PORTFOLIO OF EVIDENCE COVERSHEET

To be attached to the front of the assessment.

Campus: _EAST LONDON CAMPUS__________________________________________________

Faculty: _____FACULTY OF COMMERCE AND LAW_____________________________________
Lecturer’s Name: _____MR CHRISTOPHER CHIZONDO___________________________________
Student Full Name: ___________YONELA OTHANDWAYO MBUSI_____________________________
Student Number: _______BWNY5KT88___________________________________________________

Indicate Yes No
Plagiarism report attached

Declaration:
I declare that this assessment is my own original work except for source material explicitly
acknowledged. I also declare that this assessment or any other of my original work related to it has
not been previously, or is not being simultaneously, submitted for this or any other course. I also
acknowledge that I am aware of the Institution’s policy and regulations on honesty in academic work
as set out in the Eduvos Conditions of Enrolment, and of the disciplinary guidelines applicable to
breaches of such policy and regulations.

Signature: Y.Mbusi Due Date: 13 September 2023

Lecturer’s Comments:

Marks Awarded: %

Signature Date

Eduvos (Pty) Ltd. (formerly Pearson Institute of Higher Education) is registered with the Department of Higher Education and Training as a private higher education
institution under the Higher Education Act, 101, of 1997. Registration Certificate number: 2001/HE07/008

1
 Table of Contents

Declaration ...................................................................................................................................... 1
A. Executive Summary ................................................................................................................... 3

B. Introduction................................................................................................................................. 3

1.1. Vision and Mission Statement of Netflix, with goals and objectives ......................................... 4

1.2. Background to the industry: Specific target market and products or services ......................... 4

2.1. The type of organizational structure of Netflix ......................................................................... 5

2.2. Managerial roles and skills/competencies required .................................................................. 8

2.3. Examples of the roles, skills and competencies required ........................................................ 9

3.1. Important decisions taken by managers at different levels at Netflix:. .................................... 10

3.2. Decision-making process and tools used at Netflix ................................................................ 11

3.3. Practical examples that support the discussion ..................................................................... 12

4.1. Netflix management environment analysis............................................................................. 13

4.2. Netflix planning strategies and goal setting ............................................................................ 14

5.1. The role of leaders in the organization: Netflix ....................................................................... 15

5.2. Approach to teams and individuals at Netflix ......................................................................... 16

5.3. Leadership styles at Netflix ................................................................................................... 17

5.4. Discussion of the approach to change and innovation at Netflix ............................................ 18

6.1. Examples of the most important areas where controls are in place ....................................... 19

6.2. Criteria implemented to maintain and grow organizational performance ............................... 19

6.3. Personal opinion on Netflix performance ............................................................................... 20

7. Conclusion ................................................................................................................................ 20

8. Bibliography .............................................................................................................................. 21

9. Appendix ................................................................................................................................... 23

2
 A. Executive Summary

Netflix, founded in 1997 by Reed Hastings and Marc Randolph, has evolved from a DVD rental-by-
mail service to a global streaming giant, fundamentally transforming the entertainment industry. The
company's innovative business model, grounded in a subscription-based, on-demand streaming
platform, revolutionized how audiences consume content. Netflix's success lies in its relentless focus
on content quality, user experience, and technological innovation. The platform offers a vast library
of original and licensed content, catering to diverse viewer preferences. Notably, their data-driven
approach, leveraging advanced recommendation algorithms, ensures personalized content
suggestions, enhancing user engagement and retention.
The company's bold move into original content production, marked by hits like "Stranger Things"
and "The Crown," underscores its commitment to creative excellence and its ability to compete with
traditional studios. Moreover, Netflix's global expansion strategy has propelled it into virtually every
corner of the world, solidifying its status as a global entertainment powerhouse. Netflix’s
organizational structure fosters a culture of freedom and responsibility, where employees are
empowered to make decisions and take ownership of their projects. This unique corporate culture,
outlined in "No Rules Rules" by Hastings and Meyer, emphasizes a high-performance ethos,
transparency, and a culture of innovation.

In terms of social responsibility, Netflix recognizes the importance of diversity and inclusion. While
the company has made strides in addressing diversity within its workforce, it continues to work
towards creating a more inclusive environment. The Triple Bottom Line approach is integral to
Netflix's operations, considering social, environmental, and financial impacts. Moreover, the
company's sustainability efforts and commitment to responsible business practices are evident in
various initiatives, including energy efficiency measures and content localization.

Netflix's impact on the entertainment industry is undeniable. The company's forward-thinking

approach, commitment to quality content, and technological prowess have not only reshaped how
we consume media but have set a new standard for the entire entertainment landscape

B. Introduction
This portfolio of evidence is based on the international media-streaming and video rental
organisation, Netflix Inc. This portfolio of evidence serves to give a detailed and in-depth description
of Netflix’s four management functions, which are namely the planning, organising, leading and
control functions. This portfolio of evidence will achieve this in the form of a numbered essay, by
analysing the business and management approach of Netflix, in terms of its organisational structure,
moreover how Netflix manages its business in order to achieve its goals and objectives.
Furthermore, this portfolio of evidence will also make use of referenced and aesthetically pleasing
diagrams that give the reader context and more information. These diagrams will be accessible in
the appendix, right at the end of the portfolio of evidence.

It is now evident that utilising video streaming and internet connections, enables individuals across
the globe to effortlessly download and enjoy large video files from the comfort of their homes. Seizing
this technological advancement, the American public company Netflix, introduced a video streaming
platform in 2009, that enabled users to access the latest television episodes and Hollywood
3
blockbusters. As a consequence, this move by Netflix revolutionized the entertainment industry and
resulted in the decline of mainstream video rental stores in North America and across the globe.

