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The congruence model as put forth by suggests that organizations need to have a particular degree of consistency and fit for twelve components in order to achieve success in their strategies. They define congruence as how well the various components within the organization fit together. This means that for any organization, the components that lead to the effectiveness of the model need to be of high quality in order to fit with the others. It can be argued that the congruence model suggests that inputs for the organization must match outputs through making an efficient transformation process and feedback loop. These are the four major categories of the twelve components of the congruence models. The organization chosen for this analysis is Google. The organization meets the inclusion criteria since it has more than 25 employees.
Organizational history is defined as the period in time that the organization has been in existence combined with major historical events that have shaped the organization to what it currently is. It also includes the key leaders that have been in the organization and any decisions that they made that led the organization to become what it currently is. Any crises that arose and the company managed to survive are also an integral part of the organization's history .
Since its inception in the mid-1990s, two people have been integral to the success of the company. These are the founders, Larry Page and Sergey Brin. The two started Google with a vision to provide open access to information to people all over the world. It is this vision that has made Google what it is today. The two have also been criticized by many people on their morality. Critics have argued that Google's business sense is poor since though the company has managed to be profitable year after year, the company seems to be doing everything by the book. The issue facing the critics is that the organization's management is 'too right' which does not match what other organizations have had to do in order to succeed. Many of the organizations that are as large as Google have had to craft sneaky strategies in order to stand at the top of their industry. The founders responded to this criticism by stating that their objectivity at the company has always been to create and maintain trust from their consumers. Their unofficial business mantra "don't be evil" also supports the response and attitude that the founders have had since the inception of the company. What the Google founders have proven is that it is possible for an organization to succeed without having to be immoral.
Organizational environment is defined as the internal and external demands and constraints which the organization faces. It also includes the opportunities for growth that the market presents to the organization alongside the clientele, contracts, competition and market trends. The external environment also includes the general performance of the economy which directly affects the organization's performance, regulations, political interference and other special interest groups who influence the organization's strategy and performance .
Google has always strived to operate with high ethics and a no evil philosophy. The company's core values have always been at the helm of the organization. Google is currently the leader in search which provides many opportunities for growth of the company's market. Additionally, search engine advertising and targeting is a growing market which allows Google to offer more services to its consumers. The company is also growing into more countries. Though it has offices in more than 50 countries around the world, the company still has potential for growth since it is the most popular search engine in over 120 countries around the world.
Google also offers other services to its consumers which are being incorporated into their day to day lives such as desktop search which has been incorporated into most Linux-based operating systems. Google's mobile operating system, Android, has also gained in popularity making it the most popular mobile operating system. Google has entered into many formal partnerships with mobile manufacturers which presents growth opportunities for the company.
Critics and business analysts have also argued that Google is 'recession proof' as a result of its services being highly targeted and offering opportunities for companies hit by the recession to salvage themselves. This also presents an opportunity for Google to continue growing despite the economy's performance.
This is defined as the financial inputs, human resources, information, knowledge, goods and services that a company provides to its consumers . Google has a healthy financial base which has been increasing since the company's inception. The company currently had its annual revenue hit the $50 billion mark for the first time in 2012. 99% of the company's revenue comes from its search advertising service since most of the company's products and services are free to use. Google also has good financial ratios. The company's growth ratio, activity ratios and profit ratios all point at a financially stable company that is expected to remain so for many years. The company also has a high liability/assets ratio which suggests that debt management within the company is being done properly.
The company also has many patents which are resources that protect the intellectual properties of the company. Google has protected many of its innovations through patents which allow them to keep their complex algorithms in their inner circle and prevent competitors from releasing similar products. This ensures that Google has 'monopoly' in the offering of certain services such as PageRank. However, since patents expire after a certain period of time, it is expected that Google will face problems upon expiry of its patents.
Another important resource that Google enjoys is a strong brand name. Over the years that Google has been in existence, the company has managed to build a strong brand name that has even led to the inclusion of the verb 'google' in the dictionary. The bulk of the company's growth and success comes from the fact that Google is a well-known name around the world and their reputation precedes them wherever they go.
Strategy is defined as the tactics and plans that the organization and its management make for the organization to survive and prosper both on long and short-term. These are the goals and objectives of the organization and they are the means through which the organization matches its resources to the environment it operates.
For Google, their primary strategy is based on innovation. One major aspect of Google which the company's success is attributed to is their 'systematic innovation'. This means that the company creates an enabling environment whereby they are able to ask themselves why the status quo is and what they can do to make it better . This also involves constant brainstorming as well as thinking outside the box in the most unnatural way. Google encourages its employees to use its state of the art gym and leisure rooms during working hours since they embrace the work hard, play hard culture.
The technology/tasks component is one that requires balance. For the organization to succeed, it must be able to use the available tools and techniques towards achieving methods and processes that are efficient in producing innovative products and services for its consumers. Specialty services are extremely important in this case since such specialties or consultants help to build innovation within the organization .
Within Google, the degree of innovation is extremely high. Google prides itself in having a strong culture of innovation. It is as a result of this that the company has scaled its infrastructure significantly over the years and diversified its product offerings to represent their innovative nature. The founders and senior management of the organization are always looking for new opportunities for innovation or ways to better their products. This can be also seen in the large number of companies which Google has acquired over the years in order to incorporate their services into their product offerings .
