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Google’s Organizational Structure & Organizational Culture

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Added on  2019-09-20

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Google’s organizational structure and organizational culture are aligned to support the company’s competitive strength. The company’s organizational structure is not conventional. Google’s organizational culture is also not typical because it emphasizes change and direct social links within the firm. Theory suggests that a strong alignment between a firm’s organizational structure and its organizational culture can lead to higher chances of success. This benefit is manifested in the case of Google’s businesses that continue to expand and prosper. Thus, the company’s current dominant position is attributable to the synergistic benefits of its organizational structure and organizational culture.

Google’s Organizational Structure & Organizational Culture

   Added on 2019-09-20

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T205B TMA Case StudyGoogle’s Organizational Structure & Organizational CultureGoogle’s organizational structure and organizational culture are aligned to support the company’s competitive strength. Google’s success is linked to the effectiveness of its organizational structure and organizational culture in supporting excellence in innovation. The company’s organizational structure is not conventional. Google’s organizational culture is also not typical because it emphasizes change and direct social links within the firm. Theory suggests that a strong alignment between a firm’s organizational structure and its organizational culture can lead to higher chances of success. Thisbenefit is manifested in the case of Google’s businesses that continue to expand and prosper. Thus, the company’s current dominant position is attributable to the synergistic benefits of its organizational structure and organizational culture.Google’s organizational structure supports the company’s organizational culture to maximize effectiveness of innovation.Google’s Organizational StructureGoogle has a cross-functional organizational structure, which is technically a matrix organizational structure with a considerable degree of flatness. Thus, the company’s organizational structure has three main characteristics:1.Function-based definition2.Product-based definition3.FlatnessGoogle uses function as basis for grouping employees. For example, the company has a Sales Operations team, an Engineering & Design Team, and a Product Management Team, among others. The firm also uses products as basis for grouping employees. For example, the company groups employees for developing Nexus devices. The firm also groups employees for its Fiber business. In addition, the firm’s organizational structure has considerable flatness. A flat organizational structure means that Google’s employees, teams or groups can bypass middle management and report directly to CEO Larry Page. Employees can also meet and share information across teams.1
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Google’s Organizational CultureGoogle’s organizational culture is not typical, partly because of the effects of the firm’s organizational structure. In essence, structure and culture interact to influence the capabilities of the organization. Google’s organizational culture is:1.Open2.Innovative3.Smart with emphasis on excellence4.Hands-on5.Supports small-company-family rapportOpenness is achieved through the matrix organizational structure. Within Google’s organizational culture context, employees feel free to give their ideas and opinions. Innovation isat the heart of Google. Every employee is conditioned to contribute innovative ideas. In this organizational culture, the firm also favors smart employees who strive for excellence. In addition, the companysupports employee involvement in projects and experiments. The overall ambiance at the company’s offices is warm because the firm’s organizational culture maintains a small-company-family feel, where people can easily talk and share ideas with each other, including CEO Larry Page. Thus, Google’s organizational culture supports excellence in innovation through sharing of ideas and capability to rapidly respond to the market.Our culture It’s really the people that make Google the kind of company it is. We hire people who are smart and determined, and we favor ability over experience. Although Googlers share common goals and visions for the company, we come from all walks of life and speak dozens of languages, reflecting the global audience that we serve. And when not at work, Googlers pursue interests ranging from cycling to beekeeping.We strive to maintain the open culture often associated with startups, in which everyone is a hands-on contributor and feels comfortable sharing ideas and opinions. In our weekly (“TGIF”) meetings—not to mention over email or in the cafe—Googlers ask questions directly to Larry, Sergey and other execs about any number of company issues. Our offices and cafes are designed to encourage interactions between Googlers within and across teams, and to spark conversation about work as well as play. Google's Business Leadership and Organizational CultureGoogle Inc. has received a lot of attention and acclaim for its unusual organizational culture, which is designed to encourage both loyalty and creativity. Google has created many significant products through this emphasis on innovation, including the Google search engine, Google Mapsand the Google Chrome Web browser. The company is now much larger than it was when the organizational culture first developed, forcing some changes to the original model.2
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Leadership StructureGoogle's corporate structure is not particularly unusual other than the existence of a few unique leadership positions such as Chief Culture Officer and Chief Internet Evangelist. The company isoverseen by a board of directors, which passes instructions down through an executive management group. This group oversees several departments such as Engineering, Products, Legal, Finance and Sales. Each of these departments is divided into smaller units. For instance, the Sales department has branches dedicated to the Americas, Asia Pacific, and Europe, the Middle East and Africa. Despite the use of a standard corporate organizational structure, Google has developed a corporate culture based on giving employees substantial leeway to develop new ideas without excessive oversight.The 70/20/10 RuleAll Google employees follow a rule called the 70/20/10 rule, under which they are expected to devote 70 percent of every work day to whichever projects are assigned by management, 20 percent of each day to new projects or ideas related to their core projects, and 10 percent to any new ideas they want to pursue regardless of what they might be. The company credits this rule with being the driving force behind many of Google's new products and services, because programmers, salespeople and even executives are given enough space to be creative. When the company became too large to easily manage the flow of new ideas and projects, it instituted a schedule of meetings between employees and the company's founders and chief executives. At these meetings, employees can pitch new ideas and projects directly to the top executives.CriticismsAlthough the culture of creativity at Google has resulted in many new products, critics such as Gene Munster from the Piper Jaffray Investment Bank charge that most of these products have not produced substantial new revenue. Because advertising on search engine pages produces much of Google's revenues, many of its products are offered for free to encourage the use of the Google search engine. Google initially paid employees less than many other Silicon Valley firms, but used other perks to attract employees. For instance, Google employees receive free food cooked by a company chef, are provided with bus rides to work and are allowed to travel through the building on scooters and bicycles. They also have access to company daycare facilities, exercise gyms and other amenities. These perks are intended to help create a fun and creative atmosphere. In addition, Google now offers stock plans and higher wages that have brought its compensation package into the same range as other companies in the same industry.Google's MottoGoogle's unofficial motto is “Don't Be Evil,” and many of its policies and corporate decisions arebased on trying to live up to this motto. Although it may seem eccentric to pursue such an approach in a business environment where profit is always the final concern, employees report feeling very differently about working at Google as opposed to other companies. According to a New York Times article from 2005, Google employees interviewed said that they felt a sense of being personally invested in the company's sense of mission and future success. A 2009 article in3
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