In today's entertainment status quo, convenience and accessibility are of paramount importance.
Audiences now expect their desired content to be just a click away, no matter where they are.
Whether they are on the go or at home. Therefore, Netflix allows for seamless viewing experiences.
This means that each member of a household can enjoy content together or separately, offering a
level of flexibility that was once unimaginable.

Question 1

1.1 Vision and Mission Statement of Netflix, with goals and objectives

1.1.1. What is a Vision?

A vision is part of the planning management function in an organisation. This is because planning
is the primary management function, setting the basis for the other functions. A vision can be defined
as a concise and aspirational declaration that outlines the long-term goals, values, and purpose of
an organization. It serves as a guiding beacon, providing direction and motivation for the company's
activities (Collins & Porras, 1996). In addition, Academics James Kouzes and Barry Posner, in their
book tilted “The Leadership Challenge”, further defined a vision statement as a statement typically
encapsulates the desired future state that the organization aims to achieve, moreover, often
embodying its core ideals and overarching objectives. It offers a clear and compelling picture of what
success looks like, inspiring stakeholders and guiding strategic decision-making (Kouzes & Posner,
2012).

1.1.2. What is then the Vision of Netflix?

Netflix Inc.’s business vision is “Becoming the best global entertainment distribution service and
being one of the leading firms of the internet entertainment era.” (Netflix Inc, 2023). Even though,
mission and vision of the organization are interlinked, the vision statement focuses on the company’s
objective of being at the top of the competition, considering opponents like Amazon Prime Video
and YouTube TV. Netflix’s vision statement consists of the following goals:
1. Continuing leadership
2. Internet-entertainment leader
Late martial artist, Bruce Lee, once said that “A goal is not always meant to be reached, it often
serves simply as something to aim at”. Netflix’s strategic management supports the goal of
continuing leadership, suggesting that the company has already achieved its previous corporate
vision statement of global industry leadership. Netflix aims to maintain its leadership and effects of
its operations, meanwhile thriving its membership to satisfy the corporate vision’s objectives.

4
Netflix’s organizational culture, which drive employees to aid the organisation evolve to maintain the
vision statement by ensuring industry leadership and customer satisfaction.

1.1.3. What is a Mission?

A mission is also part of the planning management function in an organisation. A mission was
defined by management academics Bart and Baetz in their journal tilted, “Journal of Management
studies”, as a concise, declarative statement that articulates an organization's fundamental purpose
and reason of existence. Furthermore, that it defines the primary goals, target audience, and core
values that guide the company's operations (Bart & Baetz, 1998).

1.1.4. What is then the Mission of Netflix?

Netflix’s mission is “To entertain the world” (Netflix Inc, 2023). Their mission statement is based on
the attributes of the organisation, which are to provide on-demand movie streaming services. The
business prospers in acknowledgment and preferences about the media they access. There are two
objectives that support the mission statement, which are as follows:
1. Giving entertainment
2. Worldwide Scale expansion
One of the core strategies is to effectively entertain the world, the movie streaming business must
expand its membership to global scales.

1.2. Background to the industry: Specific target market and products or services
1.2.1 Brief history of the organisation: Netflix
Netflix Inc., founded in 1997 by Reed Hastings and Marc Randolph, has emerged as a major player
in the entertainment industry. It began as a DVD rental-by-mail service, allowing subscribers to rent
DVDs online and have them delivered to their homes. The innovative business model of the
company disrupted the traditional brick-and-mortar video rental market (Hastings & Randolph,
1997). Below is a diagram that shows how the Netflix logo has changed over the years.

Diagram 1: The evolution of the Netflix, Inc logo over the years to 5
now. Image source: (Shapkin, 2021)
 Netflix has proven its adaptability over the years by transitioning from physical rentals to digital
streaming. They launched their streaming service in 2009, allowing subscribers to watch a vast
library of films and television shows online instantly (Netflix, 2021). This marked a significant shift in
the way audiences consumed media, ultimately leading to the platform's popularity skyrocketing.
Consequently, "House of Cards," Netflix's first original series, premiered in 2013 to critical acclaim
and established Netflix as a major content creator (Woolfe, 2013). This was a watershed moment
for the organisation, as it transitioned from a content distributor to a content creator. Accordingly,
currently Netflix has over 200 million global subscribers, making it one of the world's leading
streaming services.

1.2.2. Description of the entertainment and video streaming industry and services offered
The entertainment and video streaming industry is characterized by intense competition, driven by
rapidly evolving technology and shifting consumer preferences. Companies in this sector vie for
subscribers and content licensing deals, striving to offer compelling content libraries, user-friendly
interfaces, and seamless streaming experiences (Gomery, 2016).
Hence, Netflix entered this highly competitive market with a disruptive business model. According
to American academic and business consultant, Clayton Christensen, disruptive innovation refers
to a process by which smaller, less established companies with limited resources introduce new
products or services that, while initially inferior in quality and performance compared to existing
offerings, address the needs of a specific niche or underserved market segment (Christensen,
1997). Since Netflix was founded in 1997 as a DVD rental-by-mail service and revolutionised content
delivery by utilising the internet to allow subscribers to receive physical DVDs and, later, to stream
content directly to their devices (Hastings & Randolph, 1997). This novel approach provided
unprecedented convenience and accessibility, effectively challenging traditional video rental stores'
dominance. It can be argued that Netflix therefore, penetrated the lower end of the market at the
time. This made competition with bigger and already established companies in the same industry
irrelevant, since they were at first not recognised as a threat.
This industry continues to evolve, consequently Netflix has well established competitors like Amazon
Prime Video, Hulu, and new entrants like Disney+ and Apple TV+ vying for market share. Netflix
maintains its competitive edge through continued investment in original content, global expansion,
and a data-driven approach to content recommendation and personalization (Netflix, 2021).

