The Organizational Culture

of Netflix

Written by: Claire Chen

Submitted to Professor Ching-Yu, Hsieh, April 4, 2022

 Table of Content

1. Executive Summary ............................................................................ 2

2. Introduction......................................................................................... 2
2.1 Terms of reference .......................................................................................... 2
2.2 Introduction .................................................................................................... 2

3. Findings ............................................................................................... 3

3.1 Independent Decision-making ........................................................................ 3

3.2 Open Information Sharing .............................................................................. 3
3.3 Exceptional Candidness .................................................................................. 3
3.4 Focal point of high effectiveness .................................................................... 4
3.5 Circumvention of the rules ............................................................................. 4

4. Conclusion ........................................................................................... 4

5. Recommendation ................................................................................ 5

6. References ............................................................................................ 5

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 1. The Organizational Culture of Netflix: Executive Summary
As one of the most influential streaming platforms within the market of media,
the organizational culture plays a crucial role in Netflix’s success. Therefore, this
report will divide it into five angles:
Ÿ Independent Decision-making:
Netflix gives employees the power to make independent decisions, and such
cultural characteristics can inspire employees to personalize solutions to
unexpected problems, drive proactive strategies of the company group, and
enhance the company's competitive advantage in developing new capabilities.
Ÿ Open Information Sharing:
In addition to increasing employee’s autonomy, the flattening of Netflix's
corporate structure also allows its employees to communicate with each other
effectively and openly about problems they encounter at work and share the best
solutions. Such efficient messaging also helps Netflix reduce communication
barriers in a media market that relies on consumer trends.
Ÿ Exceptional Candidness:
Meanwhile, the two cultural characteristics described above actually indirectly
encourage employees to be open and honest about their achievements and
mistakes. Such a corporate culture not only enables employees to learn from
each other and move forward but also encourages employees to be aware of each
other or other similar industries, which promotes the rapid development of
Netflix’s mode of media operation.
Ÿ Focal point of high effectiveness & Circumvention of the rules:
Finally, both the focus on efficiency and the rules of flexibility make Netflix's
organizational culture distinctive: efficiency increases Netflix's productivity
levels, while the rules of flexibility allow the company to remain agile to respond
to market trends.

2. Introduction
2.1 Terms of reference
Ching-Yu, Hsieh, Professor of Foreign Languages and Literature Department,
requested this report on the organizational culture of Netflix. The report was to be
submitted to her by April 4, 2022.

2.2 Introduction
In this report, I would deeply analyze the organizational culture of Netflix and
clarify the connection to its success as a streaming platform. Netflix differentiates its
organizational culture, especially when it comes to encouraging employee’s behavior

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in the workplace. The company uses its organizational culture to develop employee’s
resilience as a way to support the growth of the increasingly competitive on-demand
digital media streaming industry. This system of organizational culture enables the
online platform to effectively deliver on its value proposition and secures the
competitive advantage. The company leverages its corporate culture to maintain a
framework of core values, beliefs, business philosophies, and behaviors that permeate
its workforce and inspire individual employees to support innovative ideas for online
business growth. Through corporate culture, Netflix fosters communication to
enhance the sharing of new ideas across the organization, making streaming
businesses competitive in terms of innovation.

3. Findings
3.1 Independent Decision-making
Independent decision-making is in line with Netflix's "people over process"
approach to organizational culture. For example, this cultural trait motivates
employees to develop personalized approaches to solving challenges at work and
problems in the movie streaming business. As a result, corporate culture equates to
employee autonomy and fosters bottom-line initiative and enhances Netflix's ability to
develop new capabilities for competitive advantage and growth. Based on this feature
of organizational culture, online companies optimize employee turnover, thereby
increasing the efficiency of human resource development and related strategic
management work.

3.2 Open Information Sharing

Open, broad and thoughtful sharing of information is an aspect of Netflix's
corporate culture that correlates with communication efficiency. As an online business
that relies on innovative ideas and data on market and consumer trends, the company
leverages its organizational culture to support effective and efficient dissemination of
information to guide strategic decisions and management initiatives. The flattening of
the Netflix corporate structure aligns with this aspect of the organizational culture by
supporting effective and efficient communication across the enterprise. This corporate
culture factor helps minimize the communication challenges that hinder the growth of
online organizations. This cultural trait also drives Netflix employees to openly
communicate their work-related issues, thereby promoting the best possible solutions.