Formal organization system
The formal organizational system includes all written and unwritten operating procedures of the organization including the departmentalization and grouping of work into functions. It also depicts the formal relationships that exist between the groups and major units in the organization and how they are used to coordinate and control the organization's performance. Other aspects that are looked at include the rewards and recognition of employees, decision-making processes, HR policies, planning methods and resource-based motivation of employees .
Informal organization system
This component refers to the arrangements that are made in an informal manner that the organization works with in order to succeed. They include the organization's culture, values, vision and aspects of conflict resolution and organizational learning. Google has an informal corporate culture that encompasses the no evil philosophy alongside other ethical principles. The company offers stock options to employees even at entry level which acts as a motivation factor towards their improved performance. This is also seen in the company's ranking as the best employer in the world as per data released by Fortune magazine and Universum. The no evil philosophy is one of the major values that the company attributes its success to.
Individuals within the organization refer to the knowledge and skills which the organization's employees need to transform the various inputs into outputs. These include the commitment and motivation of employees alongside the availability of much needed human resources. Google prides itself in having an informal work culture where the employees are allowed to do their own tasks in their own chosen way provided they perform to the expected standards. Teamwork is encouraged and employees are provided with all necessary tools to enable them to work together through teamwork . Google also offers opportunities for personal development for employees through training opportunities and formal education through scholarships offered by the company.
Organizational outputs represent the utilization of resources within the organization alongside the environment that the organization operates in. It is a reflection of the adaptability of the organization to the environment and their financial viability. It also represents how well an organization uses its resources and the quality of their products and services, market share profitability and stakeholder satisfaction.
Google's business model is centered on monetizing search results that are delivered to consumers. The company has managed to generate 99% of their revenue through this channel though there are other revenue streams that the company has introduced over the years. This has helped the company achieve brilliant financial results with the recent result being the company hit the $50 billion mark in annual revenue for the year 2012. Google has thus managed to build business value for its advertisers which have helped to improve their revenue year after year. As a result of the ever increasing revenue figures posted by Google, shareholders have been extremely pleased with the company's performance.
Other stakeholders are also pleased with the company. The company provides irreplaceable services for most of its consumers meaning that it is indispensable. Google has also strived to better the consumer experience which is proven by their introduction of new technologies and improvement of current technologies. Over the years, Google has bet their reputation on providing innovative services for its consumers which can be seen in the continuous updates to the Android system and other Google services such as mail, drive and news.
This represents the satisfaction and productivity levels of the various members of the organization across all their functions, departments. It also encompasses the quality of their group outputs. Google provides all its employees with the necessary tools to succeed such as Laptops, workstations, etc. Google's servers and internal software enable and encourage teamwork as well as employee input in decision-making in order to tailor their products to the needs of their consumers. Performers are rewarded through bonuses, stock options and formal recognition through promotions and awards. This keeps employees motivated towards the success of the organization.
Individual effectiveness refers to the level of satisfaction of employees that directly influences the employee turnover and number of vacancies that arise in the organization. Google through their human resources department, dubbed the 'People Operations' department, constantly tries to find new ways to keep their employees satisfied. This has helped employees to deem Google as one of the best places to work worldwide.
The feedback loop refers to the different points within the organization which help to coordinate the organization's input towards creating output. These include work results and other information that reflects the degree of effectiveness within the organization as well as the various strategies, goals, and objectives which create a source of potential learning for the organization. For Google, the decision-making structure within Google is a decentralized one where employees are encouraged to give their input to their line managers who then present these to the final managers meeting. Though decision-making and prioritization of organizational activities are undertaken majorly by the founders and the organization's CEO, Eric Schmidt, the organization presents their employees with an opportunity to give important feedback that is useful to the decision-making process.
Major congruencies and incongruences between the components
Google can be said to have major congruencies between its inputs and outputs as a result of its ever improving financial performance. Google prides itself in keeping its shareholders happy through dividends and other measures. This has helped Google to keep shareholder interference low since they are able to see that their input matches the output.
Google's innovation also matches its consumer satisfaction. Since the company is always looking for new ways to improve the consumer experience, Google's innovation matches its consumer satisfaction. Over the years, Google's products and services have been unmatched by competitors who though provide stiff competition, help consumers to see the indispensable nature of Google as the industry leader.
Google's efforts to keep their employees satisfied also matches its low employee turnover. As a result of the company always striving to find new ways to keep their employees happy alongside the other methods that are already in place such as rewards and remuneration, stock options, performance-based remuneration and recognition, their employee turnover rate has been extremely low. Google has also been voted as the best workplace around the world by its employees as a result of these.
Google has a high degree of congruence in the six components analyzed which are history, environment, resources, technologies and tasks, formal organizational system and outputs. The high degree of congruence helps the organization to be effective by being able to achieve a high performance that is similar to their inputs and strategy. Over the years, Google has managed to be prosperous in a highly ethical and moral way which has kept its shareholders and other stakeholders happy. Google has not major incongruences as analyzed by the components.