Organisation Structure and Design: Google vs Yahoo - Essay Example

? Google vs. Yahoo Table of Contents Table of Contents Introduction 2 Organizational structure and design 4Google 5 Yahoo 6 Approach to management and leadership 8 Conclusions 13 Bibliography 17 Stone, B. 2012. Marissa Mayer Is Yahoo's New CEO. Business week. July 16, 2012. 19 Introduction Google and Yahoo are two of the prominent companies in the search engine business (see appendix for more details). Even though Yahoo’s founding exceeds that of the Google Inc. the latter’s growth, profitability, market share, and capital exceed those of the former. Even though, the preliminary business portfolio of search engine, Google has plenty of other business segments such as social networking (Google+), mobile phone operating system (Android), online book store (Google books), personal health records (Google health), etc. On the other hand, Yahoo has search engine business, Yahoo finance, web hosting and E-commerce among others (Helft, and Hempel, 2011:22). Google Inc. started as a search engine on the World Wide Web in the month of September, 1997 by Larry Page and Sergey Brin. On the other hand, Yahoo’s history dates to 1994 when Yang and Filo, students at the University of Stanford in the faculty of engineering, collaborated to device a students’ network as a mode of communication. Mainly, the founders were keen on communication within the institute, but the fame grew accordingly and the search engine thrived globally and presumed a business phase. Since then, Yahoo’s leadership changed among different CEOs thus contributing to success, innovations, profitability, and customer dominance (Hand, 2011:8). However, statistics reveal that the company’s beneficial operations grew during the first decade, dwindled in the year 2008, and inclined before 2010 to presume to the continuous crumble prevailing up to present. First, the manager should focus on the social service that he wishes to deliver to the technology consumer and then establish its vitality in satisfying the desired need of the consumer. A marketing manager working with the Google technology company should ensure that the consumer gains online successes to the services and goods that the company produces to satisfy consumer needs. Secondly, a vital component of marketing is determination of the price of the products, with a closer consideration of the consumers’ perceptions of the products at a given price. Thirdly, the manager adopts to online promotion of the social media products to the appropriate clients. Lastly, he adopts to the component of distribution of the technology products throughout the social media and to the target audience. As a manager, there is the risk company sanctioning because of violating copy right thus; he will always seek originality in all the marketing mix efforts. The growth of Google was phenomenal compared to that of Yahoo (Helft, and Hempel, 2011:25). Until recent times, Google dominated the IT business. In 2005, Google joined the list of 100 most powerful companies in the world. Moreover, Google’s revenues increased steadily. However, the entry of Facebook is causing huge challenges to Google at present. On the other hand, Yahoo is struggling to compete with Google and other IT companies. However, the social media marketing managers do not engage on risky programs that may stimulate rivalry among the competitors. Since the federal constitution closely eyes on any violations to production rights, the managers focus on products with a source of originality and distinction (Helft, and Hempel, 2011:27). It should be noted that Yahoo is trying to establish business alliances with Microsoft and Amazon as a strategy to compete with Google. The processes will eventually establish company successes with an unchallengeable legal stature against possible rivals in the social media industry. In many cases, conflicts may arise to the extent that issued information does not pursue the desired understanding among the employee thus causing misconception and consequential underperformance. Yahoo owns a personnel group of 13,800 throughout its organizational levels (Parry, 2011:56). Despite the company posing as a multibillion dollar entity, yahoo contrasts with Google Inc as it does lease technology from Microsoft Company, instead of solely owning one of its own (Sullivan, 2009:34). Microsoft and Yahoo like companies are currently struggling to compete effectively with Google. Only Facebook and Apple Inc are causing problems to Google at present. However, with the help of innovative business strategies and business alliances, Google is bouncing back strongly. For example, many of the Smartphone manufactures such as Samsung and LG are using Google’s operating system. Moreover, the acquisition of Motorola by Google is a big threat to the Smartphone manufacturers. Many people believe that Google will definitely enter into the Smartphone manufacturing market in near future itself. Google Books is the online book store established by Google recently to challenge Amazon whereas Google plus is the social network established by Google to challenge Facebook. In short, Google is offering stiff challenges to all major IT companies whereas Yahoo is struggling to survive in the market. Organizational structure, culture, management styles, leadership and business philosophies of Google and Yahoo are entirely different. The second branch is the executive, under the mandate and control of the president and it comprises of all the secretaries of the various bodies executing control over various programs of national importance. While Google’s business strategies are meeting big success, same thing cannot be said about Yahoo. This business report analyses the organizational structure, design, management and leadership styles in Google and Yahoo. Organizational structure and design Google Unlike other companies, it is hard to explain Google’s