OBD 2019 06 CASE 02 Not Being Evil Google PDF

Preview

Summary

Download OBD 2019 06 CASE 02 Not Being Evil Google PDF

Description

Not being evil: Google CASE STUDY For many people, California-based Google is the most prominent example of a twenty-fi rst-century company. Founded in 1998 by Larry Page and Sergei Brin, it grew very rapidly to become the world’s best-known search engine, accompanied by a proliferation of other ventures. The company’s name has achieved the rare distinction of becoming a verb in its own right – these days, we google, rather than search (and probably more often than we hoover). The company’s 2014 revenue was $66 billion and, in 2015, the two founders were listed by Fortune magazine as nineteenth and twentieth in its list of the world’s billionaires. This spectacular growth has been achieved by a company whose informal motto is ‘Don’t Be Evil’. How do the two ideas – commercial success and avoiding evil – work together in practice, and how well will the company be able to respond to the challenges that lie ahead in this turbulent market? In commercial terms, the predominant contributor has been advertising revenues derived from the Google Internet search operation, which is based upon the highly successful PageRank technology developed by the founders. In common with all of the competitive search engines, the Google Internet search service looks free to users, to the extent that this added value is probably now taken for granted by most. But Google’s success in its core business has been accompanied by a steady flow of new and intriguing ideas. For example, it is now completely routine to be able to search images as well as text, to call up detailed maps of anywhere on the planet, to switch to a satellite view or increasingly to photographic images at street level. The YouTube facility, acquired by Google in 2006, allows free access to a vast database of video clips uploaded by organisations and individuals. Google’s email service has grown rapidly and its Google+ service is aimed at the social networking market. In what used to be the separate mobile phone market, Google’s Android system, as well as Google’s range of phones and tablets, are engaged in a fierce battle with Apple’s iPhone and iPad. Google’s rapid diversification looks like the very opposite of the ‘stick to the knitting’ recommendation in a best-selling strategy book twenty-five years earlier. In diversifying, any company is choosing to serve new types of customers in unfamiliar markets and with the opposition of new incumbent competitors, all of which tends to increase the total risk for the company, as well as placing its core resources under strain. However, Google claims in its philosophy statement that this diversity stems from the application of its one core competence: search. From the outset, Google has actively sought out new opportunities and has deliberately fostered a culture to preserve and encourage this restlessness. As Tim Harford observes, Google fully expects most of its new ideas to fail, but its future lies with the ideas that do not fail. In a 2014 interview, Google’s two founders commented that a key role of the company was to integrate diversity, in order that the services have a recognisable Google ‘feel’. Growing pains? How, then, can these cultural values be preserved as a

company grows and changes? From its beginnings in a garage, Google had grown by the end of 2014 into a global corporation employing more than 53,000 worldwide and operating out of seventy offices in forty countries around the world. It has, however, managed to retain its reputation for an informal and quirky style: for example, the company famously encourages its employees to spend 20 per cent of each working week working on projects that interest them, rather than their main responsibilities. The many accounts of life in its Googleplex headquarters describe the mixture of working hard and playing hard – video games, pool tables, pianos and other leisure facilities are provided and commitment levels are expected to be very high. As can be seen from the examples of Google recruitment questions that can be found in Internet posts, the company is looking for very bright recruits who can think quickly, imaginatively and unconventionally. In the tough competitive environments in which Google operates, it is hardly surprising that some have questioned how well its ‘Don’t Be Evil’ motto is holding up. Google attracted fierce criticism for its decision to comply with the Internet censorship laws in the People’s Republic of China for the search services it provides in that country. As can be seen from the company’s transparency statement, the censorship question is a continuing issue for Google (and other similar companies) in many parts of the world. There have also been concerns about privacy and data security, and Google was one of a number of multinational companies criticised for tax avoidance in the UK, a claim it rejects emphatically. How does Google’s strength and culture equip it to deal with the market challenges it now faces? The first part of the answer is to re-examine the assumptions behind the story so far. As Kahneman points out in his book Thinking Fast and Slow, we should beware of seeing the story of Google’s development as something from which reliable, more general lessons can be learned. Making reference to Nassim Taleb’s concept of narrative fallacy, he warns against underestimating the role of luck (i.e. alongside hard work, inspiration and talent) in the way it turned out – we should take care to notice the things that did not happen, as well as the well-documented events that make up the story. Above all, we should be cautious about any notion of using our ‘understanding’ of the story so far to predict the future. This must be doubly so when the future in question is that of the global information industry. Gentle giant or robber baron? Google’s success has been based upon its mastery of Internet search, which has established it as a powerful global player, both while the Internet was growing around the world and in the later phases of user-generated content and the growth of social networking. But the next challenge is posed by the growing preference of users to access the Internet and its services via mobile smartphones, a change of format that threatens the standard models of revenue generation for a number of players, including Google. The effect of this is that those who want to remain major players have to build up their mobile capabilities. For some years, the smartphone sector has been a fierce (and often litigious) battle between Apple’s iPhone and devices based on Google’s Android operating

system. As the New York Times put it in 2012: Last year, for the first time, spending by Apple and Google on patent lawsuits and unusually big-dollar patent purchases exceeded spending on research and development of new products, according to public filings. As commentator Bryan Appleyard observes, Android is open – given away free to phone manufacturers – while Apple’s is not. Some see this same open/closed contrast in the corporate cultures of the two giants. From one point of view, consumers around the world have done very well from this competitive melee, with a succession of amazing devices at affordable prices. On the other hand, some (for example The Economist), are more critical of the contemporary IT giants, drawing parallels between their plans and the late-career behaviours of the early 20th century US industrialists (Carnegie, Rockefeller, Harriman etc) known as ‘robber barons.’ ’We’re charmed by their corporate mantras – for example “Don’t be evil” (Google) or “Move fast and break things” (Facebook). In their black turtlenecks and faded jeans they don’t seem to have anything in common with Rupert Murdoch or the grim-faced, silkhatted capitalist bosses of old. . . What gets lost in the reality distortion field that surrounds these technology moguls is that, in the end, they are fanatically ambitious, competitive capitalists. They may look cool and have soothing bedside manners, but in the end these guys are in business not just to make money, but to establish sprawling, quasi-monopolistic commercial empires. And they will do whatever it takes to achieve those ambitions’. It is perhaps futile to speculate about how this complex market will look in just a few years. In the twentieth century, much competition took place between well established large players (say, Ford and General Motors) in market domains characterised by stability and predictability. Twenty-first-century competition is different – technologies and market definitions are endlessly shifting and changing, bringing new players into contention with each other and raising the stakes for all concerned. Google’s spectacular success in its relatively short existence so far has given it commercial strength and its culture has given it the flexibility to deal with rapid change.

Tasks 1 Examine the organisational development of Google using two of the four main analytical models in Figure 2.1. Which do you think offers the best explanation of the company’s development, and why? 2 What are the main challenges that Google faced in attempting not to ‘be evil’ as it expanded into new and unfamiliar territories and markets? How might local managers throughout the world create a corporate culture based on this motto? 3 Is Google a ‘postmodern’ organisation or, in essence, no more than a globalised bureaucracy? Present the arguments on each side of the case. 4 If you were to research the degree to which growth and change has affected the organisational behaviour of Google employees, which theoretical approach would you choose as the basis for your enquiry? Explain and justify your choice....