Yahoo Strategic Issues - Case Study Example

Yahoo needs to develop and implement various alternatives to remain at the top. Firstly, the corporation needs to employ effective and transformational leaders with the ability to forecast market changes and make the appropriate growth strategies. The new leaders need to be transparent and accountable. They should make informed decisions that will direct the company in the right direction. For instance, the new leadership should have the ability to conduct win-win negotiations that will win the corporation good deals and contracts. The effective leaders should be convincing in light of stressful situations. For example, the Google leader Schrage was able to win the people due to his views on self-censorship. His bright remarks and the path that Google took that involved informing the users about censored information increased its popularity and image. The leaders should have the ability to control all situations without lying to the public or appearing ignorant and inconsiderate. More so, the leaders should have a background in internet technology, to be able to identify market gaps and develop technology that meets those needs. The ability to identify new markets and gaps will not only increase clientele and market share but will also assist in the growth of the organization. As Jack Ma stated, Yahoo is need of new ideas since its current ventures are not profitable.

Secondly, Yahoo needs to have a detailed company policy that addresses possible future issues. One of the reasons why the Yahoo China manager availed Shi Tao's credentials was because the company did not have any policies regarding such situations. The lack of policy was negligence on Yahoo's part primarily because of China's political environment. They should have drafted such a policy when signing the pledge, to protect its employees and clients. The manager would have spared the information was there any way to protect the employees and Shi Tao simultaneously. A policy is thus necessary for future business in China. Thirdly, Yahoo should settle with Shi Tao's family and all the individuals affected by the disclosure of client details and private information to the government of China. The individuals were affected because of the corporation's inability to protect its clients and the information they shared using Yahoo; it is thus Yahoo's responsibility to correct that mistake as a show of goodwill. Making settlements will also improve Yahoo's image which is currently tainted.

Fourthly, Yahoo should employ competent individuals and dedicate resources and infrastructure to develop competent software that will give Yahoo a competitive advantage. Yahoo is suffering from an intense competition because of its inability to come up with new products and services for the internet market. It should recruit the best talent who will dedicate their time and resources to identify new markets, market gaps, and further create new inventions that will satisfy the needs of these new markets. This alternative will assist Yahoo in securing some of the market shares it lost to its competitors and also gain new clients, thereby increasing its revenue base.

Fifth, Yahoo should develop an algorithm that shows it whether a prospective investment is worthy and whether it will return the investment and multiply the profits. 3721, Alibaba, and other yahoo investments were very costly and had not yielded much to the company. The corporation should have a scientific way to tell whether a merging, acquisition or buy-out decision is feasible. The algorithm should also detect any new entrants in the industry that are potentially lucrative and promptly make deals with them like in the case of Google and Baidu. Such deals may be cheap but worthy investments.

Lastly, Yahoo should look for a constructive and intelligent way to stop the self-discipline pledge without jeopardizing its business in China. The deal has cost Yahoo its reputation, clients, and it is against the values of the organization. Not to mention how the clients are being punished once Yahoo submits the information. It is thus in Yahoo's best interest to get out of the pledge to avoid more people from being targeted by the government through Yahoo. These alternatives will ensure that Yahoo is led by effective and capable leaders, while it increases its market share, and improves its image.

Evaluating the Alternatives

Employing Effective and transformational leaders

Yahoo will enjoy some benefits by employing effective leaders. Good leadership will ensure that the company needs are met. It will also ensure that the employs and the clients are protected from dictatorial governments and unpleasant economic situations. Efficient leaders will also plan and forecast for the future, protect the company from economic downfall, and formulate good growth strategies. Effective leaders will also improve the image of the company. Their values and conduct will appeal to the people thus increase markets. What more, effective leaders will be able to identify talented individuals who will benefit the organization and assist in creating a competitive advantage. Effective leaders will also protect the company from competitors by coming up with better strategies that will keep Yahoo at the top despite the dynamic nature of the industry. Effective leadership is the foundation of growth, sustainability, and continued existence. There are, however, some disadvantages associated with employing effective leaders. Firstly, it may be costly to find such an individual. Secondly, such individuals may not have the knowledge and background in internet and Yahoo services. Thirdly, some issues cannot be contained even with the best leaders in the market.

