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QUESTION 4 [5 MARKS] Critically evaluate leadership style used by Marissa Mayer.

Appendix 1 Banning Flexible Work Options: Yahoo's NewControversial HR Policy by Adapa Srinivasa Rao "Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people and impromptu team meetings. Speed and quality are often sacrificed when we work from home." Yahoo's Note Asking all its Employees to Start Working its Offices, in February 2013 "This seems a backwards step in an age when remote working is easier and more effective than ever... If you provide the right technology to keep in touch, maintain regular communication and get the right balance between remote and office working, people will be motivated to work responsibly, quickly and with high quality." Richard Branson, Founder of the Virgin Group', in February 2013 Internet major Yahoo!, Inc. (Yahoo) found itself losing market share in the early 2000s as competition began to increase. The continuing crisis in the company saw the exit of successive CEOs reportedly due to their non-performance. In July 2012, the Yahoo board appointed a longtime Google, Inc. (Google)' executive, Marissa Mayer (Mayer), as the new CEO of the internet giant. Mayer was given the task of reviving the company's fortunes. Soon after taking over as CEO, Mayer began implementing a slew of measures to put the company back on the growth track. She replaced a number of senior executives at Yahoo with new ones. She also focused on changing the culture at Yahoo. She introduced a new suggestion program called Process, Bureaucracy, and Jams (PB&J) to revitalize the spirit of innovation among Yahoo's employees. Besides, she set up a new framework called the 'four Cs' to evaluate the performance of all the employees at Yahoo. Other initiatives included providing free food and free iPhones to employees at the company's headquarters. Mayer also took some decisions like extending the maternity and paternity leave of the employees. However, Yahoo implemented a new HR policy in February 2013 which stirred up a homets nest. Under the new policy, all employees were required to work from Yahoo's offices. In effect, the new policy prohibited employees from working from home. While some analysts supported the new HR policy saying that it would help in trimming the bloated infrastructure that Yahoo had built up over the years, it attracted criticism from other analysts and executives in other companies. Many analysts said that the new policy was regressive and went against the flexible work practices pioneered and followed by technology companies. Some analysts opined that the new HR policy would prevent Yahoo from attracting talented employees at a time when it was looking to hire more such people. Virgin Group, headquartered in London UK, is a British multinational branded venture capital conglomerate company Google, Inc., headquartered in Mountain View, California, US is a leading internet company in the world "Employees today are demanding better work-life balance, and employers will need to offer such options if they want to attract and retain the best workers," i said Greg Kratz, independent business columnist for Deseret News. But Yahoo defended its policy saying that its new HR policy need not be seen as a general industry trend but just as a new arrangement to suit the needs of the company. Analysts felt that Yahoo's controversial decision had brought to the fore many questions related to flexible working. They said that companies often paid lip service to flexible working while discouraging their employees from availing of these options. Experts said they had often found a marked mismatch between the perceptions of employees and employers with regard to flexible the words of Office Insight, a UK-based leading publication dedicated to the design and management of workplaces: "Is it because a lot of firms feel obliged to echo the received wisdom about flexible working in order to fit into a paradigm and/or attract staff, while believing in practice that it's best to have everybody in an office for much of the time? Or is that organizations and employees have different ideas about what constitutes flexible working in the first place? Or is it simply that managers don't trust staff? Something else or a mixture of all of the above?"iv Working. In BACKGROUND NOTE Yahoo was founded by two PhD. students of Stanford University, Jerry Yang (Yang) and David Filo (Filo), in 1994 in Sunnyvale, California, USA. It was initially started as 