Task 2 Stakeholder Analysis and Communication of Netflix

Effective communication is crucial for the success of any business and is particularly
important for multinational corporation like Netflix. The company uses both external and
internal communication to convey important information to stakeholders and maintain
relationships with them. This essay will consider the differences between internal and
external communication, the ways in which the business communications internally and
externally, and a stakeholder analysis with a focus on stakeholder communication. In
addition, this essay will examine the potential barriers to effective communication faced by
the company and how they can be overcome to ensure the success of Netflix.
Internal communication refers to the communication within the organization, between
employees, managers and departments. It is the exchange to information and ideas among the
employees, to operate efficiently and maintain a functioning work environment. It involves
establishing and disseminating company policies, core values, developing plans and
guidance. It uses internal emails, intranet sites, memo, meetings, seminars, presentations, etc.
Internal communication is focused on promoting collaboration and productivity and building
a positive work culture. On the other hand, external communication refers to the
communication that takes place between the company and other external entities outside of
the organization, such as customers, suppliers and investors. External communication
determines the company’s reputation. It focuses on conveying strong messages that positively
influence the minds of the audiences and build a positive company image through
relationships. Methods of external communication include press releases, advertisements,
customer’s feedback, etc. Both internal and external communication are important for the
company to be able to function effectively.
Netflix uses several methods to communicate internally. The company’s intranet is an
essential tool for employees to access the information they need. They utilize email for a
more formal approach to communication, which is useful for larger projects. Some of them
are Slack, a secure messaging platform and PagerDuty, an incident-management tool (Slack,
n.d.). According to Marc Vilanova, Senior Security Engineer at Netflix, these two tools are
integrated to tackle incidents and facilitate communication by reducing response times in
real-time operations in the company. This system is developed to collaborate and make
decisions quickly. For crisis management, these tools are used to detect an incident, inform
and engage the involved teams across all teams instantly and resolve the problem as quickly
as possible. At Netflix, any employee can report an incident with this system. These tools
ensure effective internal communication. In addition, Netflix is well known for its unique
organizational culture. In Culture Deck, a presentation created by the CEO Reed Hastings,
the company’s values and goals are heavily promoted. The Culture Deck sends the message
that both current and future employees should be well acquainted with these values in order
to fit into the internal work culture. Moreover, at Netflix, instead of traditional performance
reviews, 360-degree feedback is given with honesty on a regular basis. According to Patty
McCord (2014), “building a bureaucracy and elaborate rituals around measuring performance
usually doesn’t improve it.” Reed Hastings also pointed out that the problem with formal
reviews is that the feedback goes only one way- downward. For this reason, within the
company, feedback is given by anyone who has one. Netflix’s internal communication
encourages employees to be productive and collaborative to ensure that internal operations
function smoothly.
Netflix also has an extensive external communication strategy to inform customers,
engage with fans and build relationships with other external audiences. Netflix uses various
channels to communicate externally, including email, social media and public relations.
Personalized emails with updates about new releases and special offers, engaging content on
social media, media events and press conferences are some of the methods of external
communication. Press releases from the company are intended to update the public and media
on significant events and news, such as the introduction of new services, content, and
collaborations. In order to market its goods and services, Netflix also collaborates with
influencers to develop campaigns. When it comes to investor relations, Netflix is one of the
most successful businesses in the world. Investors can obtain current and reliable financial
data from the company's quarterly and yearly reports. Investors depend on these reports to
keep them up to date on the company's operations and prospects. Additionally, it routinely
holds conferences and events so that it may speak with investors face-to-face and respond to
their inquiries about the business. These events provide transparency and allow investors to
gain a better understanding of the company. Netflix makes a range of resources and materials
available on its website for investors to access. This includes financial reports, earnings calls,
press releases, investor presentations, and more. By using these methods, Netflix has been
able to create a strong relationship with its external audiences and ensure they are well
informed of the company's performance and activities.
