THE MANAGEMENT ANALYSIS OF GOOGLE INC
This paper provides an analysis of the management at Google Inc. It aims at identifying the various management practices and strategies at Google. It narrows down to examine the role of organizational behavior, human resources management practices, international business, and technology at Google Inc. Further, the paper examines the strategies the management of Google may need to apply in the future after analyzing the strategies the company has employed in the past. To achieve these objectives, the paper focuses on four major sections including the company overview, analysis and the discussion of sustainability related strategies and issues. Further, the paper focuses on the analysis of entrepreneurship and innovation at the company, and the future strategies the management should engage in.
Google is a public traded company in the USA that majors in the manufacturing, processing and merchandising of internet-oriented services including online advertisements, hardware production, and cloud computing technology (Google 2014). Google was founded in the year1998 with its first Initial Public Offering starting in 2004. Its mission is to organize global information thus ensuring that it is available in a usable manner across the world. Google operates from its headquarters based in California, USA. Financially, according to the information that was released by the company in 2014, Google realized revenue amounting to $55.5 billion, a 21percent upsurge in its income from $46.0 billion in 2012 (Google 2014). This performance is similar to that recorded in 2011 and 2012. Moreover, the company recorded an operating revenue of $15.4 billion signifying an increase from $13.8 billion in 2012, which is 28 percent profitability. Consequently, the company’s net revenue as of 2013 was $13.4 billion, with basic and diluted Earnings per Share (EPS) at $20.0 and $19.0 correspondingly. In addition, the corporation reported its assets to be $111billion in 2013 up from $94 billion in the previous year. As a result, Google was rated as the 55th best performing company by Fortune Magazine (Forbes 2013).
Google is an epitome of the companies that have recorded rapid growth and development as evidenced by the company’s several partnerships and acquisitions. The partnerships and acquisitions have greatly contributed to the firm’s enlargement beyond search engine services (Brennan 2009). Its scope of the most used products and services over the years include email services (Gmail), cloud computing services (Google drive) and online social forums (Google plus). Further, Google offers desktop applications such as Picasa and Google chat and recently it integrated its products and services to cover Chrome Operating System (OS) development (Heft 2009). In addition, Google has developed Android, mobile application software that is used by manufacturers of Smart phones (Android 2008). Another important innovation of the company is its development of hardware devices like Nexus that was bought from Motorola Mobility back in 2012 (Topolsky 2010). All these achievements by Google could not be possible without the able leadership of its CEO Larry Page and his management team that has some of the best technology professionals in the world. Google has employed dynamic management strategies consistently for it to remain at the top of its game. It is this point on management that forms the basis of this paper.
Organizational behavior in Google
Organizational behavior is the practice of understanding, clarifying and eventually improving the behaviors, as well as the attitudes of individuals and groups in a business set up. Google’s organizational behavior is traced back from its founders Larry Page and Sergey Brian whose focus was the user of their product and services. While other companies were busy advertising their websites, Larry and Page decided to strip the page of all distractions such as adverts pop-ups. They understood so well that such pop-up advertising could be annoying to the end users; consequently, they presented their users with a blank page containing Google logo only. They made it clear that any advertisement on their page would be marked as “sponsored links.” This aspect of giving priority to the users above money seems to have been a tremendous factor in their success (Google 2014).
At the heart of Google is the need for keeping all the employees happy and valued. In enabling this, Google has created a working environment that preserves the best experts in the field. In 2007, Fortune Magazine rated Google as the number one “Best Place to Work For” and number four in the year 2010. A closer look at how Google treats its employees shows that indeed it is in a league of its own. Employees are given a range of world class treatments including free cuisine that is inclusive of espresso and sushi bars. In effect, most employees are known to gain 10 to 15 pounds once they start working with Google. Moreover, the staffs can get on site services for childcare, free gym, video games, showering facilities and doctors. It also allows a four months paternal leave with a full pay of 75% and $500 offers for ready-made meals for the family and the newborn. These additional benefits create a working environment where the workers feel valued (Google 2014). In addition, the workers feel that they are working at the best place in the world (Google 2014).
