History And Nature Of Business Of Google Commerce Essay
|✅ Paper Type: Free Essay||✅ Subject: Commerce|
|✅ Wordcount: 4894 words||✅ Published: 1st Jan 2015|
In this new era of globalization and advance in technology, Google had placed their position in the mind set of those cyber users as the most powerful search engine in the internet and also the most widely use web-based search engine in the world. No matter old or young, computer literate or not, the name Google will always appear in their conversation about the internet or computers. Let’s look on the history on how this company grew from a tiny to a giant and most recognize company in the whole wide world.
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Google Inc came to life with the two brilliant people as the founder of the company. Those two were Larry Page and Sergey Brin. Both of them are a PhDs holder in computer science in Stanford University California. In their research project, they came out with a plan to make a search engine that ranked websites according to the number of other websites that linked to that site. Before Google was established, search engines had ranked site simply by the number of times the search term searched for appeared on the webpage. By the brilliant mind of Larry and Sergey, they develop the technology called PageRank algorithm. PageRank is a link analysis algorithm that assigns a numerical weighting to each element of a hyperlinked set of document, such as the World Wide Web, with the purpose of measuring its relative importance within the set. All this in-depth research leads to a glorious day which is on September 15, 1997 where Google.com domain was registered. Soon after that, on September 4, 1998, they formally incorporated their company, Google Inc, at a friend’s garage in Menlo Park California. The name Google originates from “Googol” which refers to the mathematical equivalent of the number one followed by a hundred zeros. In March 1999, the company moved into offices at 165 University Avenue in Palo Alto. After that, the company leased a complex of buildings in Mountain View. Ever since then, the location of the headquarter remain unchanged.
Google core business is to provide a search engine for the cyber user who would like to go to their desire site. The Google search engine attracted a number of internet users by its sleek and simple design but result in amazing search result. After the initial stage of Google establishing itself in the world, it began selling advertisements associated with the search keywords. The advertisements were text-based in order to maximize the page loading speed. Most of the Google Inc revenue relies on the advertisement and they had been successfully with the help of AdWords and AdSense in their system. After having some experience in the industry, Google itself launched its own free web-based email service, known as Gmail in 2004. This service is established to meet the need of the cyber user in order to store and send their document through online. In the same year, one of the most captivating technologies that Google had launched is the Google Earth. Google Earth is an amazing creation that is a map of the earth based on the satellite image. It requires you to type the desire location that you want to view and it will process the image for you. Furthermore, Google Inc made a new partnership with NASA with even enhances the Google technologies. Google also had its own Google Video which allows user to search the internet for videos. One of the most important things in the Google Inc is that they have a strong organizational culture which brings them closer and stronger compare with other firms. The values that they emphasis on are creativity, simplicity and innovation in order to gain competitive advantage against their competitor.
An Introduction to Organizational Culture
There have been lots of definition regarding the term ‘Organizational Culture’ and most of them possessed certain element where you will find it very familiar. According to McShane and Von Glinow (2008), organizational culture consists of shared values and assumptions that guide the way that employees within that organization think and act and how they react to opportunities and solve problems. The employees of that particular organization are directed and guided by the “right way” of doing tasks and learn how to prioritize tasks that are important and to differentiate those tasks from other less important tasks. The employees also have certain beliefs and ideas about what kinds of goals they should pursue in the organization and their own ideology about the appropriate kinds or standards of behavior they should use to achieve these goals (Hill and Jones, 2001).
Gareth Morgan has described organizational culture as: “The set of the set of beliefs, values, and norms, together with symbols like dramatized events and personalities which represents the unique character of an organization, and provides the context for action in it and by it.” Every organization is unique in the sense that each and every one of them has their own distinct way of going about doing their business. This unique style of doing business that is different in every organization is made out of a complete combination of the artefacts, values, attitudes and shared assumptions of that organization whereby it is known as organizational culture.
The Elements of Organizational Culture
Organizational culture consists of a few elements. According to Schein’s study (as cited in McShane and Von Glinow, 2008), he defines culture as consisting of several levels that are made out of 2 primary categories that drive the organization’s action. The categories are made out of the visible elements of culture and also the underlying assumptions underneath, which in other words is the invisible element of culture.
