Google's Organizational Culture - Essay Example

In order for a firm to success within the international market, there are many issues that should be taken into consideration by its leaders. Towards this direction, Ashforth (1995) gave the following explanation regarding the qualities/ attributes of a successful leader: ‘Leaders may persuade with logic, but they motivate through emotion; leaders must come to grips with the challenges of emotion, a key driver of productivity, quality and other factors that lead to business success’ (Ashforth, 1995, 97). In accordance with the above, the success of Google should be considered to be the result of an effective leadership and of employees’ active participation. In other words, HRM and leadership are thought to be the organizational sectors that have involved more in the development of Google through the years. However, in case of Google the existence of a HR strategy cannot be considered as the only reason for the success of the firm. In fact, it seems that most organizational policies (also those related with the firm’s HR department) have been appropriately designed and implemented throughout the particular organization. The terms of the HR policy applied by Google can be viewed as included in a general scheme in which ‘a stable income base is provided with more equal and annually increasing monthly wages, while competitive incentives for better performance are offered in the form of more drastically varied biannual bonuses’ (Watanabe, 2000, 321). Generally, it could be stated that apart from leadership, a significant factor towards the success of Google has been its employees. In this context, in order to evaluate the success of the firm either in the short and the long term, we should examine the performance of its employees. Indeed, the study of Ramlall (2003, 60) led to the conclusion that ‘it is only through performance measuring that one can really articulate the benefits of HR strategies in achieving the organization's business strategy and in the process enhance the credibility of the HR profession’. The importance of employees for the success of the business is also supported by Lawler et al. (2003, 12) who noticed that ‘the greatest benefits occur when HR is a strategic business partner that fully participates in both the development and implementation of strategy’. In other words, only in firms where the HR strategies have a primary position in the firms’ daily operation the growth of the specific businesses can be expected to be high. However, it should be noticed that not all organizations have the appropriate mechanisms in order to measure the performance of their employees in relation with the firm’s performance within a specific period. Regarding this issue, it is noticed by Gelade et al. (2003, 383) that ‘in most cases, the performance of an organization is determined by the productivity and efficiency of such higher-level organizational entities as departments, retail outlets, plants, or teams’. Through a more analytical explanation of the factors that led to the success of Google, we could distinguish three particular sectors/ levels in which organizational structure and operation has been proved to be particularly successful towards the rapid development of the firm within its market. These sectors/ levels are: a) Individual level. The organizational policies in Google are considered to be extremely favourable for its employees as particular ‘units’. At this level the following elements have contributed to the success of the organization around the world: 1) HR policies enforce the development of employees’ personality. In fact, personal views and efforts are well accepted and promoted throughout the organization; 2) the attribution of each employee to the firm’s development is recognized and rewarded through appropriate schemes (bonuses, other benefits). In this way the continuous development of the firm’s employees is adequately supported; 3) motivation is given to the firm’s employees in accordance with the firm’s needs, its strengths and the position of its competitors within the market. In this context, the roles within the specific workplace are appropriately distributed throughout the firm’s departments while the performance of each employee is fairly rewarded through customized programs and schemes. Individual level is followed by the group level where all employees are considered to be part of specific teams (either the general team of the firm’s employees or the team of each particular organizational department). At this level, where ‘collective’ strategies and policies can be applied, a series of theoretical models and schemes can be used in order to explain the success of Google in the long term. Indicatively, we could refer to the Fiedler’s Contingency Theory which is based on the following four criteria/ principles: ‘a) there is no universal or one best way to manage; b) the design of an organization and its subsystems must fit with the environment; c) an effective organization also has a proper fit between its subsystems and d) the needs of an organization are better