Diagram 2: A diagram of
a disruptive innovation
model, as according to
Christensen.
Source: (Danilovic, 2018)

6
1.2.3. Netflix specific target market
In accordance to the Netflix company website, Netflix primarily targets a diverse demographic,
spanning various age groups and interests. Their core target market comprises individuals and
households who seek convenient, on-demand access to a wide range of entertainment content
through digital streaming (Netflix, 2021).

Question 2

2.1. The type of organizational structure of Netflix

The organisational structure of Netflix is there to support the organisation’s core strategy. The
organisational structure is put in place when the organisation fulfils the organising management
function, since a structure is being put in place. Organising can be seen as arranging and structuring
work to accomplish organisational goals of the company. The organising management function is
made up of the objectives, structure, cultural alignment, coordination, and authority in the
organisation. Organisational structure can be defined as the formal arrangement of jobs and duties
in the organisation.

Netflix has a distinct and innovative organisational structure that corresponds to its dynamic, volatile,
ambiguous and rapidly changing industry. Therefore, it can be said that Netflix embraces a highly
decentralized organisational structure. As a result, decision-making authority is distributed widely
throughout the organisation in this decentralised structure. This means as much as there are top
managers that possess titles such as co-CEO, teams have a high degree of autonomy, allowing
them to respond quickly to market shifts and innovate independently (Meyer, 2014). This strategy
complements Netflix's emphasis on creativity, agility, and adaptability. This structure also allows for
quicker communication channels hence, the organisation adopted this type of structure.

The absence of traditional hierarchies and formal titles is one of the most distinguishing features of
Netflix's organisational structure. The company values individual and team accountability and places
a strong emphasis on freedom and responsibility (McCord, 2018). As a result of this structure, Netflix
is able to attract and retain top talent since it is creating an environment in which employees are
empowered to own their projects and ideas. It also aligns with the company's overarching goal of
cultivating an innovative and exceptional culture (Hastings, 2020). This organisational structure
helps shape the Netflix organisational culture, which in turn shapes organisational behaviour.

7
2.2. Managerial roles and skills/competencies required (see diagram 2 in appendix)
Netflix makes use of all the levels of managers, since it has top managers, middle managers and
team leaders or lower level management. Top managers at Netflix have titles such as co-CEO, Chief
communications officer, Chief content officer, Chief marketing officer and many more. Canadian
author and academic, Henry Mintzberg, came up with three managerial roles that are to be fulfilled
in any organisation. They are namely: Interpersonal, Informational and Decisional roles.
All the levels of managers at Netflix must fulfil all three of these roles. This is very much different
from a conventional organisation, where the different levels of managers must fulfil some of the roles
and not all. The reason for this difference at Netflix is because of their highly decentralised
organisational structure that helps everyone feel included and part of the decision-making process.

However, the skills and competencies that all the managers at Netflix should possess, are the
following:

1. Adaptive Leadership: Managers at Netflix need to be adaptive leaders who can navigate
ambiguity and change (Hastings, 2020).

2. Innovation and Creativity: Given Netflix's emphasis on creativity and original content
creation, managers should foster an environment that encourages innovative thinking
(McCord, 2018).

3. Results Orientated: Managers must be results-oriented, focusing on achieving key

performance indicators and driving outcomes (Hastings, 2020).

4. Empowerment and Accountability: Netflix's culture places a premium on freedom and

responsibility (McCord, 2018).

5. Cross-Functional Collaboration: Managers need to facilitate collaboration among cross-

functional teams (Hastings, 2020).

6. Adaptability to rapid external change: The fast-paced nature of the entertainment industry
requires managers to be adaptable and responsive to sudden shifts in market conditions or
consumer preferences (Meyer, 2014).

7. Data-Driven decision-making: Managers should have a proficiency in data analysis and

use it to inform their decision-making processes (Hastings, 2020).

8. Talent Development and Retention: Managers play a crucial role in identifying and
developing talent within their teams (McCord, 2018).

8
 9. Be effective communicators: Effective communication is vital in Netflix's decentralized
structure (Meyer, 2014).

2.3. Examples of the roles, skills and competencies required

The examples below are of how Netflix management applies the required skills and competencies,
practically in the organisation:

1. Adaptive Leadership: First and foremost, they must possess the ability to guide their teams
through dynamic industry shifts and evolving business strategies.

2. Innovation and Creativity: They need to inspire their teams to generate fresh and ground-
breaking ideas.

3. Results Orientated: Netflix managers should be able to setting clear goals, monitor
progress, and ensure that their teams deliver on objectives.

4. Empowerment and Accountability: Managers should empower their teams to make

decisions and take ownership of their work. They should also hold team members
accountable for their contributions.

5. Cross-Functional Collaboration: For example, they should be adept at breaking down silos
and fostering a culture of information sharing and open communication.

6. Adaptability to rapid external change: They should be able to lead their teams through
change effectively. Bearing in mind that the goals, people and structure can change at any
time.

7. Data-Driven decision-making: Netflix managers should understand and leverage data to

optimize content offerings and user experiences.