Preparing a detailed policy

A detailed policy is crucial because it provides an establishment with a set of rules that guide its operations. It benefits because it advises management when in doubt, outlines the next courses of action after something unlikely happens, it directs how employees and managers should operate. It also guides daily operations and assists in uniformity thus making it easy to identify a corporation in various countries. Despite the benefits, a company policy can be quite rigid thus making operations difficult. Additionally, stating every action course limits creativity and innovation, qualities that are very crucial in the internet industry. A policy document also needs to be frequently checked and changed to suit the environment and changing times. Moreover, it is challenging to follow some policies, especially in stressful situations. An example is the Yahoo China manager. A company policy would not have made the decision any easier since the refusal to surrender the details would have affected the business or the employees would have been mistreated. A policy is thus good in advising about daily operations but not in the making of crucial decisions that may affect the existence of a business.

Yahoo making settlements for the aggrieved families

Lawsuits can be very costly, lengthy, taint a corporation's image, and reveal the secrets of a company to the public, including the competitors. It is, therefore, wise for Yahoo to make settlements to avoid such situations. However, Yahoo may pay more substantial sums to the aggrieved parties than the amount it would have paid after a court process. Also, a court process may result in the cases being dismissed thus saving Yahoo the money it would have otherwise spent as settlement money. A settlement can also encourage other people to intentionally send implicating information through Yahoo with the aim of enjoying the benefits.

Employing competent individuals

Competent and talented employees benefit corporations because they are innovative, creative, and intelligent. These are necessary qualities for the development of new products and services. The individuals will identify market gaps, market needs, and market opportunities thus give Yahoo an upper hand in the industry. The employees will also develop innovative technologies and software that may assist in making Yahoo the number one technological firm. However, competent employees are costly to hire and keep since they need to be paid handsomely to stay in the organization. What more, other firms are always searching for such talented individuals. They may thus be poached by competitor firms that are paying better and offering better benefits. More so, Yahoo may invest a considerable sum on talented individuals who may fail to develop any commercial software or identify market opportunities. It is thus a gamble to focus investment on competent individuals.

Developing an algorithm

An algorithm is beneficial since it will assist in identifying the lucrative business to buy and the investments that are worth huge investments. However, such algorithms may provide inaccurate information resulting in the corporation losing millions in a bad investment. Additionally, algorithms are susceptible to hackers and viruses that affect how they operate.

Yahoo stopping the self-discipline pledge

It will be beneficial for Yahoo if it comes out of the pledge that censors and control the information that its clients send and receive online. However, stopping the pledge may affect the Yahoo's business in China. China is profitable for the company, despite the intense competition and the rules associated with conducting business in it. Stopping the pledge will thus cost Yahoo colossal business.

Best Recommendation

The best alternative that will assist Yahoo in the predicament it currently faces is the employment of effective and transformational leaders. Ineffective leadership, advice, and judgment are the reasons why Yahoo is in the current situation. The leadership cost Yahoo the market by the inability to tame Google, made poor decisions that put Yahoo in the spotlight for human rights violation, and lied to Congress and the people. Additionally, ineffective leadership explains why Yahoo signed a self-discipline pledge that is against its values and its beliefs. Poor judgment is also what made the Yahoo China manager to ignore proper channels and instead hand over confidential information to a dictatorial and tyrannical government. Yahoo would be number one in the internet industry if it had a leadership capable of thinking creatively, innovatively, and one that was able to predict the consequences of its actions.

Effective leadership will thus assist in improving Yahoo's image to the public, developing plans that will create a competitive advantage against the competitors, and ensuring that client information is saved from the dictatorial government of China. Yahoo should implement the alternative for employing transformational and effective leaders by sourcing individuals of impeccable character and hiring them in the various Yahoo offices. These leaders should review the operations of Yahoo and come up with ways to improve operations while reducing costs. They should go over all the operations and identify ways that the corporation is violating human rights. It is the responsibility of the company to protect its clients from overexploitation and harm. It should thus ensure that its services and its dealings do not harm the people in any way. The leaders should monitor the activity of its clients and prospective clients to identify a gap that can result to good business for Yahoo. Additionally, the leaders should also work closely with the employees and look into ways to increase market share, market gaps, and new ideas that will make Yahoo a better service provider than its competitors. The leaders should take care of their employees by paying them well and protecting them from situations that may harm them. The people should feel safe when using Yahoo products because of the image that the effective leaders will create for the corporation. Yahoo will flourish under a new leadership that works towards improving the company, its products and the services it provides to the people.