Netflix presentation organizational behavior
- 1. Who’s Presenting? OB-II PROJECT: SEC B GROUP 4 B24058 B24067 B24081 B24086 B24092 B24093 ABHISHEK MAJUMDAR DEBOLINA CHOUDHURI MANU AGARWAL PARTH JALAN RISHABH SABOO SAGNIK DUTTA 2025 | 15 m | HD | U NETFLIX PLAY
- 2. Introduction, Environment & Structure 1997 Initial Days Netflix was founded in 1997 by Reed Hastings and Marc Randolph in California. It initially operated as an online DVD rental service. The company started with a pay-per-rental model, where customers could rent DVDs through the Netflix website and receive them via mail. Its key differentiator was the fact that it did not charge late fees, unlike Blockbuster, who dominated the video rental market during those days. General Environment Politically, the regulations in the US entertainment industry were stable. Customers preferred rentals over buying DVDs. People had busy lifestyles and didn’t like late fees, making Netflix’s USP a desirable one in the social environment. Internet speeds were slow, but DVD technology and data analytics were emerging. Sustainability wasn’t a major focus yet. There were no strong regulations on online rental businesses. Organisational Structure Netflix initially had a centralized structure, with key departments directly reporting to the CEO, Reed Hastings. The key departments included Operations, Marketing, Technology and Finance. An initial challenge Netflix faced was the bottleneck in decision-making. Since all key decisions were handled at the top level, the CEO and leadership team became overloaded. With an increase in subscriber base, the logistical complexity of processing rental orders and ensuring timely deliveries increased. Scaling Up As Netflix’s subscriber base grew in the early 2000s, the company realized that its functional structure was creating hindrances. Leadership overload took place as every department relied on top management for decisions. Preparing for the shift towards digital streaming was the need of the hour. The Dot-Com bubble burst in the early 2000s, which created financial uncertainty for tech startups. There was a requirement for a transition in the organizational structure.
- 3. Netflix’s Organizational Structure Evolution Netflix has transformed its organizational structure multiple times to adapt to crises, growth, and global expansion. Year Range Organizational Structure Key Crisis Netflix’s Response 1997-2005 Functional Structure Scaling bottlenecks, CEO overload Introduced automation & built dedicated streaming teams 2006-2012 Divisional Structure Streaming transition, Qwikster failure Centralized strategy & geographic divisions 2013-2017 Multifocused Structure Content creation costs, competition Data-driven content strategy & local content production 2018-2022 Horizontal Structure Bureaucracy slowing innovation, COVID-19 shift Reduced hierarchy, remote work adoption, real-time dashboards 2023-Present Virtual Network Structure Market saturation, ad-tier transition AI-driven personalization, ad- supported model, remote global teams Future Organizational Trends Netflix’s next organizational shift may involve: • Decentralization & AI Integration—increasing automation in decision-making. • Blockchain & Content Ownership Models—using NFTs or blockchain for streaming rights. • Metaverse & Interactive Content—adapting to the next-generation entertainment platforms. Final Thoughts Netflix’s organizational adaptability has been its biggest strength. It successfully transitioned through functional, divisional, multifocused, horizontal, and virtual network structures, responding effectively to crises at each stage.