Visible elements are the ‘artefacts’ that are found in the culture, which is the physical elements of an organization that is observable (Schein, 2004). The visible element of culture is also said to be a manifestation of the culture’s invisible values (Schein, 2004). Artefacts can be physical structure of the company, language, rituals and ceremonies as well as stories and legends (Schein, 2004).
The espoused values and shared assumptions sum up to be the invisible element which cannot be directly observable. . Espoused values are essentially the philosophies, goals and strategies that are stated by the management (Schein, 2004). In addition, shared values which are values that employees in the organization believe in and prioritize at the top of their hierarchy of values and also which they all share in common (McShane and Von Glinow, 2008). These values are normally some conscious beliefs which help in evaluating what is good, bad, right or wrong.
Along with shared values, another deeper element of culture, which some experts say is the real essence of culture, are shared assumptions which consists of unconscious, taken-for-granted perceptions or beliefs and also thoughts and feelings of individuals within organizations (Schein, 2004).
Physical structures and symbols
Physical structures and symbols such as buildings and the company logo do and can reflect or influence an organization’s culture (McShane and Von Glinow, 2008). The company logo characteristics such as the color, symbolic meaning, shape and characters can also portray the organization’s culture. The characteristics of the building such as the age, the shape, size, and location can also reveal the values that a company practices such as emphasizing flexibility, teamwork, environmental friendliness or any other values. Physical artifacts such as desks, chairs, office space, and wall hangings can also denote cultural meanings (McShane and Von Glinow, 2008).
Organizational language is defined as the so-called ‘language of the workplace’ (McShane and Von Glinow, 2008). It is a cultural artifact and highlights values that are held by organizational subcultures. How terms are used to describe something and how employees communicate with each other determines the character of an organization’s culture.
Rituals and Ceremonies
Rituals are a dramatized version of an organization’s culture by the customary activities of daily organizational life (McShane and Von Glinow, 2008). The example include how visitors are welcomed, how often senior executive s pays a visit to their subordinates, and how much time does the employee take lunch and much more. Ceremonies on the other hand are more formal than rituals. Ceremonies are activities that are carried out especially for the benefit of an audience (McShane and Von Glinow, 2008). Among the examples are product launches, press conferences and webcasts.
Organizational Stories and Legends
Stories are a part of the organization that shows the existence of a strong culture. Stories can be tales that talk about courageous things done by an employee of the company, or to ridicule past events that had strayed from the firm’s core values (McShane and Von Glinow, 2008). The stories and legends serves as powerful social reminder about the way things should or should not be done. In addition, stories play an important role in communicating the organization’s distinct culture in terms of the employees’ individual standard of performance, the corporate beliefs and also criteria of getting fired (McShane and Von Glinow, 2008). Stories in the organization can evoke emotion in those that hear these tales which will serve as a permanent reminder to the employees to uphold the organizational culture. Stories is also the greatest way to communicate the culture when it is about real people, real situations and known by employees throughout the firm (McShane and Von Glinow, 2008).
Organizational Cultural Strength
The strength of the organizational culture is referring as to how widely and deeply employees are holding the company’s dominant values and assumptions. In a strong organizational culture, most employees across all subunits maintain the dominant values (McShane and Von Glinow, 2008). The values are also difficult to change because they are institutionalized through artifacts.
Adaptive culture is defined as an organizational culture that exists when employees places their customers and stakeholders’ changing needs as a top priority and giving their support to initiatives that keep pace with these changes (McShane and Von Glinow, 2008).
Embedding Ethical Values
According to Hellriegel and Slocum (2009), organizational culture involves a complex interaction between formal and informal systems that may support ethical or unethical behavior. Formal systems include policies, structure, leadership, orientation, training programs, reward systems and decision-making processes. On the other hand, informal systems include rituals, stories, heroes, myths, sagas, language and norms (Hellriegel and Slocum, 2009). McShane and Von Glinow (2008) also shares a somewhat similar view with Hellriegel and Slocum (2009) on the possibility that organizational culture can affect and influence ethical conduct. This is logical because good behavior are influenced and directed by ethical values that are present in the individual. Therefore, organizations can guide the actions and behaviors of its employees by planting ethical values in its culture (McShane and Von Glinow, 2008). In a similar way, Hellriegel and Slocum (2009) also thinks that the organizational culture seems to affect ethical behavior. For example, the culture that upholds and places importance on ethical norms is a culture that encourages ethical behavior. Furthermore, the founders also play an important role in enforcing ethical behavior by exhibiting the right behavior.
