Analysis of the Effectiveness of Google Inc's Organisational Culture - Case Study Example

Running Header: Effectiveness of the Organisational Culture Analysis of Effectiveness of Google Inc.’s Organisational Culture Name Course Module University Name Date Analysis of Effectiveness of Google Inc.’s Organisational Culture Introduction Culture is a distinct aspect which sets apart one group of humans from another. This is true in the case of a group as big as a nation or much smaller scale one as an organisation. Many scholars have explored various facets of culture and its impact in terms of national cultures as well as organisational cultures. There is a debate on the degree of influence national culture wields on the employee and organizational behavior, but many researchers conclude that a link between these two factors exist clearly (Hofstede, 2007; Fathehi, 2002; Morgan, 2000) although there are other moderating factors affecting the organisational culture. The culture of an organisation impacts many aspects, from decision making to leadership, innovation, HRM practices and strategic focus. Therefore, understanding organisational culture and its link with organisational performance is a key priority to forge ahead in the competitive business environment. This helps organisations develop culture that has a strategic fit with organisational, industry and customer needs. This paper examines the organisational culture at Google and how it impacts the organisational performance of the company, within the theoretical framework of organisational culture drawn from available literature. Defining Culture Theoretically First and foremost, it is important to review the available literature on the subject of culture, and organisational culture in specific, to gain a clear perspective or what is culture and how it influence organisations. Culture has been an actively pursued area of studies and an abundance of literature is available to support various theories on national and organisational cultures. There is a greater consensus that culture has a binding and encompassing effect on people and has the ability to guide collective and group behavior (Hofstede, 2000; Francesco and Gold, 1998; Alvesson, 2002). Hofstede defined culture as a “collective programming of the mind which distinguishes the members of one human group from another” (Hofstede, 2004, p.5). In his study of national culture and its links to organizational culture, he developed the Work Related Values model which assumes that there is a clear interaction between the national culture and work related values of employees (Hofstede, 2007). Cultural norms, values and attitudes are often enforced in the way people in a society relate to each other (Yukl, 2006). For this reason, the influence of culture on organizational behavior is high as the level of interpersonal interaction is high within such an environment (Hofstede, 2004; Briscoe & Schuler, 1995; Schomer, 2006; House et al, 2008). Although there is agreement that the national culture will influence the culture of an organisation operating within this national boundaries, the construct of organisational culture is not in itself a replication of the national culture (Denison, 1990; Fathehi, 2002). Culture of an organisation is shaped by key factors such as the CEO or founder’s value orientations; industry demands; customer needs etc. According to Fathehi (1996) organizations need to successfully adapt in response to the environmental changes and societal demands by creating “among its members a widely shared assumptions and values that are referred to as corporate culture” (Fathehi, 1996, p. 153). Considering the definition of organizational culture, Schein (1985-2004) defines it as “a pattern of shared basic assumptions that the group learned as its solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid, therefore, to be taught to new member as the correct way to perceive, think and feel in relation to those problems” (Schein, 1992, p. 12). He describes the organizational culture at three levels of artifacts, espoused values and basic underlying assumptions. Similar conceptualizations of organisational culture has been proposed by Brown (1988) who describes culture as an “intellectual device which helps us to comprehend organisations in terms of a specific vocabulary such as norms believes, values symbols and so forth” (Brown, 1988, p. 10). According to Briscoe & Schuler (2004) organisational culture is more like an iceberg where only the tip of the iceberg is visible, referring to the artefacts such as company logos, arrangement of work places, symbols etc. while the underlying beliefs and core values are more subtle and implicit and harder to detect. Different Types of Organisational Cultures While different organisations have different cultures, it has to be said that some cultures may be better cultures than others in terms of their fit with organisational needs. According to Kotter & Heskette (1994), cultures where organisational goals and people’s goals are well aligned are successful cultures (Kotter & Heskette 1994). Some organisational cultures are unified and integrated where there is general acceptance and consensus of the cultural core values and assumptions (Martin, 1992). In contrast, some other organisations have fragmented cultures and differentiated cultures where the unified consensus and acceptance of the core cultural values are missing (Martin, 1992). According to Denison (1990), the organisational cultures are formed in response to the needs of