Organisational Structure Case Study: Google Inc.

Organisational Structure Report Assessment Requirements

You are required to select one business organisation of your choice; then identify and describe their organisational structure.

Evaluate through the use of relevant examples how their structure contributes towards achieving organisational goals and objectives effectively and efficiently.

You should include in your report recommendations to management (at least 5)
about how such structures can be enhanced.

Description of Assessment Requirements:-

1. Assignments. will be. graded on .the basis of research done, analysis of the facts collated, stand taken and the justification of the stand.
2. All research must be referenced using the APA style of referencing both in text and a Reference and Bibliography list attached. Improper or lack of either of these r;onstitutes plagiarism.
3. Students found copying from other students will also be charged with
collusion.

Module Learning
. .
1. Understand the key concepts, theories and practices which underpin the practice of management and the role of the manager in contemporary business organisations.
2. Comprehend the complexity of management roles and functions and the diversity of management focus within modern organisations.
3. Evaluate, describe and discuss the key concepts, approaches and skills which are necessary for the modern manager in contemporary organisations and cultures.

This is the format for this work;-

1. Title
2.Summary
3. Table of content
4. Introduction- introduce a company that you choose
5. the main body- with sub heading
6. conclusion
7. recommendation at least 5 recommendations
8. List of references

Solution

Summary

Google Inc. is multinational internet based company that was established in 1988 by Larry Page and Sergey Brin. Since its inception the company has had remarkable success and is renowned word wide for its innovative products and services. Despite its huge size, the company maintains a horizontal organisational structure which contributes significantly to its innovative success. This structure facilitates free flow of information and enhances collaboration and teamwork among the employees. The main advantages of the horizontal organisational structure include improved flexibility and responsiveness, customer orientation, facilitation of a holistic view of the company’s goals and objectives among the employees and promotion of teamwork and collaboration.

On the other hand, it is challenging and time consuming to determine the core processes to be used in achieving the organisation’s goals and objectives. Poor selection of these processes can have a negative impact on the performance and competitive advantage of the company. The implementation of a flat organisational structure also requires changes in the organisation’s culture and systems. This could face a lot of resistance from the employees, especially managerial personnel who desire to retain power and authority.  Moreover, it limits in-depth skill development because it undermines specialization and division of labor. The company should make deliberate efforts to address the weaknesses of the horizontal structure in order to ensure continued success. Additionally, because of its burgeoning size, the company cannot rely exclusively on the horizontal structure. The management should incorporate some aspects of vertical organisational structure into the company in order to solve some the challenges associated with the horizontal structure 

Introduction

Google Inc. is a multinational company that mainly deals with internet-based products and services including search engines, software, cloud computing and online advertising. The company was cofounded by Larry Page and Sergey Brin and incorporated as a private limited company in 1988 (Google Inc., 2013; Stockport, 2009, p.486). It was later changed to a public limited company in 2004. The development of the Google search engine signified a quantum leap in search technology (Elgin, 2008, p.1). Since its incorporation, the company has had remarkable success. Only three years into operations, the company was already making annual sales in excess of $ 900 million and $ 150 million in net profit per annum (Elgin, 2008, p.2). By the time it was made public its value had grown to well over $ 23 billion. The company’s success is also evidenced by its diverse product portfolio. Apart from its core search engine, ‘Google’, the company offers other web based products including advertising services, communication and publishing tools, development tools, map related products and statistical tools. Additionally, Google deals with desktop and mobile applications, operating systems and hardware. Some of the company’s most popular products include Google search, Gmail, Google maps and Google chrome. The company has also acquired some notable brands including Android and YouTube (The Sydney Morning Herald, 2006; Elgin, 2005). Google’s spectacular success lured other competitors such as Microsoft and Yahoo! who developed Bing and Yahoo! search respectively. Notwithstanding, the company is still a leader in its field.

