Type: Research Essays
Sample donated: Debbie Bishop
Last updated: March 13, 2019
Brief Overview of UberThe great idea of Uber stroke two young persons who were ambitious and good at thinking. One night in the year of 2008, when Travis Kalanick and his friend Garrett Camp traveled in Paris and could not stop a cab in the snowy day, a simple assumption floated through these two persons’ minds, creating a mobile app so that people could tap and call a taxi timely rather than wait for a long time (Kara swisher, 2018).In 2009, UberCab appeared in San Francisco and served for people living in that city (Radionzconz, 2016). It renamed as Uber when government accused that its name was not accordance with its industry characteristic (cars employed by Uber did not belong to cab) (Thestarcom, 2018).
Until 2016, Uber had entered into more than seventy countries (Theeastafricancoke, 2018) around the world and operated in more than two hundred cities in North America (Uber, 2016 cited in Rosenblat et al., 2017, p.258).
According to the data calculated by Uber itself, in January 2015, more than 150,000 driver-partners were active in the United States each month (Hall & Krueger, 2016, p.2). On the other hand, the loyalty of Uber’s drivers were low. Classfying drivers who did not update information of carrying for over six months into the category of inactive drivers and others into active drivers, nearly half driver-partners did not have any trip record in fifty weeks at the start of any period (Hall & Krueger, 2016, p.16). Although with low driver retention rates, Uber expand quickly for the backbone of new drivers (Hall & Krueger, 2016).Organization Structure(?11)Uber is an ambitious company. It launched in the San Francisco market in 2009 and expanded to over 450 markets during seven years around the world (Linkedincom, 2018).
Not only in North America, but also in Europe, Asia, South America, Africa, and Australia, having troubles in stopping cabs and encounting traffic problems are not unusual in daily life (Linkedincom, 2018). The original purpose to establish Uber is to reduce the pressure of these problems. Based on this, the potential market for ride-sharing app can be huge in many parts of the world. The wonderful idea and strong momentum helped Uber get financing support from various organizations and personal investment such as venture capital firms, technology giants, mutual funds and Sovereign Wealth Funds, including Google Ventures, Benchmark, Goldman Sachs, Baidu, Public Investment Fund from Saudi Arabia etc. so that it can expand and capture the market quicker than rivalries (Talkmarketscom, 2018). By June 2016, the amount of funds Uber gained was about 13.
8 billion dollars (Talkmarketscom, 2018). Furthermore, it has planned go to public in 2019 (Seth fiegerman, 2018).Global expansion is an essential way for Uber to run businesses. However, the differences in culture, expectation and other diversity of aspects are big challenges for Uber to overcome (Linkedincom, 2018). Policy???businesss ethics/culture? is the first barrier that Uber has to confront when it comes to a new place. Some countries (eg. the United States, Canada and the United Kingdom) with policies that are flexible and subject to judicial interpretation (Linkedincom, 2018) are much better for Uber to operate their laws and regulations.
In Asia, taking China for example, its policy is solid and the lifestyle for Chinese at present absolutely varies to several years ago. Taking a smartphone and paying through app (eg. WeChat, Ali Pay) is a normal phenomenon in China.
Discovering the difference and capturing local competitive advantage are essential for multinational entrepreneur to adjust and construct to adapt to its contingencies (which are inescapable and develop with the days the organization passes through) like environment, technology and size which are three inescapable contingencies that organizations have to face as these organizations become bigger and are able to predict their environment on the basis of their experience (Clegg et al., 2016, p.). The longer they exist in the market and the bigger they are, the more bureaucratic they become (Clegg et al., 2016, link, p.
). Name: the hierarchy of Uber Source: Tmtpost, 2018.As seen in the chart above, different people are responsible to dealing with different tasks as they are put in various positions. Organization structure is a means of establishing a formal system that drives labors in different positions to cooperate and achieve the company’s goals (Buchanan and Huczynski, 2017).Organizational CultureEdgar H. Schein (2004) pointed out that culture is an intangible and invisible item (reference). Culture cannot be touched in reality, but it has an influence on the how organisations work(reference).
In the past, sophisticated man were called ‘cultured’ by the amateur; experts who specialized in seeking the secret of human’s development always put this with other words like religious culture, custom culture and geographic culture (Schein, 2004). In recent decades, organizational investigators and managers refer culture to values and beliefs in controlling workers’ behaviors and having impact on their decisions in dealing with problems (Schein, 2004).Some researchers point out that organizations with a strong culture will perform effectively (Schein, 2004) and has more likelihood to get sustained superior financial performance as its culture is valuable, rare and hard to be duplicated (Barney,1986). Rodrigo Bastos (2017) has published an article called Toxic Organizational Culture which discussed Uber’s culture (Mediumcom, 2017). He pointed out the special cultural values in Uber as they “make magic, superpumped, just change, be an owner not a renter, optimistic leadership, just change, big bold bets, customer obsession, always be hustlin’, let builders build, winning: champion’s mindset, principled confrontation, meritocracy and toe-stepping, celebrate cities (Mediumcom, 2017).
