Report on Google and Yahoo Essay Example

Google has become one of the most popular search engines globally. (Source: Google corporation website, 2013)

Yahoo, similar to Google, is a widely known global company. However, it is not primarily renowned for advertising or its web search engine. Instead, Yahoo provides a variety of internet services and products without being specifically acknowledged for any single aspect. Established in 1994 by Stanford University PhD candidates David Filo and Jerry Yang, Yahoo initially served as a means for them to organize their preferred website links. As they continually added more links, they organized and categorized them into subcategories, leading to the eventual creation of Yahoo Inc. Presently, Yahoo assists users in finding what they desire and uncovering unexpected marvels (Yahoo corporation overview and Yahoo media relations, 2013).

The topic of discussion is organisational structure and design.

Organizational structure refers to the formal system of task and reporting relationships that control, coordinate, and motivate employees in an organization (Buchanan and Huczynski 2010, pp. 453). It involves arranging jobs within a company and examining how different tasks and functions are performed by individuals who interact with one another. The primary objective of this structure is to effectively organize and distribute work among employees, ensuring their efforts align with the organization's goals and objectives.

Despite their relation, structure and design in a business have distinct differences that managers must recognize to effectively shape their organization. The present focus of organizational structure contrasts with the future-oriented nature of design. Designing an organization is akin to designing a car or building as it involves planning. It falls under the responsibility of the organization's CEO to develop plans

for how the organization should function and improve, known as organizational design. Through effective design, the CEO can identify and arrange all tasks, functions, and goals of the organization by grouping and organizing job positions, departments, and individuals to ensure optimal effectiveness.

In summary, organisational structure and design are vital elements for companies as they assist in identifying the company and collaborating to complete tasks and achieve goals.

Google Inc. has a unique hierarchical structure that sets it apart from other multinational corporations. This structure allows for employee autonomy and initiative without constantly seeking approval from superiors. Stacy Savides Sullivan, the Chief Culture Officer at Google Inc., emphasizes the importance of fostering a collaborative environment that is free from hierarchy. This intentional design by Google Inc. promotes a flat hierarchy rather than it being coincidental, highlighting its commitment to these core values. Given that Google Inc. is constantly innovating and developing new products, having a flat hierarchy aligns with its requirements.

Brooks (2009) states that Google Inc. combines centralisation and decentralisation by granting employees a significant say in decisions related to their work. This is demonstrated through Eric Schmidt's 70-20-10 approach, which proposes that individuals dedicate 70% of their time to their primary role, 20% collaborating with another team, and 10% on innovative endeavors (Quentin Hardy, 2011).

Regarding formalisation, Google Inc. seems to have a low level of it because being driven by innovation makes it unlikely for the company to have strict procedures. Formalisation is the term used to describe the written policies, rules, and procedures that are used to coordinate and regulate the work done by individuals or groups

within an organization (Brooks, 2009). This can also be supported by Eric Schmidt's 70-20-10 system mentioned earlier.

The hierarchical structure at Google Inc. is suitable for the organization considering its industry and employees' preferences. According to Quentin Hardy (2005), the company emphasizes open communication and a networked structure, where the individual with the most insightful data holds the most influence. This approach not only motivates employees by offering them responsibility but also encourages skill enhancement through research to gather the best data and support their claims. Undoubtedly, this structural type plays a crucial role in Google Inc.'s exceptional success.

The organizational structure of Yahoo Inc. differs from that of Google Inc. Yahoo follows a matrix structure with multiple reporting relationships for employees, while Google encourages its employees to take initiative and responsibility in their work without constantly seeking approval from superiors. In contrast, at Yahoo, employees are required to obtain approval from their bosses. Although this structure effectively manages growth, it hinders task and project execution speed within Yahoo—an issue for an internet-based company that relies on speed and risk-taking. The reporting relationships in the matrix structure cause delays in making changes or launching products as clearance from the hierarchy is necessary and time-consuming. Consequently, Yahoo is disadvantaged compared to other companies (Salim Ismail, 2011).

Google Inc. is decentralised, allowing managers to give employees the opportunity to contribute and participate in decision-making. On the other hand, Yahoo Inc.'s matrix structure indicates that it is centralised, with decision-making being concentrated in top management (Brooks, 2009).

