2. 2
Executive Summary
This study is based on the case study of the US based ride hailing company Uber that had
recently run into a number of internal and external problems – ranging from employees
leaving the company to being scrutinized by government agencies for breach of the law.
The study concentrated on three major issues in the company since it was set up in 2009 – the
core corporate values prevalent in the company under founder Travis Kalanick, the issues of
diversity in the company and the questions raised in relation to the leadership style and
decisions taken by Kalanick.
The report concluded that the corporate values implemented in the company by Kalanick
were faulty and inadequate and the consequent corporate culture in the company was counter
productive for the motivating the employees. The study also found a severe lack of gender
diversity and equality at the company and concluded that these were because of the flawed
leadership practices and values espoused by Kalanick. The study also concluded that the new
CEO needs to take immediate measures and steps to correct the problems. The most important
aspect that the new CEO has to focus on is deciding on the most appropriate leadership style,
and values that he should follow to navigate the challenges thrown by the VUCA world.
4. 4
Introduction
Uber was trend setter in the international taxi industry. A very innovative project, Uber
disrupted the taxi industry and was based on a market demand gap between consumer
demands and option availability. The company offered a new form urban mobility at cheaper
prices and ease of use for customers/.
Founded by Travis Kalanick in 2009, the company was guided by very aggressive values to
achieve global domination. As a result of the values – which created a unique corporate
culture, the company was valued at $70 billion by 2017 and was operating in more than 70
countries. However the company also started facing huge problems for the company – with
numerous court cases, government scrutiny, and cases filed by employees and drivers,
because of the business model of the company based on ‘results at all cost’, ‘growth above
profit’ ethos, and disparate profit reports.
This report highlights three issues in the company – values, diversity and leadership, and
make recommendations for the new CEO of the company to absolve the company of all the
problems.
Values
Issue
At the core of Uber’s value was to achieve growth and revenue targets and the decentralized
structure allowed general managers to “be themselves” and were empowered to make
decisions without much supervision and scrutiny and from the company’s headquarters. The
company had also incorporated a ‘cult of personality’ and sexism. A win-at-any-cost attitude
was among the value of the business with the aim of growing as quickly as possible. The
employees were expected to personify the values such as meritocracy, principled
confrontation and "always be hustlin'" – or the culture of getting more done with less
resources and thereby working long and hard hours and being smarter. , not just two out of
three
Another value that was often fostered was that of principled confrontation urging changing of
the world and institutions to usher in the future.
5. 5
Problem
– Uber followed a very strict value system that focused on growth at all costs which
disregarded the possible outcome of incorporating such values in the company such as cult
personality, sexism and not following the hierarchy system.
Discussion
The value system incorporated at Uber since the start of the venture in 2009 by founder Travis
Kalanick was obviously detrimental for the company. They were excessive even though
logical.
Values are defined as global abstract principles that act as guiding principles such as freedom,
honesty, equality, beauty, etc. that are also applied to the business perspective (Thomsen,
2004).
Values are applicable to individuals – which are applicable to the individuals themselves
only, as well as for business organizations. Values in business organizations are applicable for
all the employees of the organization. The proliferation of organizational values results in
dominant common beliefs, attitudes, decisions and behaviors within the organization.
Corporate values are also defined as operating philosophies or principles which help in
guiding the internal conduct of an organization as well as the relationship that it should have
with its customers, partners, and shareholders. Typically, the core corporate values of a
company are encompassed and expressed through its mission statement or in a statement of
core values. It is important for companies to adopt such core values so that it is able to
execute its business strategy and is able to ensure the creation of a working environment
which is able to further support the objectives of the company (Urbanovičová, Mikulášková
and Čambál, 2017). The core values also should be such that they are able to inspire and
motivate employees to achieve new levels of productivity and aiding employees to achieve
professional goals of the employees. If the core values are well constructed and are able to
support internal and external stakeholders – including customers, it is more likely that
customers would want to engage with the company – sometimes exclusively (Thomsen,
2004). Further well developed and supportive values can also help to increase confidence of
shareholders in the ability of the company to execute its stated strategies.
The result of the values propounded by Kalanick resulted in an unrestricted workplace culture
and a toxic workplace environment. The result was unprofessional behavior where issues of
sexism and lack of diversity were not subsided. For example, the “meritocracy and toe-
stepping’ value resulted employees undermining superiors, peer and direct reports
(Westaway, 2014).
