Google Managerial Approach - Report Example

Google Inc. is a multibillionaire empire that has proven its great success through its production of innovative products along with its control within the Internet. By being the number one search engine in the world, Google has a lot of pressure to maintain a high status especially with competing companies within the advertising and marketing fields. By creating an industrious work environment for its employees with basic principles to follow, Google encompasses the control needed to preserve its position. Yet, the company may have obstacles to overcome as well with fears that Google could possibly become a monopoly which could ultimately lead to the demise of such an influential corporation. Google Inc. is a global technology leader focused on improving the ways people connect with information. Google maintains an index of websites and other content which allows anyone with an internet connection to access this information freely. Their revenues are over 16 billion per year and they employ over 16,000 people. Their growth in revenue each year is mainly due to an increase in advertising revenues for Google web sites and as well as their network. They are one of the largest companies in America based on their market share value. The influence of this company was exemplified when “Google” was added to the Merriam Webster Collegiate Dictionary in 2006. According to Webster it is defined as the way “to use the Google search engine to obtain information on the internet”. [1] The development of Google’s search engine technology began in January 1996 in a garage. Stanford University’s computer science graduate students Larry Page and Sergey Brin got together to develop a new search engine technology. They named their new product “Backrub” because of its ability to rate websites. This was done when viewing the number of reverences by examining the number of back links pointing to the web sites. This was a new way to rate web sites. The competitors had a way to assess the revelency of web sites to a particular search query based on counting metatags or “key words” included in web sites. By 1997 “Backrub” had a number of followers in the internet world in the Silicon Valley. One of these followers was Yahoo co-founder, David Filo. In 1998 David Filo convinced Larry Page and Sergey Brin to leave Stanford Graduate School and focus full time on making their search technology the basis of a new internet company. Backrub was renamed Google, or Googol, which is a mathematical term that means the numeral 1 followed by a hundred zeros. Eventually, the company attracted many venture capital firms and so Google decided to do a public offering (IPO) on April 29, 2004. At the end of the first day of trading on the stock market, Larry Page and Sergey Brin were worth approximately 3.8 Billion dollars. A handful of people enjoyed millions of dollars from their initial investment as well including Stanford University and various other computer science professors. With goggle controlling the market for search based ads, much of the company’s attention was focused on new initiatives that might allow the company to sustain its huge growth patterns and cash flow for the operations. One of the initiatives that Google focused on was their organizational design. Most companies would want to gain knowledge on how Google innovates so well in order to emulate them. Google’s mission statement and corporate culture stated on their web site reflect a philosophy that you can “make money with doing evil” and that “work should be challenging and the challenge should be fun.” These beliefs dominate the world at Google. The official mission statement of the company is to “organize the world information and make it universally accessible and useful.” In 2007 and 2008, Fortune magazine voted Google the best place to work. Through a series of new product developments, acquisitions, and partnerships the company has expanded its initial search and advertising business into other areas including web-based email, on-line mapping, office productivity, and video sharing among other product lines. The Google culture is based on innovation. Google prides themselves by promoting the sharing of ideas and opinions in a work environment that is cultivated by hands on contributions where everyone shares in the success. They have executives with titles such as Vice President, Distinguished Entrepreneur, and Vice President of User Experience. Google provides its employees with cutting edge benefits such as Google childcare on –site in the headquarter office in Mountain View California. It also offers flexible work schedules to meet the needs of families and people who are more creative at night. Employees also have access to paternity leave, adoptions assistance, as well as many other benefits. The salaries of their employees are known to be lower than the average for the industry. However, Google’s employees are supplemented with stock options and many other benefits. The atmosphere at Google is informal and it’s design was deliberately created to promote a fun and casual working environment. The company wanted to put work and play on the same field. Workers are encouraged to bring their dogs to work and work out at the Google gym. Decisions are made collectively even if management sets the agenda. All of Google’s’ engineers are encouraged to spend 20% of their work time on projects that interest them. Products like Gmail, Google News, and Ad sense came out of out these personal product adventures. In fact, Google’s Vice president of User Experience stated that half of the new product launches originated from that 20% of work/play time. In order to create a productive work environment, Google has established 10 principles within its corporate philosophy. They are located on their website, where they describe the “Ten things Google has found to be true”: 1. Focus on the user and all else will follow. Google has pioneered the way for focusing on the customer. By following this philosophy, they have results to prove that this notion works and that there are many benefits in realizing that answering the customer needs is the most productive way in satisfying their clients. Google tries to give the customer the best experience possible. 2. It’s best to do one thing, very well. Obviously, Google does search very well. They are known as the largest research group focused on solving search problems. They are considered the best at searching and making information very quickly available for millions of people. 3. Fast is better than slow. Google believes that speed is everything. Most of their users expect speed when they use Google. Google professes to be the only company in the world that wants users to leave their website as quickly as possible. 4. Democracy on the web works. Google relies on everyone and anyone on the web. They don’t have a select group of editors and do not solely give privileges to one specific site or group of people. They remaining fundamentals of Google’s philosophy are listed below as self-explanatory. 5. You don’t need to be at your desk to need an answer. 