Amazon Organizational Structure In A Nutshell

The Amazon organizational structure is predominantly hierarchical with elements of function-based structure and geographic divisions. While Amazon started as a lean, flat organization in its early years, it transitioned into a hierarchical organization with its jobs and functions clearly defined as it scaled.

Department	Type	Details	Advantages	Drawbacks
Amazon Retail	Divisional Structure	– Amazon’s core business, the online retail platform, operates as separate divisions based on product categories (e.g., Amazon Books, Amazon Electronics). Each division manages its own product selection, pricing, and customer experience.	– High divisional autonomy allows for specialized product management. – Quick adaptation to market changes in specific categories. – Efficient inventory management.	– Limited central control over pricing and product selection. – May lead to inconsistency in customer experience across divisions. – Challenges in maintaining a unified brand image.
Amazon Web Services (AWS)	Divisional Structure	– AWS is a separate division responsible for Amazon’s cloud computing and web hosting services. It operates autonomously, providing services to various industries and organizations worldwide.	– Specialized focus on cloud computing services. – Ability to address diverse customer needs. – Rapid innovation and expansion in the cloud industry.	– Potential for competition and conflicting interests with other Amazon divisions. – Coordination challenges between AWS and other business units. – Different customer bases and service priorities.
Amazon Devices	Divisional Structure	– Amazon Devices includes hardware products such as Kindle, Echo, and Fire TV. Each product line operates as a separate division, managing its own research, development, and marketing.	– Specialization in hardware product development and innovation. – Streamlined marketing and sales for individual devices. – Faster response to market demands in the tech hardware sector.	– Potential for overlap or competition between product divisions. – Coordination challenges in creating a cohesive ecosystem of devices and services. – May result in varied customer experiences across devices.
Amazon Prime Video	Divisional Structure	– Prime Video is responsible for Amazon’s streaming and entertainment services. It operates independently, producing original content and licensing content from various studios.	– Focused content creation and acquisition strategies. – Flexibility in catering to different global entertainment markets. – Strong competition in the streaming industry.	– Potential conflicts with other divisions regarding content and partnerships. – Coordination challenges in bundling Prime Video with other Amazon services. – Varied content libraries for different regions.
Corporate Functions	Functional	– Corporate functions such as finance, HR, legal, and corporate strategy are organized hierarchically. They provide centralized support and governance for the entire Amazon organization.	– Efficient centralized control over critical functions. – Ensures compliance with legal and financial regulations. – Streamlines decision-making at the corporate level.	– Limited local autonomy for critical functions. – Potential for communication challenges between corporate and divisional levels. – May lead to slower response times for certain decisions.

Table of Contents

History of Amazon

Understanding the Amazon organizational structure

Amazon is the largest eCommerce company in the world, employing over a million people spread across many different countries.

The Amazon organizational structure favors a vertical hierarchical approach with global, function-based groups and geographic divisions. This gives the company extensive top-down control over global operations, allowing it to increase market share and maintain market leadership status.

At the top of this chain is a senior management team reporting directly to CEO Jeff Bezos. Dubbed the S Team, this small team of Amazon senior executives works with Bezos to disseminate his ideas, solve problems, set high-level goals, and shape company culture.

The S Team has senior executives in charge of several function-based groups, including:

Finance.
Human resources.
Corporate affairs.
Amazon Web Services (AWS).
Worldwide consumers.
Amazon devices and digital management.
Worldwide operations.
Legal and secretariat.

Members of Amazon’s S Team

Amazon’s S Team (sometimes dubbed Amazon Steam) is comprised of 28 individuals:

