Instructor: David Schuff, Section 003

Netflix and Chill…Organizational Structure


Netflix is well known for its flat, organizational circle structure. Employees are given more freedom and responsibility than those at other companies, which is evidenced by the unlimited vacation days and lenient expense account policy. Netflix avoids top-down decision making and seeking management approval for everything. These practices are characteristic of a traditional bureaucratic organizational structure. Instead, the company values high employee performance and excellent work. The company believes that in order for employees to perform well, they should be given the freedom to make their own decisions and dictate their schedules. Even though the company may be less rigid about certain policies, the work environment at Netflix is not as “chill” as one might expect. According to Netflix’s former Chief Talent Officer, Patty McCord, the culture is “intense” and there is a lot of “pressure” (View the Source Here). Employees are expected to perform at an exceptionally high level. Managers are required to periodically perform a keeper test. For this test, the manager imagines that one of their team members is thinking about leaving Netflix for another company. She then must assess whether she would fight hard to keep that person. If she answers no, that person is promptly removed and offered a severance package. Netflix doesn’t support keeping “B level” employees. So even though Netflix may have a flexible organizational structure, there is a trade-off between freedom and stability that employees face. Would you like to work in a Netflix type of environment or would a job that offers more security and stability appeal to you more? What would be the benefits/drawbacks of each?


6 Responses to Netflix and Chill…Organizational Structure

  • A lot of companies have been following this type of structure for their employees. In research it has proven to be a very effective way for employees to work. It has shown that they work more productively and efficiently. Allowing employees to choose when to work, to work remotely, not having set work areas, etc. has shown to be very beneficial for the company. I think it would be a good experience working in this type of work environment where it’s catering to your needs. If your job is allowing you to be as comfortable as you want when working, that should greatly impact the quality of your work as well.

  • This enabling of employees is very interesting to me. The idea that giving them more freedom and more responsibility creates productive employees for their company is something to admire. Naturally, one would think with unlimited vacation days and a lenient expense policy those things would be abused. I do believe we are moving to a future of more relaxed work. Other companies are experimenting with offering shorter work days, so long as all the work still gets done, and many are experiencing a lot of success. However the intense pressure to preform does not seem like an environment I would like to work in. I do not think I would preform well knowing that any mistake I make will be stricken against me and put me on the “chopping block”. I would be curious to see employee satisfaction at Netflix.

    • I agree. I like the flat org structure and the ability to have a direct and meaningful impact. The idea of having a manager assess each person for “If they were to leave today. . .” interjects an extraordinary level of subjectivity to the process. All it takes to get removed is the manager to arrive at “no” for whatever reason they dream up. It could be something as detrimental as removing you because you are competition for them. I would be surprised if they don’t get sued very soon.

  • Netflix’s organizational structure and benefits policy is very interesting, and I’m sure incorporates many theories of motivation studied by behavioral scientists. Personally, I would not like to work in an organization like Netflix because I think the environment would be too stressful and intense. Similarly to what Kevin said, Netflix seems like an organization where mistakes or “slumps” are not tolerated, even though they are a normal part of working. I too would prefer an employer with more stability and security, and one that is more tolerant of mistakes. I also prefer more structure, so the extremely flexible benefits would make me constantly second-guess if I deserved a day off.

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