Google Management

Google's Four Functions of Management

Google began as a research project in January 1996 by Larry Page and Sergey Brin, two Ph.D. students at Stanford University, California. They hypothesized that a search engine that analyzed the relationships between websites would produce better results than existing techniques, which essentially ranked results according to the number of times the search term appeared on a page. Originally the search engine used the Stanford University website with the domain google.stanford.edu. Google is now an American Public Corporation specializing in Internet searching and online advertising. The domain google.com was registered on September 14, 1997, and the company was incorporated as Google Inc. on September 7, 1998 at a friend's garage in Menlo Park, California. The Google search engine attracted a loyal following among the growing number of Internet users, who liked its simple design. After quickly outgrowing two other sites, the company leased a complex of buildings in Mountain View at 1600 Amphitheatre Parkway from Silicon Graphics in 1999. The company has remained at this location ever since, and the complex has since become known as the 'Googleplex.' In 2006, Google bought the property from SGI for 319 million (Olsen, Google). Google's competitive advantage has been built upon two decisive factors: its innovative technology, and its simplicity. It led in the United States with 47.3% of Web searches in the month of May compared with Yahoo at 20.9% and MSN at 13.6%. Google's management techniques have proven to be fruitful. One of their "10 Golden Rules" -Google's compilation of ten rules which help motivate their employees - is place employee's in the same or even different departments in close quarters to allow them to communicate, which in turn, makes coordination extremely efficient. Google runs a unique and exceptional work atmosphere, from its constant technological advances to its friendly work environment; Google's future seems limitless.

Google is situated in Mountain View, California, or most commonly known as the 'Googleplex'. It is there where the powerful minds at Google create tens of hundreds of applications and products which are aimed at either small business or individual users. But it is from there advertisers which they receive their most profit (Google Form 10-k). One of the ways Google generates revenue from these advertisers is a product called Google Adwords. Advertisers specify the words that should trigger their ads and the maximum amount they are willing to pay per click. When a user searches Google's search engine on www.google.com, ads for relevant words are shown as "sponsored link" on the right side of the screen, and sometimes above the main search results. Google's revenue from advertisers grew from $1,465,934 in 2003, to $6,138,560 in 2005 proving to extremely profitable (Google Form 10-k). Google is a multi-national corporation which exists in every country in the world which has access to the World Wide Web. Japan, India, and in the U.S.A., Google's global corporation is there and is changing the lives of people who access the internet.

Aside from products and services, a company's organizational structure is critical. Google's organizational structure is decentralized, so that employees are encouraged to work together to find solutions to ongoing problems (Forbes, Org. Chart). Google clearly exhibits McGregor's Theory Y. From its massage room to its volley ball court, Google believes that when its employees enjoy coming to work and maybe even possibly look forward to coming to work, its employees will be as productive as they can while making decisions which are in the interest of Google's success.

Google's mission statement is simply to bring the world's information and knowledge to each and every person's fingertips (Google Form 10-k). It believes that its greatest productivity and accomplishment is a user's full accessibility to the world around him. The initial plan, as I've mentioned earlier, was to create a basic search engine. Either planning for a multi-national corporation or planning for an e-commerce website which an individual started at home, a business undoubtedly needs constant planning and direction. While the planning usually falls into the hands of the top level managers, Google's form of decentralization puts power into any employee to pursue his or her own interests at least 20% of their time (Google engineers life). Google also portrays an atmosphere in which it stresses that failure coexists with triumph. For instance, Sheryl Sandberg - a vice president at Google - recently made an error that cost Google several million dollars, her response to that error was "Bad decision, moved to quickly, no controls in place, wasted some money". When she told her boss Larry Page, co-founder of Google, he said "I'm so glad you made this mistake."(Leshinsky, Chaos by design). The planning and direction of this company seems to fall in the hands of many of the employees rather than the actual CEO or president.

With Google's decentralization, it's difficult to control employees. But Google's aim is just the opposite - giving employees the freedom to work on the projects they enjoy or the projects they choose. This approach to business management has proven to increase productivity. Services like Gmail, Google News, and Orkut, would not have been created if not for the 20% of time an employee has to work on any project they desire. Because Google CEO and presidents believe that their employees enjoy coming to work as well as being productive, they are able to give this time to their workers.

Google's investment and merge with AOL Time Warner, seems to have been an ingenious decision. In exchange for one billion dollars cash, Google will take 5% in equity stake in America Online, Inc., allowing the company to participate in AOL's future success (Rosenbush, Businessweek.com). This will, in time, produce more revenue for Google due to the creation of AOL Marketplace which will increase advertisements - Google's biggest profit maker.

In conclusion, whether it's Google's cutting edge technology or its decentralized management technique, Google's rapid growth seems almost unstoppable. Google has introduced a new and apparently successful managerial style. In contrast to today's leading companies, Google gives enormous power and trust into its employee's which has proved productive. Also, it puts its employee's within close quarters of one another to promote synergy. Google has created an environment which promotes creativity as well as a sense