MBA 522 Case Study 10.1: Publicized Conflict at Yahoo

Case Study 10.1: Publicized Conflict at Yahoo
   AbstractYahoo has been through many challenges and scandals during the years. In 2011, Carol Bartz was ousted and CEO Marissa Mayer decided to halt employees from working at home and changed the rating system based on bell curve. Henrique De Castro was hired in 2014, as the COO of Yahoo and was the second in command to Mayer. He was hired based on the assumption of being responsible for building Google’s advertising business and was the driving force of the success of Yahoo. As time passed, revenue did not improve during De Castro employment. Team members and CEO had several conflicts, which caused his departure and severance pay of $58 million.

Explain whether the ousting of former CEO and COO, as well as the employee standards reform, have been functional or dysfunctional conflict for Yahoo.

The ousting of former CEO and COO with the employee standards have been dysfunctional conflicts for Yahoo. Telecommunication from home were not allowed and presented displeasure by employees. Marissa Mayer made a decision to hire De Castro without doing the necessary research to eliminate the assumptions she thought were true. She did not know much about De Castro, which caused major issues down the line. It was clear both parties did not get along personal or professional. Employees would notice how distant and unwelcoming during meetings. The decision to discontinue working from home brought tensions with workers and turmoil. De Castro was eventually fired but Yahoo lost millions when he received a large severance pay for only a short time of employment.

Explain what type of conflict made De Castro less than suitable for the position of COO at Yahoo.

De Castro had conflicts with his team and CEO on multiple occasions creating an unproductive toxic environment. There were no achievements during the short working period. Revenue was not up to standards and he was able to boost any returns as expected. As COO, he was in charge of nurturing relationships with clients to build business up from its competitors. Previously, De Castro worked for Google presenting the same type of behavior. Conflict itself is not an issue until people attack people personally. Healthy disagreements can help increase work performance and productivity overall. De Castro did seem to works with others for the best interest of the company so his actions gave CEO Mayer no choice but to fire him. Personal conflicts never develop positive results and will damage cohesion among leadership and management.

Describe why trust will be an important factor for Yahoo as a company.

Trust is important factor for Yahoo because without it will cause more damage to the company’s name. Internal employees should be able to trust in policies, standards, and guidance. A sense of association is required to give worthiness to the business. Yahoo has to win the trust of its consumers and inside forces to remain competitive. Turnover and poor performance can pose a threat to the company. Brand identity and recognition are advantages and depends on the level of trust involved.


Yahoo suffered major losses when hiring De Castro and unpopular decisions concerning but was able to recover by making significant changes to the way one does business. CEO Mayer was under the impression De Castro was more qualified and responsible for the success of Google and Youtube. Conflicts between members and Mayer ending his time with Yahoo because it became personal, which did not fit with Yahoo’s vision. Trust is an important aspect for any company and helps with its brand identity.


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