Wellbeing: A Complete Reference Guide, Volume III, Work and Wellbeing

Chapter 7

Organizational Characteristics of Happy Organizations

Bret L. Simmons

University of Nevada, U.S.A.

Introduction

Do happy organizations have a strategic competitive advantage? Tony Hsieh, the CEO of Zappos, thinks so. In his 2010 book entitled Delivering happiness: A path to profits, passion, and purpose, Hsieh states that his vision for Zappos is “delivering happiness to the world” (p. 250). Hsieh even offers a Science of Happiness class to his employees because he believes so strongly that happy employees and customers are the key to the success of his business. Hsieh concludes his book by encouraging entrepreneurs to start their new companies “with happiness at the core of their business models” (Hsieh, 2010, p. 239).

Happiness might seem to work for Zappos; unfortunately, the empirical evidence on the long-term performance of happy organizations is almost nonexistent. That makes sense, because research that links micro-level latent variables like emotions and attitudes to macro-level observable and measurable variables like market share and profit is very difficult to conduct. Organizational happiness is also very vulnerable to the halo effect, where the happiness of organizational members is just as likely to be the result of company performance as it is the cause of excellence (Rosenzweig, 2007).

While the Science of Happiness (Diener & Biswas-Diener, 2008) is relatively well developed, the efficacy of happiness in the workplace is not a “slam-dunk.” The claims of ...