the internal and external environment. This perspective is reiterated by Weiss (2000) who states that “An effective organisational culture adjust and adapts to the changing internal and external environment” (Weise, 2000, p. 354). Denison’s model of organisational culture differentiates between four types of cultures as adaptability cultures, involvement cultures, mission cultures and consistency cultures. When organisations face external environments that are characterized by change, speed and flexibility, these firms will have a good fit with “adaptability cultures” Goffee & Johnes (1996) proposed a four dimensional model of organisational culture that differentiates on the dimensions of sociability and solidarity. These two continuums provided 4 distinct cultures as 1) “Fragments – low sociability/low solidarity”, 2) “Mercenary – High sociability / low solidarity” 3) “Networked – low sociability / high solidarity” and 4) “communal cultures – high sociability / high solidarity”. In communal cultures, employees work effectively and efficiently with high levels of collaborations and in such a culture, peoples values are well aligned with the organisational needs and effective communication is prevalent. Deal & Kennedy (1982) identified differences between strong and weak cultures and stated that a strong culture is one that has strong, unifying corporate philosophy and a mission; trusted and trusting leaders; open communication channels and access to top management. Other elements of a strong culture includes emphasis on importance of people and productivity relationships; emphasis on customer; general sense of accomplishment; sense of belonging with commonly shared rites and rituals. These cultures have an uplifting feeling on employees, their work, the place and future. There is a high satisfaction with rewards, performance and efforts. These elements are closely aligned with the “integrated culture” described by Martin and the Communal culture of Goffee and Johnes. Peters and Waterman (1982) also proposed eight key characteristics of successful business cultures and even to date these points carry much relevance (Weiss 2002). Other commonly acknowledged factors identifiable within successful cultures include entrepreneurial qualities (1999), innovation, cooperation, inspiration and adaptability (Denison, 1990; Truksie, 1999). Considering Google and its quick success in the IT industry, as well as its unique culture, it is worth exploring the relations between organisational effectiveness and its culture. Google Organisational Culture Established in year 1998 by two Stanford university students, Sergey Bin and Larry Page, Google has achieved tremendous success through the development of its fast and innovative means of searching the web through the Google search engine. The company’s net worth reach over US%$ 135 billion, surpassing IBM and has impressive annual revenues that surpass US$ 6 billion (Towers 2006). The company’s mission is to “Organize the world's information and make it universally accessible and useful (Google, 2010). Deriving from this mission, Google sets out its long-term objectives which are to “deliver new advertising technology, develop tracking mechanisms, and enable users to search a larger base of information” (Hummer et al., 2006). Google has implemented core strategies of innovation and concentrated diversification in achieving these long term objectives. With its search engine business segment dominating as the core business, Google differentiate its search engine through speed of query response, relevance of query matching with the use of Google page algorithms and page ranking. Google needs to address the need of an expanded workforce that is capable of supporting innovation and developing the core competencies of the company, if they are to sustain the rapid growth demanded by their strategic objectives. Expanding further into international markets with the extension of replication of Google culture and way of doing things is another strategic issue which Google must look into. Finally the need for continued development of new products that is aligned with Google’s core businesses needs to be addressed. Google is known for as one of the most unique and interesting organisational cultures and over a short span of 12 years, the company has achieved tremendous success as one of the fastest and most useful of web search engines used worldwide. The culture of the company has played a major role in supporting its strategic goals of innovation and development of core competencies to support expansions. The company has attracted the master minds of the industry to sustain and fuel its innovative outlook and among the best 100 companies in the world to work for as per Fortune rankings. To offset the workplace stress of continually pursuing innovation and better ways of doing what they do, the company has developed a culture of fun, innovation, and team work. Google represents a sense of creativity through a unique corporate culture that is so distinct and separates itself from any other corporate entity. The term “Whacky” is not the general image which a corporate entity that aims to be the fastest and the most reliable search engine of the world would like to be termed with. But Google has established their corporate culture in this line and succeeded in attracting the best people to work with them (De Cagna, 2005). Expanding the work force that can sustain Google’s phenomenal growth is a key issue which Google will face as the company gorge ahead at a high