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Fall, Section B
A Case Analysis of
KATHY CHEN GRACE CHUNG KAREN LIU ALICE JUN
BACKGROUND The Birth of Google The popularity of Google in the modern technological world proves to be strong. Indeed, the extent to which Google has been integrated into our culture can be illustrated by our common use of the verb “google.” The term “google” became an official word in 2006, literally defined as using the Google search engine to retrieve information; consequently, the term pops up regularly in our normal conversations (“Just google it”).1 Yet, contrary to its overwhelming effectiveness and fame, the birth of Google has much humbler origins in a garage of the two founders‟ friend. Founded by Larry Page and Sergey Brin, two Ph.D. students of Stanford University, the massive search engine Google was officially launched in September of 1998.2 Initially, Google started off as the basic topic of Page and Brin‟s research project. Larry Page, who was a student in the computer science department of Stanford‟s graduate school, was searching for a research idea for his doctoral thesis. Page explored why it was so difficult to “backlink.” At the time, going from one link was quite simple, but going backwards from a link to its previous one was a different and difficult process. Eventually, the idea developed into a project named BackRub. The scale of the project, however, proved to be too overwhelming for Page to handle by himself. Fortunately, Sergey Brin, another student in the computer science department, latched onto the project with Page. Brin, who was recognized as a math prodigy, provided valuable resources to the project. Together, Page and Brin worked on figuring out the links and citations of each site, and they eventually developed a type of ranking system from an algorithm that they called PageRank. In their system, the more popular sites with more important sources came to the top and were subsequently followed by the less popular ones. Page and Brin realized that they had just created a type of search engine, which brought back search results and information that proved to be more superior to the ones of other existing engines. Eventually, the two launched a small version of their project, which was renamed Google based off the word googol, or 1 raised to the power of 100, on the Stanford website. Google turned out to be a great success. From then on, Page and Brin further developed Google into a worldwide Internet search engine, finally launching their company Google in 1998. 3 Today, Google has developed into a multinational public corporation that specializes in Internet search, Web-based computing, and advertising technology. In addition, the company works on developing numerous online services and products. Other than its internationally renowned search engine, Google also hosts Internet-based productivity applications, including its Gmail software, desktop applications, such as its online browser Google Chrome, and social networking tools, including Orkut. Due to its rapid growth, Google has also partnered with and has acquired other products and companies, including its acquisition of one of the most largely visited website, Youtube. Because of its wide scope, Google serves an extensive range of consumers. Although its headquarters is set in Mountain View, California, Google offices are located all around the world. Moreover, Google‟s main source of revenue comes from its advertising programs, especially its AdWords and AdSense programs, which allow potential advertisers to market their products and services on the Web. Therefore, through its numerous user-friendly software applications, Google reaches all consumers on the online market, and by gaining popularity and recognition, it works to attract and retain potential advertisers.4 Philosophy Just as its mission statement portrays, Google has a relatively simple, yet immensely large-scaled objective: “to organize the world„s information and make it universally
accessible and useful.” In addition to this mission statement, Google posted ten points of its philosophy on its official website. The first point says “focus on the user and all else will follow,” showing Google‟s dedication to customer-driven policies. The next three points are “it‟s best to do one thing really, really well,” “fast is better than slow,” and “democracy on the web works.” These three points illustrate the precise, rapid and autonomous characteristics that define Google‟s work. Moreover, the subsequent points, include “you can make money without doing evil,” “there‟s always more information out there,” “you can be serious without a suit,” and “great just isn‟t good enough.” Essentially, these remaining points demonstrate the passion, creativity, and fun that defines the work culture at Google. To sum up, Google‟s philosophy encourages its employees to think hard, work hard, and play hard. Indeed, Google proves to have a unique work culture that helps to attract and retain the workers that will fit in well with its philosophy.5 INTRINSIC MOTIVATION As Google is one of the most successful corporations worldwide, one might assume that it offers extraordinary salaries to attract the talent that propelled the