To understand the stakeholders of Netflix, a stakeholder analysis can be performed. A
stakeholder analysis is a process used to identify and evaluate the key stakeholders involved
in a business, such as Netflix. Netflix has a wide range of stakeholders, including
shareholders, employees, customers, content creators, suppliers, government entities and
more. Customers are the most important stakeholders for Netflix as they are the source of the
company’s revenue. A majority of Netflix’s customers are millennials and Generation Z, who
are increasingly using streaming services. Netflix relies on these customers to provide
feedback on their services and products in order to meet their needs. Netflix regularly
communicates with customers through email, newsletter and social media. Shareholders are
the stakeholders who own a portion of the company and benefit from its financial success.
Netflix must maintain strong financial performance in order to remain attractive to investors
and continue to receive funding for its operations. It provides annual reports and regular
investor updates in the form of press releases, conferences and other communications.
Employees are another important stakeholder of Netflix. Netflix provides its employees with
competitive salaries, benefits, and working conditions in order to attract and retain talented
individuals. Also, when Netflix discharges employees when their skills no longer fit, they are
offered rich severance packages for their valuable contributions to the company. Moreover,
Netflix works with a variety of suppliers to provide its streaming service, such as hardware
and software suppliers, content delivery networks, and more. Netflix communicates regularly
with its suppliers to ensure that they are providing the best possible goods and service.
Finally, regulators, or government entities, are stakeholders of Netflix who are responsible
for enforcing laws and regulations related to the company. Netflix ensures that it follows all
applicable laws and regulations in order to avoid penalties and other legal issues. Netflix also
strives to remain transparent and communicate openly with regulators in order to ensure that
its operations are in compliance with relevant laws and regulations. It is important to have a
comprehensive understanding of the interests and influence of each stakeholder in order to
develop a successful strategy for the company.
Despites its efforts to effectively communicate with stakeholders, Netflix may face
various barriers. Some of the potential barriers include language barriers, cultural differences,
technical issues and conflicting interests. Netflix operates globally, and language differences
can pose a challenge in communicating with stakeholders in different regions. Similarly,
cultural differences can impact communications in Netflix. Different cultures may have
different communication styles, values, norms and attitudes. In the work environment, this
barrier can affect punctuality, time management and cohesion among employees, which can
lead to misunderstandings, misinterpretations, and conflicts. To overcome cultural barrier, the
company should adopt practices that take into account cultural differences. This may include
language support and cultural training to employees. Additionally, technical issues such as
website outages and email system failure, can disrupt smooth communication in the
company. Netflix should aim to resolve these technical issues within a short period of time in
order to maintain effective communication. Also, if stakeholders have conflicting viewpoints,
it can lead to conflicts and disagreements. For example, in early 2022, Netflix announced a
new password-sharing policy which led to customers’ complaints on social media and loss of
subscribers. There are also other forms of barriers to effective communication, such as
psychological barriers and personal barriers. Psychological barriers refer to biases, prejudices
and emotional responses that prevent people from receiving messages objectively. Personal
barriers to communication can include shyness and lack of confidence which can impact an
individual’s ability to communicate effectively. By understanding the potential barrier, the
organization can take steps to promote effective communication and improve performance.
In conclusion, effective communication both internally and externally is essential for
any company, including Netflix, to succeed. The organization's dedication to openness,
honesty, and customer interaction has made it a leader in its sector and a role model for other
companies trying to strengthen their communication practices. Companies like Netflix can
maintain a great working culture, make solid connections with stakeholders, and ultimately
promote corporate growth and success by putting equal emphasis on internal and external
communication with stakeholders.

References:
1. Surbhi S (2017). Difference Between Internal and External Communication (with
Comparison Chart) - Key Differences. [online] Key Differences. Available at:
https://keydifferences.com/difference-between-internal-and-external-
communication.html.
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2. McCord, P. (2014). How Netflix Reinvented HR. [online] Harvard Business Review.
Available at: https://hbr.org/2014/01/how-netflix-reinvented-hr.
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3. Slack (n.d.). How engineers at Netflix and PagerDuty outsmart incidents with Slack.
[online] Slack. Available at: https://slack.com/blog/collaboration/engineers-netflix-
pagerduty-slack#:~:text=%E2%80%9CAt%20Netflix%2C%20we%20use%20Slack.
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