rate of growth. Coming back to the corporate culture of Google, its head quarter is named as Googleplex and sustains the fun and innovative corporate image though distinct artifacts which Shein mentions in his three-component corporate culture model. From lava lamps to bean bags, bouncy balls, meeting rooms with names of rock stars and pool table, Googleplex exhibit the tip of the Google’s cultural iceberg. These artifacts indeed practically shouts out that Google is “different”, “non-conformist”, “thrive on chaos” and fluid and agile. They stand for “non conventional” which is definitely an apt culture to choose for the dynamic industry that they operate in. The Google culture places high importance on their so called Googlers. The working environment is truly something special and distinct, highlighting Google culture of “uplifting feeling on employees, their work, the place and future” which Deal and Kennedy highlighted as key elements of a Strong culture. From gymnasiums to massage rooms and free snacks to gourmet cafeterias, Google employees are rewarded and papered beyond the expectations of any employee (Weisman, 2007). In-house dentists, stock brokers and physiotherapists are symbols of caring for employees which builds a culture of unity, trust in management, and feeling of satisfaction with the rewards received (Towers, 2006). Google culture is built on pursing challenge and making things fun while doing so. These aspects are clearly evident in the office spaces at Googleplex. As per Gagliardi (1992), office spaces are true manifestations of organisational culture. With a piano in the foyer; a bronze Tyrannosaurus Rex in the walk way; badminton and tennis courts and swimming pools to jump in, Google truly a Geek’s dream house as termed by Hammond (2003). Google culture calls for innovation from their employees. Even non-engineering staff work on a 80:20 arrangement where 20% of their time is dedicated to Blue Sky projects. Achievements are rewarded and encouraged. The company believes that “Great just isn’t good enough” (Google Culture,2010), continually pushing to better themselves. At Google, organisational structure is very flat and engineers are empowered with the achievement of company mission and its welfare (Edward 2005). As cited in Google website, “there is an emphasis on team achievements and pride in individual accomplishments that contribute to our overall success. We put great stock in our employees – energetic, passionate people from diverse backgrounds with creative approaches to work, play and life.” (Google Culture 2010). There is high socializing in Google culture, with movie nights, pajama parties and get together. Fringe benefits like free holidays, 25 days holiday for a year and nursery care for children, all encourage Google staff to infuse fun in to their challenging and demanding work life. But, amidst this fun atmosphere it is serious work that gets done. As Google web site states, “Our atmosphere may be casual, but as new ideas emerge in a café line, at a team meeting or at the gym, they are traded, tested and put into practice with dizzying speed – and they may be the launch pad for a new project destined for worldwide use” (Google Culture, 2010). The culture of Google promotes commitment to the organisational mission and motivates its employees beyond the basic motivational needs in the Maslow’s hierarchy of needs including, psychological, safety, social and esteem needs and offers opportunity to satisfy their self actualization needs (Towers, 2006). There is true commitment to making a difference in the world and Google employees are believers of this mission. The Google culture has created an environment in which youthful intellect let loose their quest for innovation and hold themselves self accountable within the empowerment they are entrusted with. Towers (2006) summarize Google’s culture as a purposeful, creative, rewarding and fun. Effectiveness of the Google Culture There is great consensus that different cultures exists in organisations and they vary in terms of their effectiveness. While there is some divided opinion, there is also consensus on the influence of culture on organisational performance. Scholars as Denison (1994); Truksie (1994) and Kotter and Heskette (1993) are among those who point to a strong influence of organisational culture on employee motivation and provide strong results. Anthony (1999) also agrees on beneficial effects of effective cultures in terms of better market performance through unified cultures. Google has succeeded in performing outstandingly in its short span of time, becoming the fastest and most sought after search engine and they have focused closely on developing on their core business. Innovation has facilitated Google to forge ahead and continue to upgrade their product and service offers and the Google culture which promotes innovation, initiative and achievements. Elements as innovation, cooperation, inspiration and adaptability are key components of what has been proposed as successful cultures by Denison, 1990; Truksie, 1999; and Deal & Kennedy, 1982). The flatter organisational structures with highly empowered employees, facilitates innovation further. In this light, the Google culture can be seen as what is termed as an “adaptive culture” which is highly effective and have a good fit between its industry demands and customer needs for innovative and constantly updating technologies. Google culture can be categorized as a highly unified and integrated culture where organisational goals