From Google Earth to Google Alerts - Case Study Example

The Googley Way of Working within Google’s Organisational Culture Founded in 1998 by Larry Page and Serge Brin and operating from a garage in California, Google has emerged as a corporate structure with approximately 7,000 employees operating from Googleplexes from around the globe. Staff increases corresponded with an escalation in services provided. When Google first started it was merely a search engine. Today, Google offers a number of search services ranging from Google Earth to Google Alerts which facilitates up to the minute information. This growth in staff and services run parallel to a system of organizational culture values predicated on creativity and innovation (Webber 2008, 2). In order to understand just how Google has revolutionized organizational culture it is necessary to explore the culture that existed prior to Google’s approach to management and organizational behaviour. In the immediate aftermath of the First World War, General Motors emerged as one of the world’s largest corporate structures. The emphasis was on controls via finance and statistics, mass production, assembly lines organized by virtue of science, automatic divisions and standardization. Mass production and mass distribution gave way to consumerism which was partly facilitated by credit facilities, self-services, aggressive advertising, brands and media networking (Girard 2009, 1). By the 1980s the Toyota Motor Corporation epitomized industrialized corporations which emphasized the quality of goods together with a “corporate culture of continuous refinement” (Girard 2009, 1-2). By all accounts, Google is restructuring management values and the way that companies’ staff work as well as how “people are managed” and how “organizations are controlled” (Grirad 2009, 2). Google’s organizational culture was entirely unique from the beginning. This unique organisaitonal culture grew along with the company. Initially employees used desks that were no more than doors set over sawhorses and their chairs were typically exercise balls made of rubber. A company chef was hired to prepare healthy meals for the staff and a couple of times a week, the employees would engage in roller hockey in the parking lot (Dyck and Neubert 2008, 194). Other signs of Google’s unconventional work environment are found at Google’s headquarters where “high tech” Japanese commodes with heated seats are installed (Daft 2009, 382). Additionally, a flier on the restroom door reads “Testing on the Toilet” and true to form a quiz calculated to stimulate the brain is offered to software engineers at intervals spanning over a few weeks (Daft 2009, 282). Essentially, these kinds of tactics are manifestations of how Google keeps its employees thinking in untraditional ways. This kind of informality in organizational structure cultivated a spirit of camaraderie and allowed for the free exchange of ideas (Dyck and Neubert 2008, 194). Moreover, implicit in this organizational environment is a high level of trust and regard for employees (Grote 2009, 2). This kind of organizational behaviour not only speaks to informal management, but given Google’s growth rate and success, it also validates the empowerment theory. Informality and an increase in personal relations has the effect of empowering subordinates. It has been suggested that when subordinates are empowered, empowerment practices become “principal component of managerial and organizational effectiveness” (Conger and Kanungo 1988, 471). Moreover, it has also been suggested that when organizational controls and authority are shared “the toal productive forms of organizational power and effectiveness grow” (Conger and Kanungo 1988, 471). Additionally, informality in the context of power sharing fosters team spirit and team building and plays a significant role in development group dynamics and “maintenance” (Conger and Kanungo 1988, 471). This form of informal management would go unchecked despite the introduction of a CEO in the appointment of Eric Schmidt in 2001. Outsiders, however continued to point out that Google was characterized by an ill-defined organizational structure. Schmidt when asked how Google went about making key decisions, could not come up with a reply immediately. He did however point out that Google was managing its affairs in an entirely new way, “breaking all the rules – a triumvirate of equals with no hierarchy” (Dyck and Neubert 2008, 194). Aside from having no clear leader, Google’s management style is characterized as a combination of structure and chaos. Engineering in particular is regulated in great part by “organized chaos” (Grote 2009, 2). Teams are kept at relatively small groups ranging anywhere from between 3 and 4 individuals. Optimum freedom is conferred on these individuals for the purpose of developing goods and services. Even so, when an employee joins Google they are subjected