satisfied when it is properly designed’ [1]. The successful performance of Google through the years could be also explained using the Value Chain model of M. Porter (see Figure 1 in Appendix section) or the Kaplan Norton’s Strategy Maps (Figure 2, Appendix Section). In both these models it is made clear that the success of a firm can be based on a series of factors, especially on the firm’s values (employees, stakeholders, policies, suppliers) which should be all appropriately evaluated and developed in order to support the growth of the firm in the long term. 2. Describe some of the negative aspects of Google’s culture. Do you think Google needs to change its culture – and, if so, in what ways? Generally, culture is considered to have a significant role in organizational activities worldwide. It is for this reason that Soutar et al. (1999, 203) suggested that ‘culture is an important idea as it deals with the way people live and approach problem solving in a social and organizational context’. On the other hand, it is noticed in the literature that culture has a unique role within all firm’s operations in a specific region. However, the importance of culture for firms’ survival and development is not appropriately highlighted. Because of the above issues, leaders in HR department are called to explain the reasons of their visit in the Archbishop (Nafpaktos, Rhodes). Apart from these two sectors, other facts and issues can have a significant role in the development of corporate plans in accordance with the needs of the firm and the ability of the potential customer to involve in the relevant procedure. A possible problem for HRM department is the lack of appropriate strategy in order to effectively handle corporate problems leading to the development of corporate activities (1971). Another issue that has been resulted because of the lack of sufficient funds for the payment of various ‘obligations’ in accordance with the firm’s targets in the long term. In this context, we could refer to the study of Mathews (1998, 175) who made the following comments regarding the diversity and its development. ‘before diversity strategies are implemented, the organization's cultural environment, management and evaluation systems should be examined to ascertain if existing personnel/human resources processes will support or hinder diversity in the organization; then, appropriate strategies can be designed to develop and manage diversity based on these findings’. In other words, culture is considered to be a decisive criterion for the improvement of the organizational activity in all its factors. However, the level of involvement of culture in corporate activities is not stable. In fact, it is quite possible that the firm faces significant delays mostly because of the lack of appropriate support by the relevant organization. In the case of Google the application of appropriate diversity strategies cannot be adequately monitored mostly because of the structure and the method of operation of the particular firm (exclusively online presence). On the other hand, it is supported that HRM should be differentiated across organizations using the following criteria: ‘a) the business structure, b) the legislative and employment relationship context, c) the patterns of HRM competence and decision-making and d) the national culture’ (Schuler et al., 1998, 159). Moreover, the constant review of the firm’s performance and its organizational structure could help towards the stabilization of the firm’s growth in the long term. In this context, the firm’s leaders would be asked to take the appropriate measures for the increase of the firm’s performance. For this reason, it is stated by Rowden (1999, 22) that ‘the new business context is prompting managements to take a greater interest in the utilization of their organizations’ human resources’. In accordance with the above, one of the main weaknesses of Google is the absence of a clear HR strategy. This may be the result of the firm’s structure and operational method (mainly online). On the other hand, the above phenomenon could be possibly explained by the fact that the firm’s HR managers do not have the appropriate competencies/ skills in order to develop the appropriate HR policies. It should be noticed that in any case the HR policies chosen by a specific organization should be based on certain principles and that ‘the particular set of HR practices that an organization adopts must fit with other organizational factors in order for it to be effective’ (Harris et al. 2004, 156). We could refer here in the study of Jamrog (2004) who supported that ‘HR professionals need competencies that fall within a three-domain framework: 1) knowledge of business (which includes financial, strategic, and technological capability), 2) knowledge of HR practices (which includes staffing, development appraisal, rewards, organizational planning, and communication) and 3) management of change (creating meaning, problem-solving, innovation and transformation, relationship influence, and role influence)’ (2004, 60). The development of the appropriate HR policy