Crisis Management and Strategic Responses of Amazon Company To COVID-19 Pandemic
Crisis Management and Strategic Responses of Amazon Company To COVID-19 Pandemic
Crisis Management and Strategic Responses of Amazon Company To COVID-19 Pandemic
Abstract:
The purpose of this research paper is to provide recommendations to commercial
organizations in Algeria when managing crises by examining Amazon organizations that
manage the similar nature of crises on a daily basis. By examining the ongoing operations
of crisis management to the covid-19 pandemic in the organization, this research paper
will analyze if there are any essential learnings that can be applied for commercial
organizations. More specifically the paper examines how Amazon organizes, composes,
and coordinates, and analyzes if our commercial organizations can make use of a similar
structure.
Key Words: Crisis, Crisis Management, Strategic response, Amazon, Company, Covid19,
Pandemic.
Introduction:
Modern organizations are faced with a higher frequency of different crises than
ever before. All crises big or small have a toll on organizations; it could be financial,
reputational, and emotional/public safety among others. There is therefore an
advantage for organizations to take preventive actions so that crises that will affect
the organization are mitigated or have limited impact. The question is no longer
whether an organization will face a crisis or not, but when they will face one. Crisis
management is therefore a developing research topic that has through the years
seized bigger importance within organizations. In light of the emerging coronavirus
global pandemic, the world is currently experiencing an unprecedented crisis with
the spread of the virus in most regions of the world, which constitutes a challenge
for countries and organizations in how to manage this crisis. The Coronavirus
pandemic has had an immeasurable impact on workers and communities around the
world. As people sheltered during the lockdown, demand for e-commerce and cloud
computing increased tremendously, and with it, Amazon’s increasing leverage over
our economy and society.
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Problem Discussion: Previous crisis situations have been handled with mixed
results, sometimes devastating ones. Due to lack of preparation and appropriate
response strategies crises have escalated to more severe circumstances than
necessary. Organizations are now more than ever under constant supervision; their
actions affect not only the organizations ongoing operations but also society as a
whole. Media have always supervised the actions of politicians and governmental
organizations. However, today’s commercial organizations play a similar role
regarding societal impact. Their actions have therefore seized greater interest among
media and the public. This would imply that commercial organizations have a greater
responsibility and benefit to conduct appropriate crisis responses. Even though
organizational crisis strategies are constructed for the interest of the organization it
is inevitable to also benefit stakeholders and society with appropriate crisis
responses.
Research Questions: To fulfill the purpose and approach the problem statement of
this study we will answer the question: What can commercial organizations in
Algeria learn from Amazon organization's ongoing crisis management
operations handling the covid-19 pandemic?
I. Literature Review:
Previous literature related to the subject of this research has been reviewed in
order to provide a scientific background. To the best of the researchers’ knowledge,
no study has been conducted on Crisis Management and COVID-19 Response: The
Case of Amazon company.
1. Crisis Management:
The financial crisis 2008, the Crimean crisis 2014 and the oil crisis in the Gulf
of Mexico 2010 are some crises that have happen in the world during the last years,
and within a globalized and fast-paced world these crises have an impact across
international borders that affect a higher number of individuals and organizations
than ever before. However, a crisis could also be small but still have devastating
effects on those involved. This could for example be machinery failure, union strike
or the death of an employee. No matter what kind of crises that will occur they have
two specific points in common: they inflict a cost on the organization and with a plan
and a structure of how to handle the crisis damage can be controlled. (Holmgren &
Johansson, 2015, p. 5)
The Dictionary defines crisis as a stage in a sequence of events at which the
trend of all future events, especially for better or for worse, is determined; a turning
point. a condition of instability or danger, as in social, economic, political, or
international affairs, leading to a decisive change. (Dictionary, 2021)
There are plenty of definitions for a crisis. For this entry, the definition reflects
key points found in the various discussions of what constitutes a crisis. A crisis is
defined here as a significant threat to operations that can have negative consequences
if not handled properly. In crisis management, the threat is the potential damage a
crisis can inflict on an organization, its stakeholders, and an industry. A crisis can
create three related threats: (1) public safety, (2) financial loss, and (3) reputation
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loss. Some crises, such as industrial accidents and product harm, can result in injuries
