Official Name – Title of Course
American College of Dubai
Executive Summary
Introduction of Subject Matter
This report provides an analysis and specific evaluation pertaining to the current management climate at the Uber Company in Part I and Part II. Covered herein in Part I is a discussion on the challenge of managing people within organizations, within an understanding of the context involved. Understanding people, in terms of social perceptions and managerial protocols of group behavior give insight into the way Uber functions. According to Uber founders and CEO, Travis Kalanick, “every problem has a solution,” and feels so passionate about entrepreneurial enterprises that he has invested in other startups for people (UBER, 2015). The Uber Company is viewed as a forward-thinking and future-oriented business of sustaining a transportation network, having an American-International foundation with its headquarters in San Francisco, California.
Therefore, the Uber Company has a distinct multinational context of its macro-development practices in business management. The basic core of the Uber Company is to maximize interacting with the trends and ways in which the world literally moves, in terms of transportation delivery systems. In a borrowed concept from other management scholars, Gilbert and Behnam (2009) argue that “One of the central questions in strategic management research is how to ensure the long-term survival of the firm by outperforming its competitors.” Obviously then, this idea helps to begin to demonstrate key linkages between key theoretical concepts, thus supporting hypotheses showing the importance of corporate culture, and managing individual differences.
Uber Strategic Location
Every firm has a strategic thrust. The Uber Company is no different. In fact, founder Kalanick has well understood that pairing drivers and riders together via a conglomerate of apps, was a timely brilliant idea whose global moment has arrived. The Uber strategy of launching its business possibilities through the engagement of hundreds of partner-cities throughout the world, proves that Kalanick is well aware of a centralized context of his organization in the first place. Matching riders and drivers while targeting long-term, high-growth opportunities which will sustain itself in the global workforce and marketplace, meets the challenge of managing people and expanding clientele. What is the Uber strategy?
The Uber Company strategy is quite simple. As reported by the Slideshare (2015) overview, Uber can provide individuals who can connect two people who “need to move from point A to point B.” In this way the Uber culture has targeted a win-win strategy for both users of the service, and those who would find motivations to build a part-time or full-time independent business for themselves. The Uber Company strategy, according to the same source, helps to generate revenue for the parties who deliver transportation services (as well as for its headquarters and Corporation) in a very fast, efficient. Thanks to the global digital nature of today’s communication computer and online cloud systems, the entire scenario from start-to-finish is very predictable and convenient for people using apps. Thus, the Smartphone mobile-cloud-based technology makes it easy for most anybody to use. By understanding the context of business and consumer/worker needs in the new marketplace, Uber has structured its management and operations in a way that has shown the old ‘taxi’ model structure to be outdated.
The international outcrop of Uber is perhaps one of the most exciting aspects of the company management and performance goal insights. According to the Slideshare (2015) business report, service coverage exists for over fifty countries around the world, translating to more than 300 cities. Clearly, the building blocks of group behavior is being used to the fullest degree at the Company. It seems as though Uber has managed to develop and establish a dream business, bringing the complexity of management skills to merge with real-life applications by successfully implementing key theoretical business concepts. For example, the Uber branding has become very well-known – both well-positioned and popularly recognizable. This is key to strategic business outcomes. It has been stated by one scholarly peer-reviewed journal article that research is vital to performance evaluation, noting that keeping up with this kind of business evaluative information helps to understand how organizations are performing, and their purposes in organizational culture building. However, not all reviews of the Uber business environment are favorable.
Other Findings
Uber Technologies has had some critics, from the scholarly business world. Although, the Company has managed to tap a growing long-term marketplace, with its finger smartly on the pulse of a seemingly eternal trending pattern, all is not perfect. New data indicates that there may be insurance discrepancies, and possible violations – or at least, misleading Uber drivers in terms of certain protections in the law. The Boston College Law Review documents some very important facts regarding a case of driving and a fatal accident. According to the report, it happened one night in downtown San Francisco when “around eight o’clock at night, six-year-old Sophia Liu” was walking with her family, and just as they crossed to walk across the street, a UberX driver in a “Honda sport utility” struck the family (Davis, 2015, p. 1097). The little girl died, although her mother and brother survived.
Part of the problem is that ride-sharing is exponentially popular. When considering the price of petro-fuel, and in the aftermath of the onslaught of the global recessionary shockwaves, this style of transportation is suitable for many people. The business model, however, has its hands full in terms of managing performance with risks and legal liabilities. Furthermore, the law journal article continues to explain how the ride-sharing Company operates. As a Transportation Network Company (TNC) Uber users ‘hail’ their network taxi-alternative via a mobile phone application, then after storage of their credit card information check for which dispatcher can fulfill their request. Obviously, Uber is the world’s leading business service of its kind with a continuous growth of its fleet. Being the industry leader in numbers, performance, and outcomes, it has an ethical responsibility to set the pattern for other like-minded smaller firms. Other critics argue “Uber provides insufficient training for drivers and improperly classifies them as independent contractors rather than employees” (Davis, 2015, p. 1105). It is common knowledge that insurance companies, regional zones, and different coverage aspects and regulations can be vastly different. So, liability policy coordination is something that the Uber Company should work toward improving.