that should promote diversity in the workplace could also influence the firm’s culture in general. Indeed, the existence of a clear HR strategy could help the firm to increase its performance and stabilize its position in the market in the long term. Towards this direction, it is suggested by Parnell (2003, 16) that ‘in many respects, the evidence for the existence of a strategy can permeate an organization; its customers appreciate knowing what a company is attempting to accomplish and prospective investors tend to hesitate when they do not have a clear grasp of the firm's position and future priorities; sharing strategic information with lower-level managers and employees may enhance both job comprehension and organizational commitment; hence, the arguments for a "public" strategy are intuitively obvious’. Apart from the weaknesses of HR policies applied in Google, there are also other sectors – related with the firm’s culture – that should be reviewed. The firm’s relationship with its suppliers could be also possibly thoroughly examined. More specifically, a firm with the success of Google should guarantee the safety of the transactions of its customers and the continuous operation of the firm’s systems (website including several features). But such a target requires a strong relationship between the firm and its suppliers ensuring that all necessary material is available to the firm immediately when a need for a particular product (software or hardware) appears. In this context, the firm’s policy towards its suppliers should be based on the following criteria: ‘making and keeping relationships, implementing new technology in the supply channel, the use of forecasting to increase supply chain effectiveness, outsourcing to increase efficiency, and cost management as a strategic weapon’ (Cook et al., 2001, 14). In other words, suppliers should be considered to have a significant importance for the firm’s growth in the future. Current practices applied by the firm (as part of the firm’s culture) should be carefully reviewed ensuring that the relationship between the firm and its suppliers will be developed and improved in the long term. Generally, it could be stated that the firm’s culture is characterized by the absence of a specific framework (i.e. net of principles applied). However, this fact has not particularly influenced the performance of the firm. Rather the firm continues to be developed globally while its culture as already exists is considered to be successful. The weaknesses observed in the firm’s culture – as noticed above – have not produced – yet – a negative outcome for the firm’s performance. On the other hand, the cost related with any change in existing firm’s practices could be regarded as an obstacle towards the change of the firm’s policies. Of course, such an investment could be later evaluated as particularly valuable, however in the short term any relevant decision could be characterized as not being a priority. The changes in Google’s culture could have many aspects. They should be also based on specific principles and take into account specific variables. In this context, Robertson et al. (1995, 547) noticed that ‘because private sector organizations are driven primarily by market or consumer preferences, organizational effectiveness is more readily measured in terms of efficiency and profitability’. At the same time it is highlighted by Santos et al. (2000, 2) that ‘according to its characteristics, objectives and the resources available (human, physical, financial etc.), each company prioritizes some competitive criteria’. In other words, changes in existed organizational structures should not be applied unless absolutely necessary. The necessity of these changes will be decided in accordance with the targets of the firm in the long term and its current strengths. On the other hand, it would be necessary for these changes to be appropriately monitored throughout their application. Towards this direction, Rand (1999, 97) noticed that ‘businesses fail because management does not have effective control of the business as management is too far removed from revenue-producing processes; the interval between the time a revenue plan is launched and the time the actual revenue is collected is, to all intents and purposes, a black hole into which human resources are poured with no mechanism to measure their effectiveness; Visibility is nonexistent or, at best, extremely limited’. In other words, the appropriateness of every plan of change should be evaluated in accordance with the needs of the firm in the particular period and should not be refer to possible future events. The credibility of the changes attempted through an appropriate plan of change can be ensured through the analytical examination of the firm’s performance in advance. More specifically, as Gomez et al. (2002, Ch.15) accepted ‘the following ‘stages’ of the firm’s operation management should be examined: inputs (materials, energy, information, management, technology, facilities and labor), transformation (or conversion process) and disposition (marketing and