'Jerry and David's Guide to the World Wide Web (JDG),' a website which acted as a directory of several other websites. Yang and Filo started the website to cater to the needs of people who wanted to go to a single place and find websites related to diverse areas. Over time, JDG became very popular and became the first choice of people browsing the web to find sites intelligently. It helped people to discover useful, interesting, and entertaining content on the Internet. JDG was later renamed Yahoo in 1994 and was positioned as a customized database intended to serve different users. Yang and Filo developed customized software to help users locate, identify, and edit information available on the internet. Yahoo quickly became very popular among internet users and attracted a lot of media attention. Yahoo was formally incorporated in March 1995 and started implementing a business plan modeled on traditional media companies. Sequoia Capital", a well-known venture capital firm, agreed to fund Yahoo in April 1995, with an initial investment of US$ 2 million." Yahoo generated its revenues mainly through online advertisements, banner ads and ad placement fees, promotions, sponsorships, direct marketing and merchandising. It also generated revenues from monthly hosting fees and commissions on online sales from its merchant partners. These included transaction fees generated from the sale of merchandise on its site. In 1995, Yahoo appointed Timothy A. Koogle (Koogle) as its Yahoo is the abbreviation for Yet another Hierarchical Officious Oracle. + Sequoia Capital, headquartered in Menlo Park, California, US was a Silicon Valley-based venture capital firm founded by Don Valentine in 1972. It had invested in many technology companies like Yahoo!, Google, PayPal, Electronic Arts, YouTube, etc. Banner advertisements appear on web pages within various Yahoo channels. Hypertext links were embeddedin each banner advertisement to give user's instant access to the advertiser's website, to obtain additional information, or to purchase products and services. Promotional sponsorships were typically focused on a particular event, such as sweepstakes. The merchant sponsorship icon advertised products. Users had to click on the icon to complete a transaction. Direct marketing revenues came through e-mail campaigns targeted at Yahoo's registered users who had indicated their willingness to receive such promotions. Exhibit I I Movement of Yahoo's Share Price from January 2006 to January 2013 40 35 viny 30 25 20 15 gruar 10 2000 2007 2003 2009 2010 2011 2012 2013 Source: http://finance.yahoo.com/ Exhibit II Key Financials of Yahoo from 2007 to 2011 (In USA Thousands) 2007 2008 2009 2010 2011 Revente 6,969,274 7,208,502 6,460,315 6,324.651 4,984,199 2,838,758 3,023.362 2.871.746 2,627.545 1,502,650 4.130,516 4,185,140 3,588,569 3,697,106 3,481,549 Cost of revemes Gross profit Total operating expenses Income from operations 3,435,103 4,172,177 3,201,877 2,924,582 2,681 208 695,413 12.963 386,692 772,524 800,341 Other income, net 118.771 73,750 187,528 297,869 27.175 814.184 86,713 574.220 Itacotne before income taxes and carnings in equity interests 1.070,393 827,516 Provision for income taxes (322,868) (259,006) (219.321) (221,523) (241,767) 476920 Earnings in equity interests 150,689 596,979 250,390 395,758 Net income 642,005 424,686 605,289 1,244,628 1,062,669 (2.850) Net income attributable touou- controlling interests (5,765) (7.297) (12,965) (13,842) 639,155 418.921 597.992 Net income attributable to Yahoo! Inc. 1,231.663 1,048.827 13,600 13.900 13.600 14.100 No. of employees 14,300 Source: Yahoo!, Annual Reports: 2009 and 2011. 10 Exhibit III CEOs of Yahoo Name of the CEO Tenure Reason for Leaving Tim Koogle 1995- May 2001 Resigned in 2001 Terry Semel May 2001-June 2007 Hired from Warner Bros. Stepped down due under shareholder pressure. Jerry Yang June 2007-January Agreed to resign under pressure 2009 fromshareholders in November 2008. Carol Bartz January 2009- Hired from Autodesk Inc., a design and September 2011 engineering software company. Fired for failing to revive the company. Tim Morse September 2011- CFO of Yahoo. Worked as interim CEO until January 2012 thenew CEO took over Scott Thompson January 2012-May Hired from eBay Inc.'s PayPal. Resigned in May 2012 2012 over controversy regarding one of his college degrees. Ross Levinsohn May 2012 July 2012 Worked as interim CEO until the new CEO tookover. Marissa Mayer Joined Yahoo as Hired from Google, Inc. its CEO in July 2012 Source: "From Koogle fo Levinsohn: CEOs at Yahoo," http://finance.yahoo.com, July 12, 2012. Exhibit IV Important Internet Services Offered by Yahoo Search: Yahoo! Web Search helps users to find anything on the Internet. Yahoo! has several products for search like Yahoo! Image, Yahoo! Video, Yahoo! Local, Yahoo! News, and Yahoo! Shopping Search Content: Yahoo! Sports, Yahoo! Finance, Yahoo! Music, Yahoo! Movies, Yahoo! News, and Yahoo! Games provide content on specific topics. Users also have the opportunity to personalize content through My Yahoo! Communication: Yahoo! Mail and Yahoo! Messenger enable users to stay connected. My Web, Yahoo! Personals, Yahoo! 