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Netflix has an organizational strategy focused on results, performance, and recognizing employee contributions. Its culture is flexible and decentralized, encouraging risk-taking and innovation. Netflix's strategy and culture are aligned in emphasizing creativity and fluidity. Using Porter's framework, Netflix's strategy is differentiation by providing a unique, innovative premium service. Per Miles and Snow, Netflix's strategy most resembles an analyzer that prospectors for growth while controlling costs. Netflix uses equity compensation to attract, retain, and motivate top talent, consistent with its innovative culture and business model.

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89 views1 page

This Study Resource Was

Netflix has an organizational strategy focused on results, performance, and recognizing employee contributions. Its culture is flexible and decentralized, encouraging risk-taking and innovation. Netflix's strategy and culture are aligned in emphasizing creativity and fluidity. Using Porter's framework, Netflix's strategy is differentiation by providing a unique, innovative premium service. Per Miles and Snow, Netflix's strategy most resembles an analyzer that prospectors for growth while controlling costs. Netflix uses equity compensation to attract, retain, and motivate top talent, consistent with its innovative culture and business model.

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Arfa Fatima
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Lauren Austin

EQUITY ON DEMAND: THE NETFLIX APPROACH TO COMPENSATION


6/9/17

EQUITY ON DEMAND: THE NETFLIX APPROACH TO COMPENSATION

1. Describe Netflix’s organizational strategy.


Netflix has an organizational strategy that is geared towards “results and performance”. It is
actually very similar to the strategy used by Google and from the article it seems as though they
have the same attitude in how they treat their employees. Their organizational strategy derives
from the company’s objective which is based upon innovation with a focus on recognizing their
staff for their contributions. Netflix is not using a generic business strategy rather it is a strategy
built around its unique business objective.
2. Describe Netflix’s organizational culture.
Netflix has a business culture that engages in taking risk and innovation. The company’s
working culture is flexible, fluid, and decentralized.

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3. Are Netflix’s organizational strategy and culture aligned? Why?

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The business strategy does seem to be in alignment with the culture. Companies who are
operating on innovation usually have a working culture that is flexible, fluid, decentralized,

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creative and fluid. One example of this is that employees are allowed to choose their own
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benefit package. Like many companies of this nature Netflix believes that one great employee
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cost far less than 2 mediocre employees.
4. Using Porter’s generic business strategies: What is Netflix’s strategy? Explain.
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Using Porters theory Netflix has a business strategy that would fall in the category of the
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“Differentiator”. They follow the Differentiator strategy because they are providing a unique and
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innovative service a premium price.


5. Using Miles & Snow’s generic business strategies: What is Netflix’s strategy? Explain.
In respects to the “Miles & Snow’s generic business strategies” I see Netflix as the “Analyzer”. I
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believe that what separates them from the “Prospector” is their focus and mentions of cost
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control.
6. Attraction, retention, and motivation are key elements in an organization’s human resources
strategy. Given Netflix’s compensation mix of cash and equity, what were the company’s
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expectations for attraction, retention, and motivation?


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7. List and briefly explain Netflix’s compensation key components.


8. Is the Netflix compensation program consistent with the company’s culture, strategy, and
business model? Explain.
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