and even loss of lives. Crises can create financial loss by disrupting operations,
creating a loss of market share/purchase intentions, or spawning lawsuits related to
the crisis. all crises threaten to tarnish an organization’s reputation. A crisis reflects
poorly on an organization and will damage a reputation to some degree. Clearly,
these three threats are interrelated. Injuries or deaths will result in financial and
reputation loss while reputations have a financial impact on organizations. (Coombs,
2007, p. 3)
Crisis management can be defined as a set of functions or processes whose
goal is to identify, examine and forecast possible crisis situations and establish
special means that would enable an organization to prevent a crisis or to deal with it
and overcome it with minimal consequences and the fastest possible return to a
normal state. Thus, crisis management is a stenographical name for all kinds of
activities directed at dealing with a system in a state of disruption: prevention,
preparation, alleviation, and recovery. It is a matter of modeling actions, agreements,
and decisions that influence the course of the crisis and encompasses organization,
preparations, measures, and distribution of resources for the purposes of overcoming
it. Crisis management usually takes place under conditions of organizational chaos,
under the pressure of numerous media, in stressful circumstances, and without
precise information. (Milašinović & Kešetović, 2008, p. 180)
Crisis management is the measures and methodologies used to recognize,
control and limit the damage of a crisis, and its ripple effects. (Canyon, 2020, p. 8)
Effective crisis management handles the threats sequentially. The primary
concern in a crisis has to be public safety. A failure to address public safety
intensifies the damage from a crisis. Reputation and financial concerns are
considered after public safety has been remedied. Ultimately, crisis management is
designed to protect an organization and its stakeholders from threats and/or reduce
the impact felt by threats. Crisis management is a process designed to prevent or
lessen the damage a crisis can inflict on an organization and its stakeholders. As a
process, crisis management is not just one thing. Crisis management can be divided
into three phases: (1) pre-crisis, (2) crisis response, and (3) post-crisis. The pre-crisis
phase is concerned with prevention and preparation. The crisis response phase is
when management must actually respond to a crisis. The post-crisis phase looks for
ways to better prepare for the next crisis and fulfills commitments made during the
crisis phase including follow-up information. The tri-part view of crisis management
serves as the organizing framework for this entry. (Coombs, 2007, p. 3)
Crisis Management Capability: is very clear that it is not prescriptive about
solutions. There are no checklists and nor should there be, as good practice in crisis
preparedness is something that each organization needs to develop within the unique
context of that organization. provides a framework within which a company can do
this thinking. In particular, provides “the four basic requirements of capability”:
(Hamidovic, 2012, p. 2)
An intellectual requirement, which includes the ability to analyze situations,
set strategy, determine options, make decisions and evaluate their impact. It
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also includes the shared concepts that underpin the discipline of crisis
management.
An organizational requirement, which includes the structures and processes
needed to translate decisions into action and review their impact.
A cultural requirement, which reflects the willingness of staff to share and
support the top managers’ intentions and policies.
A logistic requirement, which reflects the ability to support solutions by
applying the right resources in the right place, at the right time.
2. Covid-19 Pandemic:
A coronavirus is a kind of common virus that causes an infection in your nose,
sinuses, or upper throat. Most coronaviruses aren't dangerous. COVID-19 is a disease
caused by SARS-CoV-2 that can trigger what doctors call a respiratory tract
infection. It can affect your upper respiratory tract (sinuses, nose, and throat) or lower
respiratory tract (windpipe and lungs). It spreads the same way other coronaviruses
do, mainly through person-to-person contact. Infections range from mild to deadly.
(WebMD, 2020)
COVID-19 is a new disease, caused by a novel (or new) coronavirus that has
not previously been seen in humans. Because it is a new virus, scientists are learning
more each day. Although most people who have COVID-19 have mild symptoms,
COVID-19 can also cause severe illness and even death. Some groups, including
older adults and people who have certain underlying medical conditions, are at
increased risk of severe illness. (CDC, 2020)
The World Health Organization considers the emerging coronavirus a global
pandemic, which has spread in at least 223 countries worldwide, infecting over 100
million people and causing over 2 million deaths, therefore there is an urgent need
for a coordinated global response to prepare health systems to meet this
unprecedented challenge. (WHO, 2021)
3. History of Amazon Company:
Amazon.com the largest online shopping site in the U.S. Founded by Jeff
Bezos in 1994, within four years, Amazon had more than four million customers.
