Google’s Organizational Culture

European University – MBA Management Skills – Group A Case Study 1: â€Å"Google† 23 October 2009 Marion Gruber Reinis Onuzans Steven Teves Jessica Wernett Table of Contents 1 Introduction†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦3 2 Google’s future growth†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 4 2. 1 Organizational Culture: Facilitating Aspects†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 4 2. 2 Organizational Culture: Constraining Aspects†¦Ã¢â‚¬ ¦.. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦6 3 Recommendations†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦8 4 References†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 9 5 Table of Figures†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦10 1 Introduction Reading the case study â€Å"Google’s HR Dilemma† by Mridu Verma, we have gained some knowledge about Google’s success story. Within 11 years the company has grown to a global enterprise employing around 20,000 people. Nowadays Google is not associated just with search service. it is also known for working in advertising, publishing, software and Gmail. Google has bought many companies, the best known is YouTube. In the 11 years time the company is running successfully with growing revenue every year. Nothing seems to stop it, because of their power in the market. Furthermore Google has received many awards in ‘’Best Place to Work’’ and has always been known for satisfied and motivated employees. This is attracting new professionals with a high potential, therefore Google is likely to expand and develop new ideas. The case study reveals Google’s organizational culture and structure. It is very unusual, however it proves to work. Case study tells how they provide positive work environment, what kind of people are hired and how Google plan their innovations. The main concern is if they can grow and still be successful with present structure in the company. Everything needs to be changed from time to time in order to maintain achievements. Our report is going to look at how organizational structure will be affected by Google’s presumable growth. We will discuss if any variations should be made, and if the company’s culture will assist or not in its potential growth. Each of us has an opinion whether of not something needs to be changed to improve Google’s future prospects. However all of us believe that some changes should take place. Therefore, we have come up with several suggestions. Google’s future growth To what extend is their organizational culture going to facilitate/constrain their future growth? Corporate Culture is defined as „A blend of values, beliefs, taboos, symbols, rituals and myths all companies develop over time†[1]. Google’s organizational culture has gone through a couple of changes. According to an article from â€Å"The Economist†, Google has a product developm ent system that was working in an informal way, which was working fine when Google was still in the beginning phase of what it has become oday. â€Å"But now that it is a giant with 20,000 employees, the firm risks stifling potential money-spinners with a burgeoning bureaucracy†. [2] So is their way of operating still applicable when the corporation is expanding at this rate? Let us identify the pro’s and cons if Google sticks to its organizational culture as it is. 2. 1 Organizational Culture: Facilitating Aspects The case study has informed us that all engineers are given twenty percent of their time to work on their own ideas. The organizational culture has been working very well over the last years where employees’ morale has been uplifted and gave them flexibility which always resulted positively. We have taken the liberty to compare Google’s current organizational culture with Mr. Abraham Maslow’s principles of human needs, to identify the positive aspects of Google’s work environment as it is. [pic] Figure 1: Maslow’s Hierarchy of Needs Source; http://stanleybronstein. com/blog/maslow. jpg Basic needs such as the physiological and safety, should be assured in every company to ensure the minimum level of motivation an satisfaction of employees. Nevertheless, Google’s human resource management and organizational culture try to encourage their workforce to achieve the next level of needs. The Love/Belonging needs could be enabled through their activity facilities and generous dining area so employees from different departments can exchange their ideas and talk about their work or private life. Maslow has identified that the need of self-esteem and confidence are very important for a person after obtaining the first three needs of its Hierarchy. One of the elements that builds up esteem is the recruitment process that Google executes. Due to this very unique process which includes several tough steps of selection procedures, people who have made it through felt a self fulfilling emotion of achievement. Finally, and probably one of the most important steps in the hierarchy is self-actualization. Google’s corporate culture enables its employees to be creative and independent, therefore allowing more flexibility which increases self-actualization. In short, Google Inc. definitely meets the standards that Maslow set out for the hierarchy of human needs. The way Google’s organizational culture has operated for the last years seemed to have worked just fine, and some might argue that having the attitude of a ‘start-up’ business within a giant corporation could be the reason for all the success. Should the organizational culture keep its structure and identity as it is? 2. 