Further on, the company encourages risk taking and innovation among its employees. For example, when one of the vice presidents in charge of Google’s advertising system made a blunder that cost the company millions of dollars, Larry commended and congratulated her on the mistake. He posited that rather than being precautious and doing too little, he would prefer to lead a company that was fast and doing too much instead (Google 2014). This attitude of moving quickly and being responsible for mistakes explains why Google is far ahead of its main challengers such as Yahoo and Microsoft. In order to promote a culture of innovation, Google encourages its employees to spend 20% of their time developing new ideas.
Google’s organizational behaviour is also replicated in their decision making where decisions are made through teamwork in the organization. This is also reflected by the management of the company that is in the hands of Larry Page, Sergey Brian and the hired CEO of the company by the name Eric Schmidt. This triad is reported to lead the company by consensus (Topolsky 2010). Simply put, at Google, decisions are not made by the senior most people and then implemented top down. Employees come together in teams to brainstorm and supply the solutions for different problems. To create a team work environment, employees operate in open offices while private offices are allocated to the selected few.
Human resource management practices at Google
Google believes in the importance of strategic management because innovative ideas only come from people (Turner & Bourhis 1996). They believe that it is impossible to maximize on innovations if they are not able to recruit and retain top innovators. In addition, Google recognizes that recruitment and retaining top experts is not enough, therefore, the firm created an environment supportive of innovation (Blog 2011). Google has made a shift from the traditional HR principles to “people analytics” HR approach. This approach posits that accurate management decisions should be people based and they are the most impactful decisions that a company can make. Simply put, the premise of this approach is that, a company cannot realize tremendous business results if its managers are not making good management decisions (Turner & Bourhis 1996).
Google decisions are attributable to being the only data-driven global human resource function. The HR model in Google is data and analytical in nature and it has resulted to tremendous productivity by the workforce that few can match. The HR function at Google is not referred to as human resources; rather it is called “people operations.” The management of Google has realized the importance of making far and wide data-based decisions. At Google, people management decisions are determined by the powerful “people analytics team.” Google has replaced the 20th century HR decision making approach that was subjective with “people analytics.” This can also be referred to as data-based decision making, fact-based decision making or algorithm decision making (Turner & Bourhis 1996).
Role of international business at Google
International business has a great impact on the operations and the performance of any international company. First, power distance index (PDI) that refers to the anticipation by the less powerful in an organisation to assent to unequal distribution of power is evident. Organisations that have low PDI such as those in the West have a higher propensity for incorporating consultations and democracy among its members. As a result, Google records higher productivity in the West because power is evenly distributed and the contributions of employees highly valued (Danziger 2008).
In many organisations, people who come from different cultures prefer to perform their tasks in seclusion resulting in individualism. Google as an international business entity has people from different cultural backgrounds, but it has ensured that peoples’ individual rights are protected in order to facilitate higher performance (Turner & Bourhis 1996). Uncertainty avoidance Index is an international factor that Google had to cope with. Organisations in the regions that have high UAI like Asian community have the tendencies of reducing the possibilities of unusual experiences while, on the other hand, organisations in the low UAI regions like in the West have a preference for reduced structures, high tolerance for change and new challenges (Hofstede et al 2010). Google, which is famous for its innovativeness is limited in its operation, in the Asian community when it is compared to the West.
Role of technology management at Google
Technology management refers to a concept or aggregation of a myriad of guidelines and techniques aimed at bringing together business (Blog 2011). Technology management is also known as management science that aims at bringing out the likely value of business technology solutions.
At Google, technology management pragmatically corresponds to different services. Technology management at Google entails IT planning, database services, balancing of Scorecards, management of Portfolios management, Support for business, management of the network management, framework and documentation services. Google also uses technology management to deliver capabilities, that is, a set of guiding principles that elaborate the main features (Blog 2011). Through technology management, Google aligns its operations both technologically and business wise such that they are indistinguishable.