Today, more than 100 million visitors access the site each month. Amazon started
out as an online bookstore, constantly making news with its product volume. In the
late 1990s, after adding CDs, videos, DVDs and games, Amazon offered more than
four million titles. It continued to add new lines of business including toys, consumer
electronics, software, power tools, home improvement products, online auctions and
cloud computing services, the latter a significant profit center for the company. By
opening up its e-commerce platform to non-Amazon vendors in 2000, nearly every
legal product that can be shipped is available on Amazon's site. In 2005, Amazon
Prime was introduced as an annual subscription. Prime offers free one-day and two-
day shipping on most products Amazon stocks in its warehouses. Prime membership
increasingly offers other benefits, including unlimited video and music streaming,
photo storage and e-book lending (Prime Video, Amazon Music, Amazon Photos
and Kindle eBooks). In the late 2000s, the company began to offer Amazon-branded
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items, including e-book readers, tablets, smartphones, cables and other devices.
(Amazon.com, 2021)
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has become a common habit, Figure 1 shows Amazon's net income increased raptly
in 2020.
Fig. 1: « Amazon's net income from 1st quarter 2009 to 4th quarter 2020»
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Amazon to ensure that their employees and their communities have access to
COVID-19 vaccinations and testing. Here are some of the ways they’re stepping up:
(Amazon, 2020-2021)
Amazon is helping vaccinate thousands of people through pop-up clinics in
Washington State and Florida.
Amazon is advocating for COVID-19 vaccinations for their front-line
employees, including team members working in fulfillment and data centers,
and at Whole Foods Market stores.
It also ramped-up onsite COVID-19 testing for employees thanks to the
ingenuity of their fast-moving response team–and they’re sharing what they
learned.
Amazon is also heavily invested in supporting employees, customers, and
communities during the pandemic, from enhancing safety measures to increasing
paid time-off. Here are a few examples: (Amazon, 2020-2021)
They provided more than $2.5 billion in bonuses and incentives for our teams
globally in 2020.
They made over 150 process updates, including enhanced cleaning and social
distancing measures, and implemented disinfectant spraying and temperature
checks across operations worldwide.
Amazon distributed personal protective gear, including millions of masks for
employees.
An employee diagnosed with COVID-19 receives up to two weeks of paid
time off—in addition to other paid and unpaid time off options. And they
ensure Amazon employees receive comprehensive health benefits starting on
Day 1 of employment.
They established a $25 million relief fund for partners, such as delivery
drivers, and seasonal associates facing financial hardship or quarantine.
With an eye on customers, Amazon is vigorously combating price gouging
to ensure fair pricing and fight entities seeking to profit off the COVID-19
crisis.
Amazon recommend all employees who can work from home to do so.
Employees and partners whose work requires being in their workplace have
access to all of their usual paid and unpaid time-off benefits. They are
continuing to pay all hourly staff who work for service providers—from
food-service workers to security guards to janitorial staff—supporting they
global offices around the world.
Amazon donates $1 million to a COVID-19 Response Fund to rapidly deploy
resources to community-based organizations at the front lines of the Puget
Sound region's COVID-19 outbreak. The fund, which is hosted by the Seattle
Foundation, will provide flexible resources to nonprofits and community-
based organizations working with those disproportionately affected by the
pandemic and the economic consequences of the outbreak. Initial grants will
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do not allow sufficient time for workers to make the 2-3minute walk to the bathroom
to wash their hands. (Green & Dwoskin, 2020)
III. Discussion:
The COVID-19 crisis is radically reshaping our world, and one of its
unfortunate side effects is the acceleration of Amazon’s domination of our markets
and, frankly, many aspects of our lives—how we work, how we consume
entertainment, how we communicate. So far, the company has not used its power as
a force for social good—it has avoided taxes, squeezed small and medium sized
businesses, dragged down labor conditions. While many organizations are suffering
during the pandemic, for Amazon, it presents an opportunity for higher revenues,
cash flows, budgets for research and development and probably profits, as well as an
expedited entry into health care. As the crisis spreads across our economy, cash-rich
Amazon is well positioned to make acquisitions at bargain basement prices or other
investments that further consolidate its power. The example of Deliveroo, given
regulatory clearance, and reported interest AMC, J.C. Penny and Future Retail Group
show the potential for Amazon to seize the opportunities created in the pandemic.
