eBay Inc.

Running head: eBay Inc.

Case Study Analysis: Meg Whitman at eBay Inc.

Joycelyn Jones

McDaniel College
 eBay Inc. 2

Abstract

This is an analysis of the Meg Whitman at eBay Inc. case study. This case details the creation of

eBay as the world’s largest person-to-person trading site on the Internet (Hill & Farkas, 2005, p.

2). The successes of eBay are attributable to its values, leadership, team structure, and most

importantly its culture. This analysis focuses on the organizational culture of eBay. It begins

with an Introduction section to familiarize the reader with the case organization. Then, this

analysis focuses on key aspects of eBay’s organizational culture and their relative importance.
 eBay Inc. 3

Case Study Analysis: Meg Whitman at eBay, Inc.

In 1995, Pierre Omidyar founded eBay (originally called Auction Web) as a pet project.

The original purpose of this project was to allow equal access to all users (Hill & Farkas, 2005,

p. 2). Furthermore, Omidyar aimed at leveraging the vast potential of the Internet by developing

an online marketplace that allowed person-to-person trading in the auction format

(Icmrindia.org, 2003, p. 1). Soon, eBay became the largest person-to-person trading community

on the Internet where customers could list items for sale and buyers could bid on items using a

fully automated, easy to use online service (Hill & Farkas, 2005, p. 2). Lastly, Omidyar’s

brainchild also included a Feedback Forum, a self-regulating mechanism that encouraged good

behavior. This tool was just one way that eBay fostered a sense of community on its site (Hill &

Farkas, 2005, p. 3).

In 1997, Omidyar realized that due to the enormous growth of eBay, he should hire a

more seasoned CEO. Early on Margaret C. Whitman (Meg) became a top candidate. Meg had

an extensive background that includes such impressive organizations as Walt Disney, Hasbro,

and FTD to name a few. With this breadth of knowledge and experience, Meg was quite capable

of making an already successful organization, the greatest organization ever. As Meg met with

representatives of eBay, she realized that her style and beliefs about organizational culture were

inherent in the eBay business model. Thus, Meg set out to do just that by keenly assessing and

respecting eBay’s organizational culture. Organizational culture outlines the collective attitudes,

beliefs, common experiences, procedures, and values that are prevalent in an organization

(Organizational Culture, 2007, p. 1).

 eBay Inc. 4

Organizational Culture

After being at eBay just a short time, Meg soon realized that the eBay community was an

integral component of the company’s foundation and business model. For that reason, the

primary element of eBay’s culture is a respect for its community (Hill & Farkas, 2005, p. 4).

Whitman’s experience taught her the importance of being respectful of culture and past

achievements when entering a new company (Hill & Farkas, 2005, p. 5). Organizational Culture

(2007) states that a “strong culture” responds strongly to organizational values and easily passes

them down the organization. As a result, Meg proceeded carefully.

eBay’s strong culture includes the following components: 1) empowerment, 2)

nonhierarchical structure, 3) team-based approach to problem-solving, 4) open communications,

5) trustworthiness, 6) honesty, 7) respectfulness, and 8) customer-focus products and services.

To no surprise, eBay’s internal culture closely resembles its external community culture. This

concept is extremely important to eBay since all internal decisions ultimately affect the external

culture.

eBay is extremely smart with respect to its culture since research indicates that culture

plays a strong role in organizations. eBay knows and research implies that the items listed above

positively contribute to increased job satisfaction and lower turnover. This is why it is

particularly important to consider organizational culture when attempting to manage

organization-wide change (McNamara, 2000, p. 1). Failure to do this generally results in failure

of the change effort. Additionally, research reveals that it is imperative that leaders not only

possess excellent management capabilities but that leaders share values with the organizations

that they operate.

 eBay Inc. 5

Conclusion

This writer believes that Meg Whitman indeed exemplifies the eBay culture and

understands what it takes to move an organization to the next level with commitment and support

from the team. She truly believes that she must do what is right for the company as well as the

community. Even in the face of controversy and growth, she perpetuates an environment of

morality, openness, creativity, and excitement. In addition, Meg’s unbelievable ability to seek

and acquire additional team members to assist with delivering her vision for strategy for

streamlining and strengthening the organization.

This writer concludes that eBay’s organizational culture will remain essential to the

organization’s success. Most organizational scholars and observers recognize that organizational

culture has a powerful effect on the performance and long-term effectiveness of organizations

(Masood, S. A., Dani, S. S., Burns, N. D., & Backhouse, C. J, 2006, p. 943).

This is evident in this quote from Hill and Farkas (2005), “Whitman describes eBay as a

site of the people, by the people, for the people”. The organizational culture is the “glue” that

holds an organization together as a source of identity and distinctive competence (Masood, S. A.,

Dani, S. S., Burns, N. D., & Backhouse, C. J, 2006, p. 943). With this mindset, how can they go

wrong?
 eBay Inc. 6

References

Egan, T. M., Yang, B., & Bartlett, K. R. (2004). The effects of organizational learning culture

and job satisfaction on motivation to transfer learning and turnover intention. Human

Resource Development Quarterly, 15, 279-301. Retrieved May 6, 2008, from

EBSCOhost database.

Hill, L. A., & Farkas, M. T. (2005). Meg Whitman at eBay Inc. (A). Harvard Business School,

9-401-024.

Icmrindia.org. (2003). Meg Whitman - The Driving Force Behind eBay. Retrieved May 13, 2008,

from http://www.icmrindia.org/casestudies/catalogue/LeadershipandandEntrepreneurship

Masood, S. A., Dani, S. S., Burns, N. D., & Backhouse, C. J. (2006). Transformational

leadership and organizational culture: the situational strength perspective. Engineering

Manufacture, 220, 941-949. Retrieved May 6, 2008, from EBSCOhost database.

McConnell, B., & Huba, J. (2003). Meg Whitman: How eBay rules. Retrieved May 13, 2008,

from http://www.creatingcustomerevangelists.com/resources/evangelists/meg_whitman

McNamara, C. (2000). Organizational Culture. Retrieved May 12, 2008, from

http://www.managementthelp.org/org_thry/culture/culture.htm

Organizational Culture. (2007). Organizational Culture. Retrieved May 12, 2008, from

http://www.organizationalculture101.com

Robbins, S. P., & Judge, T. A. (2008). Essentials of organizational behavior (Ninth Ed.). Upper

Saddle River, NJ: Pearson Prentice Hall.

 eBay Inc. 7

Simpson, R. B., Parkes, S. J., & Ott, J. S. (2008). Classic readings in organizational behavior

(4th Ed.). Belmont, CA: Thomson Wadsworth.