Introduction To Management

Task 1 : Read Case in Point: Google creates Unique Culture and answer the 5 discussion questions in your own words.

Read Chapter 8 on Organizational Culture https://open.lib.umn.edu/principlesmanagement/part/chapter-8-organizational-culture/

Case in Point: Google Creates Unique CultureSource: http://en.wikipedia.org/wiki/File:Googleplex_Welcome_Sign.jpg by Ardo191.

Google (NASDAQ: GOOG) is one of the best-known and most admired companies around the world, so much so that “googling” is the term many use to refer to searching information on the Web. What started out as a student project by two Stanford University graduates—Larry Page and Sergey Brin—in 1996, Google became the most frequently used Web search engine on the Internet with 1 billion searches per day in 2009, as well as other innovative applications such as Gmail, Google Earth, Google Maps, and Picasa. Google grew from 10 employees working in a garage in Palo Alto to 10,000 employees operating around the world by 2009. What is the formula behind this success?

Google strives to operate based on solid principles that may be traced back to its founders. In a world crowded with search engines, they were probably the first company that put users first. Their mission statement summarizes their commitment to end-user needs: “To organize the world’s information and to make it universally accessible and useful.” While other companies were focused on marketing their sites and increasing advertising revenues, Google stripped the search page of all distractions and presented users with a blank page consisting only of a company logo and a search box. Google resisted pop-up advertising, because the company felt that it was annoying to end-users. They insisted that all their advertisements would be clearly marked as “sponsored links.” This emphasis on improving user experience and always putting it before making more money in the short term seems to have been critical to their success.

Keeping their employees happy is also a value they take to heart. Google created a unique work environment that attracts, motivates, and retains the best players in the field. Google was ranked as the number 1 “Best Place to Work For” by Fortune magazine in 2007 and number 4 in 2010. This is not surprising if one looks closer to how Google treats employees. On their Mountain View, California, campus called the “Googleplex,” employees are treated to free gourmet food options including sushi bars and espresso stations. In fact, many employees complain that once they started working for Google, they tend to gain 10 to 15 pounds! Employees have access to gyms, shower facilities, video games, on-site child care, and doctors. Google provides 4 months of paternal leave with 75% of full pay and offers $500 for take-out meals for families with a newborn. These perks create a place where employees feel that they are treated well and their needs are taken care of. Moreover, they contribute to the feeling that they are working at a unique and cool place that is different from everywhere else they may have worked.

In addition, Google encourages employee risk taking and innovation. How is this done? When a vice president in charge of the company’s advertising system made a mistake costing the company millions of dollars and apologized for the mistake, she was commended by Larry Page, who congratulated her for making the mistake and noting that he would rather run a company where they are moving quickly and doing too much, as opposed to being too cautious and doing too little. This attitude toward acting fast and accepting the cost of resulting mistakes as a natural consequence of working on the cutting edge may explain why the company is performing much ahead of competitors such as Microsoft and Yahoo! One of the current challenges for Google is to expand to new fields outside of their Web search engine business. To promote new ideas, Google encourages all engineers to spend 20% of their time working on their own ideas.

Google’s culture is reflected in their decision making as well. Decisions at Google are made in teams. Even the company management is in the hands of a triad: Larry Page and Sergey Brin hired Eric Schmidt to act as the CEO of the company, and they are reportedly leading the company by consensus. In other words, this is not a company where decisions are made by the senior person in charge and then implemented top down. It is common for several small teams to attack each problem and for employees to try to influence each other using rational persuasion and data. Gut feeling has little impact on how decisions are made. In some meetings, people reportedly are not allowed to say “I think…” but instead must say “the data suggest….” To facilitate teamwork, employees work in open office environments where private offices are assigned only to a select few. Even Kai-Fu Lee, the famous employee whose defection from Microsoft was the target of a lawsuit, did not get his own office and shared a cubicle with two other employees.

How do they maintain these unique values? In a company emphasizing hiring the smartest people, it is very likely that they will attract big egos that may be difficult to work with. Google realizes that its strength comes from its “small company” values that emphasize risk taking, agility, and cooperation. Therefore, they take their hiring process very seriously. Hiring is extremely competitive and getting to work at Google is not unlike applying to a college. Candidates may be asked to write essays about how they will perform their future jobs. Recently, they targeted potential new employees using billboards featuring brain teasers directing potential candidates to a Web site where they were subjected to more brain teasers. Each candidate may be interviewed by as many as eight people on several occasions. Through this scrutiny, they are trying to select “Googley” employees who will share the company’s values, perform at high levels, and be liked by others within the company.

Will this culture survive in the long run? It may be too early to tell, given that the company was only founded in 1998. The founders emphasized that their initial public offering (IPO) would not change their culture and they would not introduce more rules or change the way things are done in Google to please Wall Street. But can a public corporation really act like a start-up? Can a global giant facing scrutiny on issues including privacy, copyright, and censorship maintain its culture rooted in its days in a Palo Alto garage? Larry Page is quoted as saying, “We have a mantra: don’t be evil, which is to do the best things we know how for our users, for our customers, for everyone. So I think if we were known for that, it would be a wonderful thing.”