360, Yahoo! Photos, and Flickr are some other communication services from Yahoo! Mobile: Yahoo! Mobile provides services such as email, instant messaging, information search andalerts on-the-go. It also includes mobile games. Yahoo! Photos is meant for camera phones. Connected Life: Yahoo! offers a range of free and premium Yahoo! content and services to itssubscribers by partnering with broadband providers. Commerce: Yahoo! enables consumer transactions on the web, with services such as Yahoo! Shopping, Yahoo! Autos, Yahoo! Auctions, and Yahoo! Travel. They enable consumers to make informed online purchases by providing them with relevant information. Contd. 11 Contd. Small Business: Yahoo! Small Business enables small business owners and professionals to establish and grow a business presence with services such as Yahoo! Domains, Yahoo! Web Hosting, Yahoo! Merchant Solutions, Yahoo! Business Email, and Yahoo! Store. Yahoo! also offers HotJobs' to help recruiters find the talent they seek. Advertising: Yahoo! provides a comprehensive set of marketing solutions and tools for businesses. Yahoo! helps marketers create and execute programs that both engage users to interact with their brand as well as provide valuable insights into their customer base. In addition, Yahoo! Search Marketing helps companies drive traffic to their websites through services such as Sponsored Search. Local Advertising, and Product/ Travel/Directory Submit. For online publishers and portals, Yahoo! can add new revenue sources and enhance user experience through the Yahoo! Publisher Network. Adapted from www.yahoo.com Exhibit V Memo Sent to Yahoo's Employees To become the Yahoos, Over the past few months, we have introduced a number of great benefits and tools to make us more productive, efficient, and fun. With the introduction of initiatives like FYI, Goals), and PB&J, we want everyone to participate in our culture and contribute to the positive momentum. From Sunnyvale to Santa Monica, Bangalore to Beijing - I think we can all feel the energy and buzz in our offices. the absolute best place to work, communication and collaboration will be important, so we need to be working side by side. That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo, and that starts with physically being together. Beginning in June, we're asking all employees with work-from-home arrangements to work in Yahoo offices. If this impacts you, your management has already been in touch with next steps. And, for the rest of us who occasionally have to stay home for the cable guy, please use your best judgment in the spirit of collaboration. Being a Yahoo isn't just about your day-to-day job, it is about the interactions and experiences that are only possible in our offices. Thanks to all of you, we've already made remarkable progress as a company - and the best is yet to come. Jackie Source: "Why Yahoo's 'No Home working'Rule will Lead us Back into the Office," www.zdnet.com, February 27, 2013. - FYI S a Q&A tool where meetings are held every Fnday at Yahoos' headquarters in which employees couldask her questions, where new hires are announced etc 21 Goals" is a new initiative started by Marissa Mayer where quarterly and annual goals will be assigned at thecompany, department, and individual level. All the employees of Yahoo need to commit themselves for achieving those goals 12 Exhibit VI Data Table for the Flexible Job Index - Top 25 Job Categories Q1 (2011) 3.06% 2.90% Q2 (2011) 2.87% 2.73% Q3 (2011) 2.78% 3.42% Q4 (2011) 2.93% 3.95% 7.13% 1.15% 4.43% 4.29% 1.35% 5.90% 1.31% 1.24% 1.97% 1.29% 2.79% 2.11% 1.59% 1.76% 5.18% 1.74% 4.64% 1.88% 3.65% 3.80% 2.02% 5.70% 2.51% 4.77% 3.65% 5.16% Category Account Management Accounting & Finance Administrative Advertising & PR Art & Creative Bilingual Computer & IT Consulting Customer Service Education & Training Engineering Graphic Design