6. 6
Lack of diversity resulted male domination with only 15.1 percent of the engineering, product
management and scientist positions were filled by women. The HR department became weak
and complaints of discrimination, sexism and harassment at work were not given due
importance- especially those made against executives personally close to Kalanick. This
resulted in a drastic fall in the morale and motivation among a large section of the 12000
employees while also resulting scores of legal cases and government and authority scruti9niy
in markets where Uber operated. This tarnished the image of the company as well.
Solution
There were major values related issues at Uber. The solution is to simply – scrap those that
resulted in the negative outcomes for the company for the long term because values help in
creating the dominant corporate culture.
The universally accepted values of equality and promoting diversity should be given
predominance at the company in the long term.
Equality – or equal treatment, for employees is should be the primary value that should be
promoted and fostered at Uber and applicable to all of its business operations globally.
Recommendation
The report makes the following recommendations with respect to value changes in the
organization:
Scarp ‘cult of personality’
No tolerance policy towards sexism
Increasing scrutiny and accountability of general managers’ decisions
Tone down value promoting aggressive growth at any cost
Tone down high risk taking attitudes
Less focus on the value of meritocracy and toe-stepping
Valuing of cut throat competitive environment in the company
Diversity
Issue
The issue of diversity at Uber is a result of the values initially imbibe in the company by
Travis Kalanick. The internal approach set by Kalanick for Uberw wherein he reportedly
fostered a ‘cult of personality’ and sexism was perhaps at the root cause of diversity disregard
7. 7
at Uber. The attitude of Kalanick hiself not according respect to people – including
employees and customers, and neglecting to create a justifiable corporate culture ultimately
resulted in a an acute lack of diversity in the organization.
The primary diversity issue was the male-female employee disparity. According ot the case
study, only about 15.1 per cent of all positions in the engineering, product management and
scientist vacancies were filled by women in the company.
Lack of diversity was also seen in the alleged cases of continued sexism and harassment of
female employees which prevented the career progression of women in the company. The
case mentions a former female product engineer being subjected to continuous discrimination
by her male colleagues and her opportunities for a promotion were always denied. Hence it
can be said that diversity was a major issue with the company.
Problem
- the main problem is a severe lack of diversity – and more specifically, a lack of gender
diversity and gender equality in the practices and policies of the company.
Discussion
Diversity at the workplace is referred to as the culture of an organization to offer employment
and an adequate working environment for people from different races – social diversity, and
from different education and economic backgrounds - informational diversity, and possessing
varied values - value diversity, and with different styles of working – cognitive diversity, so
that the best from each of the employees is brought out (Brief, 2008).
Diversity recognizes each individual to be different and therefore its achievement requires the
value of equality and inclusion in an organization. Modern businesses value and give
importance to diversity because it is believed that a diverse workforce is able to bring in
varied perspectives to a situation and hence a number of solutions can be worked out. It helps
in promotion of innovation and problem solving ability within the organization, increased
social approval, enhanced and expanded language skills, enhanced morale and hence
productivity thereby increased profits (Ozgen, Nijkamp and Poot, 2015).
Upholding diversity at workplace helps companies to foster an environment of mutual respect
among employees as well as a between the management and the employees. diversity is also
important in creating economic empowerment of marginalized workers because it does not
promote racism, ageism and discrimination against people with disabilities and therefore
allows equal opportunities for everyone. On the other hand, lack of diversity can lead to
8. 8
conflicts between employees and between employees and the management. Therefore
promoting diversity can also help to reduce conflicts and help in resolution of issues (Nagar,
2012). The society and other stakeholders outside of a company are also have an influence on
the business of the company. while the society at large comprises the current and [potential
customers of a company, shareholders provide money for the running of the company.
Companies being able to showcase high levels of diversity are able to enhance its image in the
eyes of the external; stakeholders and therefore increase chances of greater support from them
(L.awton, Aquino and Tasso, 2016). It can also enhance innovation and problem solving
ability of the company on the overall because a diverse workforce brings with it a variety of
perspectives to view an issue and therefore the greater number of perspectives helps
companies to find better solutions and innovations.
In the case at hand, Uber absolutely lacks gender diversity. The company is completely male
dominated and woken are not only given much less opportunity to be hired by the company
but also discriminate on gender grounds against those women who are already employed.
