinions and knowledge of the employees in the workplace. The autocratic and authoritative leadership styles followed by Reed Hastings in the workplace of Pure Software caused him to exclude the employees by not receiving them for any of the business decisions in the business model of the organisation. Reed Hastings also used to reply to a number of communications of the employees by the usage of non-verbal gestures. IN the workplace of Netflix, Reed changed his style of leadership to democratic which included him listening to all the opinions of the employees carefully. Reed started including the employees in the business decisions by being polite and careful in his communications with them. Reed ensured in the workplace of Netflix that the communications with the employees are not insulting to them (Hastings, 2012).

Change in use of feedback

In Pure Software, Reed Hastings wasn’t open to any kind of feedback or opinion from any of the employees. The leadership style followed by him didn’t include any of the employees in the major business decisions (Hunter, 2013). Reed never gave value to the opinions of any of the employees in any of the business decisions. In the workplace of Pure Software, Reed Hastings was also given the nickname of Animal by the employees, due to his hot headed nature in the workplace. Reed Hastings was never concerned about any of the feedbacks from the employees, clients or the shareholders. Some of the times in the workplace of Pure Software, Reed used to reply to the feedbacks of the employees with insulting gestures. In the workplace of Netflix, Reed Hastings tried to change his way of carryout the responsibilities of a leader (Lussier, 2012). Hastings changed his way of receiving the feedbacks in the workplace of Netflix, which allowed him to receive the feedbacks and opinions of the employees with open mind. Hastings started providing values to the feedback of the employees regarding any of the business processes and business decisions. Hastings started to realise that the feedback of the employees, customers and shareholders are actually the key to a successful business. Hastings started including the employees in the various business decisions for their opinions and feedbacks.  Hastings also started giving proper values to the various ideas put forward by the employees in the workplace of Netflix (Grinapol, 2013).

Change in use of coaching guidelines

The case study allows us to clearly differentiate the coaching guidelines used by Hastings in the workplace of Pure Software and Netflix. In the workplace of Pure Software, Hastings followed an autocratic leadership style which included him playing the role of a strict leader. In the workplace of Pure Software, Hastings never included the employees in the workplace in any of the major business decisions. Hastings ensured that the employees of the workplace in the Pure Software had to follow rules and regulations of the organisation for all of their learning and development activities according to the business model (Healy, 2010). The coaching guidelines in the workplace of the Pure Software allowed the employees to follow the guidelines strictly as set by the organisation. The coaching guidelines of Netflix allowed the employees to have a flexible and comfortable schedule which allowed them to complete the various training and development activities according to their convenience (Rothaermel, 2013). The coaching guidelines implemented in the workplace of Netflix by Reed Hastings involved effective and efficient guidelines to allow the employees to have enough time organised in an efficient manner which allows them to complete the various responsibilities along with the training and development activities. The coaching guidelines in the workplace of Netflix allow the employees to have full control over the various training and development activities. The leadership style of Reed Hastings allowed the employees of Netflix to have a better insight into the business model of the organisation due to the effective and efficient coaching guidelines (Licata, 2014).

 

Conflict management style

The conflict management style is the strategy in the organisations, which allows the management and leaders to manage the various situations escalated due to the difference in opinions between the employees. The leadership style followed by Reed Hastings in Pure Software and Netflix had different conflict management styles, which allowed him to manage the various adverse situations in different ways (Leonhardt, 2007). The conflict management technique followed by Hastings in the workplace of the Pure Software included activities of confrontation, rejection and insults to the employees of the organisation. This style of conflict management allowed Hastings to have the upper hand in any of the conflicts in the workplace, which in turn allowed him to resolve the conflicts in a forceful manner. This also caused the employees to be dissatisfied due to the decisions and opinions forced on them by the leadership (Shin, 2009). In Netflix, Hastings tried to follow a different style of conflict management which allowed the employees to put their opinions and explanations in the open before Hastings took any kind of decisions regarding the resolution of the conflicts in the workplace. This allowed Hastings to gain popularity in a positive manner in the workplace of Netflix (Sauer, 2005).