organizational structure in few words. It is difficult to categorize Google’s organizational structure in functional or matrix organizational structures. Google’s organizational structure is made up of different shareholders. Even though Sergey and Page own this company, Larry Page seems to be taking more responsibilities as a leader of this company. The voting system in the director board of this company is peculiar. Two types of voting structure is there; one for the shareholders and the other for the owners. Such a voting system helps Brin and Page to take full control of the company, no matter the number of people invest in this company. The voting system is designed in such a way that Brin and Page will get ten votes when others get only one. Therefore, nobody can take over this company in future also. From 2001 to 2011, Sergey led the company’s technology as the president. On the other hand Nikesh was the Chief Business Officer responsible for all overseas legal, government relations, corporate development. The management should ensure that the workers feel as an integral part of the organization (Catone, 2007:21). Further, research implicates on the necessity to provide a neutral environment within the organization to enhance unity throughout in the departments. The research implies on the necessity for the organization to ensure that the target objectives are set and that the employees have vast knowledge about them (Patrick Pichette is Google’s chief financial officer Google: Management team). Apart from the top management team illustrated in the above paragraph, plenty of executives, managers and employees are working under the top management team. “The number of Google employees has grown from 2,000 in 2004 to more than 9,000 employees in 2006” (Schwartz, 2006).In other words, the manpower strength of Google has increased heavily in just two year period. Getting an employment in Google derives peculiarities in its organizational structure and the complexities in the recruitment process. Google gives more importance to the ability to innovate while they screen the applications of job seekers. The selection process includes; coding contests, mysterious billboards and aptitude tests apart from the interviews which lasts for even months. During the recruitment process, all the job seekers undergo vigorous scanning and only few people become successful at the end. Yahoo (Carol Bartz Gets New Yahoo Org Chart, n.d.) The illustration given above represents Yahoo’s organizational chart. However, Carol Barz was replaced by Scott Thompson in 2012. Scott Thompson unveiled a plan recently that will reorganize the company (Yahoo CEO Outline’s new corporate structure, 2012:5). As per Thompson’s plan, users or consumer servicing division in Yahoo will have three units: Media, Connections and Commerce whereas the advertising division is accountable for all yahoo revenue. On the other hand technology division looks after the infrastructure development. The reporting structure also changed drastically in yahoo. Regional executives are currently responsible for creating contents and selling ads. Even though Scott Thompson worked hard to streamline the company’s progress in the right track, his attempts were not so successful. Moreover, lots of controversies started to revolve around Thompson regarding his educational credentials. As a result of that he was replaced by Marissa Mayer recently. In short, Yahoo had four CEO’s in the last five years. In short, yahoo is currently trying for a comeback with the help of a former Google employee. Different CEO’s who worked in Yahoo in the recent past tried a lot to revitalize the company with the help of different organizational structures. However, none of them was successful. While Google is trying to increase the workforce, Yahoo is trying to reduce the workforce in attempt to survive in the market. Yahoo CEO recently announced that the company would begin lay off 2,000 employees, a 14% cut to its workforce (Yahoo CEO Outline’s new corporate structure, 2012:7). It should be noted that this laying off represents the biggest in the history of Yahoo. Some rumors spreading in the corporate world indicates that yahoo is trying to alternate the investment mode. It is almost impossible for yahoo to compete with Google. Yahoo’s real problem is believed to be its poor organizational structure. Matrix structure is not working for yahoo. Centralized control is not providing by the present matrix organizational culture in yahoo. Accountability of the senior managers is less in matrix organizational structure. Moreover, this structure is preventing Yahoo managers from implementing quick decisions. Social media sites would not survive with the lack of advertising orders from other businesses. The fact is that internet users visit social media to enquire for information, which does not necessarily have to be relative to business dealings. For example, an online user seeking information about an ongoing trend in games, battles, and entertainment may not necessarily keep a business aspect in mind. However, creation of awareness about a business offer via the social channel will stir curiosity and the urge to discover. At this point, the subscriber will enquire for information from the areas of concern (Helft, and Hempel, 2011:29). Closer scrutiny will lead to adoption of the person from a subscriber to an online client swinging in the buyer decision model. During such a time, the advertising media should provide a brief and accurate set of information with a considerable degree of validity. The prospective client will make a purchase at will, without undue influence thus; the social media shall not be liable for any malpractices between the seller, and the buyer. Yahoo managers do not have the freedom to take independent decisions and implement them quickly. They are forced to take approval from the top level even for silly matters (Helft, and Hempel, 2011:29). Therefore, Yahoo Company fails to deliver value to the clientele and eventually rate as less competent when compared to the Google Inc. Approach to management and leadership Yahoo’s and Google’s approach to management and leadership are entirely different even though both have similar lines of business. Yahoo does not have a visionary leadership to look after the business. On the other hand, Google has such a leadership in Larry Page. It should be noted that most of the successful organizations in the current era are investing in the capabilities of its leadership. For example, Steve Jobs was instrumental in Apple Inc’s success whereas Bill Gates is responsible for Microsoft’s success. Larry Page is providing the effective leadership to Google now. However, Yahoo is struggling in the absence of effective leadership. As mentioned earlier, yahoo appointed changed four CEO’s within five years period. Yahoo’s director board is struggling to identify a suitable leader. Carol and Scott, two of the recent CEO’s of yahoo generated huge controversies. Research findings establish that a good team is that which performs obligations in accordance to desired goals of the organization. A prominent shall critically denote good communication amongst them and through it, coordination of performances prevail without unduly delays. Google and Yahoo’s company management should ensure a continuous motivation targeting the overall organizational goals, and supportive approaches to the employees needs. However, Google succeeds in this approach ahead of yahoo, a factor that is further seen in the companies’ profitability margins. The research implies on the necessity of ensuring prevalence of an emphatic environment, which holds on all individual problems as affecting the organization thus calling for equal attention. The management should ensure that the workers feel as an integral part of the organization (Lievrouw, & Livingstone, 2006:24). Further, research implicates on the necessity to provide a neutral environment within the organization to enhance unity throughout in the departments. The research implies on the necessity for the organization to ensure that the target objectives are set and that the employees have vast knowledge about them. The company that implements the above approaches leads effectively and such benefits are borne to Google Company. Even though Google is performing well, some of its management policies are highly questionable. “Google’s high growth rate is creating new HR challenges for the company (Verma, 2006). Human resource management in Google is not so good. Racial discriminations and stereotyping are often taking place in Google’s workplace. Google is often accused for the discrimination towards employees over the age of 40 years. Google is always interested in fresh talents and they are not much interested in the services of aged people. In other words, Google values freshness more than experience (Marketline, 2012:14). It should be noted that careful blending of freshness with experience is necessary for the smooth functioning of a company. Moreover, Google seems to be more interested in politics rather than management at times. They have no hesitation in interfering in politics. “Google has recently started a blog to tagline Google's views on government, policy and politics in America” (Catone, 2007:8). Even though Google forced to withdraw from China recently, its readiness to operate in China generated huge criticisms. In fact yahoo also has no problem in operating in China which is famous for censoring of information. “Its “Do no evil” slogan has been ridiculed, and it was called before the U.S. Congress (along with Yahoo!, Cisco, and Microsoft) to defend its decision to work in concert with Chinese authorities” (Martin, 2008:9). “Google uses competitive intelligence in order to become a more efficient and responsible user of its resources” (Helft and Hempel, 2011:116). Competitive intelligence or CI of Google is much more than that of Yahoo. CI helps Google to forecast the market trends and pulses well and take necessary actions. Moreover, Google has the uncanny ability to silence the competitors with the help of innovative business strategies. For example, Google plus was introduced as an answer to Facebook whereas Google Books was introduced to counter the challenges of Amazon (Brodkin, 2012:45). Android OS is causing big concerns not only to Apple Inc but also to Microsoft. Google has the ability to introduce products and services necessary for the needs of the changing consumers. For example, “Since its launch in 2005, Google Earth has been used to circulate information about various conflicts around the world, including the wars in Iraq and Afghanistan. Its most high profile conflict layer has been the ‘‘Crisis in Darfur” (Parks, 2009, p.536). Google maps, Google ears, Google now, Google Goggles etc are some of the latest products introduced by Google to cater the needs of consumers. Personal health records or PHR is another area in which Google showed business interests recently. They started the effort to develop PHR or Google Health in 2006. Archer (2011) mentioned that “Electronic personal health record systems (PHRs) support patient cantered healthcare by recording relevant information of patients thus; they assist patients in health management (p.515). Green energy solution is another area in which Google recently entered. It has already started investing in eco-friendly power systems. In short, Google leadership is successful in implementing effective business strategies to exploit the favorable market situations (Marketline, 2012:24). They are encouraging sustainable business practices and their corporate social responsibility is well demonstrated through its activities. It should be noted that Google had no hesitation in stopping its business activities in China, when China tried to censor the