This is potentially because of the values, attitudes and culture set by the founder owner
himself. The issues of sexism, harassment of women at work – often sexual harassment,
women not being given the opportunity to progress in the company, are all indicators of the
severe lack of gender diversity in the company.
Solution
The only solution for Uber’s new chief CEO Dara Khosrowshahi is to create policies and
strategies that promote diversity – primarily gender diversity. This can also follow from the
change of value for equality. The focus should be on providing equal opportunities for male
and female employees in the company.
Recommendation
The recommendations for Dara Khosrowshahi are as follows:
Make diversity promotion as a core value of the company
Develop gender equality policies and strategies and implement them
Secure more appointment of women in key positions in the company such as in the
appointment of engineering, product management and scientists.
Implement a strict policy no sexual harassment at work
Include women in decision making process
9. 9
Seriously investigate all pending allegations of harassment against women in the
company and bring culprits to justice.
Leadership
Issue
Leadership values, attitudes, and practices brought in by Uber founder Travis Kalanick can be
said to be at the root of most of the problems faced by the company. The very values he tried
to imbibe into the culture of the company of profit above all and policies like meritocracy can
be said to have resulted in the internal problems of Uber. His leadership mantra of success at
any cost is a faulty one which pushed his employees to do anything for business growth and
expansion. His lease faire leadership strategy wherein he allowed decentralization to a very
large extent and his apparent disapproval to hire a CEO because he did not want to share
power were problematic for the company.
The leadership of Kalanick allegedly also promoted a culture of ‘cult of personality’ and
sexism in the company. He is known to have been disrespectful towards employees and
customers and tended to favour those who were close to him. His tendency to suppress
legislation and exploit the legal grey areas was also followed by his followers which resulted
in issues for the company. Additionally his ruthless approach at work created an often-
unrestrained workplace culture. he was alleged to be deceiving for people around him and
allegedly stood by those performing employees against whom there were allegations of
harassment brought in by both men and women employees. His leadership style also made
the HR department weak to take action against erring employees – especially those who were
reportedly close to him.
Problem
– promoting persona cult in the company, not respectful to others, not promoting diversity
and equality in the company, promoting faulty values and corporate culture
Discussion
For any company to succeed and be sustainable, efficient leadership is required. While
Kalanick was apparently a good leader in terms of setting the business objectives and pushing
employees to work harder to achieve organizational goals of growth and expansion, his
attitude of achieving that ‘at any cost’ was faulty (Cook, 2009).
His fostering of disregard for law and exploiting legal loopholes was also faulty because it
prompted others down the line to do so.
10. 10
The values and corporate culture that Kalanick established in the company was detrimental in
reducing the morale and motivation levels of a large section of employees – resulting in drop
in output even though increasing morale and motivation levels of employees is amongst the
primary responsibilities of a leader.
Solution
The solution for the leadership issues should be seen in context of the VUCA world. Leaders
need to anticipate change, challenge and disrupt industry, interpretation ability to understand a
wide array of data, flexibility in decision making to deal with dilemmas, align leadership
goals with that of individual employees, and learning from mistakes made so as to innovate
(Juli, 2011).
Recommendation
The recommendations for Dara Khosrowshahi are as follows:
Implement the values and diversity recommendations made earlier
Follow a democratic leadership style which mandates inclusion of employees in
decision making process
As a leaders assure employees of equal treatment
Develop high intellectual, social and physical skills as a leader to navigate the
challenges the VUCA world.
Conclusion & Key Learning
Conclusions
Based on the analysis of the above issues it can be said that at the core of the problems for
Uber was the faulty leadership style and decisions taken by founder Travis Kalanick. The
values followed by Kalanick were faulty and inadequate and the consequent corporate culture
that dominated the company. There was a severe lack of gender diversity and equality at the
company and hence corrective measures were required. And most importantly the leadership
values and attitudes followed by Kalanick were not suited for the VUCA world and therefore
led the company to a host of problems.
Key Learning
The study and examination throws light on the following matters:
Selection and formulation of values that are universally acceptable and those which
promotes equality and diversity is critical for long term success of a company.
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Values should be such that they are suitable to be applied to an organization even
when it grows significantly.
Diversity is an important aspect of policy for organizations because it adds value to
the company
Diversity promotion requires policies that are based on equality at the workplace.
Leadership is the most important aspect of long term sustainability for companies
Leadership style and attributes need to be such that the leader is able to negotiate the
challenges thrown by the VUCA world.
12. 12
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