Right from the time it was incorporated, the company’s mission has been “to organize the world’s information and make it universally accessible and useful (Google Inc., 2013; Claburn & Babcock, 2006, p.34). The company zealously protects its brand and maintains high standards within the organisation in order to sustain brand loyalty (Elgin, 2008, p.1). It also aims at inspiring bold and fresh ideas by creating a fun workplace environment and giving the employees freedom to work on pet projects (Weber, 2008, p.5). The company’s success relies heavily on its ability to create innovative products and as such, it facilitates free flow of information within the organisation (Strategic Direction, 2013, p.16). In order to achieve this, the company has a horizontal organis

ational structure.

Company Organisational Structure

Google Inc.’s horizontal organisational structure is characterized by relatively few tiers of management and several communication channels (Belasen, 2000, p. 140). According to DuBrin (2012, p.278), a horizontal organisational structure involves the arrangement of work by multidisciplinary teams that are responsible for accomplishing a process. All the employees take collective responsibility for customers and work together to accomplish the tasks as opposed to grouping the organisation into departments which handle different tasks (Daft et al., 2010, p.369). A horizontal structure can therefore be considered as a team structure. Managerial intervention and supervision is generally limited and the employees have a very high level of autonomy. This structure can be witnessed mostly in small and medium sized enterprises (SMEs) or in small independent units within large organisations.

Characteristics

Horizontal organisational structures are created around cross-functional core processes as opposed to tasks, functions or geography (Daft et al., 2010, p.119). For this reason, the boundaries between different departments are not very distinct (Porter, 2008, p.395). This is exhibited by Google Inc. Furthermore, the organisational design and performance is based on self directed teams and not individuals. The company lays strong emphasis on teamwork (Zielinski, 2010, p. 65). Consequently, the organisation is designed to facilitate interaction between different employees within and across teams (Google Inc., 2013). Other than that, the project owners have responsibility for each core process in its entirety. At Google, the operations are divided into projects and all the employees are expected to take turns in managing the projects. Even though, they are not expected to control the employees, the project managers are expected to show exemplary talent and skills in guiding the other employees to achieve the goals and objectives of the project assigned.

Another characteristic of the horizontal structure is that team members are given the skills, tools, motivation and authority to make decisions central to the team’s performance. They are also cross trained to carry out the different duties of each member on the team (Cornelissen, 2004, p.143). This enhances their decision making capabilities because they learn to appreciate the effects of their individual decisions on the overall performance of the team. The individual teams also have the freedom to think creatively and respond to challenges more flexibly (Daft et al., 2010, p.120). Customer satisfaction is the driving force behind horizontal organisations. The effectiveness of the company’s performance is therefore measured in terms of achievement of predetermined goals and objectives.

In line with the horizontal organisational structure, Google strives to maintain an open organisational culture (Google Inc., 2013). This culture is based on trust and collaboration and focused on continuous improvement. Every employee therefore contributes directly to the achievements of the company’s goals and objectives. Moreover, the company maintains an open door policy and facilitates free flow of information within the organisation. It for instance holds weekly ‘all-hands’ (“TGIF”) meetings, where the employees address questions about the various issues within the company directly to the CEOs and Cofounders including  Larry Page and Sergey Brin among other executives. Unlike other companies which emphasize on experience, Google places more value on the ability of the employees. It also has diversified workforce which enables it to meet the needs of the diverse global market more effectively. Additionally, the company provides several recreational facilities such as gyms and video games and encourages employees to pursue personal interests ranging from cycling to beekeeping. This is achieved through the company’s twenty percent time policy, which allows the employees to use roughly one day of the week pursuing projects outside their official area of responsibility (Savoia & Copeland, 2011; Manimala & Wasdani, 2013). This policy encourages them to think outside the box and develop their entrepreneurial skills. The company provides venture capital for projects developed during the twenty percent time and those projects that are successful are incorporated into the company’s mainstream product line.

It is worth noting that Google, like other organisations has different functional departments including engineering, finance, human resources, operations, product management and sales. Furthermore, the different departments have managerial personnel like directors, vice presidents and project leaders. However, unlike other organisations, the key role of managers is to guide and connect and not to control. Moreover, the company has unique reporting relationships whereby there could be 30 to 40 people reporting directly to a manager. Title and seniority are not very important in the organisation. The majority of the employees have the capacity to make product decisions and launch or assign activities.