3.3 Exceptional Candidness

Extraordinary candor is an organizational cultural trait that encourages Netflix’s
employees to maintain an overall attitude of sincerity and objectivity. The previous

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characteristic (open information sharing) are directly related to the candor of human
resources across online companies. However, this extraordinary candor is not only
about information sharing, but also about employees' perceptions of other employees.
For example, corporate culture promotes objectivity in employee’s behavior,
especially in teamwork and related group activities that support multinational
streaming operations. To address this characteristic of organizational culture, Human
Resource Management at Netflix has developed strategies and programs to motivate
employees to adopt this attitude in social interactions in the workplace.

3.4 Focal point of high effectiveness

The focus on high efficiency has led Netflix to emphasize high productivity and
work efficiency through programs related to corporate culture. For example,
businesses use their organizational culture to show that high productivity and
efficiency are the norms in streaming workplaces, thereby motivating employees to
adopt work skills to improve efficiency. This cultural attribute is related to the
organization's efforts to achieve Netflix's corporate vision and mission statement.
Related to this, the achievement of strategic management goals is supported through
corporate culture, namely how to encourage human resources to achieve the level of
productivity necessary for long-term success in the online entertainment industry.

3.5 Circumvention of the rules

Circumvention of the rules sets Netflix's corporate culture apart. This cultural
trait is based on the idea that rules lead to rigidity in online business, which reduces
responsiveness to market changes. In this business analysis case, Netflix uses its
organizational culture to create and maintain flexibility to adapt to market trends. The
global on-demand digital content streaming market involves frequent changes in
technology and consumer preferences. By circumventing the rules in its corporate
culture, Netflix maintains business flexibility and enables its organization to adjust
and ensure consumer satisfaction.

4. Conclusion
As a major competitor in the international streaming industry, Netflix
strategically leverages its corporate culture to optimize human resource capabilities.
The emphasis on employee autonomy, communication, attitude, productivity, and
circumvention of rules creates a business environment where employees are
motivated to take risks and provide innovative ideas that contribute to the competitive
advantage of online companies. This organizational culture makes Netflix's human
resources flexible and responsive to industry challenges. The expected behavioral

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outcomes of this corporate culture are related to the nature of the company's
operations in the on-demand streaming industry. For example, employees are
motivated to share ideas that enhance alignment between the Netflix service and
market trends. In terms of strategic planning, organizational culture enables streaming
businesses to implement strategies and tactics that leverage human resource ingenuity
to support operational enhancement. Overall, Netflix maintains a corporate culture
that helps keep its organization flexible, innovative, and responsive to market
demands and consumer preferences.

5. Recommendation
Transparent feedback and the pursuit of high efficiency easily make employees
too tense, which also leads to a relatively high resignation rate at Netflix, so the
followings are my recommendation for managers to help employees relieve stress.

Ÿ Add an environment that stimulates employee resilience, such as wellness

planning sessions and yoga or meditation sessions
Ÿ Be realistic about what your team can handle in terms of turnaround time and
workload, in other words, set a realistic deadline
Ÿ Enhance the relationship with employees, which helps avoid comparison and
competition resulting from excessively transparent feedback

6. References
Chang, C. L. H., & Lin, T. C. (2015). The role of organizational culture in the
knowledge management process. Journal of Knowledge Management, 19(3), 433-455.

Hickman, C. R., & Silva, M. A. (2018). Creating excellence: Managing corporate

culture, strategy, and change in the new age. Routledge.

International Trade Administration of the U.S. Department of Commerce – The Media

and Entertainment Industry in the United States.

Liang, C., Chang, C. C., Rothwell, W., & Shu, K. M. (2016). Influences of
organizational culture on knowledge sharing in an online virtual community:
Interactive effects of trust, communication and leadership. Journal of Organizational
and End User Computing (JOEUC), 28(4), 15-32.

Simeon, R. (2010). Evaluating the projection of corporate culture online. International

Business & Economics Research Journal (IBER), 9(8), 79-94.