Google: THE WORLD OF GOOGLE 1

The World of Google

By: Amanda Dixon

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With this analysis, I hope to better understand organizational theory and how businesses create

organizational structures to maximize productivity and solve problems. Below I will analyze

Google, its structure, and environment to discuss recommendations for efficiency and

effectiveness based off what I’ve learned from the course. Hope you enjoy!
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Abstract

Google is a multinational internet-based company, known for its innovative products and

fun culture. The company started with a simple internet browsing service and has now expanded

into many markets all around the world, including smartphones, computers, cloud computing,

Wi-Fi, driverless cars and more. With all the recent expansion, Google faces increased

competition and must continue to develop new innovative products in order to remain

competitive in the market.

Further, in response to all of their recent growth, they’ve created a parent company

called “Alphabet” that will allow their main business segments to have their own focus. This was

a much-needed step for Google and will allow them better ability to manage their growing

structure and support it more effectively. However, with increasing litigation concerns and issues

within management, Google still has work to do in order to sustain this growth.
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History. Google was created in 1995, by two college students in a Sanford college dorm

room. Founders, Larry Page and Sergey Brin created what was then known as “Black Rub” as a

new and innovative way to organize information on the internet. Their mission statement has

been the same since inception, “to organize the world’s information and make it universally

acceptable and useful” (Google. About). Today, Google has more than 60,000 employees in 50

different countries, according to their website. (Google. History).

Structure. Google’s flat, matrix structure has been put in place to support the constant

innovation that’s required in the market. The flattened structure, allows its employees more

freedom and collaboration, without having to report to multiple managers. The matrix structure

enables coordination, communication and the sharing of ideas across the company. The main

levels of the hierarchy are the administration, executive, and operational levels, as shown in

exhibit A. Then, the operational levels are split into functional and product teams where they work

on specific products and/or services, which creates the horizontal linkages needed within the

organization.

Culture. At Google, employees are able to be creative, feel supported and make their

products/services into a reality. Much of Google’s success is attributed to its high quality of

human resources and its care for employees. The company selects its applicants based on their

creativity, smartness, drive and alignment with the organizational goals. Not, so much their test

scores and educational background like other companies (Lambardo. 2017). Which, supports and

enforces Google’s flattened hierarchy structure.

Google has been ranked #1 on Fortune’s list of “Top 100 Companies to Work for” for the

last seven out of ten years (Fortune. Page 1). At Google, employees are encouraged to have fun,
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be creative, and strive for the impossible. Google employees work together, are encouraged to

share ideas, and be involved in decision-making. “The Googolplex” and other Google offices are

designed to enhance communication, collaboration and provide a fun, family-like environment.

Employees are also given freedom to work on projects of their choosing, creating a competitive

and exciting culture at Google. All employees are given access to Google’s information and

encouraged to participate in meetings, which allows information to flow freely and rapidly.

Google employees are invited to join executive meetings, give feedback, and ask questions. This

fun and innovative culture is what has made Google such a success and has enabled them to

flourish in their ever changing environment.

Competitors. According to Harvard Business Review, Google competes in some of the most volatile

markets including computers, computer software, and electronics (Dyer. Ferr. Lefandt. 2014). The

volatility in the market has resulted in much more mergers, acquisitions and caused many

companies (like Google) to venture out into new markets to ensure they can fulfill their customer’s

desires to always have the newest and best technology.

Today, Google faces competition in many markets, due to their rapid expansions and

innovation. Today, Google’s competition isn’t just those offering web search, but now more align

with companies like Amazon and Facebook who offer a wide range of services and provide social

media platforms. “Google executive chairman Eric Schmidt said, “Many people think our main

competition is Bing or Yahoo. But, really, our biggest search competitor is Amazon.” (Parietti.

2016).

Environment. With globalization and economic stability in most major markets, Google

has a great opportunity to expand, especially in developing countries. The increase in internet
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access and adaption of mobile devices around the world, provides many opportunities for

growth. Google’s strategy relies on growth, especially outside of the Unites States, to expand its

customer base and penetrate new markets. As Google continues to try to increase market shares

in the global arena, the company focuses on offering expanding its services.

Regulations. Laws and regulations related to user privacy, freedom of expression, content

advertising, information security, and property rights are all areas of risk for Google. The

company isn’t just subject too federal and state laws regarding privacy and protection of user

data, they can also be liable for their users and third parties for any involvement in unlawful

activity.

Barriers to Entry. As an internet site costs very little to acquire, it’s a concern for any

internet company as barriers to entry are low. New entrants can be new start-ups offering

products like Google, or investments by large, existing technology companies. Regulatory

requirements for internet segment are also low, making it easy to become established and take

customers from Google. Today, there is a vast amount of companies who compete directly with

Google online with advertising and other services.

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Challenges Ahead

The future of advertising and computers are rapidly changing, not only do these changes

affect the company but, the most of the industries in which Google operates. As social

networking becomes integrated into our everyday lives, Google is at a substantial disadvantage.

