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Narrative 1-3 From the Start,Amazon.com Has Been in a Hurry to Be

question 58

Multiple Choice

Narrative 1-3
From the start,Amazon.com has been in a hurry to be a success. According to company founder and chief executive officer (CEO) Jeff Bezos,"Our initial strategy was very focused and very unidimensional. It was GBF: Get big fast."
With billions to spend from its initial stock offering (Amazon's stock quickly rose to over $100 per share) ,Amazon spent $400 million to build eight high-tech warehouses across the country. Each was capable of shipping 60 million items per year,and Amazon needed to control the entire buying transaction,beginning with online ordering,proceeding to quick warehouse handling and boxing,and ending with timely shipping and delivery.
Unfortunately,Amazon grew so fast that it soon lost control of the basics. Amazon burned money so quickly that it had to issue bonds to raise another $2.2 billion to keep the company running. Still,it had only enough business and cash to run six of those new warehouses. Consequently,the company took a $400 million loss to close two of the warehouses and lay off 1,500 people. Furthermore,the six remaining warehouses were poorly run. Defective products,which should have been returned to manufacturers,sat on the shelves wasting space. Mystery orders kept showing up. Instead of declining the deliveries,workers put whole truckloads of unordered items on the shelves. Amazon had so much unsold inventory in its warehouses that CEO Bezos sent out an email with a point-blank message: "Get the crap out." Amazon's problem was not its sales,which were growing exponentially,but rather in poor management. As a result,its stock,once valued at over $100 per share,dropped to a low of $6. Amazon has lost more than $3 billion since its inception. As for profits,founder Bezos cautioned patience.
In the year that Amazon reported its first quarterly profit that profit amounted to only $5 million on $1.12 billion in sales in its fourth quarter,and Amazon still lost $45 million for the year. Furthermore,it still has long-term debt of $2.2 billion to pay off at the rate of $120 million per year. Results like these would have cost any other CEO their job. If Amazon is ultimately to survive and be profitable,what does it need to do to become a more efficiently run company
-Refer to Narrative 1-3. Which traditional management function will be key in ensuring that Amazon is never again burdened with thousands of dollars' worth of unsold inventory?

Definitions:

Static

Persistent or unchanging conditions; in electronics, it refers to random noise that can interfere with signal clarity.

Stability

The state or quality of being resistant to change, especially sudden change or deterioration, within a particular environment or context.

Society

A group of individuals involved in persistent social interaction, or a large social group sharing the same geographical or social territory, typically subject to the same political authority and dominant cultural expectations.

Utilitarianism

An ethical theory that posits the best action is the one that maximizes utility, usually defined as that which produces the greatest well-being of the greatest number of people.