*TRANSCRIPT FOR VIDEO FOR QUESTIONS*

>> At a time when many retailers are struggling, Zappos, derived from the Spanish word for shoes, zapatos, is thriving, thanks in part to a unique company culture and its 36-year-old CEO, Tony Hsieh. >> Our whole belief is that everyone's a little weird somehow and so it's really more just a fun way of saying that we really want people's true personalities to shine in the workplace. >> Zappos is now so successful that last fall, Amazon paid $1.2 billion to acquire it. Tony Hsieh, who works out of a cubicle and earns as CEO, less than $37,000 a year, never imagined he would one day run a shoe store. >> I'm not a shoe person at all. I used to wear one pair of shoes for two years until there were holes in it and it was falling apart and then buy another pair. >> But selling shoes on the Internet presented a particular challenge: People were used to trying on shoes before buying them. Purchasing online meant customers had to take a risk. >> So the challenge is, how do you get customers to try out Zappos for the first time? >> So Zappos began offering something very few other companies do: free shipping and free returns for up to a year. It worked. And while many companies cut costs by outsourcing their call center overseas, Zappos' center is in Las Vegas where the operators are all members of something called the customer loyalty team. >> You're very welcome, Monica, have a great day. >> We view our call center as a branding opportunity. Every phone call is a branding opportunity. >> Every operator is given discretion to do what it takes to make a customer happy. >> Hey, you have a fabulous trip and I don't know, blow a kiss to the Eiffel Tower for me. >> So there are no planned scripts, no time limit to phone calls, as we discovered when we called last month: >> Thank you for calling Zappos, this is Christy, how can I help you? >> Christy, I'm looking for a good summer shoe. I went on and on and on, for more than 20 minutes, and never did buy a pair of shoes. >> I do remember your phone call. >> 27-year-old Christy Martin was on the other end of the call and worried she had disappointed me. >> Sometimes it's hard to direct people if they don't know what they want. >> So you'll let someone prattle on as long as they want? >> Yes, pretty much. >> Do you remember which actress in this movie had the boots? >> Another operator patiently worked with a customer trying to find a pair of boots she saw on a Lifetime Television movie. >> Is this on Youtube? "Cries in the Dark," I'll watch it. I'll watch with you and we're going to find something out here. >> But Zappos isn't just about making customers happy. Hsieh is determined to make his 1400 employees happy as well. >> We want all our employees to really think of their work here not as a job or not as a career or something to build their career, but, really as a calling, as something -- a place where they want to be for life. >> The company is so determined to get dedicated workers that it will test their loyalty by offering them money to quit! Christy Martin, who started work right before Christmas, turned down $3,000! >> Where else are you going to find a job that's as good as this and especially in this economy, you know, a job that's going to take care of you? >> That sense of security, as well as company benefits, seems to matter more than the salaries, which is on par with Zappos' competitors. >> I think a lot of it boils down to empowerment; employees at Zappos feel empowered. #1 option:

-Assumptions, artifacts, beliefs and values, corporate icons

On the front door at Zappos, there is a sign that says, "Powered Service." The words in this saying are an example of one of the company's and it serves as a way for managers to tell employees what is important in the company's culture. As a management consultant, you have been asked to evaluate the culture at Zappos. The first time you visit Zappos, you notice that employees stay on the phone with customers for as long as the customer wants to talk. Employees tell you that their bosses say to them, "Do whatever you can to make customers happy, no matter how long it takes." This saying is a part of Zappos's: O Work rules and norms O Power structure O Rewards and punishments O Organizational design Suppose that Tony Hsieh noticed that Zappos's customers were no longer willing to pay full retail prices on shoes. Which of the following actions could he take to change the company's culture so that it was more efficient? Check all that apply. Tell stories about the importance of efficiency and the things he has done to become more efficient at work himself. Reward employees for achieving extraordinary customer satisfaction ratings. Tell employees that they have the power to change any work process, so long as their changes make the overall organization more efficient. Ask employees to focus on ways to save money while doing their jobs, and reward those who save the most