8. Talent Development and Retention: Netflix managers should be skilled in recognizing

potential and providing opportunities for growth and advancement

9. Be effective communicators: Managers should be skilled at conveying the company's

vision, goals, and expectations, ensuring alignment among team members, so that important
messages do not get lost in translation.

9
Question 3

3.1. Important decisions taken by managers at different levels at Netflix

In Netflix's unique organizational structure, managers at different levels make critical decisions that
contribute to the company's success. Each level of management plays a distinct role in shaping
the company's strategies and operations.

1. Top-Level Managers: (Strategic planners)

➢ Content Acquisition and Licensing Strategy: Top-level managers at Netflix are
responsible for making significant decisions regarding the acquisition and licensing
of content. This includes negotiating deals with studios, production companies, and
content creators to ensure a diverse and appealing content library (Hastings, 2020).

➢ Global Expansion Strategies: They decide on the markets to enter, the timing of
entry, and the localization strategies required for successful global expansion. This
involves assessing market potential, regulatory considerations, and cultural nuances
(Hastings, 2020).
➢ Large-Scale Investment Decisions: Top-level managers make decisions regarding
major investments in content production and infrastructure. They allocate resources
to projects with the potential to drive subscriber growth and enhance the user
experience (Hastings, 2020).
➢ High-Level Organisational Policies: They establish overarching organisational
policies and cultural norms, such as the "freedom and responsibility" culture that
encourages independent decision-making and accountability (McCord, 2018).
➢ Strategic Partnerships and Alliances: Top-level managers may decide on entering
into strategic partnerships or alliances with other companies in the entertainment
industry, technology sector, or related fields to enhance Netflix's offerings and reach
(Hastings, 2020).

2. Middle-Level Managers: (Tactical planners)

➢ Content Curation and Recommendation Algorithms: Middle-level managers
oversee the development and implementation of content recommendation
algorithms. They make decisions about which shows and movies to promote to users
based on viewing habits and preferences (Tugend, 2017).
➢ Team Structure and Resource Allocation: They decide on team compositions,
departmental structures, and resource allocation within their respective areas. This
involves assigning tasks, setting priorities, and ensuring efficient workflow (Hastings,
2020).
➢ Performance Evaluation and Talent Development: Middle-level managers are
involved in assessing employee performance, providing feedback, and identifying
opportunities for skill development and career advancement (McCord, 2018).
10
 ➢ Operational Efficiency and Process Optimization: They make decisions related to
streamlining processes, optimizing workflows, and improving operational efficiency to
ensure that the company runs smoothly and meets its operational targets (Hastings,
2020).

3. Frontline Managers: (Operational planners)

➢ Daily Operations and Workflow Management: Frontline managers are responsible
for the day-to-day operations of their teams. They make decisions about task
assignments, work schedules, and ensuring that work is completed efficiently and
effectively (Meyer, 2014).
➢ Customer Support and User Experience: They may make decisions regarding
customer support strategies, addressing user feedback, and ensuring a positive user
experience on the platform (Pink, 2009).
➢ Conflict Resolution and Employee Well-Being: Frontline managers play a crucial
role in resolving conflicts among team members and addressing any issues related
to employee well-being and job satisfaction (McCord, 2018).
➢ Adaptation to Rapid Changes: They make on-the-ground decisions in response to
immediate challenges or opportunities, ensuring that their teams are responsive and
adaptable in a fast-paced industry (Meyer, 2014).

3.2. Decision-making process and tools used at Netflix

The decision-making process is an 8-step process. The process is as follows:
1. Identification of the problem or opportunity:
❖ This step involves Netflix managers recognizing and defining the issue at hand. It's
crucial to clearly understand what needs to be addressed or leveraged within the
organization (Ackoff, 1978).
2. Developing a decision criterion and gathering relevant information:
❖ Once the problem or opportunity is identified, managers collect pertinent data and
information. This ensures that decisions are based on accurate and reliable sources
(March & Simon, 1958).
3. Allocate weights to the criteria:
❖ In this step, managers generate and assess different possible solutions or courses of
action. They evaluate the pros and cons of each alternative (Keeney, 1992).
4. Developing options and solutions or alternatives:
❖ Managers work on creating potential solutions to the problem. This step often
involves brainstorming and using creative thinking techniques (de Bono, 1992).
5. Selecting the best course of action:
❖ After evaluating alternatives, managers choose the most suitable and effective
option. This decision is based on a thorough analysis of the available choices
(Mintzberg, Raisinghani, & Theoret, 1976).
11
 6. Implementing the decision:
❖ This step involves putting the chosen solution into action. Managers allocate
resources, assign tasks, and oversee the execution of the decision (Nutt, 2002).
7. Monitoring and evaluating decision effectiveness:
❖ Managers closely observe the outcomes of their decision. They assess whether the
implemented solution is producing the desired results and whether any adjustments
are necessary (McDavid, Huse, & Hawthorn, 2013).
8. Feedback and adaptation:
❖ Based on the evaluation of results, managers gather feedback. They use this
feedback to make any necessary modifications or improvements to the decision and
its implementation (Argyris & Schön, 1978).