Strengths

Perhaps the most important strength of horizontal organisational structures is that they improve flexibility and responsiveness (Daft et al., 2010, p.119). The structure is customer oriented which results in greater customer satisfaction and improved productivity, efficiency and effectiveness. It also enables employees to have a broader perspective of the goals and objectives within the organisation because it does not have strict boundaries and structural rigidities. Finally, it promotes teamwork and collaboration, which improve the quality of life of the employees by offering them the opportunity to share responsibility, make effective decisions and hold themselves accountable for the outcomes of their actions.    

Weaknesses

The most challenging aspect of horizontal organisations is the determination of core processes, which are aimed at attaining the goals and objectives of the organisation (Daft et al., 2010, p.120). The process determination is not only taxing but also time consuming. Other than that, implementation of a horizontal structure in an organisation entails changes in organisational culture, management philosophy, performance appraisal procedures and information systems. This might cause traditional managers to baulk because it would mean loss of authority and power. The structure also requires training of employees to work effectively in teams. Furthermore, it limits in-depth skill development (Aquinas, 2008, p.128).

Contribution of organisational Structure towards the Company’s Performance

Google’s organisational structure contributes significantly to the achievement of the company’s goals and objectives. The company’s open door policy encourages employees to air their grievances and resolve interpersonal conflicts. This helps to create a favorable working environment, which in turn motivates and elicits goal directed behavior among the employees. The recreational facilities provided by the company also motivate the employees and enhance their interactions. The flexible working hours and the 20 percent time policy enable employees to attain a suitable work-life balance. The twenty percent time policy has proven to be quite effective, given that half of the company’s products including Gmail and Google News started as twenty percent time projects (Savoia & Copeland, 2011, p.59). The management philosophy at Google generally creates a strong organisational culture which goes a long way in increasing job satisfaction and reducing the rate of employee turnover. The cost of managing employees is also substantially reduced because the motivated workforce at the company requires less supervision.  

The flat organisational structure contributes significantly to innovation which the company’s major source of competitive advantage. In fact, according to Google’s Chief Executive Officer (CEO), Eric Schmidt and the cofounders, “the business of Google is innovation” (Savoia & Copeland, 2011, p.58). The CEO also believes that innovation is the technological precondition for growth. Consequently, the company invests heavily in supporting, maintaining and continuously improving it products and services (Steiber & Alänge, 2013, p.243). In order to encourage innovation the company facilitates the free flow of information within the organisation. This is achieved through the horizontal organisational structure, which helps to reduce the barriers to effective communication within the organisation (Klie, 2010, p.14). Daft et al. (2010) and Borkowski (2009, p.436)  argue that horizontal communication overcomes barriers between departments and provides opportunities for coordination among employees to achieve unity of effort and organisational objectives.

Apart from innovation the free flow of communication also facilitates efficiency and effectiveness. This is achieved through teamwork and collaboration. The horizontal structure eliminates bureaucracy and structural rigidities which contribute to waste of time and delayed decision making. Moreover, because all the employees have the authority to make decisions relating to the company’s products and services, opportunity costs are reduced significantly and the company is able to respond quickly to changes in the external environment. The company is therefore in a better position to anticipate changes in the customers’ needs in order to produce tailor made products and services which enhance customer satisfaction and ultimately contribute to brand loyalty

Conclusion

Google Inc. uses a horizontal organisational structure mainly due to its innovative nature, which requires constant communication between the employees. The structure eliminates boundaries between different departments and facilitates interaction within and across teams in the organisation. Moreover, the organisation is customer oriented so employees collectively work towards the attainment of similar goals and objectives. This enhances customer satisfaction and promotes brand loyalty. The continuous innovation within the company is the key behind its success.

