Date: June 25, 2015
Re: The Google Giant
Google’s distinct governance structure, corporate culture, and organizational processes are key factors in Google’s success in the search engine services industry. All three of these aspects of the organization have allowed Google to capitalize on superior innovation and ultimately obtain the majority of the market share worldwide. Overall, the structure, culture, and processes have proven to strengthen Google’s market share and core competencies. However, it is also important to consider the weaknesses associated with these factors.
Google’s governance structure for top management consists of the ownership of one-third of the shares but control over 80% of the votes. Although top management only owns one-third of the company, their control over 80% of the votes allows them to ...view middle of the document...
However, Google’s clear vision and strategy will enable them to use this structure to capitalize on the future.
The corporate culture at Google is one that innovative companies strive for in order to leverage the variety of skills of their employees. Google has created a corporate culture that gives employees freedom to work on their own projects, as well as collaborate in teams and solve problems together. This organic structure is essential for companies that focus on innovation and compete in an uncertain, dynamic environment. This also helps attract the highest quality employees and encourages the generation of ideas that could be further developed and implemented if value is discovered. A weakness associated with this culture is that some employees may become increasingly competitive and try and beat out others in their projects. Although competitiveness is necessary for striving for new and innovative ideas, it may direct the attention away from Google’s core business of web search and paid business. As long as Google is able to monitor productivity and enforce the “70/20/10” rule used for allocating engineering efforts, their free and collaborative corporate culture should remain a significant strength for Google.
These carefully constructed strengths in Google’s organization have ultimately led to a 70% market share in the US and outwards of 90% in other countries in the world. As such, I predict that Google will continue to dominate the industry and expect the search business to become more concentrated. Google is a clear leader in the industry, with Yahoo! barely competing with less than 17.5% market share. Google’s shear size and ability to continuously add value to their business has created a significant barrier to entry into the search engine market. Although some small firms have appeared recently, it will be virtually impossible for them to compete with Google and would take something entirely different to even come close.