Advantage of Possessing Strong Organizational Culture
According to McShane and Von Glinow (2008), a strong organizational culture is very important to a company. It is so valuable and precious to a company because it can give a sort of competitive advantage over other competitors. Companies with a strong culture are likely to succeed, but success is not guaranteed for a company with a strong organizational culture and it is subject to a particular set of conditions. In addition, strong cultures are often put in place by the company founder’s values and assumptions. In contrast, weak cultures exist when dominant values are only held by a few people at the top of the organization and are short-lived.
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Some experts like Kotter & Heskett, Tidball, Cremer, Besanko, Dranove, & Shanley (as cited in Muafi, 2009) have established that organizational culture has a significant effect on an organization’s long-term sustainability, economic performance and outcomes such as profitability, turnover and commitment. They also indicated that congruence of values and beliefs seems to create a unifying force that boosts organizational performance.
In Pfiffner and Sherwood’s study (as cited in Mahal, 2009), they suggested that there is a positive relationship between the culture and effectiveness of a firm. Wilderom et al., (as cited in Mahal, 2009) described that there is a significant relationship between organizational culture and effectiveness. Culture helps to reduce conflicts in the organization according to Gale’s study (as cited in Mahal, 2009), and make the organization more participative and zealous.
The Google Culture
Google is well known for their organizational cultures distinctiveness and uniqueness compared to their immediate competitors. On the Google corporate website, they have listed down 10 core principles that guide the actions of the entire organization. These are the values and assumptions shared within the organization. These values are also termed as ‘espoused values’, where it is not necessarily what the organization actually values even though the top executives of the company embrace them.
In Google, the daily organizational life is distinctive and is one that thrives on informal culture. The rituals that portray the organization’s culture as unique and possesses a small-company feel are portrayed daily at lunchtime, where almost all employees eat together at the many various office cafés while at the same time having an open, relaxed conversations with fellow Googlers that come from different teams (Google.com, 2010). Also, because one of the Google culture’s main pillars are the pillar of innovation, every Googler are very comfortable at sharing ideas, thoughts, and opinions with one another in a very informal working environment. Every employee is a hands-on contributor and everyone wears several hats (Google.com, 2010). Sergey and Brin also plays a big part of laying the foundation on what the Google culture is and the founders have continued to maintain the Google Way by organizing a weekly all-hands “TGIF” meetings for employees to pose questions directly at them (Google.com, 2010).
Here are some of a few of their core principles which will provide a look into Google’s management philosophy and the type of culture they want to possess:
In Google, the motivated employees who ‘live’ the Google brand and are aligned to the company call themselves ‘Googlers’. Even former employees of Google have a name which they refer to themselves as ‘Xooglers’ (Garret, 2005). This shows that in Google, their employees are so involved in the organization that they have their own symbolic name that mirrors the organization’s name and image, which is a sure sign of existing strong cultural values that are present within the company.
After tremendous growth in Google, the organization moved from a humble office building in Palo Alto, California back in its early days to its current office complex bought over from Silicon Graphics. The complex is popularly known as the Googleplex, which is a blend of the word ‘Google’ and ‘complex’ (“Googleplex,” 2005). Googleplex is the result of a careful selection that serves to establish Google’s unique and individualistic culture in the eyes of the employees and the public. The corporate campus is built to provide a very fun, relaxed and colorful environment both inside and outside. Innovative design decisions provides Google employees 2000 car lots underground so that open spaces above and surrounding the building are filled with unique and interesting architectures that includes an on-site organic garden that supplies produces for Google’s various cafes, a bronze casting of a dinosaur fossil, a sand volleyball court, heated “endless pools” and also electric scooters along with hundreds of bikes scattered throughout the complex for Googlers to get to meetings across campuses (Google, 2009). Googleplex is a significant departure from typical corporate campuses, challenging conventional thinking about private and public space. This also points out the alignment of values that are present in Google’s culture such as innovation, fun, laid-back, creativity and uniqueness that clearly shows that their organizational culture is truly unique and different from that of their competitors and other organizations.
