MGT300 Case Study: Analyzing Google's Restructuring to Alphabet

This case study analyzes Google's 2015 restructuring into Alphabet, examining the organizational challenges, the change process, and its outcomes. The study explores the need for restructuring, the transition process, and the challenges faced, such as public image issues and leadership challenges within the new business units. The analysis highlights the lack of public awareness of Alphabet, resource management difficulties, and leadership gaps. Recommendations include developing a clear business strategy for Alphabet, implementing succession planning for leaders, and employing aggressive marketing strategies to improve brand recognition. The paper emphasizes the importance of strategic management in achieving better outcomes and overall business success, offering a comprehensive overview of the restructuring's impact on Google's operations and future prospects.

Running head: GOOGLE RESTRUCTURING TO ALPHABET
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Google restructuring to Alphabet
Student’s Name
University

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Google restructuring to Alphabet
Introduction
In 2015 Google restructured itself to Alphabet a new company that was supposed to
incorporate all the business companies operating within the Google brand. This means that
Google was supposed to operate with Alphabet like other businesses within it. This case study
analyses the Google restructuring process, the need for restructuring, the outcomes and
recommendations on what should have been done.
The business case
Google restructured itself to create a new company called “Alphabet” which is a
collection of companies including Google itself and other smaller companies that are a bit
slimmed down (Brandom, 2015). This is a move from the integrated Google business operation
to a differentiated Alphabet business that leads to a bigger structure and a management scale that
allows the organization to run well. This is prospering business through strong leadership and
independence with a model that has a strong CEO to run the business. Alphabet Inc. will replace
Google Inc. and make Google itself a subsidiary of the new company. According to Lunenburg
(2012) organizations exist to achieve goals that are broken down into tasks on the basis of the
jobs that people do. This means that the structure of an organization can be configured based on
products or functions. This means that there is a close link between business strategy and
structure as seen in what the founder Google said that the new structure will allow efficient
running and reporting of business operations (Hern, 2015). The new structure thus forms a new
way of doing business within the organization.
One major reason for such changes is to ease management challenges in the organization
and allow each different business to be run by different bosses who report their own separate

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structure. By differentiating itself, Alphabet allows different functional units in the organization
to develop their own corporate strategies for operating in the market rather than running under
the previous Google umbrella. This is a functional approach where the company is being divided
into eight functional areas that operate independently and report to the CEO. According to
Robbins & Judge (2007), functional structures have highly alluded to their greater operational
efficiency because they group employees together based on the functions that they perform.
Since each functional unit will have its own CEO who operates independently and runs like a
different company from the rest. This strategy is geared towards preparing the organization for
future business challenges that can arise if the company is run as one. Through diversity,
Alphabet brings an opportunity that allows
The change process that the organization used
The change process in Google was the transition to the new business outfit in the name of
Alphabet. This means that the top management of Alphabet was supposed to find new leaders
who will head each functional unit as CEOs. This has been the main challenge that the company
has faced since some of the leaders were not up to the task and did not manage the way Larry
Page and Sergey Brin will want it to be managed. This means that each leader was supposed to
be charismatic and successful to be able to survive. The change process entailed elevating the
leaders of every business function to the CEO level and putting proper structures in place to
address these concerns.
The challenges of the change process
One of the consequences that the company is facing with new change process is the lack
of public image for Alphabet. Smith (2016) suggests that after one year, nobody knows what the
new outfit Alphabet is which means that the company is having problems with marketing its new

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image. The image of an organization comprises of the impressions through loose structures of
knowledge and beliefs that people have about the organization. According to Rho, Yun, & Lee
(2015) states that organizational image, identity, and identification are powerful concepts when
seeking to understand the performance of an organization. These factors go beyond identity to
organizational behaviors that foster the success of any organization. The fact that Google
struggled with its public image before it became known to everybody means that there are
challenges in meeting the needs of the community.
Challenges in managing resources since all the new business functions within Alphabet
depended on Google for capital to grow. This has led to business challenges since some of the
functional areas have to entirely depend on Google for funding and it may be difficult for these
new model businesses to ever be as profitable as Google was one day. This is seen from the fact
that the non-Google companies generated only $448 million in 2015 which analysts have termed
the restructure as a failure (Shewan, 2015). This calls for the need to develop strategies for
managing the new business unit to realize the expected profits.
Another challenge that the new outfit is facing is leadership challenges in the smaller
businesses within Alphabet. Before the restructure, the whole business was led by the founders
which made it easy for them to lead the organization in the best way possible. The Google
leadership is built on charisma and success which is difficult to find in other leaders (Tran,
2017). The delegation of leadership to business CEOs has proved challenging since they are
supposed to manage the businesses on their own and report to the higher management.
Recommendations for a better outcome
The first recommendation that needs to be taken in developing a business strategy for
Alphabet that will reflect in all other businesses within. According to Favaro (2015) developing a

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management strategy will lead to dramatic improvement of the company since the new outfit will
have a better way of managing the other business. The success of Google is attributed to a clear
business strategy that saw the company gain market share.
There is a need to develop succession planning strategies for leaders who quit the
organization or retire. One of the challenges that the company is facing is getting the right
quality of leaders who reflect the business needs of the organization (Mckeown, 2011). Google
has thrived on the leadership of its pioneers who have now taken over the larger company
Alphabet. Succession planning prepares employees for future positions in the organization.
Aggressive marketing strategies need to be used to ensure that the new name Alphabet
reflects in the mind of the public. According to Zenger (2015), only investors understand the
difference between the two companies since most people are not aware of Alphabet but rather
only know the existence of Google. Marketing strategies will improve brand image and ensure
that the new business image gains a better understanding of the community.

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References
Brandom, R. (2015, August 11). Why Google's Alphabet shakeup makes sense. The Verge.
Favaro, K. (2015, September). The Strategy In Alphabet (nee Google). Forbes.
Hern, A. (2015, August 11). Why Google is restructuring, why the name Alphabet and how it
affects you. The Guardian.
Lunenburg, F. C. (2012). Organizational Structure: Mintzberg’s Framework. International
Journal of Scholarly, Academic, Intellectual Diversity, 14(1).
Mckeown, M. (2011). The Strategy Book: How to think and act strategically for outstanding
result. Upper Saddle River, New JerseY: Prentice Hall.
Rho, E., Yun, T., & Lee, K. (2015). Does Organizational Image Matter? Image, Identification,
and Employee Behaviors in Public and Nonprofit Organizations. Public Administration
Review, 75(3).
Robbins, S., & Judge, T. (2007). Organizational Behavior. New York: Pearson Education.
Shewan, D. (2015, December 24). Everything You Need to Know About the Google/Alphabet
Move . The Word Stream Blog .
Smith, D. (2016, December 7). One year later, nobody knows what Alphabet is — and that's a
godsend for Google's public-image problems. Business Insider.
Tran, S. K. (2017). GOOGLE: a reflection of culture, leader, and management. International
Journal of Corporate Social Responsibility, 2(10).
Zenger, T. (2015, August). Why Google Became Alphabet. Havard Business Review.