company to success. However, one may be surprised to discover that pay in Google actually does not meet the high benchmark of the typical corporate success. In other words, comparing the salaries of Google to that of its competitors, Google fails to top its market in terms of higher pay. Salaries for the same job title across different companies are displayed in Exhibit 1 of the Appendix. Yet, Google was able to win first in Fortune Magazine‟s 100 Best Companies to Work For because of its focus on intrinsic motivation, or the persistence towards a goal due to incentives inherent in the nature of the work itself.6 Though Google does offer generous stock options, it spends more time making sure its work system contains various mechanisms that work to intrinsically motivate and retain its workers. Thus, Google relies on the factors of its work environment that keep its employees intrinsically motivated to produce the popular software on the market today. Culture and Other Factors Indeed, Google‟s culture plays a huge role in keeping its workers motivated. Google offers its employees an abundance of benefits. First, the work culture proves to be very accepting.7 According to Google, “Diversity is our business.” With the aim of being a global company that reaches all the way around and into the crevices of the world, Google fosters a working environment that celebrates differences and diversity. Culture clash isn‟t a problem as workers are very accepting of one another. Moreover, other characteristics of the work culture provide other internal incentives to help retain workers. According to actual employees at Google, the workplace has a relaxed, yet professional and very friendly work environment. The culture is very open and each person is respected. Employees are “highly driven, intelligent, and very friendly.”8 In addition, Google also attempts to alleviate the stress and pressure of failing by proclaiming “If you‟re not failing enough, you‟re not trying hard enough.” 9 Google employees are encouraged to pursue innovation and creativity, and therefore risk, without too much fear of failure. Furthermore, Google offers unique employee award programs that encourage workers to work harder and more effectively. 10 For example, the Google Founders‟ Award rewards employees‟ entrepreneurship with potentially millions of dollars of Google stock. In addition to the extrinsic motivation provided by the stock, Sergey Brin believes that this award motivates recent graduates who may prefer to work at a start-up as opposed to at Google because they “want to be rewarded on the success of their project”.
Thus, the stock reward also acts to provide an incentive equivalent to the satisfaction of achieving success in a start-up. Job Characteristics Model Not only does the culture intrinsically motivate Google employees, but various policies and work structure also contribute to inspiring Googlers. In fact, Google‟s work environment contains factors of the Job Characteristics Model that help define its value of intrinsic motivation. Rating high on the five major job dimensions described by this model – skill variety, task identity, task significance, autonomy, and feedback – indicates that the work provides meaning, responsibility and satisfaction to the employees. Employees thus enjoy their job more and are more productive as well. Overall, Google reaches moderate to high levels on all five of these dimensions, which explains its effectiveness in intrinsically motivating employees. First, skill variety is the degree to which a job requires various skills.6 Indeed, Google‟s work culture rates high in skill variety. Google employees are not limited to just the tasks under their respective jobs; employees generally follow either the management or an individual contributor track.15 Google allows switching between the two tracks; thus, employees can try out both management-related tasks and individual tasks to determine which type fit them the best. Furthermore, employees are encouraged to take time off from work in order to use their skills and talent to pursue other innovative ideas; a policy at Google, dubbed “Innovation Time off” encourages engineers to spend 20% of their time pursuing company-related innovations of their own interest.11 Second, Google‟s work environment proves to have moderate levels of task identity, which is described as “the degree to which a job requires completion of a whole and identifiable piece of work.”6 Effectively, Google workers participate in fully developing and finishing the company‟s products. For instance, new products and software features are released within the company for Google employees to test. Thus, workers are exposed to and are encouraged to try out the Google products to which they have contributed. Google‟s philosophy and effect on the worldwide market portray high levels of task significance, or the “degree to which a job has a substantial impact on the lives or work of other people,” in its work.6 As mentioned above, Google‟s official mission statement is “to organize the world‟s information and make it universally accessible and useful.” Indeed, Google works to have an impact on the worldwide online market, and employees are quite aware of their company‟s