3.2.1 Tools that Netflix use in decision-making

Netflix makes use of many tools in order to make decisions. These tools are not limited to the
following:
❖ Technological tools
❖ Intuition based decisions
❖ Bounded rationality
❖ Evidence based decisions

3.3. Practical examples that support discussion

Below are some of the examples of technological tools that Netflix makes use of when their
managers make decisions.
1. A/B Testing Platforms: Netflix utilizes A/B testing extensively to make data-driven decisions
regarding user interface changes, content recommendations, and feature implementations.
2. Data Analytics and Business Intelligence Tools: Tools like Tableau, Looker, and other
proprietary analytics platforms help Netflix in extracting insights from large datasets to inform
content acquisition, viewer behaviour, and business strategies.
3. Content Recommendation Algorithms: Netflix employs advanced algorithms to analyse
user behaviour and preferences, which assists in making decisions related to content curation
and personalization.
4. Content Planning and Scheduling Tools: Customized tools may be used for content
planning, scheduling releases, and managing licensing agreements.
5. Content Investment and ROI Analysis Tools: Netflix likely uses specialized tools for
evaluating the potential return on investment for content acquisition and original production.
6. Cloud Infrastructure and Big Data Technologies: Platforms like Amazon Web Services
(AWS) and other cloud-based technologies are crucial for managing and analysing the vast
amounts of data Netflix collects.

12
 7. Financial Modelling and Forecasting Software: Netflix relies on financial modelling tools
to project revenue, expenses, and profitability, aiding in decision-making related to budget
allocation and financial strategies.
8. Content Tracking and Analytics Tools: last but not least, Netflix uses these types of tools
to track content performance, audience engagement, and viewership metrics, influencing
decisions on content renewal, cancellation, or production of new seasons.

Question 4 : How the planning function is applied at Netflix

The management environment is considered when doing strategic management. Strategic
management has three steps, which are the Formulation, Implementation and Evaluation stage.
Strategic management is also interlinked with the four management functions in an organization.
Planning for example is linked to the formulation stage. Planning is a fundamental management
function that entails establishing organizational goals, developing strategies, and outlining the steps
required to achieve goals (Robbins & Coulter, 2017). Planning is critical to Netflix's success in the
dynamic and competitive entertainment industry. It is applied through the following:
1. Setting Strategic Objectives: Netflix focuses on long-term strategic objectives, such as
global expansion, content production, and subscriber growth. This involves extensive market
research, competitive analysis, and forecasting to determine the company's direction.
2. Content Acquisition and Production Strategy: Planning is critical in deciding which
content to license, produce, or acquire. Netflix invests heavily in original content and uses
data-driven insights to identify the genres and formats that resonate with its audience
3. Budgeting and Resource Allocation: Effective financial planning is essential. Allocating
resources to content creation, marketing, technology infrastructure, and global expansion
initiatives requires careful budgeting and financial forecasting
4. Market Expansion Planning: As Netflix pursues global growth, comprehensive market entry
strategies are developed. This includes considerations like localization, content preferences,
and regulatory compliance in different regions
5. Technology and Infrastructure Planning: Given the reliance on streaming technology,
Netflix engages in robust IT planning. This encompasses server capacity, content delivery
networks, and ensuring a seamless viewing experience for subscribers.
6. Content Release and Scheduling: Planning the release of content is strategic. Netflix
carefully schedules the launch of original series and movies to maximize viewership and
maintain a steady stream of engaging content.

4.1. Netflix management environment analysis

Netflix operates in a dynamic and highly competitive environment within the global entertainment
industry. This means that the management environment at Netflix is volatile, uncertain, complex and
ambiguous. A comprehensive analysis of its management environment involves considering various
factors that influence its strategies and operations.
❖ Netflix technological landscape: Netflix thrives in an era of rapid technological
advancement. Streaming technology, data analytics, and personalized recommendation
algorithms are integral to its success (Hastings, 2020).
13
 ❖ Netflix market competition: The industry is fiercely competitive, with rivals like Amazon
Prime Video, Disney+, and Hulu. Netflix's strategies focus on content differentiation, global
reach, and user experience to maintain its competitive edge (Hastings, 2020).

❖ Content acquisition and production costs: Content acquisition and original production
are significant expenses. Managing budgets for acquiring licenses and producing high-
quality original content is vital for profitability (Netflix, 2021).

❖ Netflix Subscriber growth and retention Subscriber acquisition and retention are
paramount. Netflix's strategies revolve around offering a compelling content library, user-
friendly interface, and personalized viewing experiences to keep subscribers engaged
(Hastings, 2020).

❖ Global expansion and localization: Netflix's success hinges on its ability to expand globally.
Planning for market entry, content localization, and understanding cultural nuances is vital
for penetrating new regions (Hastings, 2020).

Therefore, Netflix's management environment is influenced by both internal and external factors
characterized by a blend of technological innovation, intense competition, regulatory challenges,
and a strong emphasis on content creation and subscriber satisfaction. Navigating this environment
requires strategic agility and a deep understanding of market dynamics.

4.2. Netflix planning strategies and goal setting

In its planning and organisational approach, Netflix primarily employs a differentiation strategy. A
differentiation strategy and a cost-leadership strategy are polar opposites. According to academic
and author Porter, differentiation strategy involves offering unique and distinctive products or
services that are valued by a broad market (Porter, 1980). Netflix’s differentiation strategy manifests
in the following ways:
➢ Extensive Content Library: Netflix spends a lot of money on acquiring a wide variety of
content, such as original productions, licenced movies, TV shows, and documentaries. This
extensive library distinguishes it from competitors.

➢ Personal viewing experience: Netflix uses advanced recommendation algorithms to

provide personalised content suggestions based on a viewer's previous viewing behaviour.
This level of personalization improves the user experience.

14
 ➢ Original content and production: Netflix is known for producing high-quality original series
and films, as well as creating unique and exclusive content that can only be found on the
platform.

➢ Global Reach and Localisation: Netflix's global reach and efforts to localise content in
various languages and cultures contribute to the company's differentiation strategy (Hastings,
2020).

