The ultimate measurement on the effectiveness of a company organization structure is definitely how consistent it can grow over the long run. Google from it initial pubic offering price of $85 back in August 19, 2004 to $570 today; it arguable that they have a very effective organization structure. In order to promote innovation and commitment to cost containment; Google invested lot of money to build a highly transparent organization. Having a highly transparent organization, they have make it easy for engineers to share ideas, poll peers, and makes it’s nature to change for the future.
As an organization Google use a flat, transparent, non-hierarchical structure. With their two co-founder Larry Page, President of Products and Sergey Brin, President of Technology, CEO Eric Schmidt who was brought in to provide adult supervision making the final decision on production and direction of the company and every single employee out to create the “perfect search engine”. Brin, 32, born into a Jewish family in the Russia, fled to the U. S. in the late 1970s with his parent. Page, 33, grew up obsessed with inventing things; son to parent whose both teaches computer science for a living.
Eric, 51, recruited from Novell where he worked as chairman and CEO. b. Communication Plan. Google spiritual cultures are plainly stated as “Don’t be evil”. It’s hard to say exactly what is meant by the article by TIME “In Search of the Real Google” written by Adi Ignatius. The author cited a incident with a proposal that went up to the top three, Brin, Page and Eric that might help to explain “Don’t be evil”. The proposal was to add a small sponsored links to image-search results to generate more income. In response, Page asks “We’re not making enough money already? ” than every in the room laugh with the proposal turn down.
Google focus on improving the customer experience not profit. With it anti-marketing believe, it’s the only $100 billion company that doesn’t run TV commercial. Every Friday, Google hold an all-hands meeting in which they make announcements, introduction, and have question and answer session. These all-hand assemblies help Google communicate effectively within the organization. Google also have “gatekeepers” who manage all the engineers and their ideas. With gatekeepers working as editor, designer, coder and friend to the employee; communications are not an issue at Google. This takes us to Google resource development. c. Resource Development
Google put it engineers as it soul in the organization. With free food, laundry, gym and an in-house doctor office; Google employee are encourage to feel at home while in the office. Google also came up with a formula for it employee to follow to ensure creativity. Employees have to divide their time at work into three parts: 70 percent are to be devoted to search and advertising, 20 percent on things related to the 70 percent, and 10 percent to far-out ideas. As a result employee has come up with application such as GoogleTalk, Gmail, and also their San Francisco WI-fi initiative giving all San Franciscan free Internet).
Now with Google Earth, Gmail, GoogleTalk, Google checkout and many more other product they offer Google are leading the way for all organization. Google competitive advantage is of course it employee and mainly it Search Engine, which was, create by Brin and Page. d. Core Competency. ? Brin and Page came up with their now famous PigeonRank technology, which is the heart of Google’s search engine back in their college years. PageRank “relies uniquely democratic nature of the web by using its vast link structure as an indicator of an individual page’s value” is according to Wikipedia.
Google rank the relarent of a Page base on the amount of hyperlink or vote the Page get. A page that’s linked to by many pages with a high rank get a high rank it self and a web page with no links would therefor get a low Rank. The weight given to each page are based on quanitity of inbound links as well as the importantance of the page which is jugde by the number of query it get. Of course having the fastest search engine doesn’t make Google any money. Google rely on Pay-per-Click advertising Model for most of their income. The main two programs are Adwords and Adsence.
With Adwords, ads for relevent words are shown along with the search result to customer. Adsense is a program that let website owner display Google’s ad on their sites and earn money from Google. e. Quality/Integrated systems/Learning organization. In order to create a learning organization, Google put team member within a few feet of each other. The result being that everyone shares an office with one or more member of the team. With every team member being knowledgeable sitting next to each other, knowledge sharing is a part of life everyday at Google.
And with immediate access to the entire team, Total Quality Management (Quality and Integrated System) is coordinated within the team. “In addition to physical proximity, each Googler e-mails a snippet once a week to his work group describing what he has done in the last week” According to Eric Schmidt. With the snippet every employee shares the problem and solution that he/she came up with. Leadership Control and Measurement Policies and Procedures. Google’s policies and procedures are difficult to locate, mostly because of the secrecy it maintains to help maintain it’s competitive advantage.