” These fourteen company values were the criteria guiding employees on how to deal with matters when they occurred which might be affecting their performance in the workplace (Barney, 1986) .Mike Isaac (2017), a technology reporter who is working in San Francisco bureau of The New York Times and responsible for reporting news about Facebook, Uber and Twitter, wrote an article named ‘Inside Uber’s Aggressive, Unrestrained Workplace Culture’. He proposed that Uber’s radical models which focus on pursuing the greatest achievements would have bad effects on the company (Mike isaac, 2018). The fallout was that leaders or colleagues would not be punished or fired because of their excellent performance (Mike isaac, 2018). (?????)The relationship between culture and firms’ performance has been discussed by Edgar H. Schein (2004). He argued that if culture was successfully applied by a company and got more positive feedback, others would attempt to imitate its pattern (Schein, 2004).
However, the result for this modulation could not guarantee forming competitive advantage based on culture. It correlated to how many companies adopt appropriate modifications toward culture and got similar results (Schein, 2004). If participants were majority, the activity of adaption in this time would not result in huge change in construction; if seldom, companies which attended in could enjoy sustainable competitive advantage (Schein, 2004???).
Uber and Didi had price wars in grabbing the Chinese market. Although Uber considered the diversity of culture, it was not aware of the phenomenon of brushing single. Brushing single is a trick that sellers employ some people to give good comments on their products which these people have never used this product. The consequence is that many consumers are misleased by thses comments. It is also used in the ride sharing industry in China. Some people work as a team, playing the role of driver and customer so that the order received by drivers will be more and the distance will be longer.
According to the subsidy regulation conducted by the ride sharing company, both drivers and customers can get more rewards (). In 2015, through Chinese government’s efforts and special systems designed by Didi to prevent cheating, the loss caused by brushing single was decreased (Ifanrcom, 2016). However, as an exotic company, the growth number of users and funds in Uber was not as positive as it showed in data (Ifanrcom, 2016). Especially when Didi also got an abundant of financial support from Alibaba and Tencent, low price could not be Uber’s competitive advantage in breaking into the Chinese market (Ifanrcom, 2016). Furthermore, with the huge potential market, more people take part into the ride-sharing industry such as Lyft, Curb, Grab and some of them get good grades in the market (Zacks investment research, 2018). The existence of rivals means the structure of ride-sharing industry is no longer as stable as before.
Uber needs to put more enegy and time to their customers in order to expand their customer base (). Besides the threat from competitors, Uber also undertakes stress from various countries and districts (eg.Austin, Texas) (Bbccouk, 2018). For protecting the benefit of local taxi industry, some national governments issued ban for letting Uber drive in their cities such as Russia, Italy and state of Alaska (Telegraphcouk, 2018). Uber’s culture do not have the attribute of imperfectly imitable (Barney, 1986), so it will lose it competitive advantage if it does not find a good way to adjust to the new framework of the market.
LeadershipThere are three definitions of leadership in BusinessDictionary. These are”?The individuals who are the leaders in an organization, regarded collectively; ?The activity of leading a group of people or an organization or the ability to do this; ?The act of inspiring subordinants to perform and engage in achieving a goal (Businessdictionarycom, 2018).” However, not all leadership are good.
Some leaderships have dark side (Conger). It is dangerous for a company with high-profile leadrship because the leader may misguide the organization and distort vision to realize maximize profits for himself or herself (Conger). Taking leader’s behavior and minds as the guidance of company’s developing might form a bad climate that leadership believe his vision of rightness (Conger). The performance get from internal or external will not be objective. Uber faced the situation that majority management staff left the company, including forced or voluntarily. Jeff Jones (2017), the president of Uber, quitting his job for accusing “.
..the beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced, so .
..” (Recodenet, 2017); Brain McClendon, Uber’s vice president of mapping, submitting his resignation at the end of March (Recodenet, 2017). In addition, Gary Marcus (the director of Uber’s artificial intelligence lab)(Recodenet, 2017), Charlie Miller (famous hacker responsible for program of driverless car)(Recodenet, 2017), Ed Baker (Uber’s VP of product and growth)(Recodenet, 2017), Raffi Krikorian (Uber’s senior director of engineering) (Recodenet, 2017), and Emil Michael (Uber’s SVP of business)(Recodenet, 2017) were all left Uber. As many people at the top left, management of Uber became turmoil.
In June 2017, Travis Kalanick, co-founder of Uber, leaving his position of CEO (Bbccouk, 2018). It was urgent to look for an appropriate CEO to substitute for the former. Kalanick is a masculine with scrappy attitude (NetEase, Inc., 2017). It was his characteristics that evolved special climate for the company and because of its changeless behavior, it caused a run of problems in its following development.