6. You can make money without doing evil 7. There is always more information out there 8. The need for information crosses all Borders 9. You can be serious without a suit 10. Great just isn’t good enough When Google first wrote these 10 things they included another point that stated that “Google does not do horoscopes, financial advice or chat.” They have since taken that one off their philosophy because ironically enough, Google has expanded enough to do virtually everything. In discussing Goggle’s strategy and planning process the environmental scan and the SWot analysis should be viewed. Economically, there needs be some consideration for shrinking advertising budgets and changes in workforce trends. The generations of people now entering into the workforce has been brought up in the world of computers. This can be drastically compared to people of an older generation that have been working for many years who were forced to learn how to use a computer. Below are my findings with the SWOT analysis. Strengths: 1. Established Brand Name 2. Speed and User friendliness 3. Hires the best talent 4. State of the art technology 5. Range of additional innovative services and products Weaknesses: 1. Arrogant 2. Spread too thin 3. International position 4. Dependance on advertising 5. Monopoly and Privacy issues Opportunities: 1. Acquisitions 2. Display and radio advertising 3. Engineers spend 20% of their time on own projects which are property of Google 4. Other partnerships (AOL) Threats: 1. Competition 2. Reducing advertising margins 3. Privacy issues 4. Antitrust/Monopoly 5. Regulatory changes Advertising has changed dramatically as well. Companies are no longer spending lots money on advertising. There are ways to market your product that does not include a large budget for advertising. The Internet has played a large role here since there has been a shift from paper to the internet. People within marketing have needed shift resources and focus on target audience through different venues like the internet. Also, due to the changes in economy, the level of work with some people has decreased within major industries. People have moved into self preservation mode in which they stay in this mode that they know they can survive in. There has been a huge shift from using the Internet as a knowledgeable tool to now using the Internet as a social media outlet. The success of Facebook, MySpace and Twitter have literally changed people’s lives. Some people even believe that Facebook is the biggest threat to Google’s future. Technologically, Google has a huge advantage. Google strives to hire its employees from the most qualified applicants and rewards the greatest contributors. In order to promote good performance and facilitate hiring and retention, Google has carved out the 20% rule, where employees have to spend 20% of their time on their own project interests. They also have a very large focused recruitment department that just spends time trying to search out the most talented people who are not already working at Google. There is always the possibility that talented engineers may opt to work for someone other than Google to give the “underdog” a chance. Competitively, Google’s biggest competitions are Yahoo and Microsoft. If Google doesn’t invent a new product, where 50% of their new products come from their own engineers, then Google will try to buy it. Acquisitions are a very big part of how Google gains market shares. There newest competition is within the world of advertising. Advertising firms are adjusting to market changes and are coming up with affordable ways to advertise. Due to the various changes in how the Internet is being utilized, the biggest competition may be within the social media outlet from sites including Facebook and Twitter. Not only are other companies a threat to Google, but there are regulations that proving to be some of the most serious obstacles for Google. The issues of privacy and other legal violations are emerging as to be some of the greatest threats for Google. The Obama administration is currently planning on overturning some of the regulatory laws regarding privacy that the Bush administration had previously established. Also there is an issue of monopoly that is starting to gain momentum in the software industry. As Google leverages its dominant market share and brand to move into the browser space, there may be a fork in the road for the Web. If they create an installed user base, just as Microsoft has done with Windows, Google would be able to dominate on desktops and mobile devices with various applications. This would be quite similar to how Microsoft dominated the desktop application space. Therefore, Google is being perceived as a growing monopoly which ultimately may become an issue that could threaten their plans on expansion. However, Google has many forms of control. They have a list of top 100 priorities that they manage on a daily basis throughout their email system. They monitor the new product lines extensively for the first 90 days and compare it to an internal benchmark driven by CPMs and algorithms that measure usage. They follow new employees for months with mentors to make sure they adjust to the culture of the organization. Although the say their strategic planning process is “open” or out for everyone one to see, they do have a closed model that is kept secret with access give to only a few selected top managers. Their business model is a mix of smart decisions, excellent marketing strategies, great advisors, and highly innovative and illustrious products. These products include the Pay Per Click system which today is their main source of revenue. Google has a clear understanding of the psychology, perception, and interaction with the visual demonstrations and the brain. Through this understanding, many people have speculated that the IPO in 2004 would change their culture. Therefore, in 2006, Google hired a Chief Culture Officers to be in charge of this trademark characteristic that Google has. In every aspect that Google may be viewed, whether it is organizational design, strategy, planning or control, it appears that Google can do no wrong. Yet, one mistake can have serious consequences and so, Google must stay at the top of their game in order to maintain their control as well as their innovative creativity. Since the beginnings of Google, the company has found themselves at the focus of several controversies related to their business practices and services. For example, censorship issues have cropped up within China and to a lesser extent in France. Copyright and privacy issues have come up with their new digital book search products as well. Some of the Indian governments have expressed grave concerns about their satalitte imaging product, Google Earth. Lastly,Google has been critised by advertisers regarding its inability to combat click. Industry reports say this number is out of control at approximately 14-20%. The rise of Google has become an extraordinary effort in which researchers today are still trying to gain knowledge about. Not only does this company have unique products but it also has captured unique ways of getting new ideas and making their employees feel at home. From an entrepreneurial perspective, one may never fully come to understand the strength and impact that Google has had on today’s culture. Though it serves as a tool for many people today, there may be future issues that Google may be faced with that could possibly destroy its image. Therefore, despite its great success, Google must stay in control and focus in order to build its empire more so without violating strict business restrictions. Read More