Regulators are already looking at the company’s growth, but more scrutiny is needed
as no company should have this much influence. The latest developments show
positive signs in this respect: the European Commission has launched an
investigation on the Amazon Marketplace last year, the Competition Commission of
India has ordered a probe for alleged violations of competition law, while in U.S.
lawyers have filed complaints against Amazon’s dominant position in e-commerce
and the US Congress has called on the US Department of Justice to Open a criminal
investigation into Amazon and for Bezos to testify under oath in Congress. (Mattioli
& Tracy, 2020) Regulatory pressure on Amazon should not be limited to competition
matters. It is important that governments provide adequate financing to public
healthcare and education systems and for this purpose they should impose stricter
rules on taxation to collect a fair share from the tech giants’ revenues and incomes.
Simply put, just as our world will radically change after the pandemic, so will
Amazon. But the question of whether the company’s stranglehold on our markets
and communities will tighten will be answered by the resistance of regulators,
community organizations, labor unions, and anti-monopoly activists. (Hoffman,
2020, p. 20)
Conclusion:
In conclusion, it can be said that the epidemic caused by COVID-19 is the
largest pandemic that has affected the world in the last hundred years and has caused
devastating effects both on the world economy and on that of the individual nations
and, especially, to commercial organizations and getting through the crisis will be
the only real priority on the table for most companies in the coming months and
years. Nevertheless, the post-crisis world will be a different place, and it is already
clear that companies across all sectors will need to strengthen their crisis
management and business continuity efforts to be better prepared in the future.
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Results:
Effective crisis management handles the threats sequentially. The primary
concern in a crisis has to be public safety. A failure to address public safety
intensifies the damage from a crisis. Reputation and financial concerns are
considered after public safety has been remedied.
crisis management is designed to protect an organization and its stakeholders
from threats and/or reduce the impact felt by threats.
The crisis can be an opportunity for Amazon to learn that social dialogue and
collective bargaining are vital tools that modern societies and companies use
to protect workers’ health and save people’s lives.
Any failure of Amazon to keep its workers safe does not just put their
employees at risk, it puts the entire country at risk. The virus that causes
COVID-19 can live for up to 24 hours on cardboard and up to three days on
plastic and stainless steel.
Amazon fired a worker who led an employee walkout at a fulfillment center
in Staten Island, NY to demand a temporary closure of the facility for
cleaning after a coworker was diagnosed with COVID-19.
Amazon refuses to recognize trade unions and not communicate with them.
Recommandations:
The COVID-19 pandemic has created an urgent need for companies to adopt
best practices to protect their workers, their customers, and the communities they
serve. We encourage Algerian commercial companies to adopt the following
recommended policies and practices:
Algerian commercial should establish a workforce consultation mechanism or
a joint labor/management committee for occupational safety and health issues
to be considered and remedied, and they should respect the right of employees
to refuse unsafe work.
businesses should restrict activity to the provision of essential goods and
services, such as food, medicine, household cleaning, and personal hygiene.
Employers should hire independent certified occupational safety and health
experts to advise them on best practices for the prevention of infection in each
of their specific operating environments.
With the participation of impacted workers, employers should develop a written
infectious disease control plan with requirements for hazard assessment.
The employer should regularly sanitize workplaces, where workers are infected
or suspected of infection, employers should inform other employees who have
been in contact, allow them paid time off to self-isolate, and offer to test; and
employers should immediately close, ventilate, clean, and disinfect all affected
areas or facilities for as long as necessary.
Employers should separate workstations to allow for physical distancing and
adopt social distancing best practices and procedures, including staggered
shifts, telework, and limiting contact with customers.
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Employers should provide paid sick leave to encourage sick workers to stay
home, paid leave for quarantined workers, paid leave at any temporarily closed
facilities, and family leaves options to provide for childcare due to school
closings or to care for sick family members. Paid sick leave should not be
contingent on COVID-19 testing results.
These recommendations aim to ensure that companies reduce the risk of
COVID-19 transmission to their workforces, their customers, and the communities
they serve. By adopting these best practices, companies can help mitigate the public
health crisis, build employee and customer goodwill, and position themselves for
success during and after the COVID-19 pandemic.
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