Within the Googleplex, a truly attractive, fun and extraordinary workplace environment exists for Google employees. The interior of the headquarters is furnished with items like lava lamps and giant rubber balls while sofas, Google color coded chairs, and pool tables can be found at lounges and bar counters to express Google’s laid-back working atmosphere. The lobby contains a grand piano and a projection of current live Google search queries (Google, 2009). The employees’ various needs are also taken care of by facilities such as the 19 cafes on campus which serves a variety of food choices for their diverse workforce, a gym, massage parlor, laundromats, and even micro kitchens, which provides snacks for employees who want a quick bite (Google, 2009). This ensures that employees can be more productive and happy without ever leaving the workplace. A manifestation of Google’s creative and innovative culture is shown by the unconventional building design with high ceilings to let natural light in, durable floors made of tiny quartz stones, working British phone booths splashed in Google colors, and lounges that also serve as DIY libraries with cleverly placed low-reach book racks adorned with colorful Lego sets and cubes (Google, 2009). All these innovative, creative and colorful designs are symbols of Google’s unique organizational culture that emphasizes on continuous innovation.
Google engages their employees by applying adaptive culture in the organization. From their core competency in search engine technology, Google has responded to customers change in needs by expanding onto the mobile market. The employees analyze, anticipate and seek out the opportunities to improve the organization’s performance by being proactive and quick in coming out with new technologies and solutions for mobile services. It aims to help people all over the world to do more tasks on their phone, not to mention the several different ways to access their Google search engine on a mobile phone (Google, 2008). In addition, Google recently entered the smartphone market by launching the Google Nexus One smartphone in response to customer’s increasing need for smartphones, which is gaining ground on popularity because everyone is going mobile in the Information Age. This is the result of Google employees’ common mental model that the organization’s success depends on continuous change to support the stakeholders and also that they are solely responsible for the organization’s performance (McShane and Von Glinow, 2008). The employees also believe that by entering into other markets beyond their core competency, the change is necessary and inevitable to keep pace with an ever changing and volatile technological market.
Google’s organizational culture places a huge importance of trust and transparency by having an informal corporate motto namely “Don’t be evil”. This slogan has become a central pillar to their identity and a part of their self-proclaimed core principles. It also forms the ethical codes of the organization where Google establishes a foundation for honest decision-making that disassociates Google from any and all cheating. Its ethical principles means that Google sets guiding principles for their advertising programs and practices, which is where most of their revenues come from. Google doesn’t breach the trust of its users so it doesn’t accept pop-up advertising, which is a disruptive form of advertisement that hinders with the user’s ability to see the content that they searched (Stahl, 2004). And because they don’t manipulate rankings to put any of their partners higher in their search results or allow anyone to buy their way up the PageRank, the integrity of their search results are not compromised. This way, users trust Google’s objectivity and their ethical principles is one of the reasons why Google’s ad business had become so successful. The founders of Google believe strongly that ‘in the long term we will be better served, as shareholders and in all other ways, by a company that does good things for the world even if we forgo some short term gains.’
Pros and cons in applicable theories and models for Google
Satisfied employees not only increase productivity and reduce turnover, but also enhance creativity and commitment (Chen, Yang, Shiau, & Wang, 2006). Based on the findings, Google is already having a playful variation culture in the organization for the employees. This can enable the employees to have an enjoyment environment and this will be able enhance the relationship between the employees and strengthen their bond to work as a team. An enjoyment environment definitely can let the employees to feel satisfied and subsequently will increase productivity. Apart from that, this will shape a convenient work process for the employees that will smoothen the decision making process for the management team. Google already identified the employees are the organization’s internal customers and this is the reason why it has been constantly giving employees a sense of purpose, enhancing their self-esteem and sense of belonging for being a part of the organization. The company was reorganized into small teams that attacked hundreds of projects all at once. The founders give the employees great latitude, and they take the same latitude for themselves. Eric Schmidt says that Google merely appears to be disorganized. “We say we run the company chaotically. We run it at the edge. This can adapt the culture Google and therefore they can individually to generate the ideas on their own.