2 Organizational Culture: Constraining Aspects Despite the organizational culture’s positive aspects, analysts fear that this way of structure will soon face its limit if Google keeps expanding at this exponential growth rate. From an external point of view, Google is kind of following the life cycle Microsoft has experienced when they were getting bigger and bigger. During the 80’s and 90’s, Microsoft became dominant in its field of goods and products and were accused by rivals for acting like a monopoly. No anti-trust bodies are on Google’s doorstep yet and surveys have shown that Google has the goodwill for its customers. Nevertheless Greg Sterling, head of a research agency specializing in internet companies claims, Google has an image problem. He states: ‘In the industry, around Wall Street and in Silicon Valley, there is a perception that Google is the Microsoft of the internet. It has to do with power, of course. In simple terms, Google has become a victim of its own success. ‘[3] Internally, the Google corporation is about to suffer as well. Their ‘small business' style of operating gets in the way when the company is expanding at this growth rate. Because the company has more than 20,000 people now the efficiency in work as well as the innovative product launching is more difficult to control in this work format. Because of this lack of control, employee dissatisfaction has slowly arisen and is growing throughout the Google industry. Former employees have said that they feel „disposable and easily replaced by their managersâ€Å". [4] When you change the flexible organizational structure into a more controlled work environment, you might risk employees disagreeing with the sudden change in management style and as a consequence creativity, motivation and morale will decrease. Brockett (2008) quotes that there is no specific talent programme at Google. But they have difficulties in motivating their programmers to take over managing functions. Since they love their job so much they are not very willing to spent time on managing others. [5] Product manager Robert Kniaz stated „it has become harder to keep the same level of excitement you had when it’s you and your friends working late at nightâ€Å". Even though they have a team that’s developing policies for Google to be run as a corporation instead of a small business, Google fears that these policies might take away the creativity as well as the flexibility from the employee. [6] Google’s organizational culture has to adapt to the company’s growth. Yet, changing a pattern is difficult and could raise issues. 3 Recommendations The nature of Google’s mission combined with their organizational culture makes expansion rather inevitable. We do not believe Google’s successful track record of increasing net earnings each year and the stimulated self-directed employees are just a coincidence. Our opinion and recommendation is based on our belief that Google’s unique corporate culture clearly affects the financial success of the corporation, but as expansion takes over there are necessary changes Google must make to ensure continual success. Our recommendation is as follows: Google should introduce a bureaucratic system of communication while maintaining their underlying values of universalism, stimulation, and self-direction. Prior to 2005, Google had been rightfully criticized for being arrogant and disorganized, but as Google expanded it did become more structured[7]. During this structural change, Google sustained its ‘small business’ attitude (small teams, open communication policy, informal atmosphere, and idea sharing). Now, four years later and nearly 15,000 more employees, Google is losing their ‘small business’ mentality. As the business grows, so do the complexities. Complexities always add an element of difficulty and involvedness, which makes the need for clear and cut bureaucratic organization and communication system deemed very necessary. Team Leaders To keep teams working efficiently internally and externally we recommend Google to institute a ‘team leader’ into each team. This person is someone who is already part of the team and exhibits superior organizational and management skills. This person will serve as a liaison between the team and the team’s project manager. The team leader will ensure short-term goals and deadlines are being met. Progress reports Once per week, team members will answer a series of questions pertaining to the specifics of what they have accomplished in the past week. This is to ensure there is no overlap or communication gap in current projects. The team leader will analyze each document and valid elements will then be brought to the attention of the project manager. This step is to ensure important but possibility over sighted details to not get left out when the project managers have meetings. Progress reports will aid in catching the good idea and catching the ideas to drop before too many resources have been poured into them. Since Google is comprised of so many creative and innovative people, many bureaucratic systems get pushed to the way side because they are seen as inhibitors. A bureaucratic system of communication will increase efficiency with the company while still being able to hold true to it core value system. 4 References †¢ [email  protected] â€Å"Term definition: Corporate Culture† Entrepreneur. com,  ©2009 †¢ [email  protected] â€Å"Creative Tension† The Economist, September 17, 2009 †¢ [email  protected] WACHMAN, R. â€Å"Google's expansion is coming at a price: it's losing its popularity†, The Observer 25th March 2007 †¢ [email  protected] MONTALBANO, E. , â€Å"Growing pains for Google†, Computerworld 20th October 2008 †¢ [email  protected] MONTALBANO, E. , â€Å"Growing pains for Googl e†, Computerworld 20th October 2008 †¢ [email  protected] MRIDU, V. , 2006. â€Å"Google’s HR Dilemma†, ICFAI Business School, Pune, Pg. 5 †¢ [email  protected] BROCKETT, J. , 2008. Finders keepers, People Management magazine, published 18 September 2008 5 Table of Figures Figure 1: Maslow’s Hierarchy of Needs,†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦5 ———————– 1] â€Å"Term definition: Corporate Culture† Entrepreneur. com,  ©2009 [2] â€Å"Creative Tension† The Economist September 17, 2009 [3] Wachman, Richard, â€Å"Google's expansion is coming at a price: it's losing its popularity†, The Observer 25th March 2007 [4] Montalbano, Elizabeth, â€Å"Growing pains for Google†, Computerworld 20th October 2008 [5] Brockett, J. , 2008. Finders keepers, People Management magazine, publish ed 18 Sept. 2008 [6] Montalbano, Elizabeth, â€Å"Growing pains for Google†, Computerworld 20th October 2008 [7] Mridu Verma â€Å"Google’s HR Dilemma† 2006, ICFAI Business School, Pune, Pg. 5