➢ User Experience is Priority: The user interface is designed to be simple and easy to use.

Hence, whilst cost control and efficiency remain important factors in Netflix's operations, the
company's primary focus is on providing its subscribers with a differentiated, high-quality
streaming experience. This approach has been critical in establishing Netflix as a global
entertainment industry leader. In addition, Netflix has a growth strategy. This growth strategy is
centered around company expansion and being an entertainment leader in various areas in the
world.

Question 5: Discussing organisational culture and leadership at Netflix

It is important to take cognisance of the fact that organisational culture also influences organisational
behaviour. Effective strategic leadership in an organisation is all about creating and sustaining a
strong organisational culture. Furthermore, an organisation’s culture important to providing excellent
customer service.

5.1. The role of leaders in the organization: Netflix

Leaders at Netflix are critical to the company's culture, strategy, and overall success. Their
leadership approach is consistent with the company's emphasis on freedom, responsibility, and
innovation (Hastings, 2020). Exceptional leadership at Netflix includes:
1. Fostering a Culture of Freedom and Responsibility: Netflix leaders champion a culture
that empowers employees to make independent decisions. They trust their teams to take
ownership of their work, fostering a sense of accountability (McCord, 2018).
2. Setting Vision and Direction: Leaders articulate a clear vision for the company's future.
They define strategic priorities, ensuring that all efforts align with overarching goals and
objectives (Hastings, 2020).
3. Encouraging Innovation and Risk-Taking: Netflix leaders value creative thinking and are
open to taking calculated risks. They encourage experimentation and learning from failures
as a means of driving innovation (Hastings, 2020).

15
 4. Talent Development and Empowerment: Leaders identify and nurture talent within their
teams. They provide opportunities for growth, mentorship, and skill development, contributing
to a high-performing organizational culture (McCord, 2018).
5. Adaptability and Flexibility: In the fast-paced entertainment industry, leaders at Netflix must
be adaptable. They navigate through rapid changes in technology, viewer preferences, and
market dynamics (Meyer, 2014).
6. Communication and Transparency: Effective communication is a cornerstone of
leadership at Netflix. Leaders are transparent about the company's direction, challenges, and
expectations, ensuring alignment among team members (Meyer, 2014).
7. Strategic Resource Allocation: Leaders make decisions about resource allocation,
ensuring that investments align with strategic priorities. This includes budgeting for content
production, technology infrastructure, and global expansion (Hastings, 2020).

On the other hand, an example of poor leadership would be the following:

8. Lack of Diversity in Leadership: Like other tech and entertainment companies, Netflix has
faced scrutiny for a lack of diversity in its leadership ranks. Critics argue that this can lead to
a lack of diverse perspectives in decision-making processes (Solsman, 2020).

5.2. Approach to teams and individuals at Netflix

Netflix takes a unique approach to teams and individuals, which is defined by a culture of freedom
and responsibility. This approach is described in detail in Reed Hastings' and Erin Meyer's book "No
Rules Rules: Netflix and the Culture of Reinvention" (Hastings, 2020).
1. Freedom and Responsibility:
Freedom: Netflix emphasizes giving employees the freedom to make decisions
and take ownership of their work. Teams are encouraged to operate with a high
degree of autonomy, allowing them to innovate and find creative solutions to
challenges.
Responsibility: Alongside freedom, there is a strong sense of responsibility.
Employees are expected to take ownership of their tasks and decisions. This
creates a culture of accountability where individuals are trusted to deliver
results.
2. No Formal Hierarchy:
Netflix minimizes hierarchy and bureaucracy. While there are leaders and
managers, they are expected to act more as coaches and enablers rather than
traditional supervisors. This flattening of the hierarchy promotes open
communication and quick decision-making.
3. Top Talent and Adequate Resources:
Netflix places a high value on hiring and retaining top talent. The company
believes that high-performing employees contribute significantly to its success.
Teams are given the necessary resources and support to excel in their roles.
16
 4. High Performance and Continuous Improvement:
The emphasis is on high performance. Employees are encouraged to
constantly improve their skills and contribute to the company's growth.
Adequate performance is expected, and there is a focus on weeding out
underperformance.

5. Candid Feedback and Transparent Communication:

Netflix encourages candid feedback. Open and honest communication is
valued, both upwards and downwards. This helps in identifying areas of
improvement and allows for course correction.
6. Generous Severance Package for Mediocre Performers:
In line with their culture of high performance, Netflix has a policy of offering
generous severance packages to employees who are deemed as not meeting
the company's expectations. This allows them to leave with dignity and pursue
opportunities where they might be a better fit.
7. Avoiding Rules and Micro-management:
Netflix consciously avoids implementing excessive rules and
micromanagement. Instead, they trust their employees to make decisions in the
best interest of the company