and people’s goals are well aligned. According to Kotter & Heskette (1994), this is a key feature of successful and effective cultures. This sense of integrated unification among employees is important as per Martin (1992) who sees general acceptance and consensus of the cultural core values and assumptions as important aspects of effective cultures. Google employees are highly committed and believe profoundly on its corporate mission of “organizing the world’s information and making it easily accessible and universal (Nelson & Quirk, 2005). Such close alignment with corporate mission is probably one of the most important aspects of Google culture and its effectiveness in getting the best performance out of its employees. As per the Goffee & Johnes (1996)’s organisational culture model, Google's culture can be seen as a Communal culture that has high sociability and high solidarity. In communal cultures, there is a high level of collaborations and a high value alignment with the organisation. These are rather evident elements within Google culture and make it an effective culture where there is effective communication within the organisation. Furthermore, the effectiveness of culture can be further explained by the high sociability within Google culture. This helps create bonds between employees and open up channels of communications and compel employees to engage in informal knowledge sharing, brainstorming and idea testing which can increase collaborations and cooperation (Towers, 2006). Finally, Google culture displays almost all the features described by Peters and Waterman (1982) as effective organisational cultures. Waterman’s eight effective features included bias for action; staying close to the customer; autonomy and entrepreneurship; productivity through people; hands on management; sticking to the knitting; simple form and lean staff and finally being simultaneously loosely and tightly organized (Peters & Waterman, 1982). Google culture has a high bias for action and innovation. They listen closely to customer needs. Their employees are highly empowered and autonomous and encouraged with entrepreneurship. Google culture is world renowned for seeking productivity through people. They treat their employees as the biggest and most important asset of all. It is recognized that rewarding employees is one of the most effective ways of influencing the corporate culture (Kerr & Slocum, 1987). Google’s focus on offering reward packages combining monetary and fringe benefits signals the value placed on the employees. The two CEOs still involve themselves in operational level activities and active in all recruitments. Google stick to their knitting and concentrate on what they are good at which is “searching information”. The organisational structure at Google is simple and lean. And this is a tightly organized culture where core values are concerned while being loosely organized where structure is concerned. Measured against the Peters & Waterman’s conceptualization of effective culture too, Google’s culture comes out a winning formula. Above assessment indicate how the organisational culture of Google measures up effectively to many of the theoretical perspectives on successful culture types. It possesses many or all of the key elements deemed to be within effective cultures. For those who advocate that organisational culture influence organisational performance, this effectiveness of the culture may well be the explanation for Google’s outstanding performance. However, literature indicates that there are scholars who oppose the effect culture have on performance. Smircich (1983) is one of the key opponents of the view that culture influence performance. Contrarily, he proposes that culture is NOT a component of organisation but culture is THE organisation itself. According to Alvesson (2002) too, culture should be viewed as an embodiment of the whole organisation. If one considers these arguments, there is still a possible explanation for why most successful firms have their own way of doing things? This is in fact their core competency or competitive advantage which others cannot easily replicate. It is possible that success of organisations lead to unified workforce with shared beliefs and unique ways of doing things that has proven effective for them. If this is the case, the theory that culture leads to successful performance can be reversely stated (Towers 2006). This can in fact be applicable for Google scenario as Google culture embodies an element which no organisational culture has yet captured. This is the “fun” element of the Google culture. Google started off with a fun element in it and its co-founders believed in this greatly. This helped them attract best brains in the industry who just passed out from universities motivate them beyond expected standards to retain and gain their commitment. This is Google’s way of doing things which has proven correct for them and given the fact that all these elements were in place during the Google’s high performance may have lead it to be embedded as a core value. In that case, it is the success and organisational performance which has shaped and influenced the organisational culture and not vice versa. Having considered both supporting and opposing views on the influence of culture on organisational performance and achievement of strategic objectives, a clear links is there between the two constructs. However, the direction of the relationship is will be a cause for debate for time to come. In explaining Google’s strategic