Their policy to remain secretive is clearly noted in several articles including “For all the papers it had published, Google, refuses to answer many questions. “We generally don’t talk about our strategy… because it is strategic,” Another critical policy is not to let out information regarding its quantity and quality of computer equipment. “One of Google’s biggest secrets is exactly how many servers it has deployed”. Another critical element to Google is to develop a friendly work environment and allow their employees to enjoy the work environment. while technology plays a vital role in keeping projects on track, so do the Ping Pong tables and the elaborate cafeteria at the company headquarters in Mountain View, California. ” Part of their procedures includes maintaining open communication throughout their many offices worldwide. “The closest thing to a technological answer to reaching those overseas workers is videoconferencing and even then face to face contact is better. ” One recent policy change that Google is trying to accomplish, is to go carbon neutral by 2008. “Google says that it plans to be carbon neutral by 2008, Reuter reports.
To reach the goal, Google is investing in energy efficiency, renewable energy like solar, and will purchase carbon offsets. Other technology companies are also following suit as Yahoo recently announced the same carbon neutrality goal for 2008. Value Chain. Instead of the traditional business practice of leasing equipment, Google, buys computer equipment for “maximum control over its infrastructure. Google chief executive officer Eric Schmidt defended the strategy. “We believe we get a tremendous competitive advantage by essentially building our own infrastructures”.
Google maintains very few vendors in order to maintain it’s competitive advantage. One of the few suppliers includes Citrix Systems who produce a NetScaler Application Delivery system and uses this application as a web protocol accelerator. Another supplier is Basis Technology who produces a Rosette Language Analyzer for Chinese, Japanese, and Korean languages and applies a web content translation system. For file conversion and content extraction services, Stellent, provides the product “Outside In”. In order to maintain large database management systems, Google, uses Sleepycat Software using the product called BigTable, Berkeley DB.
Google generates revenue by how many Internet websites are visited through their search engine. So in a way Google suppliers are its many advertising partners. “The company generates revenue primarily by delivering online advertising. Businesses use its AdWords program to promote their products and services with targeted advertising”. Performance Measurements. One method to evaluate a company performance measurement is always its financial state. As this is the main reason why companies are in business is to become profitable. “The company recorded revenues of $10,604. million dollars during the fiscal year which ended in December 2006, an increase of 72. 8% over 2005. For the fiscal year 2006, the US, the company’s largest geographic market, accounted for 56. 9% of the total revenues”. These increases are a direct reflection of an outstanding performance measurement. Another performance measurement tool is to look at SWOT, (Strengths, Weaknesses, Opportunities, and Threats). Google’s greatest strengths are that they are maintaining a strong market position. They are the leading search engine in the world. “The company offers search results in 158 domains and in more than 100 languages.
In March 2007, Google sites captured 48. 3 of the US search market, gained . 2 share points from the previous month. Their weakness is based upon their heavy reliance on Google Network members. “Google provides advertising, web search, and other services to members of it Google network, which accounted for 39% of the company revenues in 2006. Some of the members may compete with Google in one or more areas”. The major opportunity is the potential of growth within Internet usage. “Globally, 16. 9% of the population uses the Internet. Internet usage has grown rapidly over the last few years, doubling over the period 2000 to 2007.
Asia recorded the highest growth of 638. 4%, followed by the Middle East, 491. 4% and Latin America/Caribbean, 433. 3%. ”. With this recent surge, who knows where Google influence and impact will carry them. Threats include competition from both Microsoft and Yahoo. “Presently, Microsoft and Yahoo are its key competitors. Microsoft has developed features that make web search a more integrated part of its Windows operating system and other desktop software products. Recently Microsoft stated that Google’s acquisition of DoubleClick, deserves close scrutiny from regulatory authorities to ensure a competitive online advertising market”.