Custom «Meg Whitman at eBay Inc (A)» Essay Paper Sample
This is an essay on Meg Whitman at eBay Inc (A). The essay comprises of my opinions and reaction to some questions in the case study. In particular the essay discusses whether Whitman should go through with the deal of acquiring Kruse, how to integrate Kruse into eBay, whether Kruse should remain in Indianapolis and retain complete control over its day to day operations and its 80-person staff, should they add David Kruse to eBay's senior management team if he joins. The answers will be in relation to a leadership decision.
eBay started off as a typically small company selling only one product-access to e-commerce. However it has grown in the number of its users and partners, share price, revenues, goodwill and efficiency. The growth of the company has been marred by cultural challenges as observed by Omidyar: its hardness to keep to its policies, system failures may come about due to the increased number of users, the challenge of hiring quality employees, how to communicate the community values to the high number of new users. The errant emails from users condemning the previous acquisition of butterfield cannot be ignored. Consequently the company is strained both internally and externally due to the rapid growth.
The eminent acquisition of Kruse was timely and relevant according to capital markets as it will bring a broader selection of goods and sellers which is the ultimate network effect. But the Kruse deal poses more challenges than just enjoying good business. It involves leadership decision which should consider the goodwill of the company, satisfaction of users, technical knowhow required and the capacity of the company. And so, in my opinion I would suggest that Whitman-president of eBay should not go ahead with the deal for the time being. This is because although the company is enjoying some good dominance in the market, it should consider the opinions of its clients. As a leader Whitman should largely consider the interests of the users. The number of emails she has received recently signifies the dissatisfaction of the users by the previous acquisition which may probably swell in the acquisition of Kruse. This may generate the urge to move to other competitors hence losing customers.
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The challenge of communicating community values increases with the increase of new users. Hence, by acquiring Kruse the users will increase and hence the company policies will be hard to achieve. As the president Whitman should ensure that company policies are adhered to. Despite the increased number of users, the technology and systems of the company have not been increased or improved and hence further increase of users will possibly crush the systems or bring persistent delays as recorded in the company's prospectus. This will diminish the goodwill of the company and hence losses in share price. The incorporation of David Kruse to the senior management of the company may bring divergent effects now that there are so many senior management members already and David was the chairman of Kruse- it would be difficult to manage him.
Similarly as the growth intensifies so does the technical staff required. Considering that eBay is already under staffed, the acquisition of Kruse will bring on board internal strain. Even if eBay retains control of the 80-personnel at Indianapolis and trains them, it will take time before they acquire the required knowhow to service the company. eBay is not involved in auctioning, but the acquisition of Kruse will make it venture into auctioning hence a conflict of interest and a breach of its policies-Whitman should make sure that company's policies are upheld. Hence in leading this complex company, Whitman will have to sit with the senior management team and consider the long term effects of her decision.
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I would thereby suggest that eBay should first of all improve its technical, personnel and systems before acquiring Kruse so as to cope with the rapid growth and competition in the market. That way, it will maintain its successful progress financially and in the user community.