Case written by Berrin Erdogan and Talya Bauer to accompany Carpenter, M., Bauer, T., & Erdogan, B. (2009). Principles of management (1st ed.). New York: Flat World Knowledge. Based on information from Elgin, B., Hof, R. D., & Greene, J. (2005, August 8). Revenge of the nerds—again. BusinessWeek. Retrieved April 30, 2010, from http://www.businessweek.com/technology/content/jul2005/tc20050728_5127_tc024.htm ; Hardy, Q. (2005, November 14). Google thinks small. Forbes, 176(10); Lashinky, A. (2006, October 2). Chaos by design. Fortune154(7); Mangalindan, M. (2004, March 29). The grownup at Google: How Eric Schmidt imposed better management tactics but didn’t stifle search giant. Wall Street Journal, p. B1; Lohr, S. (2005, December 5). At Google, cube culture has new rules. New York Times. Retrieved April 30, 2010, from http://www.nytimes.com/2005/12/05/technology/05google.html ; Schoeneman, D. (2006, December 31). Can Google come out to play? New York Times. Retrieved April 30, 2010, from http://www.nytimes.com/2006/12/31/fashion/31google.html ; Warner, M. (2004, June). What your company can learn from Google. Business 2.0, 5(5).

Discussion Questions

1. Culture is an essential element of organizing in the P-O-L-C framework. Do you think Google has a strong culture? What would it take to make changes in that culture, for better or for worse?

2. Do you think Google’s unique culture will help or hurt Google in the long run?

3. What are the factors responsible for the specific culture that exists in Google?

4. What type of decision-making approach has Google taken? Do you think this will remain the same over time? Why or why not?

5. Do you see any challenges Google may face in the future because of its emphasis on having a risk-taking culture?

Task 2 : Write up (1 Page) on What would you do if you are in charge of Google based on the information given below :

What Would You Do? Case Assignment, Communications – Google Mountain View, California

Founded in 1998, Google just had its most dominant year, with its search market share rising from 77 percent to 83 percent and revenues jumping 25 percent. Because most of the revenue came from search, Google is trying to diversify. But it faces intense competition in every market.

In traditional search, Microsoft’s Bing search engine and Facebook, which passed Google as the most popular website in the world, pose threats as people desire more personalized and social media-related search information. Searches for local information, such as restaurant reviews or directions, are 20 percent of all Google searches and half of all mobile or smartphone searches. Yet, local-related search advertising is a weakness for Google, but a strength for Groupon, Facebook Places, Living Social, Foursquare, and Bing. Although Google’s Android smartphones have more market share than Apple’s iPhone, the Android software is open source, so Google makes no money except for built-in Google Ads and services. Likewise, Google trails Apple and Amazon in the number of publishers who use their software, devices (i.e., smartphones, tablets, book readers), and online stores to sell electronic versions of newspapers, magazines, books, music, TV shows, and movies. Finally, Google’s Chrome web browser (13% market share) competes with Microsoft’s Internet Explorer (55%), Mozilla’s Firefox (22%), and Apple’s Safari (7%).

In short, Google is trying to position itself for the day when people won’t automatically use a Google search box to find information. Keith Woolcock, founder of 5thColumnIdeas, a technology research firm, doubts Google is up to the task, saying, “The problem for me as an investor is that Google looks a little too [much] like last year’s model. It’s the chicken in the sandwich—Apple and Facebook are on the opposing sides. Google is in the middle. Really, it looks to me as though it has become the Microsoft of its generation: big, bad and quickly becoming irrelevant.”

Unfortunately, you fear that Woolcock might be right, which is why you replaced CEO, Eric Schmidt, who becomes executive chairman. When Google started, you were CEO for three years. But, as an introvert who prefers technology challenges to management issues, you were relieved to hire Schmidt from Sun Microsystems because of his extensive leadership experience. When Schmidt became CEO, Google was much smaller and still in start-up mode, so he focused on management and financial systems, while you and Sergey Brin focused on technology and product development. Google’s philosophy was to hire really smart people and then let them do whatever they wanted. It was the norm for Google engineers to have 20 percent of their time to work on whatever they wanted to. And it spawned great products like Gmail, which engineer Paul Buchheit designed in a day and then shopped around, to get other Google engineers to join his team. This approach worked well until Google hit 10,000 employees. But at Google’s current size, 24,000 employees, with plans to hire another 6,000, it leads to confusion, poor coordination, and a lack of focus.

Today, Google is a much larger, more complicated company. But the biggest problem is that paralyzing bureaucracy has slowed the company. As technology companies grow, this happens. IBM, Apple, Microsoft, and HP weren’t immune, and neither is Google. In fact, the key reason you became CEO again was to streamline decision making and communication, and create clearer lines of responsibility and accountability. But how do you do that in a company of 30,000 people? A related problem is that top management is increasingly isolated from middle- and lower-level managers and employees who are responsible for the research and project management that is key to Google’s success. So, what might you do to improve upward communication within the company? Finally, what can Google do to communicate effectively on an organization-wide basis in an organization that has dozens of product lines and hundreds of research projects and that will soon have 30,000 employees?

If you were the new CEO at Google, what would you do?