Analysis of entrepreneurship and innovation at Google
The world’s online search engine industry has had a major shakeup and evolution over the last ten years. Different companies have taken leadership role overtime, but today, Google remains the undisputed leader. To remain at the top of this industry, Google has applied different entrepreneurship and innovative strategies (Barbra 2011).
First, Google has ensured that the search engine is loaded with data and strong engine algorithms. Further, it has ensured that its search and results are relevant to the end user leading to high traffic of the users. This has given Google the ability to leverage its economies scale above its competitors. This strategy has locked out its competitors that remain disadvantaged in terms of the economies of scale, as they do not have the ability to charge low fees for their services compared to Google. Secondly, Google has maintained its loyalty brand to its clients and in 2007 and 2008, it was rated the top brand winner of Brand Keys Customers Engagement Leaders List that was inclusive of 374 other brands. Google’s global dominance in the search engine industry is unmatched save for the Chinese market where Baidu is the leading player. The global internet demand is on the rise especially on search engine services (Barbra 2011). The search engine users are more interested in a set of product display rather than on the list of products. As people do their searching, they not only look for nouns or data but actions as well. Google has capitalised on this need by investing on over 500,000 servers and more than 100,000 huge ranks of disk drive collection that are spread across 50 to 60 data centres worldwide. No other company has been able to invest on search equipment making Google have a greater competitive advantage.
The internet service provider (ISPs) is a critical supplier of internet to search engine companies globally (Android 2008). These companies depend on ISPs to provide them with broadband infrastructure services to the very last mile to link the portals to the users. Searching services are impacted directly if infrastructure breaks down or in case of slowed network, (Barbra 2011). To avoid these inconveniences, Google is planning to establish a high-speed fibre optic broadband network in the United States. This provides faster internet services that are 100% efficient than what Verizon and AT&T offer today. Google’s focus on entrepreneurial and innovation services can be summed up as focusing on the user, specialization, efficiency, democracy and mobility. In addition, Google believes in business ethics, international business, innovativeness and vision (Brennan 2009).
Future strategies management should engage
Though Google is one of the world’s best managed companies, there is still a lot that it can employ in its systems in order to improve on the management (Deton & Tonchia 2005). Today’s management strategies in Google may be the best in the world, but tomorrow they may become obsolete. First, managers at Google need to offer training lessons to the employees with the objective of developing their skills and creating awareness among them on different management practices. For example, Google can offer graduate leadership management training programs that focus on developing effective leaders that operate in a set up with people from different cultural backgrounds. This initiative will enable Google to penetrate the markets that it has not been able to conquer fully such as China and other Asian markets (Ere.net2013).
Second, it is imperative that managers are involved in the creation of operational procedures that vary for different regions on a cultural basis (Ere.net 2013). For instance, the management practice in the UK and USA should focus mainly on aggressive strategies, higher level of risk-taking and individual achievements (Barbra 2011). Conversely, operations in the Asian community can be modelled towards reducing risks, less aggressive strategies and communal emphasis to achieve the organisational culture. However, these practices could be modelled to make sure that the actual goals of Google are met.
Third, the global need for search services is up surging day by day as the middle class continues to expand because of the increased need for searching information. Simultaneously, innovations, such as social networking, location applications and videos are expanding the content being searched using the search engines (Barbra 2011). This will result in greater rivalry that will shift from the traditional growth of the market share to innovation growth and development. As such, the management should ensure that the Google’s already outstanding research and innovativeness remains ahead of their competitors.
Finally, the management at Google needs to take cognisance over the threat the social media is likely to have on its end users. This is because the social sites are providing substitute services that were formally provided by Google. It is imperative for Google to revamp the Google Wave and Google Inc.’s social networking connections so as to capture the rising number of social media advertisers (Flat World Knowledge 2014). On the other hand, Google can collaborate with the already existing social networking sites accrue a share of the working revenue from the adverts on the social networking sites in a symbiotic relationship.
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