Vancouver Island University Understanding UBER’s Organizational Culture Management 292 - S19N02 Prepared for Professor Paul Cleaver Scheduled Due Date: April 2, 2019 Greg Moynan - 578650491 Maddi Pierce - 655466514 Erik Johannsen - 656666492 Geoffrey McKinnon- 655779726 Corina George - 528279748 Running Head: Understanding UBER’s Organizational Culture Table of Contents Table of Contents 1 Executive Summary 2 Introduction 3 What is Organizational Culture? 3 Uber’s Organizational Culture 4 Negative Results of Uber’s Culture 5 Changing a Toxic Culture 7 References 10 1 Running Head: Understanding UBER’s Organizational Culture Executive Summary In this report, we will discuss the toxic organizational culture that Uber has created through poor management choices and aggressive competition that formed upon its rapid company growth. The result of this lead to media turmoil, employee disfunction, and competitiveness which destroyed the company’s positive organizational culture and values. 2 Running Head: Understanding UBER’s Organizational Culture Introduction Uber is a networking company that links people to forms of on-demand transportation such as: food delivery (called, “Uber Eats”), taxiing services, employee transport, and peer-to-peer ridesharing ("About Uber - Our Story - Vision for Our Future | Uber", 2019). There are over 100 million active, worldwide users of the company, which generates over 69% of the United States market share. Uber’s app connects the driver with the “rider” after initiating/entering a destination. The app screen will display wait time, price, closest pickup location, and car sizes when a rider inputs a request. What is Organizational Culture? Organizational Culture is the set of values, beliefs, and behaviours that contribute to the unique psychological and social “personality” of an organization (Nelson et al., 2015). This influences the way a group will collectively collaborate and perform (Coote & Hogan, 2014) as a corporation, through its decided style of management, company vision, norms, systems, and habits. A company’s traditional way of thinking is shared amongst all members involved, “by emphasizing certain values and by building corresponding norms for expected behaviors” (Coote & Hogan, 2014), to ensure that all members learn to accept the services of the firm. If there is not an effort to understand the importance of organizational culture, beginning at the managerial level, the company culture will become disorganized and broken, resulting in powerful negative 3 Running Head: Understanding UBER’s Organizational Culture influence on employee behaviors. The forces that develop a company’s personality should be consistently maintained and reviewed to ensure that it can function on its best ability. If not, the company will ultimately suffer from the disengagement within the organization. Culture is a critical component to any organization, as it will define how the unique social and psychological environment of an organization is formed. Uber’s Organizational Culture For a long time, Uber prioritized growth over ethics, and doing whatever it took to win, which bled over into the organization's culture. Under the reign of former CEO, Travis Kalanick, Uber enforced a set of 14 company values that greatly affected the culture of the organization. A few notable values are, as listed in Staley (2017), “always be hustlin”, “champion’s mindset”, and “meritocracy and toe-stepping”. The key overarching theme across these values is the idea of doing whatever it takes to win, even if that means sacrificing ethical and moral values. Although Uber’s hunger to win brought significant growth, sacrificing ethics bred a negative working environment, and overall negative workplace culture due to misinterpretation of the company vision. In 2015, the newly hired CEO, Dara Khosrowshahi, implemented a change in developing eight new values. These new norms will continually be “updated and improved (Staley, 2015) as the company evolves”. By adopting this flexible, new dimension in which the company functions, helped it grow into the healthier culture it drives today. 4 Running Head: Understanding UBER’s Organizational Culture Negative Results of Uber’s Culture Uber’s dysfunctional organizational culture led to a tremendous amount of media turmoil and inevitable changes in upper management. As mentioned in the company values, meritocracy is “the idea that the best and brightest will rise to the top based on their efforts, even if it means stepping on toes to get there” (Isaac, 2017). The motto behind this notion caused uncertainty and fear amongst all levels of the company employment, due to the constant battle to “be the best”, or risk losing your job. Provided this mentality let the company grow to such high value in a short period of time, many former employees stated that company felt as if they were living in a “Hobbesian jungle”; where managers were constantly fighting and finding ways to “kill” the manager above them (Wong, 2017). The constant rivalry for higher positions meant that people holding upper management positions emphasized traits of aggression and an unwillingness to compromise (Isaac, 2017). When an organization fails to support the basic levels of organizational culture (assumptions, values, and artifacts [Nelson et al., 2015]), it will cause controversy and discrepancies between all levels of employment. As a result, the company failed to provide employees with the security and support they craved on the most basic levels; an important piece to one’s primary needs, as per Maslow’s Hierarchy (Rasskazova et al., 2016). This made it difficult for employees to believe in their own abilities within the company (and quite possibly outside of work), in achieving psychological needs such 5 Running Head: Understanding UBER’s Organizational Culture as experiencing autonomy, internal competence (to master one’s own behaviours, and to feel valuable amongst other employees ( Rasskazova et al., 2016). Many employees were also victims of sexual harassment. The claims that were made had been ignored by Human Resources, and left unnoticed, until former employee Susan Fowler followed up with a law firm (Solon, 2017) investigation. Harassment is unethical in any form, and with the massive amount of claims made within the company called for a company change. Not only do these actions violate employees’ individual rights, but they are ethical violations of workplace conduct. This was not the only damaging force to Uber, but a determined strict schedule for employees. An expectation was set to have company meal times: to always have dinner at 8:00 pm. This set time coerces employees to stay later, and hurts employees who have a family or a homelife that requires them to work reasonable times. This unhealthy environment did not allow for cooperation amongst employees at different levels of seniority, a key element for both employee and company growth (Holder & Albarrán., 2017). Uber’s workplace culture became flawed when ethics were sacrificed when the company did not see importance in the skill of implementing ethical standards (Isaac, 2017). This had been a major negative characteristic of Uber’s workplace culture since the beginning of the company due to the hyper-competitive nature that the founders pushed upon their employees. The aggressive style of work that developed from the lack of supervision and proper leadership created holes in the system. A key value that Uber expresses (and possibly a result of these 6 Running Head: Understanding UBER’s Organizational Culture ‘holes’) is the idea of meritocracy: “the idea that the best and brightest will rise to the top based on their efforts, even if it means stepping on toes to get there” (New York Times, 2017). Changing a Toxic Culture When used correctly, developing competition amongst employees can be a useful tool in order to motivate employees and increase productivity. In Uber’s case, it had been developed too quickly and not maintained by upper management, which caused employees to become vicious in their actions aimed at working up the corporate ladder. The overarching issue was poor management structure, care to employees, and lack of training. The segregation amongst the managerial hierarchy, and unwillingness to cooperate, led to turmoil within the company. For a company as dynamic as Uber, the organizational culture requires constant improvements and revision to ensure that ethical behaviours became the new adopted norm (Linnenluecke & Griffiths, 2010). Recognizing the importance of understanding the concept of organizational culture and the amount of effort that is required to change an established culture, Khosrowshahi had begun the demanding process of re-tailoring the company from a non-adaptive to adaptive practices (Nelson et al., 2019) shortly after taking over as CEO. Starting from the top, the majority of upper management (including the CEO, CFO, COO, and CMO) has been replaced, allowing a better foundation for the company to rebuild from, due to the majority of problems occurring happening amongst this level (New York Times, 2017). In doing this, the number of 7 Running Head: Understanding UBER’s Organizational Culture “bad habits”, that were the result of a poor company culture, were drastically reduced. New leadership roles were clearly implemented, and the new management was able to hold employees accountable for their expectations by creating new, more inclusive and positive expectations such as: leadership training program for anyone