Essay on Management: of Netflix and the Reason They Are Great

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Netflix was founded in 1997 by Reed Hastings and Mark Randolph. The entrepreneurs started a business together; however, Hastings’ part was more important undoubtedly, as he was not only a good specialist but an excellent businessman, who remains “the boss” of the company until now. Both founders had some business in IT sphere before.

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Essay’s Introduction

Netflix started as a DVD-by-mail company. The founders noticed a big possibility in the video rental market regarding the inconveniences of current rental services. They invented a new method for video rental which lies in sending DVDs via mail. Now you don’t have to go to the shop to get a film or series for some time, as you can make the internet order at home and receive it without any efforts.

The business was doing good. Since 1997 a secret wizardry of competent management and a splendid corporate culture made an internet giant (83 million customers and $42 billion capitalization in 2016) out of 30 men staff and 900 DVDs. Now the service is available all over the world (except North Korea, China, and other related folks) and makes its own movies and series which create a worthy competition to such TV monsters as HBO, Starz etc.

The Corporate Culture Itself:

Netflix’ corporate culture has been creating and evolving since its foundation and until now. During its existence, there were composed 5 main rules which are used everywhere in the company management:

  1. Do not be afraid of fundamental changes. Change your strategy until you find one that really works. Steps in this direction will not only determine the prospects for your business, but also will help to find your own competitive advantages.
  2. Play for the future: the origins of this rule follow: Netflix originally positioned themselves as the "best option for DVD-rental", which did not allow to reach the maximum understanding of what should be offered to the client to move on. In 2004 Netflix conducted research, made conclusions and came to a new brand positioning - "Enjoy movies easily." This has not only led to the creation of marketing message, but allowed to think about the possible new benefits, improved design and more. The point is that well worked out brand positioning simplifies complex tasks and provides a strategic control.
  3. Learn and react to the marketing changes: no one can predict the future. However, you can explore the market to foresee changes in it, to react quickly and not to rely only on short-term objectives. (Drawing attention to the lightning-fast development of the Internet technologies, the company has over 4 years before the appearance of their first modest streaming library planned out into the field of streaming video).
  4. Do not be afraid to cancel your decision: few know that Netflix created its own gadget for streaming. And while filming a promotional video for it, management realized that it has no prospects, due to the many existing consoles by such companies as Microsoft, Sony, and Samsung. The competition is huge and there is no way of facing it efficiently. So, they decided to cancel the sales of it. As a result, a large pile of money lost, but it could be even greater in case the product released to the market. Refusing own decisions is difficult both emotionally and financially, but if such a decision is the best for the company - it is necessary to be made.
  5. You must build the corporate culture from the scratch: it can’t be simply written; the company should create it through the actions and the employees should live it out.
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The Policy of Grownups: More Curious Facts for Your Essay

Netflix is famous for its corporate culture and management now. Patty McCord co-wrote a report that has become fabled – a 126-page presentation that shows the in-company culture of the firm. Here are some interesting abstracts of it:

  1.  Good work should be generously paid;
  2. We are a team, not the family. Leaders of Netflix hire, develop and fire wisely. Therefore, we have stars at every position;
  3. The more talents we have, the more we can achieve. Internal conflicts and selfishness are unacceptable;
  4. Unconditional loyalty to falling indices and inefficient staff is not about us;
  5. We do not evaluate people by how often they come to the office and how many hours do they work;
  6. Stable “B” work should be paid generously and there are no any “A’s” for diligence. Stable "A" work is paid even better, but imposes additional responsibility;
  7. Our model is to give our employees more freedom, instead of restricting it;
  8. Vacations. There are no any restrictions and inspections. Also, Netflix has no dress code, but no one goes to work naked. Conclusion: not everything requires some special rules;
  9. Netflix’ policy on hospitality: you can do anything you want if it is in the interests of the company;
  10. One outstanding employee does more and costs less than two medium employees;
  11. Bonuses are not needed. Better to spend the money on big salaries and to give the employees the opportunity to spend it at their own will.

To generalize Netflix’ policy on employees, we may only say: they treat them like grownups. Netflix’ corporate culture is designed to divide the processes, to expand employees’ rights and opportunities, to trust them so that they are able to make decisions like adults. Such way of attitude to the subordinates made an incredibly good influence on business. Their management style is worthy of being an exemplar.

Creativity is extremely valued in Netflix. Netflix hires “outstanding” employees only. There is no room for adequate at Reed Hasting’s video streaming company. “Those hires often lead to generous severance packages,” says the CEO of Netflix. McCord provides evidence that creativity is the most important asset in an employee. “In creative/inventive work, the best is 10x,” she writes in the deck.

Generally, Netflix’ corporate culture is really efficient for the business sphere they deal with. It proclaims freedom and adequacy in actions and decision making, which helps to react quickly, toughly and successfully. Also, their HR policy makes millions of people crave to join Netflix team.

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