CEO Andy Jassy.
CEO Doug Herrington – Worldwide Amazon Stores.
CEO Adam Selipsky – Amazon Web Services.
Chief Security Officer Steve Schmidt.
SVP and Distinguished Engineer James Hamilton – AWS.
SVP Amit Agarwal – Country Manager of Amazon India.
SVP Colleen Aubrey – Performance Advertising.
SVP Christine Beauchamp – North American Stores.
SVP Jeff Blackburn – Global Media & Entertainment.
SVP John Felton – Worldwide Operations.
SVP Beth Galetti – People, Experience, and Technology.
SVP Matt Garman – AWS Sales and Marketing.
SVP Russell Grandinetti – International Consumer.
SVP Drew Hardener – Worldwide Communications.
SVP Mike Hopkins – Prime Video and Amazon Studios.
SVP Paul Kotas – Advertising, Music & IMDb.
SVP Dave Limp – Devices & Services.
SVP Neil Lindsay – Prime and Marketing.
SVP Brian Olsavsky – Chief Financial Officer.
SVP and head scientist Rohit Prasad – Alexa Artificial Intelligence.
SVP Dave Treadwell – E-commerce Services.
SVP and general counsel David Zapolsky.
VP Peter DeSantis – Global Infrastructure and Customer Support.
VP Peter Krawiec – Worldwide Corporate Development
VP Steve Boom – Audio, Twitch & Games.
VP Candi Castleberry – Global Diversity, Equity, and Inclusion.
VP Udit Madan – Amazon Transportation.
VP Rob Williams – Device Software and Services.

Recent additions to the S Team

In December 2022, CEO Andy Jassy released a short note to explain that the S Team would be expanding with four additional members. These include:

Steve Boom – a Harvard Law School-educated employee with a Bachelor of Science in Electric Engineering from Stanford University. Boom served as the VP of Amazon Music for a decade between 2012 and 2022.
Candi Castleberry – the former VP of Intersectionality, Culture, and Diversity (ICD) at Twitter who was responsible for related initiatives both internally and on the social media platform. Castleberry has also worked at Xerox, Sun Microsystems, and Motorola.
Udit Madan – a 15-year Amazon veteran who now heads the rapidly growing Last Mile team at the company’s Bellevue, Washington campus. Madan is primarily tasked with connecting processes, people, and technology to develop innovative solutions.
Rob Williams – like Madan, Williams has been with Amazon for over a decade. He started as a financial analyst but then moved into the company’s global pricing, supply chain, and vendor management processes. Before becoming VP of Device Software and Services, he worked as a Senior Manager of Fintech Product Management.

Jassy noted that these new additions exemplified Amazon’s leadership principles and were also customer obsessed, inventive, curious, and had “a propensity to be right a lot”.

The additions of Castleberry and Madan were also seen as a way for the company to increase diversity among senior executives – a facet Amazon has tended to struggle with in the past.

Geographic divisions

Despite the vast geographical reach of Amazon, the company only has two geographic divisions: North America and International.

The company also utilizes groups according to physical location and related business goals. For instance, Amazon.com Inc. is the eCommerce arm of the company. It uses groups to manage eCommerce operations according to geographic regions and their associated regulatory frameworks and logistical challenges. Ultimately, this allows Amazon to address country or region-specific issues proactively and efficiently.

How has Amazon used organizational structure to its advantage?

Many would assume that a large, hierarchical organization would be rigid and resistant to change.

However, this is not the case at Amazon. The company is a flexible and adaptive market leader in eCommerce. Indeed, Amazon has caused disruptive innovation in online marketplaces and also in global logistics.

How is this status maintained in the face of centralized decision-making and top-down control?

One key contributing factor is the Two Pizza Rule. Instituted by Bezos, the Two Pizza Rule states that no meeting should be so large that two pizzas cannot feed the entire group.

The goal here is efficiency and scalability. Smaller teams spend less time managing timetables or keeping others in the loop and more time doing what needs to be done. In turn, each team has access to company resources to meet short and long-term goals. A product team, for example, can add new product lines without having to meet with the project, process, or logistics teams.

In purely theoretical terms, these teams are given more autonomy than say a worker in an Amazon warehouse. But they are very much marching to the beat of Bezos’ drum.

Stability

Stability is also a notable feature of the Amazon organizational structure – particularly in senior management.

Although there are frequent new additions to the S Team, many members have been in the same position for years or in some cases, decades. The long-term success of the hierarchical model has resulted in a highly experienced senior management team.

Ultimately, this has allowed Amazon to grow and expand into new markets without sacrificing competitiveness.