Conflict management in the deal with Epix

Epix used to have the access to the media content of some of the biggest studios in the world such as Lions Gate, Paramount and MGM. Reed Hastings struck a deal with Epix to be able to provide the customers of Netflix with all the exclusive media contents from any of the three large studios. Hastings envisioned the deal with Epix to increase the business of Netflix to a new height due to the popularity of the exclusive contents provided by the various product offerings of Netflix. Some of the most important goals and objectives of the organisation along with the vision of a successful Netflix were dependent on this deal with Epix. This caused Reed Hastings to follow the collaborative style of conflict management. Reed Hastings ensured that any conflict between both the organisations is resolved in an effective and efficient manner which allowed both the organisations to be benefitted by the resolution of the conflict. Sometimes Hastings also preferred to follow the compromising style of conflict management to avoid any kind of the adverse situations for the business operations of Netflix in terms of the deal with Epix (McCord, 2014).

(2) Changes in Netflix’s product offerings

The product offerings of Netflix can also include some new changes which allow the organisation to have better demand in the market. Netflix should include the coverage of the various live events around the world, which allows the customers to enjoy them through the services of Netflix. The products of Netflix should also include the various features of customisation which allows the customers to have proper control over the content on their televisions. The product offerings of the Netflix should also include the various denominations of the packages which allow the customers to have a wide range of packages and varieties through the subscription from Netflix (DuBrin, 2013).

 

(3) Leadership paradigm presented in the case

The various leadership paradigm used by Hastings in the workplaces of Pure Software and Netflix can clearly be differentiated based on the value provided to the opinions and ideas of the employees in the workplace. In the workplace of Pure Software, Reed Hastings followed the autocratic style of leadership in which he ignored the opinions and ideas of the employees working in various business functions of the organisation. Hastings used to force his decisions and ideas on the employees working in the Pure Software, which in turn caused the employees to be unsatisfied of the working conditions in the workplace of Pure Software. But in case of the workplace of Netflix, Hastings tried to maintain a situation of healthy and positive relations among the employees working in the various business functions. It can be concluded from the case study that the leadership paradigm implemented by Hastings in the workplace of Netflix was the paternalistic leadership paradigm, in which he ensures that the ideas and opinions of the employees of the organisation are listened to carefully and being acted upon depending on its effectiveness. In the leadership paradigm used in the workplace of Netflix, Hastings also tries to have a close relationship with the employees working in the various business functions by including them in some of the major business decisions associated with the business model of the organisation.

(4) Big five model of personality

There is a number of personality models used to define and analyse the personality traits of the individuals in the workplace of an organisation. The big five model of personality is such a modelling tool which is used in the various organisations to observe, analyse and understand the characteristics of an individuals in different situations. We will discuss the changes in the personality of Hastings from the workplace of Pure Software to Netflix based on these factors included in the Big Five model (Lüsted, 2012).

Agreeableness

This factor suggests the limit up to which an individual tries to cope up with the situation in the workplace in terms of behaving in a good way with the other employees. This value of this factor for Hastings was low in the workplace of Pure Software in comparison to Netflix (Lohr, 2009).

Conscientiousness

This factor suggests the behaviour of an individual in terms of being organised and determined to achieve a set of objectives. Hastings had similar value for this factor in both the organisations.

Extraversion

This factor suggests the capacity of an individual to be sociable and friendly in the workplace. The value of this factor for Hastings was low in the workplace of Pure Software and high in the workplace of Netflix (Guzman, 2011).

Intellect

This factor suggests the intellectual property held by the individual allowing him or her to have creative and innovative solutions. This factor had similar values for Hastings in the workplaces of both Pure Software and Netflix (Doughty, 2013).

Emotional stability

This factor suggests the capability of an individual to control and manage his or her emotions, which had greater values for Hastings in the workplace of Netflix in comparison to Pure Software (Copeland, 2010).

 

(5) Leadership styles

The University of Iowa defines two types of leadership styles which suggest the leader to follow two completely different paths to lead the employees working in various business functions. These leadership styles defined by the University of Iowa are autocratic leadership style, in which the leader forces his or her decisions on the employees and democratic leadership styles, in which the leader gives a lot of values to the opinions and ideas of the employees in the workplace. The case study covers both the types of leadership styles by mentioning the autocratic leadership styles followed by Hastings in Pure Software and the democratic leadership style followed in Netflix (Biba, 2006).