- 4. Organizational Life Cycle 2025 Entrepreneurial Stage Collectivity Stage Formalization Stage Elaboration Stage 1997 - Early 2000s 2003-2010 2011-2017 2018-Present Characteristics Characteristics Characteristics Characteristics • Founded by Reed Hastings and Marc Randolph in 1997 as an “online DVD rental company” (Subscription based). • Organization was small, flexible, and with informal culture. • Founders actively involved in daily operations. • Rapid growth and expansion; Netflix went public in 2002. • Shifted from DVDs to streaming technology (2007). • Employees identified strongly with the company mission (customer experience focus). • A more defined organizational culture emerged, emphasizing “high performance” and a “no-rules” culture. Crisis: Leadership and Survival Crisis • Rapid expansion due to favourable dot com bubble with low borrowing costs. Need to bring managers or adjust organisational structure to manage. • Dot-com crash (2001) forced it to layoff one-third of its employees. • Blockbuster rejected 50 million deal. Response • Flat organisational structure for fast decision making and flexibility. • Organisational culture focussed on freedom and responsibility to reduce need for management levels. • Innovating Subscription model to cater to needs of customers better and started developing algorithms for personalised experience. Crisis: Need for Delegation and Growth Management • Middle management became necessary. • To ensure lower-level managers had freedom and autonomy. • Strong communication and coordination was essential. Response • The famous Netflix Culture Deck was release which institutionalised company culture. • “No rules, rules” implemented in terms of expense and employee wellbeing policies where employees were given full freedom to exercise their judgement to boost creativity and adaptability. • Focus on transparent communication • Expanded globally and transitioned from licensing content to producing original content (House of Cards, 2013). • Organization became more bureaucratic, requiring formal processes and standardized operations. • Hierarchical layers emerged to manage new business divisions (Content, Data, Marketing, Engineering). Crisis 1: Bureaucracy vs. Agility • Formalization and expansion slowed down innovation and stifled creativity. Employees feared the loss of Netflix’s fast- moving culture. Response • Focused on produced original content and specials to sustain creativity and edge. • Focus on high performance culture ensured fast innovation despite formalization. Crisis 2: Qwikster Debacle (2011- 2012) • Split its DVD and streaming services into two separate platforms (Qwikster for DVDs, Netflix for streaming), leading to customer backlash. Response • Refined its leadership approach, implementing "farming for dissent" to encourage employees to challenge leadership decisions, improving strategic • Operates as a global media powerhouse, competing with Disney+, Amazon Prime, HBO Max. • Structure is highly complex, teams work across data science, AI, content production, global expansion, and marketing verticals. Crisis : Need for revitalization • Market saturation and increased competition led to stalling of subscriber growth. • Financial burden due to high burn rate on content production. • Employees questioning no rules culture in terms of mass layoffs and content cancellations. Response • Netflix doubled down on organizational agility, shifting towards advertisement- supported models to increase subscriber growth and revenue (Netflix Ad Tier, 2022). • Diversification into gaming and life sports broadcasting to increase engagement. • Revamped policies to focus on employee well being and autonomy and decrease freedom in terms of layoff and cancellation to foster a culture of trust, inclusion and sustainability within the organization.
- 5. Current Organizational Environment 2025 The Dream Team: High- performing individuals who excel both independently & collaboratively. People over Process: Empowering employees with the freedom to make decisions, fostering innovation. Uncomfortably Exciting: Encouraging bold & ambitious initiatives, even if they involve discomfort or risk. Great and Always Better: Self-awareness to recognize areas for improvement & achieve growth. Corporate Culture Parental Leave: Encouraging employees to take necessary time for family without strict limitations. Time Away: Offering flexible vacation policies, allowing employees to observe what's important to them personally. Family Forming: Benefits for family planning, including fertility treatments, surrogacy, and adoption support. Mental Health: Programs like mindfulness, meditation, and counseling to ensure employees' overall well-being. Work-Life Philosophy Cast: Reed Hastings, Ted Sarandos, Bela Bajaria, more Genres: Corporate Dramas, Leadership & Innovation, Workplace Culture This company is: Disruptive, Fast- Paced, Relentlessly Creative Inclusion and Diversity Netflix strives for a workforce that reflects its diverse global audience. By employing individuals from various backgrounds and cultures, the company enhances its ability to innovate and connect with members worldwide. Organizational Structure Netflix employs a unitary (U-form) organizational structure with a relatively flat hierarchy, promoting agility and swift decision-making. This design facilitates direct communication between executives and their teams, aligning with the company's emphasis on employee autonomy and accountability. Recent Developments Netflix’s expansion into live streaming, in-house productions & audience diversification showcases strategic agility. A password-sharing crackdown boosted engagement. It reflect its culture of innovation, autonomy & continuous improvement, ensuring a high-performance work environment.