Both Yahoo Inc. and Google Inc. have a matrix structure and lack formalization, meaning they both do

not have written policies, rules, and procedures to coordinate and control work within the organization (Brooks, 2009). However, Yahoo Inc.'s new CEO Marissa Mayer is implementing a major change by requiring all employees to work in the office and prohibiting remote work. This determination will undoubtedly impact the company's level of formalization. Considering what was mentioned earlier, this decision appears hopeful for getting the organization back on course.

The organization acknowledges the need for change in response to the combination of a matrix structure and low formalization, which is not beneficial. This change is crucial as it aims to address the aforementioned issues. Margie Warrell (2013) cites Jackie Reses, current HR chief at Yahoo Inc., who emphasizes the importance of physical co-location in fostering unity within the company. Reses states that being physically together is vital in becoming one Yahoo! and that working from home often leads to compromises in speed and quality (Margie Warrell, 2013). This statement aligns with earlier discussions on Marissa Mayer, CEO of Yahoo Inc.'s focus on achieving efficiency and timely completion of tasks and projects.

Leadership and management approach

Leadership is the act of influencing a structured group towards achieving objectives (Buchanan & Huczynski, 2010). Larry Page, CEO of Google, demonstrates innovative leadership qualities through his possession of vision, charisma, and transformational abilities. Alongside Eric Schmidt (Executive Chairman) and Sergey Brin (Co-Founder) at Google Inc., Page inspires and motivates employees by implementing the "20 percent time" program. This program allows employees to dedicate 20 percent of their work time to pursuing their own ideas and projects (Sergey Brin and Larry Page: The genesis of Google video clip,

2004).

According to Mullins (2007), Larry Page can be seen as an effective leader based on this example.

Mullins (2007, pp.364) emphasizes the importance of leaders in prioritizing the improvement of employee skills and promoting teamwork for the benefit of individuals and the organization. Leaders must actively address bureaucratic obstacles that impede individual enthusiasm and willingness to contribute meaningfully.

Henri Fayol states that management encompasses multiple tasks such as planning, organizing, coordinating, commanding, and controlling employees (Brooks, 2009). In essence, management is the process in which managers effectively plan, organize, lead, and allocate resources to accomplish a company's objectives.

According to McGregor (1960), the ‘Neo-Human Relations’ approach encompasses his theories on human motivation known as theory X and Y. Theory X suggests that managers believe employees dislike their work, are lazy, avoid responsibility, and need to be pressured to perform. This implies that managers rely on pressure and coercion to motivate employees and achieve company objectives. Conversely, theory Y assumes that employees are creative, desire responsibility, and can exercise self-direction (Buchanan and Huczynski, 2010). By examining Google's implementation of "the 20 percent time" initiative, we can observe the management approach aligns with theory Y as proposed by McGregor (Buchanan and Huczynski, 2010).

Both Larry Page and Marissa Mayer, the new CEO of Yahoo Inc., possess the qualities of new leadership. However, whereas Larry Page is considered a transformational leader, Marissa Mayer seems to adopt a transactional leadership style. A transactional leader motivates their followers by clearly defining roles and tasks to achieve specific goals (Buchanan and Huczynski, 2010). This can be seen in the

changes she is implementing at Yahoo, including the decision to restrict employees from working remotely.

Yahoo Inc.'s management style can be classified as theory X, according to McGregor's (1960) theory of management. The new CEO, Merissa Mayer, has implemented a policy that requires all employees to work from the office and prohibits working from home. This decision suggests that Mayer believes employees are less productive and motivated when they work remotely, which aligns with the assumptions of a theory X manager.

To sum up,

Google Inc. and Yahoo Inc., two global internet companies, possess different qualities. Google's hierarchical structure is flat and suits its industry well. This distinctive organization motivates employees by giving them responsibility and opportunities to improve their skills through research and data analysis, ultimately leading to Google's ongoing success.

Yahoo Inc., unlike Google, has a matrix type of structure that is not suitable for an industry dependent on speed and risk. While this structure is effective for managing growth, it hinders the execution and completion of tasks and projects in a fast-paced organization like Yahoo Inc. Consequently, this structure puts Yahoo Inc. at a significant disadvantage in comparison to similar organizations like Google.