Airbnb, Inc. Analysis

Airbnb, Inc. Analysis

Organizations and teams

Airbnb In. is a giant online platform that specializes in offering brokerage services in the hospitality industry. Business in the company is transacted in an e-commerce digital market place to facilitate peer to peer lodgings, tourism accommodation offerings, and experience services. The company has a complex organizational structure that is a blend of holacracy and hierarchical organizational structure (McKinsey, 2018). It, therefore, functions as a hybrid matrix organizational structure.

In the company, the hierarchical structure is designedto follow a chain of command where there is a clear reporting structure (Airbnb, 2020.). In Airbnb, Inc., the CEO reports to the board of directors, vice presidents from each department report to the CEO. Under the vice presidents, there are directors followed by product managers who delegate to support staff.Additionally, organization operations are steered by departments that work cross-functionally(McKinsey, 2018). They feature product managers who integrate objectives of the department to the strategic goals of the organization and employees who work autonomously while ensuring the business objectives are accomplished. Themanagers simply review and resolve any bureaucracy issues. The holacratic organization structure is very responsive to fast-changing business trends (Eremina, 2017)..

Project teams, through their leaders, should ensure that their products or services are compliant with government regulations. Moreover, it is the responsibility of the project teams to pursue regulatory permits and comply with the regulatory agencies. Project teams may also determine the constitutionality of some government regulation and seek legal redress where they find illegality on the part of government agencies. Airbnb has, in some cases, sued local governments for regulations that are deemed to have violated their business rights. For instance, Airbnb sued Palm beach county for its rental tax ordinance (Martineau, 2018).

Internal and external stakeholders

Airbnb, Inc. operations are facilitated with the service of both external and internal stakeholders, who are investors, employees,and customers of the organization. Internal stakeholders manage the organization’s operations and projects. Employees who are part of the internal stakeholders are remunerated with stocks as part of their benefits package(Eremina, 2017). Ownership of some shares in the company is a significant motivator to enhance their productivity. By owning a stake of the company, they are obliged to make informed decisions to improve the company’s profitability.

Airbnb, Inc., external stakeholders are the customers and the financiers. In my opinion, customers are the most important stakeholders. They buy services from the company and are affected by the level of customer service offered by Airbnb, Inc. Therefore, the company has to offer quality services and value for money to the customer to boost their profits and ensure customer loyalty. Another important group of external customers is banks that finance the organization. Through the bank input in the form of loans or investment, the organization can run operations with ease.

Airbnb, Inc. was involved in heavy lobbying and an expensive election against Proposition F in San Francisco. Proposition F was a law that attempted to restrict short term rentals. If the law had passed, the company could lose a considerable amount of future business and revenues. With that at stake, the company embarked on vigorous campaigns to fight the proposition; it spent multiple million dollars to win the city elections (Said, 2015). The move protected Airbnb, Inc.’sbusiness interest.

In 2018 the company filed a lawsuit against the state of New York; the litigation was to protect the company from unlawful data intrusion. The move helped in the revision of the New York ordinance Act that would compromise the company’s business. It was following the enforcement of the 2010 and 2018 Ordinance Act in New York City. According to the law, the company was required to submit transaction reports to the enforcement agencies for scrutiny for violation of the law. In the company’s defense, it would compromise the data privacy and security of the customers and organization (Lammi, 2019).Production of the information could also compromise their competitive interest benefiting their market rivals and violating the agreement to keep customer’s information private hence a problem for maintaining strong customer relationships.

Current Business Environment

According to pitchfork, Airbnb, Inc. was valued at $31 billion in 2017. In 2018 the company raked $200 million in profit. However, all was not rosy as in the subsequent year; it recorded a substantial loss of over $300 million in incomes from January up to September as per reports made by the Wall street journal (Barker, 2020). In August 2019, Airbnb’s equity funding was more than $25 million. The company also acquired Urban door, Inc. during the same month. Airbnb Inc. is preparing for an IPO in 2020, a move that will immensely increase the company’s equity. The company made headlines when it reported over $1 billion in revenues in 2019.

The company has been accused of hiked short term rental costs in major cities across the globe (Aliaj, Hancock, and McGee, 2019). Airbnb, Inc. faces challenges in government regulations in major cities. To promote its business interest, it has sought to amend the laws through numerous litigations. The company has also been sued numerous times due to illegal advertising, tax non-compliance, and unscrupulous business practices. In 2019, it was involved in more than 200 legal suits (Carville, Tartar, and Lin, 2020)

Many political figures have backed the US- Mexico-Canada Agreement stating it is a better deal compared to NAFTA. The deal got significant support from the Democrats. President Trump, who sanctioned the deal, commented that it would keep jobs wealth and growth in America (The Engine Team, 2018). The trade deal was gladly accepted on both political divides by Republicans and Democrats who applauded it because it would bolster the economic growth in America. The trade deal will transfer numerous benefits to companies such as Airbnb, Inc., that is, and other companies which use digital platforms because it encourages data protection and bars tariffsand discriminatory measures on e-commerce. The USMCA agreement also prohibits data localization; companies will not be forced to open facilities in each country for data storage and production, hence time and cost-efficient for such companies (The Engine Team, 2018).

References

Airbnb. (2020). Airbnb. Retrieved from https://www.airbnb.com/

Aliaj, O., Hancock, A., & McGee, P. (2019, Sepetember 19). Airbnb plans to go public in 2020. Financial Times . Retrieved from https://www.ft.com/content/cf865bb6-daea-11e9-8f9b-77216ebe1f17

Barker, G. (2020, February 21). The Airbnb Effect On Housing And Rent. Forbes. Retrieved from https://www.forbes.com/sites/garybarker/2020/02/21/the-airbnb-effect-on-housing-and-rent/#1a1e34132226

Carville, O., Tartar, A., & Lin, J. C. (2020, February 14). Airbnb to America’s Big Cities: See You in Court. Retrieved from Bloomberg : https://www.bloomberg.com/graphics/2020-airbnb-ipo-challenges/

Eremina, A. (2017). Comparison Of Organizational Structures – Case Zappos. Oulu Business School.

Lammi, G. G. (2019, January 17). Airbnb, Inc. v. NYC: Data Collection And Fourth Amendment Protection. Forbes. Retrieved from https://www.forbes.com/sites/wlf/2019/01/07/airbnb-inc-v-nyc-data-collection-and-fourth-amendment-protection/#43c91e84707b

Martineau, P. (2018, March 3). Inside Airbnb’s ‘Guerrilla War’ Against Local Governments. Wired.

McKinsey. (2018, October ). Agile compendium. McKinsey & Company .

Said, C. (2015, November 4). Prop. F: S.F. voters reject measure to restrict Airbnb . SF Gate .

The Engine Team . (2018, December 10 ). How startups are assessing the United States-Mexico-Canada Agreement.