sales)’. In the case of Google, the examination of the firm’s sectors as described above could lead to the assumption that there is no need for immediate action (in terms of application of change plans). However, it would be good to develop an appropriate plan referring to all firm’s weaknesses (as developed above) and suggesting appropriate methods for the improvement of the relevant business sectors. In any case such a plan would not be considered as of high priority – as already stated above currently the firm faces a continuous growth and only suggestions for the stabilization of the firm’s performance in the future can be made. Another issue that should be considered is the fact that any attempted change is related with a specific cost. Indeed the study of Walker (1998, 9) led to the conclusion that ‘costs of human resource processes and initiatives (investment of money, time, and other resources) are best measured in relation to their outcomes while unusually high recruiting and training costs may be justified by the resulting business results achieved; however, such recruiting and training costs should also be evaluated in terms of productivity measures and results achieved’. In the case of Google the application of a change plan (including suggestions for improvement of all sectors mentioned above) should be appropriately revised and evaluated as of its cost and the result targeted. In other words, there could be a comparison between the required target and the cost involved. The appropriateness of the particular strategy for the specific firm should be also carefully examined. We could mention here the view of Chase et al. (2006, Ch 5, 2) who supported that ‘a process that does not match the needs of the firm will punish the firm every minute that the firms operate’. References Ashforth B. E. (1995). Emotion in the workplace: A reappraisal. Human Relations 48(2): 97 Chase, R., Jacobs, R., Aquilano, N. (2006) Operations Management for Competitive Advantage, 11e. The McGraw-Hill Companies Cook, J. S., Debree, K., Feroleto, A. (2001). From Raw Materials to Customers: Supply Chain Management in the Service Industry. SAM Advanced Management Journal, 66(4): 14-23 Fiedler, F. Contingency Theory, available at http://www.valuebasedmanagement.net/methods_contingency_theory.html [1] Gelade, G.A., Ivery, M. (2003). The Impact of Human Resource Management and Work Climate on Organizational Performance. Personnel Psychology, 56(2): 383-398 Gomez-Mejia, L., Balkin, D. (2002). Management, 1e. The McGraw-Hill Companies Gooderham, P.N., Nordhaug, O, Ringdal, K., (1999) ‘Institutional and Rational Determinants of Organizational Practices: Human Resource Management in European Firms’, Administrative Science Quarterly, 44(3): 507-526 Harris, H., Sparrow, P. (2004) Globalizing Human Resource Management. New York: Routledge Kaplan Norton, Strategy Maps, available at http://www.valuebasedmanagement.net/methods_strategy_maps_strategic_communication.html [3] Korman, A., Kraut, A., London, M. (1999). Evolving Practices in Human Resource Management: Responses to a Changing World of Work. San Francisco: Jossey-Bass Lawler, E.E., Mohrman, S.A. (2003). HR as a Strategic Partner: What Does It Take to Make It Happen? Human Resource Planning, 26(3): 15-31 Mathews, A. (1998). Diversity: A Principle of Human Resource Management. Public Personnel Management, 27(2): 175-183 Parnell, J.A. (2003). Five Critical Challenges in Strategy Making. SAM Advanced Management Journal, 68(2): 15-25 Porter, M. The Value Chain Model, available at http://www.valuebasedmanagement.net/methods_porter_value_chain.html [2] Rand, T. (1999). Why Businesses Fail: an Organizational Perspective. Emergence, 1(4): 97 Ramlall, S.J. (2003). Measuring Human Resource Management's Effectiveness in Improving Performance. Human Resource Planning, 26(1):51-64 Robertson, P. J., Seneviratne, S. J. (1995). Outcomes of Planned Organizational Change in the Public Sector: A Meta-Analytic Comparison to the Private Sector. Public Administration Review, 55(6): 547-558 Rowden, R.W. (1999) ‘Potential Roles of the Human Resource Management Professional in the Strategic Planning Process’, SAM Advanced Management Journal, 64(3): 22-29 Santos, A., Silva, D., Barros, J. (2000). A study about application and refinement of a production strategy formulation model in a building company, available at http://strobos.cee.vt.edu/IGLC11/PDF%20Files/50.pdf Schuller, R., Rogovsky, N. (1998) Understanding compensation practices across firms: the impact of national culture’, Journal of International Business Studies, 29(1): 159-172 Soutar, G.N., Grainger, R., Hedges, P. (1999) ‘Australian and Japanese value stereotypes: a two country study’ Journal of International Business Studies, 30(1): 203-211 Walker, J.W. (1998). Are We Using the Right Human Resource Measures? Human Resource Planning, 21(2): 7-10 Watanabe, S. (2000) ‘The Japan Model and the future of employment and wage systems’, International Labour Review, 139(3): 307-325 Appendix Figure 1 – Porter M. Value Chain model (source: [1]) Figure 2 – Kaplan Norton, Strategy Map (source: [2]) Read More