Google Organization Analysis

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Organization Bound Condition Maria Khisameeva David Maes Amanda Nielsen Kitti Tumbasz 10A Content 1. Introduction 2 2. Assessment2 Background information2 SWOT analysis3 Organizational structure3 3. Baseline4 Problem statement4 Internal events causing change5 External events causing change5 4. Components6 Cultural analysis of markets6 Goals of the project7 Levitt’s diamond7 5. Down to specifics / Implementation8 Resistance to change analysis8 McGregor Theory X/Y9 Kurt Levin’s’ 3 Phases Change Management Model11 step model12 6. Evaluation13 7. Sources 14 1. Introduction By looking at today’s market it is noticeable that innovation and fast reaction on the market changes is one of the key-components for success. During our research we have realized that even the fastest-growing company in the world – Google – is having difficulities, therefore we decided to look into the problems of the organization and propose some changes that would protect the company to be “too big and too slow”.

As our main structure the ABCDE strategic model has been used in order to cover up the whole process. Within that several other organizational theories have been used, such as Lewitt’s Diamond, the 3 step process, McGregor’s X/Y theory, Kurt Levin’s’ 3 Phases Change Management Model and John Kotter’s 8 step model in order to analyze the problem and work out a possible solution for the company’s problem. . Assesment Background information Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. The company`s core business is search advertising, which accounts for 90% of their revenue, therefore Google is being considered as “the world’s most popular Internet search engine” .

Besides that the company offers online productivity software, such as the Gmail email service, the Google Docs office suite, and as a try to challenge the market leaders of social media – Facebook and Twitter- the Google+ social networking service. It also offers applications, such as the Google Chrome web browser, the Picasa photo organizing software, and the Google Talk instant messaging application. The company is the leader of its mobile operating system, called Android and it ownes the biggest video-sharing site, Youtube.

SWOT analysis Strengths * strong brand name * continous innovation and growth * word-of-mouth publicity * broad target market * leader in more different markets * challenger in several markets * a chain of products * significant growth| Weaknesses * dependent mostly on its search based marketing * data protection issues * size issues (growes very fast) * products and services integration is quite heterogeneous| Opportunities * because of the broaden product range it is always possible to reach new roups/segments * new products * new innovations * new acquisitions * increase internet usage| Threats * lost control over the giant organization * increasing level of competition in every market segments | Organizational structure The founders of Google named the search engine they made “Google,”  this was meant as a play on words “googol,” the mathematical term for a 1 followed by 100 zeros. The original idea was that it should reflect immense volume of information which they would create in Google. Looking at the organization structure of Google the name and meaning seems appropriate since it is so complex.

Google is using a functional organization structure. In this structure, the market does not see the key persons behind the product. Obviously the top four or five persons are not attached to any product. People down the line are not given appropriate weight by the market and market runs them down also more easily. Lack of visible product champions, which other start ups have, is probably making things difficult for Google products in the market. The public does not know. Maybe it is better that Google reorganizes its management structure on product basis and makes the head of the product organization responsible for success of the product.

Then he is there in public all the time to promote the product, to launch offensive actiity to promote the product and to defend the product in market competitive propaganda. An alternative could be setting up of subsidiary companies for various product categories. This will create an entrepreneurial spirit among the personnel associated with each company as their future is now linked with the performance of the subsidiary and their incomes depend on the success of the products of their subsidiary company. They cannot depend on Google’s search success to mask their failures in market place. . Baseline Problem statement According to the chosen article: “The problem was that the company had ballooned so quickly — it now has more than 31,000 employees and $27. 3 billion in revenue so far in 2011 — that it had become sclerotic, at least by the standards of Silicon Valley. A triumvirate of Mr. Page, Mr. Brin and Mr. Schmidt had to agree before anything could be done. The unwieldy management and glacial pace of decision-making were particularly noticeable in the Valley, where start-ups overtake behemoths in months. As chief executive, Mr.

Page is facing challenges on several fronts. Though Google remains immensely powerful and successful, it is an aging giant that moves a lot slower than it did when it was a hot start-up. It is losing employees to the new, hotter start-ups, and is being pushed around by government regulators and competitors like Facebook, Apple and Amazon, which are all vying for people’s online time. While Google has had success in new areas like mobile and display advertising, it has struggled to branch out into other businesses like television. ”

Internal events causing change As mentioned in the problem statement, the organization has grown too fast, that resulted in a very confusing organizational system that cannot be controlled. The company is reacting slower and this is not acceptable since in case of an innovative organization, especially operating in this fast moving world of the Internet cannot allow losing its dynamics in the field of reacting on the market changes. By looking at the drawing of the largest companies on the world, we can note that Google has the less organized system.

