I. Current Situation
a. Current Performance
b. Strategic Posture
i. Company provides a general strategy statement. Not publically available vision statement or mission statement ii. They are in the internet subscription business. They are in this so users can instantly watch movies or TV programs iii. The objectives is to maximize member satisfaction and month to month subscription retention. Corporate objectives: customer loyalty, profits, growth. Busniness objectives- customer service Functional objectives- Marketing and sales. They are all consistent with each other. They all have one goal and that is to be profitable and make sure the customers are satisfied with their business. iv. Strategy- pursuing new content deals and streaming rights to current season shows. Also looking at new ways to improve the subscriber’s experience. Encouraging multiple accounts in one household.
v. Privacy policies, code of ethics, insider trading policies. All the policies are consistent with each other. They all want their employees and board members to act ethically. They want their nonpublic information to stay private and prohibit insider information trading. vi. II. Corporate Governance
a. Board of Directors
i. Mostly External members. Jay Hoag- Technology Crossover Ventures. Timothy Haley- Redpoint Ventures. Ann Mather- MGM holdings Inc. Leslie Kilgore- Linkedln Corporation. Richard Barton- Zillow, Inc. A. Battle- Aspen Institute. Reed Hastings- Chair of board ii. Significant shares on the board are only held by Leslie Kilgore. Reed Hastings and Jay Hoag hold 0. iii. Publically traded iv. Richard Barton-2002
A. Battle-2005
Timothy Haley- 1998
Reed Hastings- 1998
Jay Hoag -1999
Leslie Kilgore- 2000
Ann Mather- 2010

b. Top Management
i. Reed Hastings is the Founder and CEO. David Wells is the CFO. ii. Reed Hastings has been the CEO since 1998. He was previously a CEO of Pure Atria Software from 1991 until 1997. He currently is a member of the board of directors of Microsoft. He holds a M.S.C.S degree from Stanford University and a B.A. from Bowdoin College. David Wells has served as CFO since December 2010. Before that he was the Director of Operations Planning & Analysis from 2004-2008. Prior to Netflix he worked at Deloitte Consulting from 1998-2004. He has an M.B.A and M.P.P. from The University of Chicago. iii. Only 2 top managers have been in their positions for less than 3 years because they recently got hired. They were externally hired. iv. Top level management is very involved. The CEO makes a lot of important decisions and coordinates a lot of research. He spends millions of dollars a year to make improvemtents and make new innovations.
v. Strategic decisions are mostly ethical. Customers did have a complaint about high price increases. They say that once Netflix had their customer base they raised the prices knowing they would lose valuable customers. That didn’t sit well with people knowing that Netflix didn’t care if they lost them as customers vi. It is environmentally sustainable. Most recently it is trying to stream movies and programs from online so that will save a lot of paper and energy packaging and shipping the DVDs. All the discs are packaged in paper so that will help eliminate some of that waste.
5. Human Resource Management
a) The HR objectives start with hiring the right people for the job. Top management have interviews with every person that is being considered for the job and if they don’t think they will fit in, then they are immediately out. They have a very serious but informal atmosphere. Most of their employees have 7-15 years experience and are interested in what they are doing. They don’t have a dress code or mandatory work hours. They also can take as much vacation time as they see fit. They have no budgets or caps that they cant outspend. They believe that if they hire the right professionals they wont be taken advantage of and they haven’t thus far. They also have yearly evaluations of their employees and if they aren’t perfmorming well then they are fired. They want the best possible team and if their numbers aren’t up to par some one else’s will be.
I. They are mostly implied to their employees
II. They are consistent. They want their employees to be satisfied but also to do their work to the best of their ability to keep profits high as well as maintaining a good reputation.
b) Through these HR strategies they find the best employee that will fit with the job. Employees are very happy because they genuinely care about the work, they are working with other intelligent driven individuals, and they get paid well with perks. Voluntary turnover at Netflix is very low.
I. The trends emerging from this are that they are hiring good people that know what the have to do to get the job done.
II. These trends keep the employees motivated. They know they have to show improvements and what they have accomplished throughout the year. They work hard to get good end results
III. HRM does provide the company with a competitive advantage because people want to work for Netflix. They are a great company to work for so they get the most qualified and diligent workers that are available.
c) Comparing Netflix with Google they aren’t giving away all this free stuff and showering their employees with free food, massages and laundry mats. They are paying their employees well and letting them decide how they want to make the balance between work and their outside social life. They both give their employee’s free reign and choices just Netflix doesn’t spend a lot of money on all that extra perks like Google does.
d) They are using appropriate ways to evaluate the employees performance. Annual 360-degree reviews provide direct and honest feedback. During the annual review process the managers to a “keeper test”. It tests if an employee were to tell a manager they were moving to a peer company, what employee would they fight hard to keep at Netflix. The people they wouldn’t fit hard for are all ushered out. Netflix doesn’t believe in training, professional development or career planning. They believe the employees should manage their own careers. They surround their employees with excellent colleagues and let them develop themselves.
e) Mandatory diversity training is delivered via an online module.
f) Netflix expanded internationally in September 2010 by offering an unlimited streaming plan without DVD rentals in Canada.
g) As Netflix grew they needed to expand their IT infrastructure and re-architect their existing platform. They outsourced this to Amazon Web Services (AWS). They did this because they wanted to use their engineers with core business rather than wasting their resources on non-core issues like deploying and maintaining their own infrastructure.
h) One of the main roles of HRM manager is to hire a great team carefully. They have to be interested and have knowledge of the business. They attract and recruit the best of the best. Most HR people derive their influence through knowledge of rules and regulations. Netflix power comes from influence, from the roles they play in helping the business succeed.