Yahoo Inc
Yahoo Inc is an international company based in Sunnyvale, California in US. Yahoo is popular for its web portal and Yahoo! Search engine. In addition, the company offers other services including Yahoo! Directory, Yahoo! News, Yahoo! Mail and Yahoo! Also, the company provides advertising services, video sharing, social media and online mapping services. Yahoo website is one of the popular sites in US and around the world. More than 7 million people visit Yahoo Websites each month. Jerry Yang and David Filo established Yahoo Inc in 1994. The company was incorporated in 1995. The company grew fast in 1990s. The company added a web portal like other search engines and web directories. Also, the firm made acquisitions. The company’s stock prices increased during the dot-com bubble. The stock closed at $118.75 per share on 3rd January 2000. However, the company share price reduced greatly on 26th September 2001 to $4.05(Lane & Daft, 2008).
At first, the company did not have any search technologies, and it used Google. Yahoo utilized Google for searching in 2000. However, the company developed search technologies and started using them in 2004. In 2007, the company overhauled its mail services in order to compete with other mail services like Google Gmail. The company has not performed well financially. The company revenue and operating income in 2011 totaled $4.98 billion and $800 million respectively. In addition, the net income, total assets and total equity in 2011 totaled to $1.04 billion, $14.78 billion and $12.53 billion respectively (Lane & Daft, 2008). The company has experienced leadership challenges and employee lay off since it was established. The company has different CEO for the past five years. Carol Bartz worked as Yahoo CEO in 2009, and she was replaced in 2011 by Roy Boston, Yahoo Inc chairman. Carol Bartz was replaced by Tim Morse. In 2012, Scott Thompson was appointed as CEO and replaced by Ross Levinsohm. Yahoo hired Marissa Mayer as CEO in June 2012. Apart from having leadership problems, the company has struggled with layoffs from 2008. The company has laid a large number of workers in order to reduce cost. The Company announced that it would cut 2,000 jobs on 4th April 2012 to reduce the cost. The company CEO, Thompson claimed that customers came first in the company, and he reorganized the organization (Wibbeke, nd).
Several factors have affected the company success, competition and growth for last few years. Poor leadership style and selection of inappropriate leaders have affected the company badly. The leaders have prompted authoritative leadership style which has affected the company performance. Only leaders in the organization make decisions. This has resulted to unethical decisions that have affected the form success and performance. The company refused Microsoft Corporation offer in February 2008. Microsoft Corporation wanted to acquire Yahoo for $44.6 billion. The leaders claimed that the bid undervalued the firm and was not in line with shareholders decision. However, the company capitalization was half of the bid 3 years later. That is $22.24 billion. Apart from making decisions, the leaders have not been able to bring change in the company. The leaders have not worked with employees to reorganize the organization and enable it compete with Google and other companies in the internet industry (Davis, 2010). The leaders have used different leadership theories including situational and contingence theories. In situational theories, leaders select the best action. The action depends on the situational variable. Different leadership styles are appropriate for particular types of decision making. The leaders can exercise authoritative style if they have enough experience and knowledge than other people in the organization. In other cases, the leaders exercise democratic leadership style if the members are skilled. Yahoo leaders exercise authoritative leadership style as they were the main decision makers.
Also, contingence theories are evident in Yahoo Inc. In contingence theories, leaders concentrate on certain environmental variables which determine the leadership style suited for a particular situation. No leadership style is effective in all circumstances. The current and former leaders at Yahoo choose the leadership style to exercise. The style depends on the problems in the organization. Some leaders focused on reorganizing the organization by lying off workers like Thompson. Others exercised democratic leadership like Carol Bartz and discussed the organizational problems with worker. Carol and the workers develop solutions to the problems. Carol Bartz exercised facilitative and directive leadership styles (Winkler, 2009). The leaders had a wide range of skills and traits (Hajdini, 2010). Some of the traits included courage, passion for a job and people and emotional intelligence. Other qualities include flexibility, adaptability, courage and internal locus of control. Moreover, the leaders had other traits like self confidence, humility, assertiveness and sense of humor. Further, the leaders had several skills including team work, problem solving, communication skills etc. Each leader had different skills and traits that affected his or her leadership style. Carol Bartz had self confidence, and this enabled her to make tough decisions that would bring change in the organization.