to training with respect to pivotal material that will be utilized in developing software relative to security, compilation, project management among others. Although introduction to this material is subjected to a formal and an entirely conventional “bureaucratic framework”, subsequent management is entirely open and innovation centric (Grote 2009, 2). With the exception of key words for advertising purposes and algorithm ranking, all Google members have liberal access to all code. As a result, any Google member is at liberty to introduce new concepts out of any part of the current code. All Google members typically commit at least 20 percent of their time working on new ideas and development teams spend at least 80 percent of their time implementing those ideas (Grote 2009, 2). As Grote (2009) explains: People are hired for their brains and their “Googley” attitude and once they have passed the very high Google hiring bar, they are left to do their own thing (2). This method of managing and working within Google is compatible with the chaos theory for a number of reasons. The chaos theory takes the position that organizations are comprised of “open, dynamic, nonlinear” systems that are subject to “internal and external forces which might be sources of chaos” (Thietart and Forgues 1995, 19). Chaos is therefore random but essentially a highly determined course of conduct. The organization is said to benefit from the various “interactions between forces of stability and forces of instability” that the organization is naturally characterized by (Thietart and Forgues 1995, 19). Instability originates from the initiatives of actors within the organization. When these actors take initiatives it necessarily creates disorder within the organization. On the other hand, instability can also arise out of multiple management systems (Thietart and Forgues 1995, 19). In other words, chaos theory challenges the traditional method of thinking that we live in an entirely ordered and structured universe. In this regard, the chaos theory exposes the chaotic and complex nature of the organization and presents it as entirely complicated, “nonlinear, and dynamic” unit (Rabin, Miller and Hildreth 2000, 475). This new way of thinking has infiltrated the science of management and organizational behaviour (Rabin, Miller and Hildreth 2000, 475). This is hardly surprising since the world we live in has turned into an essentially knowledge-based society. Understandably, modern society and its emphasis on knowledge calls upon us to change the way we think regarding innovation particularly in the larger business environment (Nonaka 1994, 14). Google, with its lack of hierarchy in management and its confidence in employees particularly with respect to creative freedom is a manifestation of the profound impact that the chaos theory can have on organization and management effectiveness in an organization that harvests and distribute knowledge to the world at large. The new emphasis on knowledge compels us to think in entirely different ways about innovation regardless of whether it is technical or product oriented or organizational or strategic in nature. Essentially, the chaos theory engages inquiries into how knowledge is processed and how that knowledge is created. As Nonaka (1994) points out: Such a shift in general orientation will involve, among other things, a reconceptualization of the organizational knowledge creation process (14). Ultimately, priorities have shifted for Google in a way that is entirely consistent with the chaos theory. The focus is on the manner in which the organization interacts with the external environment rather than how it functions internally. This is necessary for the harvesting, creating and distribution of knowledge which are perceived are far more significant for understanding the organization. As Nonaka (1995) explains: Innovation, which is a key form of organizational knowledge creation, cannot be explained in terms of information processing or problem solving. Innovation can be better understood as a process in which the organization creates and defines problems and then actively develops new knowledge to solve them (14). Traditionally, organizational science dictated that organizations were primarily concerned processing information or solving problems. Capitalizing on this new way of looking at the universe, Google has employed what is now perceived as the Googley way of working. This Googley way of working is grounded in the chaos theory, which is in reality a simple and open way of managing systems and people (Rabin, Miller and Hildreth 2000, 475). The chaos theory is suitable to Google because its employees are paid to think, to experiment and to take risks. Mistakes are inevitable, but Google takes the position that mistakes are useful for learning (Googling Out of Control 2008, 25-27). Also implicit in Google’s management style is the adaptability