Netflix Organizational Change: The Change Event

The transformation is a good example of episodic change. Weick and Quinn (1999) describe an episodic change as infrequent, discontinuous, and intentional. Nadler and Tushman’s (1989) ‘Organisational Change’ model describe episodic change as anticipatory or reactive and whether the change needed a strategic shift in operations (Gibson, 2019). The change at Netflix is episodic because it was caused by external forces, especially from clients. There was a need for streaming television series and general films. Failure to accommodate the change would have sent the organization’s sales down the losses lane. The change was necessary to meet the demands of the rising technological invention and innovations and meet the public’s ever-growing demand. There was a transformation in the way clients wanted to watch the movies and the films that shifted the desire of the clients to have this need met.

Reason for the Happening of the Change Event

In 2007, Netflix began to face stiff competition from organizations such as Amazon, Apple, and Walmart. All of these companies had shown resilience in meeting their customers’ demand. In particular, long before Netflix had raised its antenna on the issue of meeting its customer’s demand, all of these companies had revolutionized how they did allow their customers to interact with their respective channels for online downloads (Walker et al., 2017). With the digitalization of the era, it was becoming outdated to deliver discs in wrappers and mail them to clients. This means that while other clients were accessing movies and films quickly at the tap of a button, Netflix clients suffered delivery delays.

External forces played a role in the change performed by Netflix. According to McGahan (2004), industries usually change due to threats to the industries’ core activities and assets. One of the driving forces for the change was the problems faced while using the system. The company delayed receiving the discs back after the clients had watched them already. The system was becoming strenuous and with lots of liabilities. It is essential to understand that the fragile disc wrappers could also get spoilt during the shipment, resulting in losses. A new invention would be essential to help Netflix regain its stand and guarantee business operations continuity with all these liabilities.

According to Kotter’s model of change, eight steps lead to the administration of change. The initial step of the model primarily intervenes in analyzing the reason for the need for change. In the first step of the model, urgency is needed (Kotter 1996; Galli, 2018). From the situation in which Netflix found itself in 2007, change was imminent and essential. Other rival companies gained dominance because of their accessibility to downloadable movies and films. There was a need to shift from more extended waiting periods of mailing and DVDs, according to Ruiz-Navas & Miyazaki (2017). The urgency of action at the time was in the offing. Additionally, there was a need to incorporate all the other steps of Kotter’s model to cement the required change. A team was to be built and have a vision sold to them before taking action. Short-term goals were created, and relentless work was done to realize a change. The change would then need to stick for the entire company’s future operations.

The transformation was pertinent to allow for faster streaming of videos, including Hollywood classics, mini-series, cult movies, and sometimes foreign films. The library at the Netflix collection amounted to over 70,000 videos that could then be accessed at $5.99 a month, which earned every subscriber six hours of unlimited streaming in a month (Boyd, 2017). With the new development, streaming was made easy as simply tuning in to a television network in the present day and having a watch. The limitations of the user interphases were marked with the archaic nature it held, but it was bliss for the time in which it was inculcated. It reduces the general time of accessing and watching the movies. An additional feature to counter the competition was introduced in the streaming and movie market. There was an introduction of queue and dock titles in which users could dock some of the movies to be able to watch them later. The developments were under the leadership of Reed Hastings, the then CEO of Netflix Inc.

With the introduction of the streaming system in 2007, Netflix has grown to a whelming 87 million subscribers instead of the initial 4.3 million clients that majorly used their DVDs on the worldwide scope. This increment is recorded by evidence of research conducted by Kobiruzzaman (2021). This is a clear sign that it was a calculated step to counter the competition emanating from the companies that operated similar activities, including Amazon, Walmart, and Apple. The evidence is th