Recommendations

  • Despite the fact that the horizontal organisation structure has been very effective in achieving the organisations goals and objectives, the company’s high growth rate has presented a myriad of managerial challenges (Montalbano, 2008, p.28). Due to the company’s size, the management should not use only the horizontal structure but also incorporate some aspects of vertical organisational structure that create order. At the same time, it should avoid those that bring about structural rigidities (Camilleri, 2011, p.77). 
  • Managers at the company should be very careful while selecting the core processes that are employed to create customer value. Poor selection of the core processes would impact negatively on the company’s effectiveness in meeting customer needs.
  • Many organisations have bureaucratic organisational structures, which unlike that of Google Inc., limit the free flow of information, interaction and collaboration among employees. Most employees in the labor market will therefore have a very problem adapting to the organisational structure in Google Inc. Consequently, the company should organize training and induction programs to incorporate new employees into the organisation.
  • Horizontal organisational structures limit specialization and division of labor and therefore hinder the development in-depth skills at the workplace. The company should therefore introduce some degree of specialization in the workplace to ensure that employees gain greater expertise in their individual fields. Specialization and division of labor would contribute to innovation, which would further increase the company’s competitive advantage. Moreover, the company should facilitate job rotation to enhance the decision-making capabilities of the employees.
  • Finally, the company should adopt open innovation as opposed to closed innovation. Most of the company’s innovations are developed within. This limits the level of innovation in the company to the skills and talents of the company’s employees. By adopting open innovation, which incorporates the ideas of other industry players from non-competing firms, the company will obtain more ideas from the public domain and incorporate them into their products.

References

Aquinas, P.G., 2008. Organization structure and design : applications and challenges. New Delhi: Excel Book.

Belasen, A.T., 2000. Leading the learning organization : communication and competencies for managing change. 1st ed. New York: State University of New York Press.

Borkowski, N., 2009. Organizational behavior, theory, and design in health care. 1st ed. Sudbury, Mass: Jones and Bartlett Publishers.

Camilleri, E., 2011. Project success : critical factors and behaviours. 1st ed. Farnham: Gower Publishers.

Claburn, T. & Babcock, C., 2006. Google Revealed. InformationWeek, 28 August. pp.34-36,38,40-43.

Cornelissen, J., 2004. Corporate communications : theory and practice. 1st ed. London: SAGE.

Daft, R.L., Kendrick, M. & Vershinina, N., 2010. Management. 9th ed. Andover: South-Western/Cengage Learning.

Daft, R.L., Murphy, J. & Willmott, H., 2010. Organization theory and design. Andover: South-Western Cengage Learning.

DuBrin, A.J., 2012. Essentials of management. 9th ed. Mason, Ohio: South-Western/Thomson Learning.

Elgin, B., 2005. Google Buys Android for Its Mobile Arsenal. [Online] Available at:  http://www.businessweek.com/stories/2005-08-16/google-buys-android-for-its-mobile-arsenal [Accessed 15 September 2013].

Elgin, B., 2008. Sergey Brin and Larry Page: keeping the edge at google. In Entrepreneur Power Plays : How the World’s Most Dynamic Thinkers Reach the Top of Their Game. New York: The McGraw-Hill Companies, Inc. pp.1-15.

Google Inc., 2013. Google’s mission is to organize the world’s information and make it universally accessible and useful. [Online] Available at: http://www.google.com/about/company [Accessed 15 September 2013].

Google Inc., 2013. Our culture. [Online] Available at: http://www.google.com/intl/en/about/company/facts/culture [Accessed 15 September 2013].

Google Inc., 2013. Our history in depth. [Online] Available at: http://www.google.com/about/company/history [Accessed 15 September 2013].

Klie, S.2.1.(.2.2.1., 2010. Google’s innovation imperative. Canadian HR Reporter, 23(16), pp.14,16.

Manimala, M.J. & Wasdani, K.P., 2013. Distributed leadership at Google: lessons from the billion-dollar brand. Ivey Business Journal Online, http://search.proquest.com/docview/1370362790?accountid=30552

Montalbano, E., 2008. Growing Pains for Google. Computerworld, 42, pp.28-32.

Porter, M.E., 2008. Competitive Advantage: Creating and Sustaining Superior Performance. New York : The Free Press.

Savoia, A. & Copeland, P., 2011. Entrepreneurial Innovation at Google. Computing Now, April. pp.56-61.

Steiber, A. & Alänge, S., 2013. A corporate system for continuous innovation: the case of Google Inc. European Journal of Innovation Management, 16(2), pp.243-64.