Although they’ve tried to shift more into the social media platform, it’s unlikely that they will

ever steal market share from their competitors, Facebook and Twitter. Also, an increasing

amount of Google’s customers are turning to their mobile phones to conduct searches on Apps

like Amazon, where Google doesn’t have much presence.

With all of their recent growth, the company seems to be losing focus on what’s made

them such a success in the first place. Further, as Daft states in our text, the adaptability culture

at Goggle is beginning to show signs of strain, due to the need to manage and adapt more

bureaucratic controls. Which hinders the companies creativity and flexibility (Daft. P.382).

Google’s recent structure changes under Alphabet, is great way to provide the company more

structure and focus while trying to keep a more organic feel. However, with increasing regulatory

issues, and revenues showing signs of decline, Google must shift their focus from growth to

sustainability, if they hope to improve their position. Below, I will discuss the challenges Google

faces ahead, in detail.

Lack of Quality Managers. With all the recent growth, the company needs to ensure the

structure is able to support it. Due to Google’s flattened structure and the amount of positions

available at Google, employees say that there isn’t room for personal growth. Further, those that

are being promoted are not promoted because of their management skills but, because it’s the
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only position available. So, those who are the most tech-savvy, are the ones being promoted to

managers and employees don’t feel they have the support that they need.

For example, a former employee gave the following feedback after eight years with the

company “Don’t dismiss emotional intelligence and adaptive leadership. They’re not just catch

phrases. You need great management and leaders in order to build great companies and develop

great employees. The people who may be brilliant at solving technical issues may not be (and

most are most often, not) the best candidates for management” (GlassDoor. Page 1).

Another former employee comments “I’ve heard stories of managers straight-up cussing

out their employees and intimidating/scaring them into compliance. So many political battles,

empire building, territory grabbing Google says “Don’t Be Evil”. But that practice doesn’t seem

to be put into place when it comes to internal practices” (Glass Door. 2017).

Grim Future of Computer based Advertising. According to the company’s 10-k, advertising

generates $79,383 million dollars of revenue, while “other” revenues make up only $10,080

million. Further, Google’s “cost per click” has continued to fall from -7% last year to -13% this

year. Meaning, advertising makes up almost 80% of revenues, yet they’re beginning to make less

and less off of those efforts, which is a horrible sign for the future of the company’s main money

making segment. Not to mention the future of advertising is greatly changing.

Today, “90% of time spent on mobile phones is spent in apps” and not on Google search

(Chaffey. Page 1). Not only are users moving from desktop to mobile devices, they’re also

spending most of their time on apps like Facebook and Amazon. Thus, creating not only less

demand for computer based advertising, but also causing a decrease in profits for the company’s

main revenue segment.

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Problems Abroad. According to an article on Fortune, Google has 90% of the market share in

Europe and only 67% in the United States (Fortune. Page 1). With much of Googles revenue

coming from overseas, Google faces increasing risk due to their intrusiveness and the way

they’re collecting user information. Strict rules and regulations exist in many countries Google

does business with and many of them are looking into Google’s business practices.

For example, Europe’s Commissioner claims Google is abusing its position in the E.U.

search market in order to “elbow out competitors in the prized online-shopping industry” (Walt.

2015). Also, stating that they may bring formal anti-trust charges against the company. This

lawsuit could also bring traction to other lawsuits in other countries, meaning Google’s future

could be uncertain in many foreign markets. With much of its revenues coming from oversees,

it’s imperative that Google repairs their image, if they plan to grow and capitalize on their

biggest markets.

Evaluation and Recommendation

Google’s weaknesses, in spite of their dominance in the market, could prevent future

growth and cause further damage to the company’s image. The lack of quality managers and

fighting with forging governments, will soon devastate their reputation and the innovative

culture they’ve created.

Quality Managers. Now that they’ve split up the company’s core business activities under

Alphabet. In attempt to try become more organic, free flowing and encourage entrepreneurship

and innovation. Google needs to focus their attention on quality managers, in order to sustain

this type of “boss-less” structure, that allows the innovation needed in their rapidly changing
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environment. Without this, Google employees won’t have the strong cultures, shared values, or

the trust that is necessary to flourish in this volatile environment.

Traditional control mechanisms based on strict rules and close supervision are

inadequate for controlling behavior in conditions of high uncertainty and rapid change”,

according to our text (Daft. Page 366). As employees at Google need freedom to be innovative,

it’s important that the organizational structure stays flattened with less vertical hierarchy and

more flexibility. Further, Google needs managers that can implement and support this structure,

where “managers act primarily as mentors, role models, and agents for transforming values”

(Daft. Page 366). Google employees need support, trust, and managers who can help foster their

creativity.