mission. Google‟s 65% penetration of the search engine market also marks the success of its mission.12 Moreover, autonomy, or the “degree to which a job provides substantial freedom and independence,” plays a significant role in Google‟s work environment.6 Because Google is still expanding so rapidly, its hierarchical structure remains fairly flat. With many employees and less management, employees are not so restricted. In fact, there is not a lot of top-down direction in Google‟s work environment.8 Employees are encouraged to carry out projects on their own, but are offered help and resources as needed from management and the company. The emphasis on workers being able to take the initiative is reflected by their hiring process. The company looks for self-starters who can solve problems independently. 13 Finally, feedback is defined as the “degree to which carrying out the work activities required by a job results in the individual obtaining direct and clear information about the effectiveness of his or her performance.”6 The performance reviews at Google‟s provide high levels of feedback to its workers.14 Employees have two performance reviews per year, each of which is generally comprised of two parts: a self-assessment and a set of peer reviews. The self-assessment includes one‟s evaluation of one‟s strengths and areas for improvement
based on one‟s job requirements. Each employee chooses three to eight peers to write his peer reviews. The content in the peer review is very similar to that of the self-assessment but also includes comments on the employee‟s progress and contributions. These two parts of the performance review determine each employee‟s performance rating.15 Workers are also encouraged to receive peer reviews from other departments, fostering the cooperative work environment as well as providing feedback to the employees based on their impact on the whole of the company‟s processes and not just within their functional department. THE CULTURE AT GOOGLE Basic Characteristics An organization‟s culture is defined in the course textbook as “a system of shared meaning held by members that distinguishes the organization from other organizations.”6 In particular, a strong culture, such as the one at Google, is defined as one in which “the values are both intensely held and widely accepted.”6 The organizational culture at Google is defined by an “unconventional, creative spirit.”16 For Googlers, it‟s not so much about the money as it is about the passion. As previously mentioned, Google has in place a Founders‟ Award, which rewards employees‟ entrepreneurial ventures, to nurture passion and facilitate innovation.17 This emphasis on passion above all else, including previous experience, makes for a heterogeneous pool of employees across all disciplines and backgrounds. In addition to the expected software engineer, a previous humanities scholar can easily be found among Googlers, all connected by their intense passion and quirky personalities. In general, Google‟s offices around the world buzz with personality, high energy, and friendliness.17 The culture at Google is also defined by an emphasis on employee satisfaction, a fact that can be seen in the numerous non-monetary benefits it provides. For example, most offices provide Google apartments for housing, Google buses for transportation, and Google wi-fi to keep employees connected 24/7.18 The office at Ann Arbor is tailored to local Googlers with rooms named after cities in Michigan and filled with items from those cities.17 Other offices provide breast feeding rooms for mothers to take care of business in private. New employees at Google, affectionately called “Nooglers,” get their own Google buddy to help them assimilate into Google‟s work environment, and every Friday there is a TGIF company meeting celebrating team accomplishments.19 During an interview with Suon K. Cheng, a real estate planner for Google work facilities, he described personal masseuses on call 24/7 that would massage the muscles of hardworking Google employees whenever needed. When questioned about the cost efficiency of these masseuses, Suon nonchalantly stated the truth that every Google employee knows, “A happy worker is a good worker.” Clearly, all these perks and factors make workers proud to proclaim they are Googlers, building a strong and innovative workforce.20 Humble Beginnings Part of this structure can be traced back to the small company feel of Google‟s humble beginnings with a handful of employees under the direction of founders Larry Page and Sergey Brin. The two founders were able to get the company off the ground with its principles of passion, dedication, and fun. Indeed, passion, creativity, and a familial atmosphere still permeate the culture at Google due to its commitment to “preserve the best aspects of our startup culture.”19 Page and Brin‟s physic presence can also still be felt around the workplace. The two founders are often caught giving out high-fives as they walk down a hall.16 Their purpose in the company is twofold. On the one hand, they are businessmen, making sure the engines of the company are running smoothly, but on the other, they are the social glue perpetuating the corporate culture they help put into place.
