Group Assignment-2

Yahoo!’s Peanut Butter Manifesto

Prepared for: Course Instructor Strategic Management (W 650)

Prepared by: Group H

Institute of Business Administration, Dhaka University October 10, 2011

Yahoo!’s peanut butter manifesto
In November 2006, the Wall Street Journal created some weekend buzz by publishing an internal memo written by Yahoo Senior Vice President Brad Garlinghouse. In the "Peanut Butter Manifesto", Garlinghouse calls on senior management to radically restructure the company, cut redundant positions and do away with confusing competitive services. According to Garlinghouse, Yahoo was in lack of:  focused cohesive vision  effective communication among departments  suitable organizational structure  clarity of ownership and accountability  decisiveness and helicopter view The peanut butter strategy involves spreading resources equally across the enterprise. Every project is given equal importance. Hence, important things should be given more resources and attention than the other things. The three pronged approach that Garlington proposed was correcting the vision, establishing accountability and organizational restructure to make Yahoo! more successful. In today’s world, success depends much on quick identification of consumer needs and meeting those needs with innovative products. This strategy requires capital intensive research project to be pursued. So the peanut strategy is not sustainable in the long run. Having clear cut accountability and ownership establishes a sense of responsibility among the managers. This sense of responsibility makes the managers take decisions that will add value to organization. In this regard, organization can enhance this positive effect by adopting a compensation system that encourages managers to take value maximizing decision. Anything redundant is wastage of resources in business. Therefore a business must focus on reducing redundant activities and thus become more efficient in managing its operation. In fact, there is much to agree with in Garlinghouse’s memo. Yahoo! does have a great number of challenges to overcome. It was necessary to come out of the redundancies and focusing more on the important issues. But the innovative businesses should be given a chance to prove their opportunity.

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