The first step should be to obtain information from employees using surveys, and

interviews. This will help Google to figure out what employees are lacking in terms of

management, how the company can help them to do their jobs more efficiently and provide

them with the support they need to flourish. Second, start placing value and promoting those

who understand the importance of motivating and retaining good employees, whose values align

with the organization. With control structures that rely on types of clan/self-control, you need to

find employees who are committed to the organizations purpose, in order for this type of control

to be effective. The most important thing to ensure these controls can be effective, is having

strong leaders in place that can create and sustain a culture that’s based on values that guide

actions for the corporate good (Daft. 367). Google employees need to be innovation and

supported, not micromanaged and it takes the right managers to give them that.
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Align Values & Repair Image. With Googles dependency on Internet search, it’s vital for the

company to expand into developing markets as well as penetrate existing markets. Foreign

markets are some of Googles biggest markets, even larger than markets in the U.S. and huge

amounts of profits have been coming from oversees. However, strained relationships in these

larger markets like China and Europe, are leading to huge missed opportunities for the company

and resulting in a damaged reputation. Google has had an increasing amount of criticism over

the years about the way it conducts online business and faces litigation from multiple countries.

With these increasing concerns and criticisms, Google has become the opposite of their

slogan “don’t be evil”. People are starting to see them as monopolistic bully’s that will do

whatever’s needed to get ahead. With all the back and forth between Google and foreign

governments, the company isn’t leading by this example. I would recommend taking a look at

their core values and asses if they are in line with business activities. Further, I would work

foreign governments and conform to the preferences of the users. Whether it be censoring, ad

placement or privacy Google really needs to step up its interactions and compliance before it

burns all of its most profitable bridges. With increasing concerns about online user privacy, it’s

an opportunity for the company to increase privacy measures, protect their users and fix their

reputation on a global level.

Conclusion & Implications. As a manager, I would start by aligning image with their slogan,

“Don’t Be Evil” and focus on incorporating the slogan internally. With Google’s reputation

dwindling in forging markets, its imperative that the company repair these relationships by

aligning business practices with their wanted image. In order to do this successfully, they must

start by assessing the behaviors of management and ensuring that all behaviors are ethical and
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coincide with their desired practices. Management could initiate this by conducting surveys and

utilizing interviews. Then, I would conduct companywide ethics trainings, to demonstrate the

importance of good behavior and following company conduct. I would also focus my attention

on employee and management support by finding out what’s lacking and where I could improve.

I think this would go a long way within the organization, and show our dedication to the

employees and their future. From the feedback, I would focus on ensuring that the company had

quality managers that could support the workforce and give employees what they need to be

successful.

I do believe Google has the resources and skill needed to overcome these challenges they

face as an organization. If they address the concerns from foreign governments, it will go a long

way in mitigating their reputation and prove that they enforce their values. In term of their

structure and growth, they seem to be addressing these issues with their recent shift to

Alphabet. Further, Google employees are dedicated to the company, so I believe if the

management issues are addressed, it will go a long way in preserving their culture. In closing, it’s

imperative that Google focuses on aligning their goals with their values and creating a safe

environment for their employees. Once relationships are repaired and trust is built in foreign

markets, Google can mend its reputation, and start to repair global market share.

References

“About Google”. Google. Web. February 19, 2017. Retrieved from:

<https://www.google.com/intl/en/about/our-story/>

Chaffey, Dave (March 2017). “Mobile Marketing Statistics Compilation”. Smart Insights.
Web. February 19, 2017. Retrieved from:<http://www.smartinsights.com/mobile-
marketing/mobile-marketing-analytics/mobile-marketing-statistics/>
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Daft, Richard (2016). “Organizational Theory & Design” 12th Edition. Cengage Learning.

Ginny, Marvin (December 2014). “7 Challenges Facing Google With The Rise Of Native
Mobile Advertising”. Web. March 12, 2017. Retrieved From: <http://marketingland.com/google-
search-mobile-native-ads-111819>

Jeff Dyer. Nathan Furr. Curtis Lefrandt. (2014). “The Industries Most Plagued By
Uncertainty”. Web. February 10, 2017. Retrieved From: < https://hbr.org/2014/09/the-
industries-plagued-by-the-most-uncertainty>

Lombardo, Jessica (January 2017). “Google’s HRM”. Web. February 10, 2017. Retrieved
from:http://panmore.com/google-hrm-recruitment-selection-retention

Parietti, Melissa (March 8, 2016). “The World’s Top Ten Technology Companies”. Web.
February 10, 2017. Retrieved from:
<http://www.investopedia.com/articles/investing/071515/search-engines-compete-google.asp

“Investor Relations: 10-K Form”. Google. Web. March 12, 2017. Retrieved from:
https://abc.xyz/investor/pdf/20161231_alphabet_10K.pdf

Walt, Vivienne (April 2015). “Google’s legal woes in Europe might only just be beginning”.
Fortune. Web. March 11, 2017. Retrieved from: <http://fortune.com/2015/04/16/google-
europe-regulators/>

“100 Best Companies To Work For”. Fortune. Web. February 10, 2017. Retrieved from:
<http://fortune.com/best-companies/>

“2017 Best Places to Work” Glass Door. Web. March 11, 2017. Retrieved from:
<https://www.glassdoor.com/Reviews/Google-Reviews-E9079.htm>

Appendix

A) Googles Organizational Chart:

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Retrieved from: http://safehouseweb.com/facebook-and-google-an-org-chart-infographic