Recruiting, Hiring, and Socialization The most important step in continuing the Google culture and passing on the spirit of Page and Brin‟s small company start-up is in the recruiting. Thus, Google invests much time and resources into selecting only the best for their workforce in a three step process. The first step is to receive an application, which will be reviewed, along with a resume and experience, by a recruiter. Then, if the recruiter feels the candidate suits the job, she will contact him to learn more about him, and answer any questions he may have about working at Google. Here, the recruiter describes Google‟s work culture and work environment. The recruiter formally assesses the candidates skills and determines if he should proceed to the next step of the hiring process, an phone interview. An important characteristic of this step is that the phone interview will be conducted by someone at Google in a similar role. In this way, Google makes the job of hiring not up to hiring managers, but the job of every employee at Google. The last step of the hiring process is the onsite interview. If the phone interview went well, the candidate is asked for an interview in person, where technical skills, behavior, problemsolving, and thought process are examined. Here, recruiters and interviewers see if the candidate‟s personality will fit into Google‟s culture of innovation, creativity, and passionate productivity. Although this three-step process is time consuming and not as efficient as other companies that use hiring managers, a distinguishing feature to this hiring process is the high degree of employee involvement and equality. Through this process, every new recruit will have an interview with at least four Google employees, drawn from both management personnel and potential colleagues, allowing everyone working at Google to make their opinion count. Afterall, those working at Google who already share the Google culture are more likely to bring in others who they feel will also fit into the culture.21 Control However, this strong culture can feel excessively controlling. Besides the innovative thinking that acts as the driving force behind the production of all goods and services, Google‟s culture does most of the thinking for its employees, leaving the employees little to do for themselves. In addition, Google takes care of all physical needs, such as housing and transportation, for its employees to the point that it may feel stifling. Some feel that by pampering them, Google is actually inhibiting self-actualization and independent thinking.18 In an e-mail interview from a Xoogler (an ex-Google employee) that crossed over to Microsoft, he reports the culture was fit for recent college graduates who are used to protected environments that provide everything for them. More experienced Googlers are forced to “drink the cool-aid and duke it out with the college kids” in order to survive in the hip, cool workplace.18 In fact, one of the major reasons that otherwise-satisfied Googlers leave is because they want independence.16 Recommendations Overall, Google‟s culture is effective in attracting and retaining the right people and the company actively works to sustain its unique culture. However, some consequences arise as the result of having a strong culture. First, the unique “college” culture at Google may be detrimental to its employees over time. Secondly, strong cultures are known to make its organization inflexible to changes in a dynamic environment; they are also known to foster homogeneity by forcing workers to conform. Surprisingly, Google manages to counteract the typical problems of homogeneity and inflexibility in the workforce. Although homogeneity usually decreases effectiveness, Google actively hires people possessing similar traits that encourage heterogeneity. For example,
during the hiring process Google seeks recruits who are passionate and creative, characteristics that promote diversity. In this case, Google workers may seem “homogenous,” in that they all possess some similar characteristics, but the characteristics they possess all serve to form a unique and diverse workforce. Common traits such as innovative thinking, spontaneity, and creativity in Google employees serve to increase effectiveness, not undermine it. Furthermore, since the majority of Google‟s employees are fairly young, they are flexible enough to adapt to new environments and accept those who are different. After taking into consideration the traits that Google looks for in new hires, it is clear that the slightly homogenous nature of Google‟s employees does not impede diversity but in fact bolsters it. Therefore, sustaining the culture would be most effective for Google. Google can maintain its current mechanisms, such as focusing on its hiring and socialization processes in order to attract and retain the right people. One potential problem with Google‟s culture is the effect of its overwhelming benefits and perks on older and experienced workers. Some former employees cite these subtle extrinsic motivators as a potential problem because older and experienced workers are becoming spoiled and are taking advantage of these benefits. These extrinsic motivators can thus over time undermine the intrinsic motivation that ultimately drives Google employees. Therefore, recommendations for improving this aspect can be adding in other subtle extrinsic motivators that will not undermine intrinsic motivation as much. For example, Google can implement more employee recognition programs that give praise to these older workers. Though the use of intrinsic motivation to increase worker productivity is clearly successful in many ways, such a strong emphasis on intrinsic motivation does not come without consequence. However, intrinsic motivation is closely linked to Google‟s culture; thus, overall, any changes to Google‟s intrinsic motivators may decrease the strength of Google‟s culture. Although there are slight problems that arise due to an emphasis on intrinsic motivation, in the long-run, these problems can be overlooked in order to maintain the culture. First, an over-emphasis on giving employees personal freedom to make many workrelated decisions, in addition to having a lack of managers in general, results in a wider span of control for each manager. For some, this in itself is a demotivating factor as those who want more management-related jobs are dissatisfied with the lack of control. For the long-run goal of sustaining Google‟s unique culture, however, this type of discrepancy would effectively remove dissatisfied workers from Google‟s employment. Further, the workers under these managers are strongly encouraged to spend 20% of their time pursuing their own company-related innovations, as Google “is big into „generating luck,‟ which means trying a whole bunch of stuff in the hopes that a few efforts will pay off.”22 Essentially, Google pours resources into brainstorming innovation on the gamble that the innovation time might produce something worthwhile. The combination of too much autonomy and too much inspiration results in a good amount of innovation but not enough execution of good ideas that may hit success if given the opportunity. Though brainstorming is critical to improving the quality and quantity of ideas, and thus to the creation of the innovative products and services that define Google, it cannot continue to take this gamble with no guarantee of return. Though these gambles have paid off thus far, Google should be wary of its luck running out and gradually shift its attention to the execution, not generation, of ideas.
