Strategic Management at Google Inc.

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Current Organizational Structure of Google

Google Inc. is currently known as Alphabet Inc. The company does not embrace a conventional corporate structure model, in which the prevalence of influence flows in a top-down fashion to the managers and then to staff (Yarow). Conversely, Google Inc. has adopted a cross-functional corporate structure, utilizing a team approach to management. Therefore, the company is horizontally structured. It is believed that every employee is an important contributor to Google’s success (“Our Culture,” par. 2). Thus, the organization has purposively maintained a startup company.

The decision-making process at Google Inc. is decentralized to many units. The company is controlled through a shared vision. Therefore, Google’s people communicate the ideas with each other, including the CEO. Google Inc. also embraces a limited bureaucracy. Thus, engineers can make decisions in teams and quickly develop the ideas, because there are hardly any distractions from the management. Several small teams address the problem while employees try to influence each other using rational persuasion and data (Bauer and Erdogan 518). Whenever there are tough decisions to be made, staff members take opposing sides and debate the issue until they reach the consensus (Newcomb). Additionally, the company is managed by three senior officers who lead by consensus.

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Organization of Google

Google Inc has a clever CEO who oversees all the company’s operations. According to Winkler, Google’s new structure resembles a common one. A team of senior officers works closely together to implement the operational decisions. The company is organized on the basis of a combination of functions, projects, and geography. After the expansion in new areas and development of new products, more people report directly to the CEO. Therefore, all the product, geographical, and project areas report to him/her as well.

The company’s structure is clearly understood by everyone in the corporation because there is an effective internal communication. The company’s CEO sends memos to all employees to communicate any changes in organizational structure. In addition, employees are usually involved in the decision-making process. Therefore, they clearly understand their company’s structure.

Current Company Structure versus Objectives, Strategies, Policies, and Programs

Google’s current organizational structure is consistent with its corporate objectives, strategies, policies, and programs. For instance, the company seeks to develop new products. Consequently, their development requires some kind of innovation. Then the company’s horizontal structure creates an ample environment for the implementation of strategies, programs, and policies to achieve the new heights. Since the company has a global presence, its current corporate structure is congruent with its international operations. It permits the teams of staff members in various geographical locations to formulate the ideas and make decisions that can improve the company’s performance.

Google’s Corporate Structure versus Similar Corporations

The organizational structure of Google is unique, though it is similar to that of other corporations in some aspects. For instance, Virool also utilizes the team approach in making decisions. However, the company is vertically structured. Similarly, 3M delegates the responsibility for innovation to teams, but it assumes a hierarchical corporate structure (Table 1). Therefore, every employee, regardless of their department, is required to contribute to the company’s business success with innovations. Facebook also involves corporate function-based, product-based, and geographic teams.

Table 1

Comparison of Google’s corporate structure with similar corporations

Google Facebook Virool 3M
Structure Horizontal Vertical Vertical Vertical
Decision-making Team Team Team Senior management
Nature Flat Hierarchical Hierarchical Hierarchical

Google’s Organizational Culture

Nature of Google’s Culture

Google Inc. does not have a well-defined or emerging culture composed of shared beliefs, expectations, and values. However, the company believes in ability rather than experience (“Our Culture”). Therefore, the company hires smart and determined people. Furthermore, Google Inc. embraces an open culture that is often associated with startups. Everyone is regarded as a hands-on contributor to the company’s success. Thus, decisions at the company level are made in teams. The company’s culture makes employees feel like they are working in small company and can share their ideas and suggestions as well as ask questions directly to company executives.

Culture versus Current Objectives, Strategies, Policies, and Programs

Google’s culture aims to keep employees happy. Consequently, the company has managed to maintain a high productivity. The idea of sharing aspect of Google’s culture includes a futuristic and selfless thought. The company’s culture enhances the setting of goals that cannot be reached. In other words, company objectives are met because employees get further than expected as they do their best to achieve the set goals. Therefore, Google’s culture is consistent with the current strategies, policies, and programs because it encourages employees to focus on innovation and the development of new products and services.