- 6. Current mission, vision and org strategy 2025 Netflix’s strategic focus fosters an adaptability culture, reinforced by its mission- driven approach The firm’s performance-driven culture has shaped its HR policies and employee behavior thus fostering an ethical and socially responsible workplace • Mission: Entertain the world • Vision: Becoming the best global entertainment distribution service Netflix’s externally focused mission and vision drive employee behavior toward innovation, customer-centricity, and content excellence through adaptability and learning Strategic focus Internal External Flexibilit y Stability Environmental needs Adaptability culture Clan culture Bureaucratic culture Mission culture Most applicable types of org. culture for Netflix Decentralized decision- making approach encouraging employees to “Lead with context, Not Control” Performance-based retention through the Keeper test thus enabling only top performers to stay Mistakes were seen as learning pillars, thus reducing fear- driven behaviours Key organization strategies driving Netflix’s current activities These strategies have helped the company shape their HR policies basis 4 pillars Talent density • High performing employees encourage their peers to perform at high levels thus fostering a performance-driven culture • Due to the social contagion of high performance, weaker performers are often pressurised to leave No rules policy • Netflix does not have any formal vacation policy encouraging employees to take ownership of their workstreams thus driving intrinsic motivation • Additionally, the company does not have any expense approval system thus fostering employee accountability and self discipline Leadership model • Leaders provide strategic direction instead of micromanaging thus encouraging each employee to take ownership of their workstreams • Employees internalize company goals rather than following rigid processes Ethical and social responsibilities • Reduces ingroup bias to enhance diversity while maintaining meritocracy • Global storytelling initiative fosters cultural intelligence sharing among teams • Prioritizes engagement over retention, with autonomy-driven job satisfaction
- 7. Future Outlook and Recommendations 2025 A: Enhance Talent density, Immediate goals Strengthening Performance-Driven Talent Strategy Optimizing Organizational Structure for Agility A: Short Term (1-2 years) Strengthen Leadership and Organizational Learning Sustain High-Performance culture in rapid-growing organization Refining the Work-Life & Talent Strategy B: Mid Term (2-5 years) Leadership Evolution maintenance in expansion Sustaining Competitive Advantage & Organizational Excellence Future-proofing content and Consumer engagement C: Long Term (>5 years) • Adaptive Organizational Culture & Leadership • Decentralized Decision-Making • Talent Density & Social Learning • Ethical Behaviour, Inclusion & Psychological Safety C: Industry Leadership, Future-Proofing B: Scale Innovation, Organization agility Ensuring agile leadership, sustainable high-performance culture, continuous learning, and future-ready talent strategies • Ensuring psychological safety so employees don’t fear candor, instead leverage it for adaptive learning. • No formal vacation or expense policy → Continue reinforcing intrinsic motivation & accountability. • Building of cross-functional decision- making capacity, by training leaders in strategic delegation and not reactive management – thereby reduction of siloed decision-making. • For growth areas implementation of flexible reporting model enabling high- autonomy teams to make localized strategic decisions. • Training of middle-level managers in coaching-based leadership rather than control-driven performance evaluation. • Implementation of rotational leadership programs, exposing senior managers to different business units - streaming, regional content etc. • Prevent stagnation, ensure fresh perspectives by encouraging internal mobility. • Reinforcement of "Lead with Context" principle by enhancing managerial coaching, ensuring leaders to empower teams with strategic clarity. • Introduction of flexible workforce structure where employees can work in adaptive project-based teams rather than fixed roles, allowing for higher innovation cycles and career mobility. • With expansion into emerging markets, adaptive leadership and agility needs to be maintained. • Development of regional leadership hubs to maintain Netflix’s high- autonomy culture while adapting to local markets • Promotion of knowledge-sharing and decentralized decision-making while reducing bureaucracy. • Evolve the “Keeper Test” for employees on the verge of high performance, rather than immediate exits. • Incorporation of semi-structured decision-making hubs & have them align when cross-functional leaders land on actions regarding major strategic shifts.
- 8. 2025 | 15 m | HD | U NETFLIX END THANK YOU