Management Practices in Netflix Case Study
Introduction
Managers play a significant role in the management of any business until it reaches their success levels. But that is not important since any business that desires to excel in its services does not only have to employ just any person to head the operations of a company. It must consider professional qualifications and skills, including the ability to embrace and adopt critical management practices in the business. Netflix company case study in one example of a business that has been through ups and downs to make sure it stabilizes amidst economic dynamics and stiff competition in their respective market. The success of Netflix Company has been a result of unique management practices and the adoption of effective policies, including understanding the impacts and role played by employee engagement programs in the management exercise. This essay examines some of the management practices used in reinventing HR in Netflix Company.
Management practice 1
One of the management practices discovered from the Netflix case study relates to the significant role played by human resource management, including understanding the role played by employees amidst HR policies and procedures. From the case study, Netflix was performing better and had reached about 120 employees. The management team was even planning an Initial Public Offering (IPO). But after the dot-com bubble burst as well as the 9/11 attack, it became difficult for the company to proceed on with its plan. The company was forced to lay a third of its employees and stalled the IPO process to counter the challenge it was going through. But after these changes were made, the company realized that it was causing many losses as a result of having many employees who were not equal to the task. In the conversation between the management team and the best engineers the company had, it was revealed that sine employees had their interest above that of the company and did not care whether the company made profits or not. The latter may explain the company’s inability to achieve the desired results and overcome the by then challenges. The managers also realized that if the company has given work opportunities to employees that had the right qualification and attitudes, Netflix would be successful. The management practice of human resources is vital in attracting high success levels (Bright et al., 2019). Notably, letting employees handle the situation they encounter in the company independently allows them to exercise their ability and skills, thereby equipping them more. Employees desire to be motivated and encouraged to exhibit high performance and to set the interests of the company above theirs (Bright et al., 2019). When employees are supported and compensated adequately for their hard work, they will, in turn, provide exemplary performance, thereby leading to the success of the firm.
Management practice 2
Planning is also evident across the entire change process of Netflix Company. As other management practices, the management had to send home a third of its employees and stop pursuing the IPO after the dot-com bubble burst as well as the 9/11 attack. The event was such dynamic that if the Netflix management team could have proceeded on with the same plan, they could have been adverse effects on the overall performance of the company and its profitability. Planning, which entails redefining the organizational goals and objectives, establishing new strategies for meeting new dimensions, and developing plans for corporate work activities (Bright et al., 2019). Considering the latter, the management first embarked on determining the necessary strategies that will help them overcome the market dynamics and become successful in the movie industry. To strategize, Netflix had to fire some employees and maintain a small number of them. This allowed the managers to clearly understand some of the things that were not revealed in their company. One of them was that the company had many employees who had their interest above that of the company. Second, after the conversation with the bookkeeper, it is also revealed that her skills were not as high as required by the company as soon as it entered an IPO. One of the requirements is that a company should have accountants who are highly qualified and have the relevant skills to execute the high performance. This would require the company to incur more cost in salaries. Since the current had not acquired the appropriate skills, the company had no option but to send her home. This was a hard decision but inevitable for the planning practice of future activities and expectations. The company also realized that it was not right to incur another cost by having the current bookkeeper in place, whereas they can employ another professional and qualified employee.
Management practice 3
The organizational culture has also been featured in the Netflix case study. In definition, culture is the set values and attitudes that individuals share and which may have a significant impact on the operations of a company (Saxena, 2009). Culture shapes people’s behavior and beliefs about what is important to them, and because of this, it may impacts negatively on the performance of the organization (Saxena, 2009; Colley, 2007). The primary reason for modeling a corporate culture, as indicated by Netflix managers, was to avoid mismatch in the set goals. In an example provided in the case study, there a great mismatch inefficiency to finish a game to the winning or the efficient to keep time for an important meeting. The feedback provided concerning the latter exhibits a high mismatch level in goal orientation and the success of the company. Lack of transparent cultural practices is one of the significant problems that run counter to the high-performance levels leaders always anticipate to create. In amidst a company such as Netflix, many cultural issues tend to rise if no strategic plan or establish culture grounds are not laid in place. Cultural diversity tends to interfere with the set goals of the company, and instead of focusing on the interest of the firm, personal goals exceed those of an organization (Colley, 2007). As an example, Netflix managers had to continuously remind people that there was a big difference between salaried employees working at the headquarters and the hourly workers in the call center. Their organizational goals were different from each other and were substantially determined by the set organizational goals and objectives. The success of any company lies in the management team’s ability to embrace and adopt a productive corporate culture in the working environment (Colley, 2007). Clear goals enhance the performance of a company while poor structures only dictate the time until the firm fails.
Management practice 4
Decision-making ability is also another essential management practice that managers should have and emulate in daily operations (Saxena, 2009). In today’s business operations, decision making has become an integral part of the management. Many companies that have become successful have not been because of how best or good in administration and employing qualified employees, but has also been as a result of strong decision-making skills. In the Netflix case study, there are many examples of decision-making instances which all led to the success of the company. First, the decision to halt the IPO because of the dot-com bubble burst as well as the 9/11 attack. This was significant since the company was facing many challenges, and it was not the right time for the management to consider the IPO. The second was the decision to lay off a third of its employees. Considering the alternative, Netflix would have many challenges in paying salaries and other expenses, which may have led to the company being declared bankrupt. Another hard decision the company had to make was to retain its current bookkeeper despite her being useful in the success of the company. According to the case study, Laura had exhibited a higher performance level. Still, her skills and qualifications could not provide the competence level required when the company was approaching the IPO. There several steps to be followed while making decisions. Based on the performance of Netflix, it is clear that the management followed due process in developing informed decisions. The managers had to consider the impact of the choices on the operations of the company both in the long run and short-run basis. This would help them understand the strategies in place to ensure that if it a negative impact, then it will not affect other significant activities of the business.
Conclusion
From the discussion, several management practices have been identified with the Netflix case study. The first management practice is the understanding of employees and developing effective programs to ensure they exhibit high-performance levels. The second management practice is the ability to make effective and informed decisions. From the case study, Netflix managers understood how to make decisions as well as their associated impacts. The third management practice is to understand the cultural diversity in your company and determine how best it can affect the operations company. The company had to define cultural practice in Netflix and make sure that there was a success in the operations. The fourth management practices, as identified from the Netflix case study, is planning. Netflix management has managed to achieve higher results because of planning, which provides employees with strategies and the path to follow while executing roles and responsibilities. All the above practices are essential in the successful management of a firm.
References
Bright, D. S., Cortes, A. H., Hartmann, E., Parboteeah, K. P., Pierce, J. L., Reece, M., Shah, A., … OpenStax College,. (2019). Principles of management.
Colley, J. L. (2007). Principles of general management: The art and science of getting results across organizational boundaries. New Haven: Yale University Press.
Netflix Company Case Study
Saxena, P. K. (2009). Principles of management: A modern approach. New Dehli: Global India Publ.