E-Bay Case Study

Since eBay was launched in 1995 the company has grown at an incredible rate. It is the founder of online auctioning and it has been difficult from a leadership point of view to accommodate the needs of the company and clients as development of services are being established. As a leader of this company it is important to shape the organizations goals, motivate behavior toward the achievement of those goals, and help define the organizational culture. There are many different ways of accomplishing these leadership ideals. By analyzing eBay and Meg Whitman through leadership, the necessary changes can be made about trust, outside investors, specialized attention, and employee motivation and morale for the continued success of the company.

eBay is fortunate to have Meg Whitman as the new CEO of this emergent company. She was able to acquire her legitimate power through her expert power. Her leadership qualities with a Harvard MBA and manager in firms such as Hasbro give her the information and expertise she needs to run this company. eBay is an innovative experiment turned corporation that is facing many obstacles. As different issues arise Whitman possesses the knowledge to establish the goals needed to fix the problems and then delegate tasks in order to accomplish the goals. It was a good strategy for Pierre Omidyar to step down as CEO and for Whitman to take on the challenge.

Going from a System 4 behavioral model to a more bureaucratic model is a positive step for this growing company. Trust has been a big issue with the buying and selling of goods from independent sources. The user-generated performance rating system was a good way to increase trust but that quickly plummeted after the users began to exploit and manipulate the system. The firm needs to rely more on rules and regulations to help correct this problem. Incorporating leadership behaviors from the Ohio State Studies on initiating-structure behavior will define clear roles of what is expected of each buyer and seller on the eBay site. This formal line of communication lets the users know how each sell of an item will be carried out so trust can be established in this company once again.

Another reason for a more bureaucratic model is so the investors are content. Since eBay has become a publicly traded firm the outside investors want to make sure their investment is not going to waste. They want their investment to make them money so from the Michigan Studies a job-centered leader behavior is important. By being interested in production the firm will continue to have the support from outside investors and the finances to continue to build an innovative company for many people to enjoy. A more bureaucratic model is not the sole direction this company needs. The behavioral model also plays an important role.

This company also needs to have the support of a behavioral model to keep cohesiveness to eBay. One eBay seller criticized the company for not paying attention to the sellers and treating them like second class citizens to the buyers. The sellers are the base of the company and without them the buyers wouldn’t be able to purchase anything. eBay should use consideration behavior from the Ohio State Studies that establishes a warm, friendly, and supportive climate for all its clients. This way everyone feels like equals and there will not be bitterness between the buyers and sellers.

Then there is a problem with employee motivation and morale. The employees have a loss of motivation and low morale working for eBay. A former executive referred to it as being outdated and an uninspiring organization. This is where the employee-centered leader behavior from the Michigan Studies needs to be incorporated. This insures that the employees are satisfied and can work in cohesive work groups. It is always important to be concerned with the welfare of the subordinates. The lead researcher of the Michigan Studies, Rensis Likert, argues that the employee-centered leader behavior tends to be more effective. There does need to be a common ground