CASE STUDY 8.1 - AMAZON'S SILENT RISE TO THETOP

Amazon, the Seattle-based Internet retailer, was started in 1994as the 'Earth's biggest bookstore'. Besides selling books, thecompany has diversified into selling music and entertainment, aswell as apparel, furniture, food, toys and jewellery. In recentyears, the company has also added cloud infrastructure services toits remit and has become a producer of digital content, includingAmazon Kindle, e-book readers, Fire tablets and Fire TV. Over theyears, Amazon has slowly but steadily built its brand andreputation. Far from being just an online retailer, Amazon hasbecome a true digital innovator, rivalling the likes of Google andApple in its innovative prowess. The company is constantlyinnovating new digital products and offers a breadth of digi­talservices, ranging from marketplaces bringing buyers and sellers oflocal services together to e-book lending services. This constantinnovation of products that are, upon launch, almost immediately inhigh demand stems from founder Bezos' vision for creating what hecalls the 'world's most consumer-centric company'.

Corporate Silence

When he started Amazon in 1994, Jeff Bezos' personal traits - acompetitive spirit, a loathing of taxes and government intrusion, alack of sentimentality and a mistrust of the media - proved to bethe perfect foundation for a young start-up that quickly gainedground. Those values appear to be, however, still very much alivein the company today. despite the fact that the company has becomefar bigger in size. In fact, Amazon is these days somewhatnotorious for its lack of communication with the media. Some saythat most of its communication efforts are not out in the open, buttake place behind closed doors in the form of its communicationstaff lobbying legislators to pass, for example, favourablelegislation on transporting Amazon pack­ages through drones in theair and through longer delivery trucks on the ground. This may wellbe the case, as its media relations demonstrate a largely stony,silent effort. The company does not appear to be pushing itsstories into the media, nor does it often seem compelled, even inthe face of ongoing media criticism, to respond. This way ofhandling the press is perhaps not unique to Amazon; Apple, Googleand other high-tech giants often say very little in the press. Thismay work when trying to keep new products under wraps, but it isperhaps less effective when the company is being criticized orattacked in the media, with its reputation hanging in thebalance.

An Ongoing Dispute in Book Publishing

A recent issue that flared in the media was the struggle betweenAmazon and the Hachette book group. Hachette was very vocal on thenegotiation and its fight, with Amazon saying very little. Theissue involved the difference of opinion on the royalty payment forAmazon and the pricing of e-books, which were no longer set butopen for discussion. Amazon did not want to abide by the price thatwas set by Hachette, so that it, in effect, can decide itself onthe appropriate pricing of books. This, however, would affectauthors who would see their profits dwindle, and could in somecases not even make a profit at all. When the dispute continued,Amazon eliminated discounts and delayed the delivery time for booksprovided by Hachette, badly affecting the sales of Hachette booksand pushing customers away for those titles. Throughout thedispute, Amazon remained largely silent, even when many well-knownauthors, readers and loyal customers waded in. In a post on itswebsite, the company did, however, release a brief formal statementin which it declared that 'we are not optimistic that this will beresolved soon', seeing the issue as at the heart of its businessmodel and the future of the publishing industry. In the same post,Amazon also oddly enough criticized the media for its `narrow'coverage of the dispute with Hachette, but had undertaken no mediaefforts of its own to balance out such coverage.

A Great Place to Work?

A second issue that emerged in the media in 2015 was a critiqueof the company's corporate culture. The New York Timespublished a scathing critique of a competitive and intenseworkplace environment faced by Amazon's white-collar employees.Whilst earlier coverage had detailed the conditions for workers inits warehouses. the New York Times feature documented whatit saw as cruelty towards employees in the company's corporateheadquarters, including gruelling working conditions and the ratherharsh, even bullying, treatment of staff suffering personal crises,such as cancer and miscar­riage. Confronted by the article,communication staff did not immediately respond to The New YorkTimes or to the general media who, following the feature, hadalso started to write about the work conditions at Amazon. JeffBezos did, however, issue an internal e-mail to employees, sayingthat the article 'claims that our intentional approach is to createa soulless, dystopian workplace where no fun is had and no laughterheard'. Bezos writes: 'I don't recognize this Amazon and I verymuch hope you don't, either ... I strongly believe that anyoneworking in a company that really is like the one described in theNYT would be crazy to stay. I know I would leave such a company'.In the e-mail, he also encourages staff to report the kind ofnegative experiences and management practices reported in theNew York Times feature: 'Even if it's rare or isolated,our toler­ance for any such lack of empathy needs to be zero.'Whilst the company has remained largely silent on the externalfront, the vice president of corporate affairs for Amazon, JayCarney, interestingly did post a message on Medium a few monthsafter the New York Times piece was first published. In it,he criticizes the lead journalist for not checking her sources andfor offering a rather one-sided account of Amazon's corporateculture. Carney also writes that through all their conversationswith the lead journalist on the arti­cle, they 'were repeatedlyassured that this would be a nuanced story that dove into whatmakes Amazon an exciting and fun place to be, not just ademandingplace to work'.

Apart from the question of what conditions at its headquartersmay really be like, these two recent cases do reveal an interestingfact about Amazon. In contrast to what its steady rise in terms ofthe value of its brand and reputation would suggest, the companyhas been operating a very minimal approach to its media relations.Its record in terms of pushing stories in the press shows thatAmazon has done very little of the kind, and equally when issuesemerge in the media - such as the two issues described in this case- the company often remains silent, and for a prolonged period oftime. It seems that communication practitioners in the companybelieve - and they may, at times, be right - that too strong aresponse to such issues may escalate them even further, turningthem into real talking points in the public domain and affectingthe company's reputation in turn. At the same time, with such atacit response there is a real risk of such issues lingering andturning into a real crisis for the company, which may be one reasonwhy, after a few months of silence, the company's vice-present ofcorporate affairs tried to set the record straight on the NewYork Times article.

QUESTION

1. In your point of view, what are the potential risks and rewardsfor Amazon in staying out of the limelight, in response to mediacoverage on its business conduct? (10m)