Carol exercised facilitative and directive leadership style to encourage employees to be innovative and make the company competitive. She was courageous and had a passion for a job as the company CEO (Pride, Hughes & Kapoor, 2006). Carol argued that her leadership at Yahoo Inc was far, but tough when interviewed by the Wall Street Journal. She claimed that all people in the organization were supposed to work hard so as to attain company goal. Also, she ensured work was interesting. Many people described Carol leadership style as bluntness and humor as she had a sense of humor (Hajdini, 2010). Carol knew how to solve problems the company was experiencing. She set up a 45 minutes meeting with people to know what people were thinking and identify problems and solutions. Her leadership was effective, but the Yahoo board was not happy with the progress of the change process and they fired her (Nielsen, 2004). On the other hand, Semel had a different leadership style and qualities from other Yahoo leaders. Semel encouraged an authoritative kind of leadership. Semel focused on reducing the company costs by lying off 12% of the workforce. Semel changed the organization culture, and prevent employees from working in the same equal sized rooms. He also prevented employees from meeting freely after getting approval from the manager (DuBrin, 2012).
Semel had no passion for the employee as he did not motivate them by allowing them to meet and work in a similar environment. He established his own private office, and he did not communicate with the employees like Tim Koole did. Semel had poor communication skills like Tim Koogle, and this affected the organization’s performance. The employees were not motivated to work and hence affected organizational goals. He was not flexible and adaptable and this hindered him from adapting to the organizational culture (Hajdini, 2010). Semel did not encourage innovation among the employees as the employees provided a detailed explanation of their ideas and their benefits to Yahoo (Pride, Hughes & Kapoor, 2006). This ensured the proposed projects were in line with the organizational standards and policies. Semel did not have problem solving skills, and was unable to solve problems in the organization. Semel encouraged formal communication and establishment of connection between projects, policies and company standards. This consumed a lot of time and prevented the development of solutions to the problems in the organization. Most leaders like Semel gave technology priority and did not focus on internal structures and control. Semel did not have any experience in the digital word. This affected the company as he could not ethical decisions and develop solutions to problems. Yahoo was in a poor financial situation than before when Semel left (Schermerhorn, 2011).
Tim Koogle encouraged team work and motivated the employees in order to attain the company goals. However, the board fired him after the company failed to recover after suffering a crisis during the bubble burst. Most observers expected the company to recover, but it did not. Most of the leaders including Scott Thompson and Semel did not take to understand the company organizational culture and this affected their leadership in the organization. They were not able to bring change in the organization (Pride, Hughes & Kapoor, 2006). Marissa Mayer is the current CEO for Yahoo. Marissa Mayer hopes to transform the company like other CEO. Marissa is flexible and adaptable, and this has enabled her to transform Yahoo. Marissa encourages clear communication in the organization as it is important in transforming the organization. Marissa launched a 100 days action plan and included communication at each step (Werner, Randall & Jackson, 2011). She stated that communication was important during Scott Thompson leadership and it is still important. Marissa argues that he will accelerate strategic, operation and organizational processes. She developed a five on boarding building blocks to accelerate the processes. Apart from promoting clear communication Marissa ensures, people are assigned the right roles. Yahoo needs effective leadership in order to achieve its goal, remain innovative and competitive in the market. Having the right traits and skills will enable the organization compete in the industry. The leaders should be assertive, self confident, flexible, courage and adaptable. They should have decision making skills, problem solving skills and communication skills in order to bring change (Werner, Randall & Jackson, 2011).
Reference
Davis, R. (2010). The intangible leadership. John Wiley & Sons, p1-256
DuBrin, A.J. (2012). Leadership. Cengage Learning, p60
Hajdini, I. (2010). Innovation management. GRIN Verlag, p20
Lane, P.G., & Daft, R.L. (2008). The leadership experience. Cengage Learning, p1-493
Nielsen, J.S. (2004). The myths of leadership. Davies-Black publishing, p1-187
Pride, W.M., Hughes, R.J., & Kapoor, J.R. (2006). Cengage Learning, p20
Schermerhorn, J.R. (2011). Exploring management. John Wiley & Sons, p45
Werner, S.S., Randall, S., &Jackson, S.E. (2011). Managing human resources. Cengage learning, p1-688
Wibbeke, E.S. (nd). Global business leadership. Routledge, p1-20
Winkler, I. (2009). Contemporary leadership theories. Springer,p1-107
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