information passing through Google search engines. Since organizations comprise of factors of production, with labor implying on the personnel of the organization. Through the performance of obligations, different personnel win chances to promotions thus creating a hierarchy of leadership throughout the different positions vested on them, these advantageous performances steered Google’s creativity and software development to curb any intrusion by hackers and counterfeiting organizations (Guerrieri, & Bentivegna, 2011:35). Therefore, leadership becomes a vital aspect in an organization and the communicative correlations to the entire workforce implies on efficiency in teamwork. This context documents on the various activities that occur in the daily undertakings of the organization and the controllable variables. Yahoo adapts to traditional leadership theories which denote leadership as the nature borne of individual and established on the impossibility to create such attributes on a grown individual as illuminated by the great man theory, whilst a contrasting theory of the behavioral implicates on the possibility of an individual to be a leader as shown through traits. This factor has steered the continued development at Yahoo as the company recruited employees over time to undertake and engage on innovative performances that enabled them to develop new products and dominate the search engine market for almost two decades. Participative and situational theories implicate that an individual’s performance and influence in the decision making process is a measure of leadership. Contemporary leadership theories depict the advances of an individual through a series of stages that show possibilities of becoming a leader. Commonly, the contingency, transformational, and transactional approaches derive the best results whenever forecasting on the capabilities of an individual. However, changes in leadership are continuously emerging because of the dynamics in the environment and acquisition of skill, and failures to comply affect a company’s performances as shown in the Yahoo Company. The search engines’ authenticity, building of trust and relationships are the modern approaches to effective organizational leadership serve as intrinsic to innovation and strategic management. The best organizational leader should have the capability of building up healthy and ethical relationships that would interconnect the personnel to a single group targeting to deliver performances to enhance organizational performances. The leader should remain emphatic to employees and avoid biases that would divide the employees. In order to ensure that the company performs obligations to fullest, the leader should bear motivational characteristics and avoid any act that would seem to induce pressure on the personnel. Google argued that Chinese laws are human right violations and hence they withdrew their operations in China. However, Yahoo is ready to obey Chinese laws and they are making significant headways in the country. Yahoo believes that Chinese market is essential for their future growth prospects. In fact yahoo is developing its future business strategies based on the needs of Chinese market. Successful leadership is a big asset for Google. On the other hand, yahoo is struggling even to find a suitable leadership and management team. Team works is encouraged more in Google whereas yahoo seems to believe in individual work. Instead of working as a team, yahoo managers are trying to safeguard their interests. Yahoo tired a business alliance with Microsoft and Amazon as a strategy to counter the challenges of Google. “However despite the best efforts of its competitors, Google holds the majority of the global search engine market, and this does not look set to change” (Marketline, 2012:4). Conclusions Even though Yahoo entered search engine business much earlier than Google, present statistics show that Google is yards ahead of Yahoo. In fact Yahoo is currently struggling for survival whereas Google is trying to swallow smaller companies. Companies should carry out an adequate research on the needs and wants of the consumer before indulging in production of new products. The research should entail their tastes and preferences and draw conclusions on the best approach (Ismail, 2011:1). For example, Yahoo Company should avoid failures by becoming certain of the types of needs that consumers seek to satisfy, and to what extent the market can enhance the returns on investment. The two companies seem to consider the environmental factors that surround the product and possible reactions from stakeholders. Competitors are always pursuing dominance; a company cannot assume the importance of environmental concern, as they will use it for a weapon to fail the company, as it happened in Yahoo Company (Dwivedi, 2008:24). The company considers this fact, and is able to tailor the product such that it tames opposition entirely. The recent acquisition of Motorola definitely shows Google’s intentions to enter into the Smartphone manufacturing market. Failure of organizational structure, poor leadership and management are the major reasons for the failure of Yahoo. Yahoo forced to change many CEO’s in the recent past. However, they never bothered much to change its matrix organizational structure. Decision making is taking place much slowly in yahoo because of the matrix organizational structure. Moreover, the accountability of the middle managers and executives are very less and risk taking attitudes are invisible in yahoo (Marketline, 2012:31). On the other hand, Google has no hesitation in entering the enemy territories to challenge them. Google plus, Google books etc are examples of Google’s courage to counter the challenges of enemies. Yahoo tried a strategic business alliance with Microsoft and Amazon to challenge Google’s dominance in the IT industry. However, Google was successful in countering such