Google case 2 - xxxx PDF

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Oe ece add  Aabe  Ne. Sd R&D ace f Ne be ef  e be   d e be ceaed? Peae de e ea  fa ad e ea aga ceaa. One reason against centralization would be that it is normally used to grow markets and has a need for functional integration and specialist staff or equipment. This would suggest that highly diversified industries, like the one being discussed, are better suited towards more decentralized organizations than industries with narrower product portfolios. Centralization might be inappropriate in the case of Nests R&D activities, as the company generally insists on avoiding the division of units and departments and judging employees by the quality of their ideas and not their hierarchical position. Decentralization can slow down innovation, as employees would be less able to contribute to the decision-making process. In contrast, if Nests R&D activities are centralized, the business unit can enjoy improved functionality from the connectivity and integration of other business units. Googles hardware businesses share the common theme of gathering data and using it to provide more value for their consumers. Therefore, by centralizing R&D activities, Google can develop other products, both software and hardware, creating network effects that improve the functionality of Nest. The Internet of Things connectivity has to be integrated in all of Alphabets products to take advantage of the data that Google possesses.

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