According to contingency approach, person should realize that he or she could not be an excellent leader in any situation. It stressed that person should be put into a position that he or she was good at. If a person was allocated in a wrong situation, it needed to change elements of working context which could be better directed by the leader or this person should be transferred into another post.Obviously, the main cause leaded Uber to mess as present was its organizational culture. Organizational culture embodied rules for a particular company how to choose leaders, for example, who would get promoted and who would be followed by subordinates. Situation control contained a point that a leader’s characteristics would not change so that it was elements of situation rather than leader’s characteristics should be changed when a leader could not exert well in a situation. Culture developed with the company developing. It depended on complicated events the company experienced while leaders’ behaviors took a small part in forming culture.
However, when a company almost lost its opportunity to exist in the industry because it failed to use culture properly, company’s leadership needed to take part in, analyse and solve the problem together. Hence leadership had a close relationship with organizational culture.Ohio State University had conducted a research for employee-centered leadership and production-centered leadership and got a result that both could achieve excellent outcome. Obviously, under the guidance of Travis Kalanick, Uber adopted production-centered leadership. Everyone were struggling to realize his or her value to the organization by finishing a mount of incredible tasks and attempted to bypass superiors in working.
Relationship was sightless in the company. Nevertheless, Korman (1966) proposed suspicion about it and claimed that the experiment could not support its result on account of less experimental groups. Contingency existed in the research done by Ohio State University. Adam Lashinsky had uploaded an article in June of 2015 in FORTUNE CHINA, gleaning and editing comments made by five individuals who were the first batch staff of Uber. These five persons entered into billionaire list in 2015 and shared their story about how they joined in the company, what tasks they undertook at beginning and how to deal with business growth and overcome challenge for surveillance. Their experiences for joining Uber were highly similar that was ‘by accident’. Characteristics emanated from them were good to help them adapt to the technology startup.
The tiny space accommodated a table only was awash in intelligence, achievement drive, enthusiasm, initiative, persistence, insightfulness and tolerance for stress every day. Each employee tried to improve the quality of his or her job in hand. At the same time, they encouraged each other and gave advice sincerely to whom asked for help. As Austin Geidt mentioned ‘…
I wasn’t super-qualified at the time…but they kind of hung on to me while I was green until I got the hang of it.’ This democratic leadership created a cordial and harmonious atmosphere.However, as company size became bigger and more talented people joined in the company, democratic leadership converted into laissez-faire leadership imperceptibly. Deviating from supervising and empowered to dispose work, internal management worked ineffectively and hierarchy existed in name only.
In September of 2017, Dara Khosrowshahi, Expedia boss, taking charge of CEO at Uber. When many reports criticized Uber’s culture, he did not totally repudiate all cultures Uber had formed but remained good, abandoning bad. He respected efforts and achievements Uber has done before. Under the condition of minefield, Khosrowshahi expressed his prospects for Uber’s future in public to calm down employees and tried to regain confidence from customers and investors.In addition, Uber’s executives solicited ideas from employees without limitation for company’s cultures and received suggestions from over 1,200 staff. At the same time, they had more than twenty dialogues with representatives from Human Resource Organizations and international branches. Relationship-oriented was what this technology company missed before. Except complains from external, employees also were tired of outdated cultures.
Khosrowshahi adopted participative leadership to build relationship with staff and facilitated them to get involved in forging a better company. The higher staff engaged in giving counsels for company, the stronger they acquired the sense of ownership. Ownership drove people willing to contribute themselves to the organization and increased their efficiency. Business EthicsEthics is considered as a study of morality that established rules and principles to judge right or wrong under particular situations (Crane and Matten, 2010). Ethical mismanagement may cause business crisis. In recent years, Uber underwent a series of events and pushed itself into a perilous situation. Recruiting drivers with felony records and refusing to explain anything (Wwwftcom, 2018), tracing passengers with economic value (James temperton, 2018), hiding the event of information leakage (Wwwftcom, 2018), delivering a speech with sexism (Fortunecom, 2018) etc were annoying (Wwwftcom, 2018). In February of 2017, Susan Fowler, the former engineer in Uber, published an article called Reflecting On One Very, Very Strange Year At Uber in her blog which shocked everyone for the industry and Uber was brought to the forefront immediately (Susanjfowlercom, 2018).
It disclosed disrespectful treatments she had experienced at Uber, harassed by executives (Susanjfowlercom, 2018). As a result, related government began to investigate internal culture of Uber and executives resigned in quick succession (Businessinsidercom, 2018). In June at the same year, Travis Kalanick started his unlimited vacation under the pressure from the board of directors (Bbccouk, 2018). The individual morality sometimes may be not in accordance with the institutional morality. Jeff Jones quit his job in the Uber because he thought what he did was inconsistent with his morality(Recodenet, 2017).
Morality is the thing that formed and affected by society to determine the behavior of right or wrong for individuals or communities (Crane and Matten, 2010).”