achievements, its culture is certainly a key factor whether or not the success leads to the shaping of such a culture or the culture lead to such success. Prospective Issues and Recommendations Despite its success, Google is weary of prospective issues in sustaining its culture in the face of meeting the set strategic objectives. First of all, Google needs to address the issue of expanding its workforce while attracting employees that can integrate in t o the Google culture. An organisational culture can sustain and be effective as long as there is cultural integration and alignment of member values with organisation’s core values and objectives. With the rapid expansions, Google employs over 30 new employees each day. This can pose threats of fragmented or differentiated cultures, unless Google manage to orient the new employees to the eixisting culture. To overcome this issue, it is recommended that Google recruitment process incorporate personality analysis tests and other psychometric assessments which can help them identify prospective candidates who are most likely to integrate well in to the organisational culture. New employees should be clearly breifed of the importance Google place on its well integrates corporate culture where members are clearly aligned with the company’s core values and objectives. Orientation programs can further support new google employees to merge in to the new culture. It is also recommended that each new employee be allocated a Google mentor that can help the new entrants to assimilate the culture of the company and accomadate and integrate in to it gradually but effectively. Expanding further into international markets is another key strategic target for Google and along with it comes the challenging issue of how to replicate the Google cultures across these cross-cultural boundaries. Replicating the current winning culture across global Google locations may turn out to be a hard task since different national cultures will infringe on the cultural implanting. For instance, somber, more formal cultures such as Japan will find the Google’s “whacky” corporate image to be rather incompatible with their own cultural norms of formal and structured corporate environments. To address this issue, Google has gone to the extent of appointing a “chief culture officer” whose key responsibilities include replicating Google corporate cultures in Google offices across the globe. According to Stacy Sullivan, holding this post, Google aims to attract and retain same kind of people who made Google what it is today (Weisman, 2007). A recommendation to address this issue would be to develop a cultural adaptation program which can be used in Google’s global location. Here, the “cultural ambassadors” if Google can take stocks of the core corporate cultural elements which they wish to implant within offshore Google offices and the work in coloboration with foreign employee to arraive at an acceptable cultural adaptation between components of the parent company culture and elements of host country culture together. This adaptation will help Google to replicate and retain its core values and cultural identity, while respecting and accomadating values from the foreign cultures when it comes to the organisational cultures of Google offices located elsewhere in the world. Another issue that is likely to surface as the company continues its steep growth is “how to sustain the empowered, closely knitted, highly socialized and high solidarity type communal culture concept?” Since these facets of Google culture contribute heavily to its effectiveness, to sustain it, the need for preserving these elements is essential. Google will need to create positions such as “culture ambassadors” and Google global location rotation programs where employees from different locations in the world receive a chance to experience the original Google culture at Googleplex. These individuals should be strong change agents who can then pass on and inculcate their experience in their own home locations. Conclusion Culture is a strong phenomenon, which drives many aspects of human behavior. From national cultures to organisational cultures, the members of the group is influenced by the culture while the culture itself is fortified by the attitudes, thinking, values and way of doing things of the members and especially the leaders of these cultures. Theories on culture points to effective culture status such as integrated, communal and strong while fragmented, differentiated and weak cultures are considered less effective. The assessment made with the use of Google culture as a case study, shows that there is a clear connection between culture of the organisation and its performance, although which way the relationship influence is exerted is still a debate. A final point to note is that, along with the concept of strong and successful cultures, there is a considered superiority of one culture over the other. Some organizations may assume that their cultures can be re-engineered by mimicking elements of strong and successful cultures. However, this superficial approach to culture may not yield the desired effects. Schein’s advice is “Do not assume that a stronger culture is better. What is better depends on the stage of evolution of the company and its current state of adaptiveness” (as cited in Weiss 2002, p 359). What is needed is to achieve a proper cultural fit between the organisation, the demands from external environment and the employees. 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