Culture and Environmental Sustainability

Google’s culture promotes the environmental sustainability, because the company has been making profits without sacrificing its resources, or those of its employees and community. Encouragement of creativity and innovation has contributed to the development of products, systems, and services that conserve the nature. The culture has compelled company employees to be committed to making the renewable energy a reality.

Culture and Productivity, Quality of Performance, Adaptability, and Internationalization

Google’s culture pursues the creation of an effective environment for productivity. For instance, the company ensures that it has created the happiest and most productive workplace (“Our Culture”). Therefore, it hires the managers who most of all wants their employees to be happy and to enhance their level of productivity. New employees can easily adapt to Google’s culture because the environment resembles one as in small company. It increases the adaptability to the changing marketing conditions as it encourages the innovation. Consequently, the company has been able to achieve its internationalization goals through the innovation and to launch all new products and services to its consumers.

Culture and Employees’ Diversity of Background

Google Inc has ensured that there are no barriers to employees so that they can concentrate on their issues and clients. Consequently, the unique benefits of employees are addressed through the caregiver leave programs and LGBT policies (“Diversity”). Such factors as equity and fairness make every employee thrive. The company also takes certain actions to satisfy gender equity in the workplace. Employees are encouraged to celebrate diversity and inclusion through local community programs. Thus, a global corporation considers the cultural values of each nation, where it operates. For instance, the company educates its employees about the Asian culture and supports all Googlers in their endeavors, regardless of their background.

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Resources of Google

Marketing

Google’s current marketing objective is to shape the voice of its commodities by focusing on insights strategies and executions within the products, business-to-business, and brand marketing teams (“Marketing & Communications”). Therefore, the company seeks to organize global information and avail it to all people in a useful manner. Admittedly, Google AdWords is used as an online platform for advertising. The company’s marketing objective, programs, policies, and strategies are clearly stated. All employees and stakeholders dealing with Google are well aware of its marketing objectives.

The marketing objectives, programs, strategies, and policies are consistent with the corporation’s mission, objectives, strategies, and policies as well as internal and external environment. For instance, the company aims to arrange global information and make it universally available and useful. In this situation, the users are of great priority in marketing efforts of the corporation. Consequently, the company has exhibited an exceptional performance. For example, the company has a broad range of products that are widely diversified to enhance an expansion and growth. Google has been constantly launching new products to expand its business and broaden the market share. In terms of place, Google’s products and services are available online, because they are digital. Nowadays, Google products require a minimal promotion due to the vast popularity of the company. Google has also exhibited the best pricing policy. Thus, domestic and international clients enjoy free products and value-based prices.

The company does not depend on a few customers. Conversely, the company avails its products to all the clients so that interested parties can purchase products or use the services. The company’s market is enormous, because it operates globally. Google has increased substantial market share in all locations, except China, where it had to discontinue its services. According to the 2016 third quarter financial information, Google websites contributed 23% of its revenue. Network members’ websites, advertising, others sources, and segments, earned 1%, 18%, 39%, and 20% of revenue respectively (“Alphabet”). The company’s products are present in all the stages of the product life cycle. For instance, current products are in the introduction and growth stages while older ones have reached the maturity and decline stages.

The introduction of Google new products and services has definitely increased the company’s market performance. By the way, continued innovation and marketing efforts will enhance the company’s superior performance in future. Therefore, this analysis supports the corporation’s past and pending strategic decisions, because the company is set to strive and achieve the best results in the market. However, Google’s competitive advantage does not emanate from marketing efforts, but from its innovation and creativity.

Finance

The company’s financial performance is better than that of similar corporations. For instance, Microsoft Corporation’s revenue was $20,614 million for the three months ended on 30th June, 2016, compared to the previous year’s $22,180 million (Figure 1). Facebook, in its turn, earned $6,436 million for the same period ended on 30th June, 2016, and in the previous year only $4,042 million. However, Google Inc. earned $21,500 million for the above-mentioned period in this year, compared to the previous year’s $17,727 million (“Alphabet Inc.”).

Google’s financial performance

Fig. 1: Google’s financial performance compared to Facebook and Microsoft: Source: “Alphabet Inc.”.