This issue is already having effects on the company’s success and in order to keep up with the market, the company has to change its structure. External events causing changes Google is being influenced by many external impacts, mainly by competition but the company is also having issues with the protection of consumers’ privacy. First of all, the growing competition in social media, such as the success of Facebook and Twitter is disturbing for the company, because the nformation exchanged over the social network is walled off from search engines — and increasingly lucrative territory for ads. Google also faces competition from Microsoft’s searching engine the “Bing”, which is covering a small part of Web searches in the United States, 12. 7 percent, compared with Google’s 62. 6 percent. But the main issue is, that the Bing’s share is increasing, while Google’s has been decreasing. Besides that Google’s acquisition of the software developer Android in 2005 gave the company stronger access to the mobile phone market.

But the company is experiencing growing competition on this market as well, since Microsoft has just released its operation system as well. The company has received numerous criticism on its privacy and copyright protection and it also was the subject of an European antitrust investigation into whether it has shortchanged its competitors. Therefore the company needs to have a more concrete and transparent organizational structure in order to fight competition on its different markets and handle any other kind of problems. 4. Components

A mission and vision is important as it provide employees with a picture of where the organization is going and this is an asset of a bigger value system, this provides directions on how the organization will respond to the overall business landscape and how the business will position itself among its competitors. Creating this idea for the future is essential for when persuading the board of directors and motivating the employees to create a rigorous strategic plan with multiple tactical elements. Cultural analysis of markets

First let start with giving you an idea of the main offices of Google in the world As you know the product/ service that Google offers is accessible everywhere in the world. But when looking at where the most offices are we can determine which market areas in world are the most important for Google as the they make their profit through advertisement and want then good consumer relations with those clients so that’s why they have a lot of offices spread over the world, But the biggest on the European continent are in Zurich and Moscow.

When looking at the map we can see that the main concentrations of the offices are in the East coast of the United States and Europe. Europe has on itself the greatest linguistic and cultural diversity of the western world. Goals of the project To find a new organizational structure that brings more chance of achieving the goals for the future in a best way. The future: As the most watched, scrutinized, and reported-on company in the web space, Google’s every move is analyzed by competitors big and small.

Its rapid expansion into areas beyond search and seemingly insatiable appetite for acquisitions has the company strongly positioned to dominate numerous key parts of the Internet. However, we should be reminded that not everything Google touches turns to gold; for example, the demise of Google Answers and the demotion of Froogle. Stay tuned for what are sure to be hundreds of announcements in the years to come. Leavitt’s Diamond This model has been made to show that each element of an organization (people, tasks, structure and technology) are independent.

Which means that in case of any changes to one of those elements will not occur in isolation as when changes are made in any other area of your organization, it will have an impact on the entire organizational system. For example, a change in the organization’s structure will result in an alteration in communication patterns between levels/departments/employees (affecting the people component) while the introduction of new technology could require an entirely new set of goals (tasks) to be formulated. . Down to specifics / Implementation Resistance to change analysis The main objective would be to restructure the organization structure of Google to make it less complex and thereby adapting it to the proper format. This should be done with the existing culture of Google in mind so that the change would not be to major for the employees. The reason for choosing this change strategy is to make convert the very diverse business into a more suitable one.

This would create some resistance with the employees which all changes usually does in businesses but if the composition, planning and structuring is done well the change would be minimal for the employees and thereby getting the restructuring done easier. Ones the employees adapts to the change, which will be done by going through the change circle as seen below, then Google will be able to benefit from the restructuring. This might lead to some new needed changes within the organization.

But as a starter restructuring the organization would be first priority. McGregor Theory X/Y McGregor argues that there are at least two approaches that managers use to manage their employees. These approaches are consequences of two different views of human nature: negative (“Theory X»), and positive (“Theory Y”). Analyzing the relationship of managers to staff people, McGregor understood that perception of managers on the nature of individuals is based on various assumptions which are shown on the table below.

Theory X – is an authoritarian view, leading to direct regulation and tight control of all the above variables of organizational behavior. This theory assumes that people are mostly in need of coercion, strict and constant supervision and encouragement for good work involves punishment or the fear of possible punishment. In the context of Maslow, those managers who follow Theory X, convinced that people need control the lower levels. According to McGregor theory this is the most common. In our case Google management is using Y model.