culture which is characterized by strategically focusing on the “external environment” by the application of a flexible approach as a method for meeting the needs of customers (Daft 2009, 382). The adaptability culture thrives on encouraging entrepreneurship, normative values and beliefs that are supportive of the organization’s ability to identify, interpret and transfer environmental signs into “new behaviour responses” (Daft 2009, 383). Organizations that subscribe to the adaptability culture respond rapidly to changes in the environment and also create change. In the final analysis, the adaptability culture values and rewards, creativity, innovation and risk taking (Daft 2009, 382). In Google’s adaptability culture, mistakes are not seen as something to penalize employees for. For instance when its vice president, Sheryl Sandberg’s mistake resulted in a loss in millions of dollars, Page accepted her apology but said that if the company’s employees did not make mistakes, it would mean that they were not “taking enough risks” (Daft 2009, 382). Clearly, Google is detached from the conventional concept that systems management and thinking is grounded in the concept that management dictates what should and will occur (Miller 2004, 109). Hamel (2000) maintains that what is ahead of us cannot be predicted with any degree of accuracy. Therefore, “when it comes to predicting the future, humility is a virtue” (Hamel 2000, 119). This is particularly so in management systems where software is crucial to the organization’s business objectives. Managers are obliged to shed itself of the bureaucratic method of managing systems. Management cannot take control, nor can they predict outcomes or what measures to be taken in order to obtain specific outcomes (Miller 2004, 111). Essentially, creativity and innovation cannot be dictated, neither can outcomes be predicted with any degree of precision. Google focuses its attention and efforts on recruiting and motivating “the best and brightest” (Vise and Malseed 2008, 256). In line with the culture against conventional management, Google announced that it would be introducing the Founders’ Award which would allocate millions of dollars in stock to teams that came up with the “best new ideas” (Vise and Malseed 2008, 256). The idea is for the retention of innovators and entrepreneurs who might be compelled to take their talents and skills elsewhere (Vise and Malseed 2008, 257). For the most part, Google is certainly a mammoth success story, lending weight to the validity of the chaos theory as a management tool. In 2003, Google which generates revenue from advertising, achieved sales amounting to US$1.5 billion with US$106 million in net profits. In 2006, the sales figure increased to US$10.6 billion with net profits climbing to US$2.9 billion. Revenues for 2009-2011 were predicted to be US$30 billion with profits at US$7.8 billion (Moyer, McGuigan and Kretlow 2009, 257). Regardless of its success, Google, like the rest of the business world is feeling the effects of the current financial crisis. The financial crisis is a true test to the durability of the chaos and empowerment theories as well as to the adaptability culture. Google’s rapid growth is also testing these theories and cultures. Google’s headquarters once housed only a few hundred employees. This number rapidly increased to over 20,000 (Daft 2009, 382). The current global economic crisis and the rapid growth that Google experienced culminated in management shifts in strategies and policies. There is now a “stronger top-down management” as well as greater control and regulation of “risks and costs” (Daft 2009, 382). There is also a relaxation of the “anything-goes culture” as Google seeks more effective ways of surviving the economic downturn (Daft 2009, 382). Even so, Google is not letting go of its chaos, empowerment and adaptability culture easily. It continues to make a concentrated effort to hold on to the core of its management culture. After all, the company’s success was built on innovation encouraged by independence and creative freedom. This culture has so far thrived under chaos, adaptability and employee empowerment. Bibliography Conger, J. and Kanungo, R. (Jul. 1988) “The Empowerment Process: Integrating Theory and Practice”. The Academy of Management Review. Vol. 13(3): 471-482. Daft, R. (2009) Organization Theory and Design. Cengage Learning. Dyck, B. and Nuebert, M. (2008) Management: Current Practices and New Directions. Gengage Learning. Girard, B. (2009) The Google Way: How One company is Revolutionizing Management as We Know It. No Starch Press. “Googling Out of Control: Can Google’s Chaos Management Style Ensure Continued Success”. Strategic Direction, Vol. 23(8): 25-27. Grote, G. (2009) Management of Uncertainty: Theory and Application in the Design of Systems. Springer Publishing Group. Hamel, G. 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