Possible Recommendations
Good logical sense dictates that no matter how successful, or big a corporation is, it can always use a strategy for improvement in the areas of either cost-effectiveness, or performance. After thinking about Uber’s flaws in its insurance coverage for drivers, and the gaps leading to poor outcomes in passenger or accident victims, it is a good idea to explore further risk mitigation. Perhaps one way to tackle the situation is for Uber to try and expand its diversity human resource team, and create cohorts of insurer researchers for the various zones in the world. One expert announces “Diversity initiatives have emerged as a core component of many companies’ mission statements, driving human resource practices” (Andrulis and Sachdev, 2009, p. 175). The entire team of a new ‘Diversity Department’ could be installed, creating collaborating teams which work on issues in insurance, healthcare (where applicable), and pro-actively expand the opportunities for all people in the various regions of the globe.
The team could employ this tactic very easily since finances are abundant in the Uber Technologies Company. One journal article suggests that “Diversity initiatives generally are devised with the intent of understanding and improving acceptance of differences between people, ensuring that legal and ethical practices are carried out in the workplace and that a diverse environment is created that improves business results” (Andrulis, 2009, 176). Since the Company is founded originally from the United States it is only proper, moral, and befitting for it to operation its functions to abide by its anti-discrimination employment legislation. Traditionally, historically, and legally these legislations were instituted to protect Black Americans – who should not be left out of the equation – despite the factor that women, handicaps, homosexuals, Hispanics, and Asians have been able to benefit from measures put in place for the people whose ancestors made the United States rich in the first place. Likewise, a person of older age should have a chance to participate. Common sense tells the wise business person, that using a total scope of human capital and resources will yield better understanding among people, in terms of a social perception.
Here is another important question. Can Uber afford to endlessly keep wasting millions on certain aspects of the Company? According to one source, Uber spends roughly $62 million dollars on:
Legal and local/state regulations battles using third-party participants
As much as $5 million alone on lobbying
A whopping $30 million on marketing managers in territories, with staffs
Super-expensive office rents in San Francisco real estate business offices, which are well-known to be among the highest prices in the world
Insurance, despite that drivers are considered independent contractors
Technology expenditures on a broad scale, whose complexity demands constant upgrades to software, hardware, IT cloud security, and a network of internal tools, “many of them are custom” (Cummings, 2015, p. 1).
The conversation now shifts to the concerns outlined in Part II. These concerns relate to the consequences of power, relationships/management of people in the Uber organization, changes in the Company, and reasons for the change.
MAJOR CHANGES TAKING PLACE IN THE ORGANIZATION & WHY
There have been major changes taking place in the Uber Company. The two major ones have taken place on the technological side, and the managerial-operational side, although both (keen observers would agree) involve a heavy dose of politics. The New York Times covered a story about Uber and Google’s early partnership in terms of the former receiving “more than $250 million” to invest in the young app-rider-matching firm (Isaac, 2015). But lately Uber announced its intentions to develop plans for ‘self-driving’ car, which somewhat conflict with Google, since Google has had its sights set on a similar goal for quite a long time. Obviously, this change results from advancing opportunities in capital-revenues advancement in bringing new technologies to the public. The impact will affect the Google-Uber relationship in terms of power positioning.
SECOND MAJOR CHANGE & POWER RELATIONSHIPS
Power relationships have to do with equity. The second example of a major change at Uber will demonstrate this aspect better. However, in terms of equity Chapter 7 of the textbook explains Adam’s Equity Theory of Motivation as a model wherein people in organizations try to find a give-and-take balance in the relationship. Kinicki (2011) argues that although the main components involve internal management issues of employee bonuses, promotions, or job security, there are positive and negative thresholds of inequity. For example, the outcome weighs more positively on the scales for the more powerful party. The second major change occurred when a woman driver made legal claims against Uber, resulting in the State of California’s Labor Commissioner Office, ruled the ride-hailing service must designate each independent-contract driver as an “employee,” further ordering a reimbursement of approximately $4,000 to Berwick (Huston, 2015). Consequences in terms of power relationship always distill to politics in some form or shape, and in this case directly affects how Uber will manage its people. Uber appealed the legal ruling, yet another response to the change is Uber’s hiring of David Plouffe, basically as a strategy to manage the political fallout and use a campaign-politics method to help the firm’s transition management protocol (Scola, 2015). Plouffe supposedly had experience in dealing closely with the President, as Vice President of policy and strategy (Scola, 2015). Last year, California drivers protested working conditions of Uber, which has strained internal management relations.