In this company managers prefer to flatten the hierarchy in order to give more value to geek talent. “The tech ladder is far more valued than the management ladder,” Merrill said. Performance management across the entire company is open and transparent. “Everything is a 360 [degree] public discussion,” Merrill said. A distributed, public performance management system automates the complete process, requires discussion and provides data and calibration. Employees of the validity of the theory of higher Y and a promoter of ideas broad participation by all members of the rganization in the process of preparing and making decisions, granting employees greater responsibility and opportunity to take risks, but also pointed out the importance of optimal group relations as a factor in individual motivation. The clarity and simplicity of the theory of McGregor provoked widespread recognition and criticism for a simplified approach to the problem. Kurt Levin’s’ 3 Phases Change Management Model Model of organizational change, developed by American social psychologist Kurt Lewin is still quite popular and widely used in practice management organizations.

The essence of the model is that in an organization, there are two groups of factors whose interaction maintains the balance and stability or change. The process of change involves strengthening or driver, or a weakening of the constraints, or a combination of different factors, one way or another leads to an imbalance. With regard to the activities of managers, they should strive to reduce the impact of limiting factors to a greater extent than trying to make efforts to encourage an increase in strength, since it would lead to an increase in resistance.

Lewin believed that the change process goes through three stages. Unfreeze: At this stage, members of the organization are informed about the real situation in order to encourage them to recognize the need for a change and search for new solutions. It also should provide information on new methods and their possible consequences. Transition: At this stage the management should process all changes and activities, develop new behavior and values. Freeze: The final stage, were all new changes are strengthening and adapted.

Employees must verify the effectiveness of the new, to adopt new methods to support their use This element offstage is very important the only question is, how deep the “freezing” is going to be. 8 step model John Kotter introduced his eight-step change process in his 1995 book, “Leading Change. ” This is the model, which can help organizations to successfully manage changes and  raise the level of knowledge in the field of change management and of course  tell in which direction and what kind of steps to do.

Step One: Create Urgency To analyzing the market situation, the competitive position of the company, identify and analyze actual and potential crises, opportunities) Step Two: Form a Powerful Coalition To make a powerful coalition of reformers (joint efforts of influential members, encouraging the activity of the participants formed teams) Step Three: Create a Vision for Change

Create a vision (creating an image of a desired future with a view to increasing the activity of employees, developing a strategy for achieving the vision) Step Four: Communicate the Vision To promote the new vision (using the accessibility statement, metaphors, analogies, examples of models of the new behavior team of reformers) Step Five: Remove Obstacles Create the conditions for implementing a new vision of life (changing structures and responsibilities that are contrary to the new vision, encouraging creativity and risk-taking) Step Six: Create Short-term Wins

Plan and achieve the immediate outcomes (mandatory planning of first steps, rewarding and promoting early success) Step Seven: Build on the Change Attach to achieve and enhance the transformation (creating an atmosphere of trust in new approaches, changing staff and disseminating of successful experiences through the whole organization) Step Eight: Anchor the Changes in Corporate Culture To formalizing the rules of conduct, build a relationship between performance and rewards, creating conditions for development of new qualities of employees). 6. Evaluation

Google has a very different organizational structure than most companies. It is made up of many different share holders, branches and different categories these things makes it hard to keep the organizational structure defined throughout. Google’s culture is informal, equal, involvement, and empowerment and it has an aversion to bureaucracy. They feel that if they operate with very little bureaucracy it will encourage their engineers to develop good ideas at a faster pace. This might be true be the employees including the engineers needs some ground setting and defined structure to be able to keep the bigger picture.

Therefore it would be a solution for Google if they chose to divide their organization into different categories thereby making the organization structure more horizontal than vertical. The structure of an organization is meant to complement the company’s business goals and objectives. It is also the foundation of the company’s culture and as such affects employee behavior, performance, motivation and cooperation. Effective organizational structures are adaptive to process requirements and possible changes while trying to optimize the results of the input of manpower and resources.

Organizational structures should allow for flexibility, encourage employee creativity and effectively utilize the skills and abilities of the workforce. A functional organizational structure groups employees based on the positions they hold or by the tasks they perform. The benefits of structuring employees by common job titles and activities include better communication among specialists, increased teamwork and shared knowledge, and it allows for quicker decision-making. A functional horizontal organizational structure would therefore be the best solution for Google. . Sources http://www. google. ru/imgres? q=theory+x+and+theory+y&um=1&hl=en&newwindow=1&tbm=isch&tbnid=rYbrJ1LCU65GzM:&imgrefurl=http://www. betacodex. org/node/508&docid=cQsQGFU3-jPPFM&imgurl=http://www. betacodex. org/sites/default/files/theory-x- http://topics. nytimes. com/top/news/business/companies/google_inc/index. html? scp=1&sq=google%20organization&st=cse http://www. google. com/intl/en/about/corporate/company/execs. html http://www. nytimes. com/2007/10/13/technology/13google. html

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