Uber Continuing CaseChapter 2: Management Theory

This part of the Uber continuing case focuses on Chapter 2 and provides parallels to management theory. This cumulative cases real-world application of management knowledge and skills is designed to help you develop critical thinking ability and realize the practical power of sound managerial skills for solving problems in your job and career.

Read the cumulative case and respond to the questions that follow.

Intro

Uber is frequently touted as one the most spectacular success stories in Silicon Valleys history. Within 7 years of its 2010 launch, it went from a one-city pilot-test to a multinational company with a $48+ billion dollar valuation, millions of drivers, thousands of full-time employees, and specialized divisions dedicated to things like self-driving and flying vehicles. But in 2017 Uber also found itself mired in a barrage of scandals surrounding regulatory infractions in numerous countries, accusations of intellectual property theft, concerns about CEO Kalanicks erratic and aggressive behavior, and reports of a cutthroat, hostile, and sexist corporate work environment. Kalanick, along with at least 13 more top executives, ultimately resigned from Uber that same year.

How does a company doing so many things right simultaneously get so many things wrong? Different management theories offer insight. Complexity theory, for example, teaches us that in dynamic environments such as the tech industry, a managers job is to facilitate an organizations ability to swiftly adapt to its environment by allowing it to operate on the edge of chaos, giving workers the freedom to solve problems on their own terms rather than providing strict procedures, and encouraging a healthy level of tension and anxiety in the organization to promote creativity and maximize organizational effectiveness. Systems thinking also tells us that organizations unable to constantly improve based on feedback risk extinction. In other words, organizations need to learn in order to survive.

Below we describe Uber under both Kalanicks (Ubers cofounder and CEO from 2010 2017) and Khosrowshahis (Ubers new CEO as of August, 2017) leadership. As you read, look for clues about the two CEOs management philosophies, things that prevented Uber from learning, and things that helped Uber to become more of a learning organization.

Uber Under Kalanick

As CEO of Uber, Kalanick encouraged employees to adopt core values that included winning, stepping on others toes to get to the top, and ignoring coworkers bad behavior as long as they were top performers. He pitted workers against each other and reminded them that meritocracy was the center of the Uber universe. He encouraged making bold bets, but made it clear that only top performance, not the act of taking risks, would be rewarded.

Former employees describe the environment under Kalanicks leadership as a frat-house or a bro culture that felt unwelcoming, and even hostile, toward women, minorities, and other workers who werent part of Kalanicks in-group. Recent diversity numbers show that women hold only about 15% of technical jobs and 22% of leadership roles at Uber, putting the companys gender diversity numbers well below major tech companies like Amazon, Netflix, Facebook, Apple, and Google. In terms of racial diversity, over 80% of Ubers global workforce is white or Asian, with workers of Black, Latino, and other races comprising less than 20%. While Ubers racial diversity is comparable to that of other tech companies, data from 2018 show that the percentage of Black workers at Uber is actually decreasing. Further, Kalanick encouraged internal competition and often had multiple teams compete against one another on the same projects. When Liane Hornsey joined Uber as head of human resources, she quickly realized there was no sense of trust, no sense of were building this together. Instead, she witnessed animosity, secrecy, and a lack of cooperation among Ubers employees. A former worker described a Game of Thrones political war raging within the ranks of upper management adding that it seemed like every manager was fighting their peers and attempting to undermine their direct supervisor so that they could have their direct supervisors job.

Uber Under Khosrowshahi

Khosrowshahi spent his first two months as CEO meeting with Uber teams and employees across the globe to seek their input on what the company needed to repair itself and move forward. Employees submitted thousands of ideas and voted on their favorites, and Khosrowshahi turned them into a new set of cultural norms for the company struggling to regain its employees and the publics trust. "Rather than ditching everything, I'm focused on preserving what works while quickly changing what doesn't, said Khosrowshahi.

Here are some of Ubers new cultural norms along with what the company has done so far to exemplify them:

We act like owners. Uber wants its employees to look for problems and to solve them together, to help each other, and to be accountable for mistakes. Khosrowshahi believes Mistakes themselves are not a bad thing. The question is, do you learn from these mistakes? The new CEO has made several public apologies for Ubers past transgressions. After London authorities banned Uber for failing to comply with regulations surrounding drivers criminal backgrounds, he issued a letter stating While Uber has revolutionised the way people move in cities around the world, it's equally true that we've got things wrong along the way. On behalf of everyone at Uber globally, I apologise for the mistakes we've made. ... We won't be perfect but we will listen to you; we will look to be long term partners with the cities we serve; and we will run our business with humility, integrity and passion."

We value ideas over hierarchy. Uber employees believe that the best ideas can come from anywhere, both inside and outside our company. Our job is to seek out those ideas, to shape and improve them through candid debate, and to take them from concept to action. Khosrowshahi hired Bo Young Lee as Ubers first chief diversity and inclusion officer and she is working to develop strategies around hiring, training, and support groups at Uber. The company is also working to increase its diversity profile by building and strengthening recruiting relationships with outlets that serve under-represented populations.

We celebrate differences. Uber wants all employees, regardless of their backgrounds, to feel welcomed, to be open to different approaches, and to come together to execute the best ideas. Khosrowshahi has emphasized the important role of teamwork and collaboration at Uber and the company has modified its performance review system to encourage employees to work toward meeting their own personal goals rather than compete with each other.

CEO Khosrowshahi spent his first two months as CEO meeting with Uber teams and employees across the globe to seek their input on what the company needed to repair itself and move forward. Assume Khosrowshahi did not decide on what management style to utilize until after these observations. In this case, he would be utilizing the ______ viewpoint.

Multiple Choice

• behavioral

• quantitative

• classical

• systems

• contingent