(6) Analysis of politics, networking, power and negotiation

The case study mentions various kinds of distribution of power in terms of the workplace condition of Pure Software having power concentrated in one place and workplace condition of Netflix having power distributed across the business (Davidoff, 2012). The case study also mentioned some of the organisational politics used in the situations of Pure Software and Netflix, which allows the management to handle the various situations associated with the various business functions. The case study also mentioned the effects of networking and negotiation on the business operations in terms of the deal of Netflix with Epix (Stone, 2004).

Conclusion

The case study of the journey of Reed Hastings from Pure Software to Netflix allowed us to understand the various types of leadership styles used in the workplaces of the organisations. The case study also allowed us to clearly understand the flow of power through the workplaces of the organisations. The analysis also allows us to understand the reason behind the success of Netflix being the usage of democratic leadership style by Reed Hastings in the workplace (Arango, 2010).

Recommendations

The major recommendations for the implementation of a leadership style are to treat each and every employee in the workplace equally and maintaining close and positive relationships with them, which in turn allows the employees to help each other in various tasks and activities (DuBrin, 2013). The employees in the workplace should be involved in the various business decisions, which in turn allow them to have better insight into the business and the vision of the founder (Bach, 2013). 

 

References

Arango, T., & Carr, D. 2010. Netflix’s Move onto the Web Stirs Rivalries. The New York Times, A1.

Bach, S. B. 2013. MBA 501 Advanced Strategic Management (& Leadership) Sacramento State University Spring 2013.

Biba, E. 2006. Netflix Presents.

Copeland, M. V. 2010. Reed Hastings: leader of the pack. Fortune (December 6).

Davidoff, S. 2012. In Netflix Case, A Chance to Re-Examine Old Rules. NY Times.

Doughty, M. 2013. Strategic Management and Organizational Culture: How Netflix Survived Disaster.

DuBrin, A. J. 2013. Principles of leadership. South-Western Cengage Learning.

Gallaugher, J. 2008. Netflix Case Study: David Becomes Goliath. Gallaugher. com, 9.

Grinapol, C. 2013. Reed Hastings and Netflix. The Rosen Publishing Group.

Guzman, E. 2011. Netflix split births Qwikster and PS3, Xbox 360, and Wii game rentals.

Hastings, R. 2012. The Official Netflix Blog: US & Canada: An Explanation and Some Reflections. Blog. netflix. com. Retrieved, 06-14.

Healy, C. 2010. Netflix in an academic library: a personal case study. Library Trends, 58(3), 402-411.

Hunter, S. T., Cushenbery, L., Ginther, N., & Fairchild, J. 2013. 4 Leadership, Innovation, and Technology. Creativity and Leadership in Science, Technology, and Innovation, 81.

Jeyakumar, N. 2014. Netflix-Loyal Customer Base.

Keller, M. 2011. Netflix: a strategic analysis (Doctoral dissertation).

Leonhardt, D. 2007. You want innovation? Offer a prize. The New York Times, C1.

Licata, B., Lowry, E., & Tallan, T. 2014. Leadership Analysis of the Streaming Video Industry.

Lohr, S. 2009. Netflix awards $1 million prize and starts a new contest. New York Times, 21.

Lüsted, M. A. 2012. Netflix: The Company and Its Founders EBook. ABDO.

Lussier, R., & Achua, C. 2012. Leadership: Theory, application, & skill development. Cengage Learning.

McCord, P. 2014. How Netflix Reinvented HR. Harvard Business Review, 1.

Rothaermel, F. T. 2013. Strategic Management: Concepts. McGraw-Hill Irwin.

Sauer, P. 2005. How i did it: Reed hastings, netflix. Retrieved July, 23, 2011.

Shin, W. 2009. Netflix (Case). Harvard Business School.

Smith, E. T. H. A. N. 2011. Netflix CEO unbowed. Wall Street Journal.

Stone, B. I. 2004. Want a Movie! Now. Newsweek Magazine.

Vance, A. 2013. Netflix, Reed Hastings Survive Missteps to Join Silicon Valley's Elite. Bloomberg Businessweek.

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