The Netflix Company’s Organizational Change

Need for Change

To evaluate the need for change within Netflix, the Six-Box model might be utilized, with its respective focus on the six variables of the organizational state. The factors in question include purpose, structure, relationships, rewards, leadership and helpful mechanisms (Ihsani, 2020). The purpose box is the first step in this analysis tool, both logically and chronologically. A good starting step is to acknowledge the organization’s core mission and vision and to ask oneself how effectively the goals it sets for itself and its workers are understood. Then, determining how well these objectives align with a company’s capabilities may show why it isn’t functioning at peak efficiency. Setting these objectives is also critical; each employee should not only be aware of them but actively participate in their creation.

The structure is likely to follow directly after the purpose, which in Netflix’s case involved the need for drastic evolution due to the DVD rental services becoming obsolete. To begin, the managers identified the nature of the organizational structure, including the chain of command. This was then compared to the organization’s procedures to see how well the practices satisfied the established needs. The efficiency of these processes may then be determined by asking more detailed inquiries, such as regarding communication routes (Fouladirad et al., 2018). Thirdly, the relationships were analyzed to profile the existing dynamics and networks, both formal and informal, to see whether there might be a potential for improvement in the area.

Furthermore, the managers analyzed the firm’s existing reward mechanisms before the change. At the time, they were unlikely to be considered satisfactory by modern standards since the understanding of employee motivation has drastically improved in recent years. Yet the managers always knew how critical an effective incentive mechanism is for determining employee performance and is frequently a contributing factor in organizational problems (Lozic, 2020). It is critical to evaluate not just how employees are compensated but also what job they are compensated for. Although there may be generous incentive mechanisms in place, certain employees’ accomplishments may be routinely overlooked. The lack of acknowledgment has caused many Netflix employees feelings of anger, resentment, and demotivation, ultimately causing job withdrawal.

The organization’s leadership was addressed and evaluated as well, since this element is expected to hold the other parts together, working cohesively towards the common goal. Prior to the change implementation, the decisions made by leaders of the firm failed to increase its revenue or customer base. As the market itself was slowly disintegrating, the leaders were naturally ineffective in attempting to lead the firm to prosperity within a dying industry of DVD rentals. Finally, the support systems available to employees and managers alike required renovations, too, with better communication, budgeting and data processing policies required to maximize operational efficiency (Rahe et al., 2021). With all of these indicators in mind, Netflix executives recognized the need for drastic measures that included new market penetration and change in the value proposition delivery. The company continued to operate under a subscription model, but the variety of titles it involved increased massively, which was fitting for the new era of online entertainment.

Organizational Change Analysis

Regardless of the drivers that contribute to an organization’s adaptation and evolution, resistance to change within the staff is to be expected. Business scholars have designed a variety of frameworks and tools to examine and discuss change management within an organization. In order to evaluate such management in relation to Netflix, Lewin’s three-step model was selected. The steps in question are referred to as unfreezing, changing, and refreezing.

During the unfreezing stage, employees mentally prepare for the expected transformation. They are introduced to the idea by their superiors, breaking down the current state of affairs and pointing out the necessary areas for improvement, often covered by low KPI indicators. Employees are usually content with the organization’s existing state; as a result, some are hesitant to accept a rapid change of management due to inevitable uncertainty (Rataul et al., 2018). The process of teaching individuals about opportunities for organizational transformation is the unfreezing step (Jaworski, 2021). This stage’s main goal is to persuade employees to accept management change by using effective change communication. To encourage workers to accept change, it is critical to retain good managerial contact (Fernandes et al., 2019). Employees