Stockport, G.J., 2009. Google: Organising the Worlds Information. In Enhancing Organizational Performance Through Strategic Initiatives : Handbook of Management Cases. Sahibabad: Institute of Management Education. pp.486-503.

Strategic Direction, 2013. Google grows on people: Bottom-up leadership and minimalist management inspire innovation. Strategic Direction, 29(9), pp.16-18.

The Sydney Morning Herald, 2006. Boom: Google buys YouTube for $2.2b. [Online] Available at: http://www.smh.com.au/news/business/boom-google-buys-youtube-for-22b/2006/10/10/1160246131252.html [Accessed 15 September 2013].

Weber, S., 2008. Organizational behaviour – Google corporate culture in perspective. Scholarly Paper. GRIN Verlag.

Zielinski, D., 2010. Building a Better HR Team. HR Magazine, 55(8), pp.65-68.

Summary Solutions for other Organizations

Organizational Structure of Amazon

Summary

This report aims to analyze the organizational structure of Amazon and evaluate how it contributes to achieving the company’s goals and objectives effectively and efficiently. The report also provides recommendations to management on how the structure can be enhanced.

Table of Contents

  • Introduction
    • Company background
    • Purpose of the report
  • Organizational Structure of Amazon
    • Description of Amazon’s organizational structure
    • Evaluation of Amazon’s organizational structure
      • Contribution to achieving goals and objectives
      • Efficiency and effectiveness
    • Recommendations
  • Conclusion

Introduction

Amazon is a multinational technology company based in Seattle, Washington that specializes in e-commerce, cloud computing, digital streaming, and artificial intelligence. The company was founded in 1994 by Jeff Bezos and has since grown to become one of the largest and most successful companies in the world.

The purpose of this report is to analyze the organizational structure of Amazon and evaluate how it contributes to the achievement of the company’s goals and objectives. The report will also provide recommendations to management on how the structure can be enhanced.

Description of Amazon’s Organizational Structure

Amazon’s organizational structure is a matrix structure, which means that the company has a combination of functional and product-based departments. The functional departments are responsible for specific functions such as finance, marketing, and human resources, while the product-based departments are responsible for specific products or business lines such as Amazon Prime, Alexa, and AWS. This structure allows the company to balance the need for specialized expertise with the need for coordination and cooperation across different business lines.

Evaluation of Amazon’s Organizational Structure

Contribution to achieving goals and objectives

Amazon’s organizational structure allows for clear lines of communication and decision-making, which enables the company to efficiently and effectively achieve its goals and objectives. For example, the functional departments allow for specialized expertise in their respective fields, while the product-based departments allow for a focus on specific business lines and the unique needs of each. This structure allows for the efficient allocation of resources and a clear understanding of the company’s overall strategy.

Efficiency and Effectiveness

The matrix structure of Amazon also allows for flexibility and adaptability to changing market conditions. As the company has multiple product-based departments, they are able to quickly respond to changes in demand for specific products or services. Additionally, the functional departments provide support and guidance to the product-based departments, which allows for the effective and efficient implementation of strategies and initiatives.

Recommendations

  1. Encourage cross-functional collaboration: Encourage more collaboration and communication across functional departments to improve coordination and knowledge-sharing. This can be achieved through regular meetings or cross-functional teams.
  2. Emphasize flexibility and adaptability: Regularly review and update the organizational structure to ensure that it is flexible enough to respond to changing market conditions and customer needs.
  3. Encourage employee engagement: Implement initiatives and programs that promote employee engagement and empowerment to improve job satisfaction, motivation and productivity.
  4. Invest in technology: Invest in technology and digital tools to streamline communication, decision-making and collaboration.
  5. Emphasize performance management: Implement a performance management system that focuses on setting clear goals and expectations, regular feedback, and ongoing development and training opportunities.

Conclusion

Amazon’s organizational structure, with its combination of functional and product-based departments, allows for specialized expertise, efficient resource allocation, and adaptability to changing market conditions. This structure has played a significant role in the company’s success and has allowed it to efficiently and effectively achieve its goals and objectives.