Comparison with Top Related Companies

Walmart: Walmart operates with a traditional hierarchical structure that is heavily divisional, focusing on different retail formats and geographic regions. While both companies are hierarchical, Walmart’s structure is more rigid, focusing on efficiency in retail operations. Amazon’s hierarchical structure is supplemented by its innovative approach in areas like Amazon Web Services (AWS) and its adaptive use of technology in retail, which provides it with flexibility to innovate more than Walmart’s more traditional model.
eBay: eBay has a less hierarchical, more flexible organizational structure compared to Amazon. eBay operates primarily as a marketplace and thus does not require the extensive supply chain and logistics structure that Amazon maintains. This allows eBay to be more agile in decision-making and adapting to market changes, whereas Amazon’s hierarchical structure supports its vast operational needs but may slow down decision-making.
Alibaba: Alibaba’s structure is somewhat similar to Amazon’s in that it also combines elements of a hierarchical and divisional structure, particularly in managing its diverse array of businesses from e-commerce to cloud computing. However, Alibaba tends to operate more as a holding company with considerable autonomy granted to its various subsidiaries, which can foster innovation but may lead to less control from the central corporate level compared to Amazon.

Similarities and Differences

Similarities: All these companies utilize a hierarchical structure at some level to manage their operations, focusing on efficiency and clear lines of authority. Amazon, Walmart, and Alibaba all operate globally and need robust organizational structures to manage their widespread operations.
Differences: Amazon’s structure uniquely blends its hierarchical nature with innovation-driven units like AWS, which operates somewhat autonomously within the broader corporate structure. This allows Amazon to engage more effectively in technology-driven markets compared to Walmart. Compared to eBay, Amazon has a more complex and structured hierarchy to support its extensive logistics and product range.

Implications

Innovation and Scale: Amazon’s hierarchical structure supports its massive scale and operational complexity, particularly in logistics and product fulfillment. This structure supports stable growth but needs continuous adaptation to maintain innovation pace, especially in technology-oriented sectors like cloud computing and AI.
Operational Efficiency: The hierarchical nature of Amazon’s structure ensures operational efficiency and effective management of resources across its vast operations, from retail to technology services. However, this might limit flexibility in some areas, unlike eBay, which can pivot more quickly due to its less cumbersome organizational setup.
Market Adaptability: Amazon’s divisional approach within its hierarchy, with clear roles for different business areas, helps tailor strategies to specific markets and products, similar to Alibaba. However, the autonomy Alibaba provides its subsidiaries can lead to faster localized innovations at the expense of centralized control.

Key takeaways:

Amazon is a predominantly hierarchical organization incorporating function-based groups and geographic divisions.
Reportable to CEO Jeff Bezos is a group of senior executives called the S Team. Each member of the S Team is responsible for leading a functional or business unit. Many of these units are in fact large organizations in themselves.
Amazon has maintained its position as a flexible and adaptable market leader despite a rigid hierarchical structure. To some extent, this has been facilitated by small product teams having autonomous access to company resources and stable, experienced leadership.

Key Highlights:

Evolution of Structure: Amazon’s organizational structure has evolved from a lean and flat organization in its early years to a more hierarchical structure as it scaled and expanded.
S Team and Function-Based Groups: At the top of the hierarchy is the S Team, a small group of senior executives reporting directly to the CEO. This team is responsible for disseminating ideas, solving problems, setting high-level goals, and shaping company culture. The S Team oversees various function-based groups such as Finance, Human Resources, Amazon Web Services (AWS), and more.
Geographic Divisions: Amazon has two main geographic divisions: North America and International. It also utilizes groups based on physical locations and business goals to address region-specific issues proactively.
Two Pizza Rule: Amazon follows the “Two Pizza Rule,” which aims to keep teams small enough that two pizzas can feed the entire group. This promotes efficiency, scalability, and autonomy within smaller teams.
Stability and Experience: While there are frequent new additions to the S Team, the organizational structure maintains stability in senior management. Many S Team members have held their positions for years, resulting in a highly experienced leadership team.
Flexibility and Adaptability: Amazon has successfully maintained its status as a flexible and adaptable market leader despite its hierarchical structure. The use of small, autonomous teams and experienced leadership has contributed to this ability to innovate and expand.
Global Operations: The hierarchical structure with clear function-based groups and geographic divisions gives Amazon top-down control over its global operations, allowing the company to maintain its market leadership and expand its market share.
Customer-Centric Approach: Amazon’s focus on the customer is evident in its organizational structure, where customer satisfaction is a top priority, and processes are aligned to meet customer needs.
Innovation and Growth: Despite being hierarchical, Amazon’s structure promotes innovation and growth by providing autonomy to smaller teams and leveraging the expertise of experienced senior leaders.
Long-Term Success: The stability of the organizational structure, coupled with a customer-centric approach and innovative strategies, has contributed to Amazon’s long-term success in various markets and industries.