5.3. Leadership styles at Netflix

Netflix embraces a unique leadership style that aligns with its distinctive organizational culture.
The company's approach to leadership can be characterized by the following styles:
1. Transformational Leadership: Netflix encourages transformational leadership, which
focuses on inspiring and motivating employees to reach their full potential. Leaders at
Netflix aim to instil a sense of purpose and passion in their teams, driving innovation and
creativity (Hastings & Meyer, 2020).
2. Laissez-Faire Leadership: Netflix leans towards a laissez-faire leadership style, allowing
employees a significant degree of freedom and autonomy in their work. Leaders provide
guidance and resources, but they avoid micromanaging and empower employees to make
decisions (Hastings & Meyer, 2020).
3. Coaching Leadership: Leaders at Netflix often adopt a coaching approach. They act as
mentors, providing guidance and support for individual growth and development. This style
encourages continuous learning and skill-building (Hastings & Meyer, 2020).
4. Results-Oriented Leadership: Netflix places a strong emphasis on results-oriented
leadership. Leaders are expected to set clear goals and drive their teams towards achieving
measurable outcomes. They are accountable for delivering results (Hastings & Meyer,
2020).
5. Innovative Leadership: In line with Netflix's culture of reinvention and constant innovation,
leaders are encouraged to embrace an innovative leadership style. They foster a culture of
17
 experimentation, risk-taking, and adaptability to stay at the forefront of the entertainment
industry (Hastings & Meyer, 2020).
6. Transparent Leadership: Transparency is a cornerstone of leadership at Netflix. Leaders
are expected to communicate openly, sharing information about the company's direction,
challenges, and expectations with their teams (Ibarra & Hansen, 2011)

5.4. Discussion of the approach to change and innovation at Netflix

Netflix's ability to navigate change and foster innovation has allowed it to stay ahead in a dynamic
industry. By embracing new technologies, taking calculated risks, and prioritizing user experience,
Netflix has not only disrupted the entertainment landscape but has also set new standards for
content delivery and viewer engagement. Below are relevant examples of how Netflix’s approach
to change and innovation.
1. Agility in Technology: Netflix's transition from a DVD-by-mail service to a streaming
platform is a prime example of its adaptability. Recognizing the shifting landscape of media
consumption, Netflix swiftly embraced streaming technology, making it a pioneer in the
industry (Hastings & Meyer, 2020).
2. Original Content Investment: Netflix's venture into original content production was a
transformative move. By investing heavily in original series and movies, the company
differentiated itself from traditional studios and networks. This strategy not only attracted
subscribers but also garnered critical acclaim, solidifying Netflix's position as a content
powerhouse (Hastings & Meyer, 2020).
3. Data-Driven Content Personalization: Netflix revolutionized content delivery with its
recommendation algorithms. By analysing user behaviour and preferences, Netflix offers
personalized suggestions, enhancing user experience and retention. This data-driven
approach has become a hallmark of the Netflix experience (Hastings & Meyer, 2020).
4. Global Expansion: Netflix's aggressive global expansion strategy is a testament to its
willingness to embrace change and explore new markets. The company recognized the
potential of the international market early on and made significant investments in content
localization and region-specific content offerings (Hastings & Meyer, 2020).
5. Embracing Risk and Experimentation: Netflix's willingness to take risks and experiment
with new formats and genres is evident in its diverse content library. The success of
unconventional shows like "Stranger Things" and interactive experiences like
"Bandersnatch" showcase the company's bold approach to content creation (Hastings &
Meyer, 2020).

Question 6
6.1. Examples of the most important areas where controls are in place

Netflix employs a variety of controls to ensure that its goals and objectives are met. These controls
enable the company to monitor performance, identify areas for improvement, and stay on track
with its strategic goals. Below are examples of the controls implemented:

18
 1. Financial Controls: Netflix maintains stringent financial controls to manage budgets,
monitor expenses, and allocate resources effectively. For instance, the company closely
tracks production costs for original content to ensure they stay within budgeted limits
(Hastings & Meyer, 2020).
2. Performance Metrics and Analytics: Netflix relies on a robust set of performance metrics
and analytics to assess viewer engagement, content popularity, and subscriber retention.
This data-driven approach guides decision-making related to content acquisition,
production, and user experience (Hastings & Meyer, 2020).
3. Quality Assurance and Testing: Netflix places a strong emphasis on delivering a high-
quality streaming experience. Rigorous testing and quality assurance processes are in
place to identify and rectify any technical issues or glitches that may impact user
satisfaction (Hastings & Meyer, 2020).
4. Content Licensing and Compliance: Netflix has controls in place to ensure compliance
with content licensing agreements and copyright regulations. This involves rigorous vetting
of content rights and adherence to regional licensing requirements (Hastings & Meyer,
2020).
5. Subscriber Management: Controls are implemented to manage subscriber accounts,
billing, and subscription plans. These controls help ensure accuracy in billing and prevent
unauthorized account access (Hastings & Meyer, 2020).
6. Cybersecurity and Data Protection: Given the sensitivity of user data, Netflix has robust
cybersecurity measures in place to safeguard against cyber threats and protect user
information. This includes encryption protocols, authentication processes, and regular
security audits (Hastings & Meyer, 2020).
7. Content Curation and Recommendation Algorithms: Netflix employs controls to refine
its content recommendation algorithms. These algorithms play a crucial role in guiding user
choices and ensuring that content offerings align with viewer preferences (Hastings &
Meyer, 2020).
8. Market Research and Consumer Insights: Netflix conducts extensive market research
and gathers consumer insights to stay attuned to evolving viewer preferences and trends.
These insights inform content acquisition, production strategies, and user experience
enhancements (Hastings & Meyer, 2020)

6.2. Criteria implemented to maintain and grow organizational performance

6.2.1. What is the Triple bottom line performance measurement?

The triple bottom line can be defined as a framework for evaluating an organization's performance
in three key areas: social, environmental, and financial. It aims to assess the organization's impact
on people, the planet, and profits, also known as the "3 Ps" (Elkington, 1997).

