Google LLC’s organizational structure is among the fundamental factors that contribute to the success of the information technology business. A company’s organizational structure or corporate structure refers to the anatomy and arrangement of the various components of the business, especially in terms of its resources and processes. In this business case of Google, the corporate structure is designed to support the need for innovation and creativity. Innovation is a major characteristic of Google’s corporate culture. In relation, the company’s organizational structure promotes product development to facilitate high performance and competitiveness in the Internet services industry. Product development is among the major approaches to grow the business, as identified in Google’s generic competitive strategy and intensive growth strategies. In this way, the organizational structure contributes to business optimization to address competitors, such as Apple, Amazon.com, Facebook, IBM, Intel, Microsoft, Snap Inc. (Snapchat), and Twitter. These firms are aggressive competitors, but Google’s corporate structure strengthens business competencies to counteract competitive forces.
In 2015, the conglomerate Alphabet Inc. was established, with Larry Page as CEO and Sergey Brin as President, and became the parent company of Google, after restructuring the business. In 2017, upon further restructuring, the company became Google LLC. Despite such restructuring, the company retains its organizational structure, considering that its core business processes remain largely the same, including online advertising, cloud computing, digital content distribution, and consumer electronics. With a multinational reach, the business develops its corporate structure to correspond to the complexity of its operations spanning different regional markets. In light of the rapid technological development involved in the industry and the aggressiveness of competitors, Google’s corporate structure is expected to continue changing as a way of maintaining the company’s global market position.
Google’s Organizational Structure Type and Characteristics
Google has a cross-functional organizational structure. In essence, this structure is of the matrix type. However, in this specific business case, the company maintains flatness as a major factor that influences functions throughout the corporate structure. The following are the main characteristics of Google’s corporate structure:
- Function-based definition
- Product-based definition
- Flatness
Function-Based Definition. This structural characteristic refers to grouping of resources and processes based on business function. For example, Google’s organizational structure involves a group for Global Marketing, and another group for Finance. An executive heads each of these groups. This function-based grouping is responsible for organization-wide strategic decisions and direction. For instance, Google’s operations management approaches are developed and defined through these function-based groups at the corporate headquarters. This characteristic of the company’s corporate structure influences business processes, such as top-down and bottom-up communications, as well as strategic management to solve problems encountered at various levels and areas of Google’s organization.
Product-Based Definition. Google’s products are developed through the support of product-based groups in the company’s corporate structure. This structural feature addresses the need to develop innovative and competitive products, such as the ones enumerated in Google’s marketing mix or 4Ps. For example, the company has a group for Cloud operations, and another group for Artificial Intelligence operations. An executive heads each of these groups. Through this characteristic of the organizational structure, the business satisfies current and future market demand and consumer preferences regarding information technology and consumer electronics products, such as Search, mobile apps, and mobile devices. This ability helps fulfill Google’s corporate vision and mission statements. The company’s product lines are aimed at enhancing people’s access to organized information, especially information through the online environment.
Flatness. This structural characteristic involves the minimization of vertical hierarchical lines of communication and authority, despite Google’s function-based groups. For example, through its flatness, the company’s organizational structure enables employees, teams, and groups to bypass middle management and communicate directly with upper management. Also, in this way, Google’s corporate structure facilitates meetings and sharing of information among employees and teams belonging to different areas of the organization. This structural feature is a major contributor to innovation for novel products that help in business diversification, which is among the business strengths outlined in the SWOT analysis of Google LLC. This characteristic of the organizational structure supports Google’s corporate social responsibility strategy and stakeholder management, especially in terms of increasing employee morale, motivation, and satisfaction in their work as part of the company’s business and long-term success.
Google’s Corporate Structure – Recommendation
The flatness of Google’s organizational structure has the advantage of promoting innovation and creativity, based on the sharing of knowledge throughout the business organization. In relation, the company’s corporate structure has the benefit of facilitating innovation specific to product development. Google’s product-based groups are designed for this purpose. These advantages are in addition to the company’s function-based groups that ensure coherence throughout the business. In spite of these advantages, Google’s corporate structure has room for improvement, especially with regard to flexibility.
A recommendation to improve Google’s corporate structure is to address possible flexibility issues. The corporation’s current structural characteristics are effective in supporting flexibility in human resources. For example, the organizational structure’s flatness optimizes flexibility in how Google’s employees share knowledge and develop products. However, the business applies corporate standards that limit overall flexibility in customizing products to suit customer preferences based on regional and local market conditions. A way of addressing this strategic issue is to increase the level of flexibility of product-based groups through policies and adjustments in the company’s corporate structure. For instance, additional positions within teams or groups can add to such flexibility. This recommendation is intended to address concerns regarding how Google’s organizational structure supports the ability to satisfy various customer preferences and regional market characteristics.
References
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