Chris Noon, "Brin, Page See 'Google' Take Its Place In Dictionary," Forbes.com, July 6,
2006, http://www.forbes.com/2006/07/06/page-brin-google-cx_cn_0706autofacescan01.html (accessed November 29, 2010). 2 "Google milestones," Google, Inc., http://www.google.com/corporate/milestones.html (accessed November 29, 2010). 3 John Battelle, "The Birth of Google," Wired, August 2005, http://www.wired.com/wired/archive/13.08/battelle.html (accessed November 29, 2010). 4 "Corporate Overview," Google, Inc., http://www.google.com/corporate/index.html (accessed November 29, 2010). 5 "Our Philosophy," Google, Inc., http://www.google.com/corporate/tenthings.html (accessed November 29, 2010). 6 Text Stephen P. Robbins and Timothy A. Judge, Essentials of Organizational Behavior (Upper Saddle River, NJ: Prentice Hall, n.d.). 7 "Google Diversity and Inclusion," Google, http://www.google.com/corporate/diversity/ business.html (accessed November 29, 2010). 8 Google Anonymous, post to Glassdoor Web forum, November 1, 2010, http://www.glassdoor.com/ Reviews/Google-Reviews-E9079.htm (accessed November 29, 2010). 9 Sara Kehaulani Goo, "Building a 'Googley' Workforce," Washington Post, October 21, 2006, http://www.washingtonpost.com/wp-dyn/content/article/2006/10/20/AR2006102001461.html (accessed November 29, 2010). 10 Katie Hafner, "New Incentive for Google Employees - Awards Worth Millions," New York Times, February 1, 2005, http://query.nytimes.com/gst/abstract.html?res=F40C1EFC395F0C728CDDAB0894DD404482 (accessed November 29, 2010). 11 Bharat Mediratta, "The Google Way: Give Engineers Room," New York Times, October 21, 2007, http://www.nytimes.com/2007/10/21/jobs/21pre.html?_r=1 (accessed November 29, 2010). 12 Great Place to Work Institute, "Google: Take Two - Google is #1 on this year's list of the 100 Best Companies to Work For," 2008, http://resources.greatplacetowork.com/article/ pdf/100-best-2008-google.pdf (accessed November 29, 2010). 13 Don Dodge, "Working at Google - the first 6 months," Don Dodge on The Next Big Thing, entry posted June 17, 2010, http://dondodge.typepad.com/the_next_big_thing/2010/06/ working-at-google-the-first-6-months.html (accessed November 29, 2010). 14 Edmond Lau, post to Quora Web forum, August 26, 2010, http://www.quora.com/ How-are-performance-reviews-done-at-Google-What-are-they-used-for (accessed November 29, 2010). 15 Google Technical Writer, post to Glassdoor Web forum, January 3, 2009, http://www.glassdoor.com/Reviews/Employee-Review-Google-RVW144182.htm (accessed November 29, 2010). 16 Antone Gonsalves, "Web 2.0 Summit: Entrepreneurial Spirit Too Strong For Google Alumni: The money was great... Larry and Sergey were focused... but a panel of ex-Googlers revealed why they have now gone off to build their own Web 2.0 fortunes.," InformationWeek, October 20, 2007 17 HAIL TO THE GOOGLERS: Vibrant decor, lots of snacks found in search firm's Ann Arbor offices. Detroit Free Press (Detroit, MI) May 18, 2007 18 Trixter98052, "Life at Google – The Microsoftie Perspective," Just Say "No" to Google, entry posted June 24, 2007, http://no2google.wordpress.com/2007/06/24/life-at-google-the-microsoftieperspective/ (accessed November 28, 2010). 19 Google, "FORTUNE's '100 Best Companies to Work For,'" Google, http://www.google.com/intl/en/jobs/lifeatgoogle/fortune/index.html (accessed November 28, 2010). 20 Suon K. Cheng, interview by author, Carnegie Mellon University, November 12, 2010. 21 Google, “Hiring Process,” Google, http://www.google.com/jobs/joininggoogle/hiringprocess/index.html (accessed November 28, 2010).
Stan Schroeder, "Google Employees Explain What It‟s Like Working at Google," Mashable, http://mashable.com/2010/07/05/google-employees-working-google/ (accessed November 30, 2010).
Salaries for the Same Job Title Across Different Companies
Salaries for Software Engineers
Salaries for Sr. Software Engineer/Developer/Programmer
118,528 112,240 120,542