Human Services Insurance Internet & Ecommerce Marketing Medical & Health Nonprofit & Philanthropy Other Project Management Research Sales Web & Software Dev 5.95% 2.54% 5.60% 5.89% 1.84% 1.76% 2.05% 2.67% 1.57% 0.49% 2.33% 2.29% 1.72% 3.06% 7.58% 5.64% 1.19% 4.81% 1.30% 1.17% 1.77% 2.68% 1.38% 2.56% 6.91% 3.78% 21.88% 2.03% 2.10% 5.67% 3.98% 7.27% 1.63% 2.45% 1.97% 3.35% 2.05% 2.82% 9.54% 4.15% 24.70% 2.84% 8.31% 3.73% 26.93% 27.76% 2.16% 2.26% 3.57% 2.55% 6,01% 6.15% 7.23% 3.13% 3.19% 3.04% 5.73% 5.20% 1.61% 2.44% Web Design 0.52% 0.97% 2.43% 2.14% 2.46% Writing 2.44% Source: http://www.flexjobs.com/trends 13 End Notes: : 1 it iu 20 "Why Yahoo's 'No Home working Rule will Lead us Back into the Office," www.zdnet.com, February 27, 2013. Richard Branson, "Give People the Freedom of Where to work." www.virgin.com, February 25, 2013. Greg Kratz, "Balancing Act: Yahoo's Decision Shouldn't Derail Flexible Work Options," www.deseretnews.com, March 12 2013 , . "Yahoo is Not the Only Firm that Doesn't Like Flexible Working," http://officeinsight.org, February 24,2013. www.yahoo.com James B. Stewart, In the Undoing of a C.E.O., A Puzzle," www.nytimes.com, May 18.2012. "Google exec Mayer Named Yahoo CEO, 5 in 5 Years," http:/ews.yahoo.com, July 16, 2012. Ibid. Andrew Ross Sorkin and Evelyn M. Rusli, "A Yahoo Search Calls up a Chief from Google." http://dealbook.nytimes.com, July 16, 2012. Patricia Sellers, "Marissa Mayer: Ready to Rumble at Yahoo," October 11, 2012. Paul Graham, "What Happened to Yahoo," www.paulgraham.com, August 2010. As quoted in the article, "Ronald Grover and Heather Inside Yahoo," by Ben Elgin, Linda HimelsteinGreen, posted on www.businessweek.com, dated May 21, 2001. Kara Swisher, "Exclusive: Yahoo's Longtime HR Head David Windley Out." http://allthingsd.com, August 10, 2012 Nicholas Carlson, "Marissa Mayer Just Hired an Executive to Solve Yahoo's Biggest Problem," www.businessinsider.com, September 5, 2012. "Marissa Mayer's First 60 Days as Yahoo! CEO." www.siliconrepublic.com, September 13, 2012. 21 Ibid. Hayley Tsukayama, "Marissa Mayer's Plan for Yahoo." http://articles.washingtonpost.com, September 26, 2012 vil Ryan Tate, "Marissa Mayer Allegedly has 10 or 20 Different Priorities for Yahoo," www.wired.com, September 26, 2012. "Mayer Strives to Change Yahoo! Culture," www.forbes.com, September 7, 2012. Julianne Pepitone, Marissa Mayer Extends Yahoo's Maternity Leave," http://money.cnn.com, April 30, 2013 Douglas MacMilan and Karl Baker, "Yahoo CEO Mayer Revives Debate over Work-From-Home Merits, "www.bloomberg.com, February 27, 2013. Elizabeth Weise and Jon Swartz, "As Yahoo Ends Telecommuting, Others Say it Has Benefits," www.usatoday.com, February 26, 2013. til Kenneth Matos and Ellen Galinsky, "2012 National Study of Employers,"http://familiesandwork.org/site/research/reports/NSE_2012.pdf, Leslie Larson, "Marissa Mayer Tells Yahoo Employees who work from Home to Get Back to theOffice...will other Tech Companies Follow Suit?" www.dailymail.co.uk, February 23, 2013. 1 OLI 14 *** Jenna Goudreau, "Back to the Stone Age? New Yahoo CEO Marissa Mayer Bans Working from Home," www.forbes.com, February 25, 2013. *** Margaret Ryan, "Teleworking: The Myth of Working from Home." www.bbc.co.uk, February 27, 2013. *** Jenna Goudreau, "Back to the Stone Age? New Yahoo CEO Marissa Mayer Bans Working from Home, "www.forbes.com, February 25, 2013. Chris Isidore, "Yahoo Defends No-Work-At-Home Policy," http://money.cnn.com, February 27, 2013. xix Christopher Tkaczyk, "Marissa Mayer Breaks her Silence on Yahoo's Telecommuting Policy." http://tech.fortune.cnn.com, April 19, 2013. *** Christopher Tkaczyk, "Marissa Mayer Breaks her Silence on Yahoo's Telecommuting Policy," http://tech.fortune.cnn.com, April 19, 2013. XXXI Yahoo! CEO Marissa Mayer Back to Work Full Time Just Two Weeks After Giving Birth to Her First Child," www.dailymail.co.uk, October 15, 2012. xx Leslie Larson, Hayley Peterson, and Reuters Reporter, "Yahoo! Boss Marissa Mayer Under Fire for Building Personal Nursery Next to Office. Before Telling Employees They Cannot work from Home," www.dailymail.co.uk, February 26, 2013. xx Jenna Goudreau, "Back to the Stone Age? New Yahoo CEO Marissa Mayer Bans Working from Home, "www.forbes.com, February 25, 2013. EXV Nicholas Carlson, "Why Marissa Mayer Told Remote Employees to Work in Office or Quit," www.businessinsider.com, February 24, 2013. **** Greg Kratz, "Balancing Act: Yahoo's Decision Shouldn't Derail Flexible Work Options" www.deseretnews.com, March 12 2013. 15