On the other hand, Google hires employees that have good academic results but without practical experience and this will be a threat to Google in terms of their organization’s operation. Google is a results-driven organization and if employees with only creative ideas but lacking of skills to realize the ideas they have initially planned, this will absolutely reduce the productivity of the organizations. Google had been public listed on year 2004 and therefore Google had to take the shareholders’ views into consideration before making any decision. The shareholders had been strongly emphasizing on reducing the employee benefits due to the high cost invested on it. This leads to the organizational culture would be degraded and the employees would feel less satisfied and affect their produced results. Employees are very important asset the Google while the shareholders also the contributor of funds for Google. The management team has to weight the importance of both of the stakeholders for the Google as this will create a different organizational culture.
From what we have mentioned above, Google is recommended to not only hire employees with good academic results but also hire employees with a lot of working results in the industry. Google needs to strike a balance between experienced employees and good academic employees. Off balance could offset the needs of the company for both explicit and tacit knowledge in order to be effective. On one side the source of explicit knowledge in the firm is from employees who are graduates from prestige universities with great academic results. On the other hand, experienced employees who are well verse with the industry and how it works can help inject new cultures in the organization. Due to the fact that more experienced employee can also be a mentor for those younger new employees to enhance the productivity throughout the company. Therefore, Google need to understand that both tacit and explicit knowledge is important for the growth of the organization. Since they have acquired enough explicit knowledge based employees, they need to focus now on hiring experienced employees that is the input for tacit knowledge.
Apart from that, what Google can do now is to implement a cultural assessment for the organization to investigate how well organization in maintaining their core values in this competitive business environment. After assessing the culture of the organization, the management needs to come out with new standardizations and policies in order balance the treatment of both employees and shareholders.
Since Google’s organization structure is highly decentralized, all the employees are well empowered. Most employees are given the power to make decisions and thus they are highly independent. However, what the higher management overlook is that the invisible competition and conflict among the employees. Furthermore, according to Bakar, Salleh, & Ling (2008), a need for a more controlled bureaucratic culture is necessary. A high score on bureaucracy means the organization is power-oriented, cautious, established, solid, regulated, ordered, structured, procedural and hierarchical. In order to reduce dysfunctional conflict, the employees need to be sent to training organized by the Human Resource department to train in the way to understand that conflict is normal in a working environment but it needs to be constructive. Employees must learn how to engage in a conflict and to build up other employees and not cause office politic.
After reviewing information about organizational culture and doing the case study on Google, it is shown that the company does have a unique culture that is begins with the founders of Google. Sergey Brin and Larry Page has established the Google culture that is based on informality, creativity, innovation and fun (Google, 2010). This can be seen throughout the company through the artifacts that are present in the company. The way how employees greet and refer to one another as fellow ‘Googlers’, where the headquarters of Google are located in a unique and fun place that looks more like a campus than an office, or the way Google treats its employees by providing perks and benefits for them.
The importance of organizational culture has shown through the example of the Google case study. Employees have high motivation at the company because they have a heightened sense of purpose and mission at the company. This is why even some employees who became millionaires are still working at Google (Stahl, 2004). Due to the fact that that founders of Google set their firm’s mission is to improve the world and to organize the world’s information, their employees was casted a great purpose of existence, therefore they feel right at home working at Google.
Nevertheless, not every company can apply the Google culture in their organization. The findings of Bakar, Salleh, & Ling (2008) suggest that not all types of corporate culture could invoke an increase in the employees’ job performance. The study concludes that overall corporate culture does have a significant and positive correlation with job performance. Nevertheless, not all types of corporate culture produce significant correlation with the job performance. . Thus, an organization that strives to improve their employee’s job performance should inculcate innovative culture that creates an exciting and dynamic environment in which entrepreneurial and ambitious people thrive in this environment.
Therefore, Google is believed to have an organizational culture in a class of its own. Its organizational culture cannot be applied successfully on many other organizations especially for those of other industries other than information technology field. However, it is until now only successfully applied in Google and this shows that this unique organizational culture is best suited for Google.
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