Conflict and negotiation management can invite different methods of handling styles. Some involve smoothing, integrating, or straight-up domination. It seems Uber is trying to appear smooth, while using the political position of dominance. Compromising does not seem to be the attitude of Uber. Digital communication behavior plays a big role, but even though apps are the basis of Uber’s market role, interpersonal relationships can go far. The text gives the example of Starbucks’ CEO, who does not like to substitute personalized human communication for emailing or texting. While it is true that Kalanick is passionate, he may not be treating the firm’s associates working under him with respect.
LEADERSHIP AND UNDERSTANDING PEOPLE AS SOCIAL BEINGS
The management of people in organizations must not forget the principle that understanding human beings is important, as is recognition of the various theoretical styles of leadership. Kinicki (2011) presents the following chart showing how the transformational leadership style is supposed to function. As the reader can see, the figure showing the transformational model has divisions of four sets which pinpoint and highlight ways to mitigate any confusion. These behaviors are broken down into categories of four. Kinicki (2011) argues that the first set involves an inspirational appeal as a leader, therefore using emotional arguments, “and exhibition of optimism and enthusiasm,” also quoting Burt Nanus as recognizing if this style is done the right way, it can serve as a “beacon of hope” by promotion of “attracting commitment, energizing workers, creating meaning in employees’ lives, establishing a standard of excellence, promoting high ideals, and bridging the gap between an organization’s” current problems and future aims (Kinicki, 2011, p. 380). When it comes to leadership, one does not get the impression that Uber is concerned about people and truly building a win-win situation where the people as workers benefit and get to share in the wealth.
LEADERSHIP FLAWS OF UBER AND CONSEQUENCES OF POWER
The three other sets of the transformational leadership theoretical model must be clearly understood to clarify how it impacts consequences of power, in terms of management relations in the firm’s internal environment. Kinicki (2011) explains that the second set in the model may be described as an “idealized influence,” which basically means the leadership component of the company would sacrifice his (in the case of Uber) own greediness of wealth and personal comfort and gains, for “the good of the group, being a role model, and displaying high ethical standards,” which are very important because “employees are more likely to report the questionable behavior of others when they believe that their boss sends positive messages about ethics” (Kinicki, 2011, p. 380). If you really think about it, a smart person would have to ask the following question: Does Uber truly care about the welfare of its people-drivers and the safety of the public who have to engage in interacting with them?
Besides the factor of the little girl dying due to the negligent driving of an Uber contract-employee, it is common knowledge that passengers have been sexually assaulted. This should never be. It leaves one to wonder about the personal motivations of leadership at the top and upper ranks of Uber Technologies. Is the Company so focused upon the ‘brilliance’ and pragmatic application and utility of its digital software-app that it cares so little for the people being affected by adverse consequences? This question brings one to consider the third set in transformational leadership style, which is ‘individualized consideration.’ Does this conceptual theory seem to be a priority at Uber? According to the text, this third set “entails behaviors associated with providing support, encouragement, empowerment, and coaching to employees” (Kinicki, 2011, p. 380). While it may be true that employee-status people may not always be happy with management or leadership behavior or decisions, people from a social and human standpoint can discern when corporate CEOs do not care about them. One very disturbing factor demonstrating the consequences of power, or at least the pathway leading to its results, is when Uber hired Plouffe to specifically take a political ‘plan’ directly to the President of the United States, and the White House.
Instead of just following California laws in terms of what the State’s Labor Commission ordered, Uber chose to appeal and fight against it. What does this behavior say to the workers in California? The consequences of power often mean that those in positions of authority in capitalized successful businesses worth multi-millions of dollars (or even billions) reflect that they can often become intoxicated with such power. When this happens, it simply demonstrates that leaders only care about themselves, and not the people who operate and work in daily life. If this is true of the Uber leadership, namely its CEO Kalanick, then the fourth set in the transformational model has been completely ignored. According to the text, “intellectual stimulation” is a leadership input/output set that requires actors in positions of management authority to pro-actively search for new ways of having a fresh perspective on the situation. If you really think about it, running to the President and White House by assigning David Plouffe, is almost akin to a Mafioso strategy by going to align with an even more powerful political ally, which as a consequence will overshadow any conflict negotiations with the people relationships in the organization. One can easily see how this kind of power-move can fuel resentments between managers and field staff drivers.
Conclusion
Managing performance, people, and regulatory protocols are crucial aspects in a rapidly changing world. Finance and social realities can change situations in a split second. Uber Technologies as a company, is operating on the cutting edge of world environmental interactions with transportation networking, and mobile app usage for requests. Its highly successful model has demonstrated its ability to lead the industry through motivations, outcomes, and meeting the challenges of putting people together to work for a mutually satisfying benefit – for both users, and the firm itself. Forecasting its future looks sunny, however a more detailed research evaluation and qualitative economic figures would determine the final word on linking present performance, with those yet to come. One thing is certain. Organizational culture and performance management represent key connections, and is “consistent” with those business entities which engage in delivery of “public services” (Taylor, 2014, p. 9). At the end of the day, Uber is no exception to best practices of integrating ethics, stressing individual performances of excellence, and taking on the responsibilities any leaders in industry should adhere to.
Bibliography / References
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