Netscape's Work Culture

Netscape's Culture Contd..

According to an analyst,¹⁶ employee retention is the key to success in the IT industry. Compared to the industry attrition rate of 30%, Netscape's attrition rate was 20%. Netscape's management believed that more than the pay check, employees were interested in meaningful work, independence, flexibility, and a desire to learn on the job. Tim Garmager, principal of the Human Resources Strategies Group at Deloitte & Touche LLP in Chicago, confirmed this belief: "There is less emphasis on pay today than ever. In today's job market, employers need to look closely not only at the benefits they offer but at the culture they engender."

The Setback

After the acquisition, AOL planned to integrate Netscape's web-browser products and Netcenter portal site with its Interactive Services Group.¹⁷ The company created a Netscape Enterprise Group in alliance with Sun Microsystems¹⁸ to develop software products ranging from basic web servers and messaging products to e-commerce applications.

However, overlapping technologies and organizational red tape slowed down the process of integration. Within a year of the acquisition, Netscape browser's marketshare fell from 73% to 36%. Andreessen, who had joined AOL as chief technology officer, resigned only after six months on the job.

His departure triggered a mass exodus of software engineering talent from Netscape. Soon after, engineers from Netscape joined Silicon Valley start-ups like Accept.com, Tellme Networks, Apogee Venture Group and ITIXS.

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16] Jeffrey Pfeffer, a professor of organizational behavior at Stanford University's graduate school of business in Palo Alto, California, and author of The Human Equation: Building Profits by Putting People First (Harvard Business School Press, 1998).

17] A provider of online Internet portal services and developer of Internet browser software.

18] Sun Microsystems, Inc. is a leading provider of industrial-strength hardware, software, and services that power the Internet.

Case Details

Case Code : HROB013
Themes: Organizational Culture
Case Length : 13 Pages
Period : 1994-2000
Organization : Netscape
Pub Date : 2001
Teaching Note : Available
Countries : USA
Industry : Information Technology

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