Zappos Case Study


Zappos’ Case: Focus on Stakeholder Happiness

The principle focus of Zappos is the satisfaction of itsstakeholders, employees and customers. All the decisions made by thecompany aim at improving employee and customer relations. This focushas affected the ethical culture of Zappos in a number of ways. Thecompany has a return policy for all its customers. If a customerreceives a commodity and they happen not to like it, they can returnit to the store and receive a full refund (Ferrell et al., 2015). Thecompany has an active team of employees who reply to customercomplaints over the phone. The phones are active 24 hours a day.

To enhance their accessibility further, Zappos has put a phone numberon every page of its website to encourage customer access. Thecompany has also trained all its employees to handle the customer ina courteous manner. The policy of transparency is an integral part ofZappos’ ethical culture. When the company decided to lay some ofits staff members in 2008, the CEO wrote an email to each of theaffected, explaining to them the reasons behind the dismissal.

Competitive Advantage of the Good Relationships

The good relationship between Zappos has conferred on it acompetitive advantage over its competitors. Unlike other onlinestores, Zappos has a unique corporate culture. The company insists onquality services to its customers while maintaining fun in the workplace at the same time. When employees work in an environment full offun, evidence shows that they become more productive Llopis (2013).This culture encourages teamwork and prepares the workforce for anyunprecedented challenges in the future. Zappos also trains itsemployees to make them more productive. This practice gives it acompetitive advantage over other online companies that think of humanresource development as a waste of resources and working time.

The manner in which Zappos handles its clients is very different fromits competitors. The customers feel important when they learn thatthey can return goods that do not meet their desires. Although thereturn rate at Zappos is 45%, the customer loyalty it attracts isappalling. A customer is likely to trust a retailer that is willingto take back his good than the one without a return policy. Thissimple gesture has given Zappos a competitive advantage over itscompetitors in the online fashion business.

Management of Ethical Risks and Future Ethical Risks

A common risk for online businesses is the pilferage of importantinformation to unwarranted hands. The same applies to Zappos whenhackers retrieved the personal information of its clients from thedatabase. Zappos managed this threat by informing the peopleaffected. It was an ethical move to make. Some companies would havekept the information a secret for the fear of soiling the company’sreputation. Zappos went ahead to repair its systems to prevent arepeat of the incident in the future.

Future potential risks include competitors poaching highly trainedemployees from Zappos. Although the company treats its employeeswell, it is usually hard to turn down the prospects of a bettersalary. The tough economic times have made people to yearn for bettersalaries (Pofeldt, 2014). Unethical competitors that do not want totrain their employees may take advantage of the tough economic times.


Ferrell, O.C., Fraedrich, J., &amp Ferrell,L. (2014). Business Ethics: EthicalDecision Making &amp Cases. Stamford,CT: Cengage Learning

Llopis, G. (2013). 6 Ways to Make Your Leadership And WorkplaceFun Again. Forbes. Retrieved from,&lt November, 2015

Pofeldt,. E. (2014). How to Master the Art of Poaching [Online]. Retrieved from,&lt November, 2015