The financial managers of Google Inc. apply the accepted financial concepts and techniques to evaluate and improve current corporate and divisional performance. In addition, such methods as financial leverage, capital budgeting, and ratio analysis are carried out to evaluate the achievements of the company. The company also manages the foreign currencies appropriately since it has its divisions throughout the world. Thus, the financial part is adjusted to the local countries in which the company operates. Moreover, financial manager builds financial forecasts to aid in the strategic management process in those foreign coutries.

Research and Development (R&D)

Research and Development Google seeks to make significant and practical benefits to its users rapidly. R&D department explore new technical innovations and advance existing areas of service (Spector, Norvig and Petrov). In research and development issues the company uses an iterative approach. Nowadays, technology plays a significant role of innovation in Google’s corporate performance. The company’s mix of basic, applied, and engineering research is quite appropriate as per the company’s corporate mission and strategies.

Google attains its competitive advantage from R&D as it contributes to the introduction of new products and services. Therefore, the company earns revenue from its investment in researching and developing new products and services. The company’s investment in R&D is associated with higher returns than in similar corporations such as Microsoft and Facebook. Google In. does not outsource R&D. Contrary to that Google Inc. adjusts its research and development to the conditions in each country where it works. Hence, the role of the R&D manager in Google’s strategic management process is to promote creativity and innovation through research.

Operations and Logistics

Google’s product and service production objectives provides for the reliable information and environment-conserving products. That is why they are clearly stated in the company’s mission and are consistent with the corporation’s mission, objectives, strategies, and policies as well as with the internal and external environments. The company specializes in information provision, so it should satisfy a fast and reliable speed of search capabilities as its main operations.

The company does not outsource and it ensures that its employees operate in an environmentally sustainable manner. It should be noted that it earns most of the income from its ‘other sources’ of revenue (“Alphabet”).

Google provides ideal facilities for its employees and users. It assures that clients receive a continuous service constantly. As the company uses the most current technology and equipment, it is able to deliver the best products and services. The rate of automation within the corporation is very high while mass communication devices are used intensively. Thus, various facilities have a high capacity and are fully utilized. Particularly, Google’s facilities have neither been affected by strikes and natural disasters nor are they vulnerable. The provision of professional service is a matter of principle for the company. So it tries to perform much better than its competitors. It can be proved with the number of paid-for clicks that has been increasing significantly.

In fact, Google is mainly a service-providing firm with the objective of providing the world with reliable and useful information. The company has been greatly improving its service provision recently. Therefore, continuous improvement of facilities and equipment has led to superior performance, which is in line with the corporation’s past and pending strategic decisions and future performance. Efficient operations within Google Inc. provide it with a competitive advantage. The operations managers utilize the appropriate concepts and techniques in personnel management to evaluate and improve the company’s current performance. Google tends to perform standardized operations, regardless of the country of operation. However, environmental sustainability is prioritized by operations managers whose role is to ensure that the company is endowed with innovative workers.

Human Resources Management (HRM)

Google seeks to recruit smart, excellent, and innovative employees. Therefore, the company always attracts and retains high-quality human resources. The headhunters of the company carefully select the methods of recruitment. These techniques are clearly stated in the company’s people and operations charter. In addition, Google’s HRM processes are consistent with its mission, objectives, strategies, and policies as well as with internal and external environments. Google strives to improve the skills of the employees and their job through appropriate training and the provision of the best working conditions. Consequently, there are few cases of turnover, strikes, grievances, and layoffs.

Google Google’s HR department uses a cross-functional team of employees. The company has adopted a three-thirds staffing model created by the global people operations executive. No doubt, company’s employee attraction and retention performance is exceptional. The company has been recording a high financial performance because its employees are well motivated and encouraged. Creativity and innovation are embraced too. Therefore, the company has managed to achieve its current and pending strategic decisions. It should be admitted that Google Inc. is expected to continue recording a superior performance, growth, and expansion in future.

HRM provides the company with a competitive advantage, because the innovations are made by well trained and motivated employees. In addition, the quality of working conditions has helped the company to reach success, because employees exhibit an appropriate performance. In comparison with similar corporations such as Apple, Microsoft, and Facebook, Google’s HR performance is superior. The company’s HRM managers use appropriate concepts and techniques to evaluate and improve the corporate performance by ensuring that employees work as per the set standards. The corporation provides a lot of benefits for their workers. At first, they enjoy a play environment in their workplaces. Secondly, paid maternity leaves are provided to female employees while the company also allows them to use some work time for developing their own projects. Third, Google has built a tight relationship with its worker unions.