challenges with ease. Larry Page is instrumental in Google’s success. He was providing the necessary leadership needed for a modern IT company to counter the challenges. On the other hand, yahoo is struggling a lot in identifying a suitable leadership. Management styles in Google and yahoo are entirely different. In many cases, conflicts may arise to the extent that issued information does not pursue the desired understanding among the employee thus causing misconception and consequential underperformance. Even though there are plenty of criticisms against Google’s management styles, the outcome of this management style is very good. On the other hand, Yahoo seems to believe in participatory management and the employees are exploiting the freedom. Yahoo should make drastic changes in its management styles. Yahoo is still trying to make a comeback with the help of same old products and services. Diversification is not at all taking place in yahoo’s business portfolios. It is necessary for a company to change tactics when competition intensifies. For example, Apple shifted their attention from computer manufacturing to consumer electronics, when they faced strong challenges from Microsoft. On the other hand, Yahoo is still trying their luck with the help of old products and services. Yahoo should diversify its business instead of sticking with the same products and services. Yahoo has a strong customer base, but it is mainly located in United States only (Ismail, 2011:2). Yahoo is not doing anything to spread its customer base across the world. It should be noted that global wealth is currently shifting from US and Europe to Asian region. Yahoo needs to give more attention to Asian region. In short, Google is successful because of its innovative business ideas and strategies. On the other hand, yahoo is struggling because of its reluctance in diversification of business and over confidence in the existing business Product innovation charter entails product planning and strategizing prior to its development. Google adapts to PIC charter, which summarizes all the necessary tools that a company’s development team should draft to come up with new products. The charter ensures that a product developed under it targets to achieving the company’s goals and objectives (Marketline, 2012:34). Thus, the specialists must abide to PIC if they target to ensure their development is for the best of the company once it is in the market. It enables the team to set the product’s objectives in accordance to service sales forecasts in the search engine business (Ismail, 2011:3). A product will product will be of critical importance to a company if only it will draw positive attention from the consumer markets, as it improves sales sales margins. Similarly, Yahoo sales should be profitable to the company at the long run as far as the company is a profit making organization. Further, a significant development is that which enables a company acquire a higher market share despite the ongoing dwindle in performance and continued rate of incompetence against other search engines (Catone, 2007:65). Managers and product developers should focus on improving the market share competently and profitably. Market trends are changing day by day because of the huge changes in science and technology. Yahoo should fine tune its business strategies based on these changes. The challenges that come with every innovation are as well overwhelming. Managers should understand that product charters only reveal prospects and not certainty. The criterion often tends to control development teams to operate within distinct procedures (Brodkin, 2012:76). Therefore, the team may develop a product that suits specific needs. This results to reduction of sales prospects, profitability, and market segment. The company finds realizes to be losing worth an investment to a nonperforming product. It is advisable that companies should endure on practicing the best details a product innovation charter can offer in relation to the company’s goals and objectives. 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The Economic Impact of Digital Technologies Measuring Inclusion and Diffusion in Europe. Cheltenham, Edward Elgar Pub. Appendix Changes in Market Share in February and March, 2011 (Hand, 2011) Outline 1. Introduction (524 words) Background information of Google and yahoo is given in the introduction paragraphs. Different business segments and the history of these two companies are explained briefly in the introduction. Moreover, the reasons for growth of Google and the reasons for the struggle of yahoo are briefly introduced in the introduction part. 2. Organizational structure and design (1024 words) Organizational structure and design of Google and Yahoo are discussed under two different headings with the help of schematic diagrams and theories. This part also explains the frequent CEO changes in Yahoo. Moreover, it also discusses why yahoo is reducing workforce whereas Google is increasing workforce. 3. Approach to management and leadership (964 words) This part explains the leadership and management failure in yahoo and the success of the same in Google. Moreover, the importance of competitive intelligence in Google’s growth is discussed thoroughly in this part. Some of the unethical behaviors and the management failures of Google are also discussed in this part. Leadership failure, lack of diversification and poor business forecasts and strategies are identified as the reasons for the failure of Yahoo 4. Conclusions (487 words) The findings of this research are concluded in the conclusion part. Moreover, some recommendations for the improvement of leadership and management in yahoo are also given in this part. 5. References All the references used in this paper are cited in Harvard format in this section. 6. Appendix Appendix used for writing this report is given at the end of the reference part. Read More