The criteria were broken down into the following three categories:
a) Social (people)- this dimension evaluates the organization's social impact on stakeholders,
including employees, customers, communities, and society at large. It focuses on factors
such as employee well-being, diversity and inclusion, community engagement, and social
responsibility

19
 b) Environmental (planet)-The environmental aspect of triple bottom line assesses the
organization's ecological footprint, environmental stewardship, and efforts to minimize its
impact on the environment. It encompasses initiatives related to resource conservation,
pollution reduction, sustainability, and environmental responsibility

c) Financial (profit)- This dimension examines the financial performance and economic
viability of the organization. It includes traditional financial metrics such as revenue,
profitability, return on investment, and shareholder value

6.3. Personal opinion on the performance of Netflix

Netflix is a successful organization in terms of growth, finances and market leadership. It is

arguable that this success can be attributed to the disruptive innovation manner in which it entered
the market, furthermore, also its differentiation strategy. The performance of the organization is
outstanding, because it continues to grow in the industry and is always up to date with the latest
on-demand streaming content.
7. Conclusion
In conclusion, this portfolio of evidence did discuss in depth, the four management functions in-
conjunction with Netflix’s strategic management process. Furthermore, it discussed how Netflix
manages their organisation in order to achieve its goals and objectives. The portfolio of evidence
achieved this through a numbered essay that analysed the business and management approach
of Netflix, focusing on its organizational structure and how Netflix managed its business to achieve
its goals and objectives. Additionally, the portfolio incorporated referenced and aesthetically
pleasing diagrams to provide the reader with context and additional information.

8. Bibliography
Ackoff, R. L. (1978). The Art of Problem Solving: Accompanied by Ackoff's Fables. Wiley.

Christensen, C. M. (1997). The Innovator's Dilemma: When New Technologies Cause Great Firms
to Fail. Harvard Business Review Press.

Collins, J. C., & Porras, J. I. (1996). Building Your Company's Vision. Harvard Business Review, 9-
96505.

Danilovic, M. (2018). Business Model Approach for Commercializing Smart Grid Systems, s.l.:
Research Gate.

Diaz, J. (2020). The story of Netflix, the company that revolutionized the entertainment industry.
Business and Entrepreneurship, 24 May, Volume 4, pp. 1-2.

20
Elkington, J. (1997). Cannibals with Forks: The Triple Bottom Line of 21st Century Business.
Capstone Publishing Ltd.

Gomery, D. (2016). Streaming, Sharing, Stealing: Big Data and the Future of Entertainment. MIT
Press.

Hastings, R. (2020). No Rules Rules: Netflix and the Culture of Reinvention. Penguin Random
House.

Hastings, R., & Meyer, E. (2020). No Rules Rules: Netflix and the Culture of Reinvention. Penguin
Random House.

Hastings, R., & Randolph, M. (1997). Netflix: A new way to rent movies. Harvard Business
Review, 9-600-143.

Ibarra, H., & Hansen, M. T. (2011). Are You a Collaborative Leader? Harvard Business Review.
Retrieved from https://hbr.org/2011/07/are-you-a-collaborative-leader

Keeney, R. L. (1992). Value-Focused Thinking: A Path to Creative Decision-making. Harvard

University Press.

Kouzes, J. M., & Posner, B. Z. (2012). The Leadership Challenge: How to Make Extraordinary
Things Happen in Organizations. Jossey-Bass.

March, J. G., & Simon, H. A. (1958). Organizations. Wiley.

McDavid, J. C., Huse, I., & Hawthorn, L. R. L. (2013). Program Evaluation and Performance
Measurement: An Introduction to Practice. Sage Publications.

McCord, P. (2018). Powerful: Building a Culture of Freedom and Responsibility. Silicon Guild.

Mintzberg, H., Raisinghani, D., & Theoret, A. (1976). The Structure of "Unstructured" Decision
Processes. Administrative Science Quarterly, 21(2), 246-275.

Netflix Inc. (2023). Netflix.com. [Online] Available at: https://about.netflix.com/en/leadership

[Accessed 07 September 2023].

21
Netflix. (2021). About Us. Retrieved from https://about.netflix.com/en

Nutt, P. C. (2002). Why Decisions Fail: Avoiding the Blunders and Traps That Lead to Debacles.
Berrett-Koehler Publishers.

Pink, D. H. (2009). Drive: The Surprising Truth About What Motivates Us. Riverhead Books.

Porter, M. E. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors.
Free Press.

Robbins, S. P., & Coulter, M. (2017). Management. Pearson.

Shapkin, A. (2021). Netflix Logo. 1000Logos, 22 June.

Solsman, J. (2020). Netflix Is Only Now Releasing Diversity Numbers -- Why Is That? CNET.
Retrieved from https://www.cnet.com/news/netflix-releases-employee-diversity-numbers-but-it-will-
not-make-him-blacker/

Tugend, A. (2017). Netflix: A Case Study in Change Management. Harvard Business Review.
Retrieved from https://hbr.org/2017/03/netflix-a-case-study-in-change-management
Woolfe, Z. (2013). With "House of Cards," Netflix Takes a Big Leap. The New York Times.
Retrieved from https://www.nytimes.com/2013/02/01/arts/television/house-of-cards-stars-kevin-
spacey-and-robin-wright.htmls

22
9. Appendix

Diagram 3: Netflix leadership and key personnel (source: (Netflix Inc, 2023))

23
24
Diagram 4: Below is the current Netflix, Inc. Logo as of 2023. (source: (Netflix Inc, 2023))

Diagram 5: A picture of the co-founders of Netflix

On the left is On the right is

co-founder and co-founder,
first CEO of Reed Hastings.
Netflix, Marc
Randolph.

Image source: (Diaz, 2020)

25