Google embraces diversity of its workforce. Therefore, smart and excellent employees are recruited, regardless of their background. Google Inc. upholds all its employees’ human rights by treating them with dignity and respect. Further, Google monitors the human rights record of key suppliers and distributors. For instance, the company ensures that suppliers do not permit forced labor, and child labor (“Responsible Manufacturing”). The working hours of suppliers should not exceed those set by applicable local wage laws.

Google’s HRM processes adjust to the conditions in each country in which it operates. Local laws should be observed in the recruitment and management of human resources. Therefore, Google has a HRM code of conduct for itself and key suppliers in developing nations. Some employees receive international assignments, but this does not necessarily prepare them for managerial positions. Outsourcing of human resources helps the company to acquire local employees in other countries. The role of the HRM manager in the strategic management process is to ensure that the company recruits and retains high quality human resources. In addition, the HRM manager creates the right working conditions for employees so that they can work to achieve the company’s strategic objectives.

Information Technology (IT)

Google Inc. seeks to utilize the information technology in organizing and availing useful information to the world. Therefore, the company uses internal software, people management, open source, and bought hardware to enhance the performance of search engine. The IT objectives, programs, policies, and strategies are clearly stated and are consistent with the company’s mission, objectives, internal, and external environments. Google has exhibited exceptional information technology utilization. For instance, commodity hardware and free software have been converted into a computing program that supports the search engine (Cluburn). In addition, information technology provides Google management with useful database and automates its internal operations. Therefore, information systems help the management in decision-making by providing all necessary information.

The analysis shows that Google embraces the information technology as an information company. This allowed to improve its performance and brought it to a higher level. For example, Google’s past strategic decisions have been achieved with the help of information technology. Speaking about IT performance and stage of development at Google Inc., it is slightly superior compared to other corporations working in the same industry. Google uses the internet, extranets, and intranet appropriately, given that is a key online information provider.

IT managers at Google Inc. use the appropriate concepts and techniques to evaluate and improve the company’s performance. Construction and management of complex databases is one of the roles that Google’s IT managers perform very well. In addition, Google’s IT managers are experts in the establishment of web sites with firewalls and virus protection, performance of system analyses, and the implementation of interactive decision support systems. Google is globally present in terms of information technology and internet. There are no difficulties encountered by the company in getting data across national boundaries. The role of the IT manager in the strategic management process is to ensure that the company utilizes information technology inn routine operations appropriately.

Summary of Internal Factors

As per the results of this analysis, some of Google’s internal factors are its core competencies. For instance, the company’s corporate structure, decision-making model, human resources management, corporate culture, research and development, and IT are the company’s core competencies. However, Google’s distinctive core competencies are the decision-making model, corporate structure, corporate culture, and human resources management (Table 2). The most important factors to Google Inc. and to the industries in which it competes at the present time are the decision-making model, human resources management, and corporate culture. In future, research and development, finance, and information technology will become more important factors for Google’s success. Moreover, Google can outsource the human resources management function. According to the internal factor analysis summary, Google has been reluctant to marketing and operations and logistics. Undoubtedly, those areas need to be improved..

Table 2

Internal Factor Analysis Summary (IFAS) Table: Google Inc.

Internal Factors Weight Rating Weighted Score Comments
1 2 3 4 5
Strengths
Good Corporate Structure 0.05 5.0 0.25 Key to Success
Good Corporate Culture 0.10 4.2 0.42 Key to Success
Good Decision-Making Model 0.15 4.0 0.60 Good
Superior HRM 0.20 4.8 0.96 Exceptional
Intensive R&D 0.05 3.2 0.16 Deteriorating
Superior Financial Position 0.10 4.0 0.40 Good
Weaknesses
Reluctant Marketing Efforts 0.20 4.5 0.90 Should Improve
Operations and Logistics 0.15 3.8 0.57 Should Improve
Total Scores 1.00 4.26