In April 2011, Larry Page, one of Googles two founders, became CEO of the company. Page had been CEO of Google from its establishment in 1998 through 2001, when Eric Schmidt took over.
I need a 1 page critique for the summary attached. I have also attached actual summary as well and based on it, there should be compare & contrast and recommendations provided as well.
Closing Case Organization Change at Google (Alphabet)
In April 2011, Larry Page, one of Google’s two founders, became CEO of the company. Page had been CEO of Google from its establishment in 1998 through 2001, when Eric Schmidt took over. After 10 years, Schmidt decided to step down and handed the reins back to Page. One of Page’s first actions was to reorganize the company into business units.
The alleged great virtue of Google’s functional structure was that it was flat, with very few layers in the hierarchy and wide spans of control. Innovation was encouraged. Indeed, numerous articles were written about Google’s “bottom-up” new product development process. Engineers were encouraged to spend 20% of their time on projects of their own choosing. They were empowered to form teams to flesh out product ideas, and could get funding to take those products to market by going through a formal process that ended with a presentation in front of Page and Google cofounder Sergey Brin. The products that emerged from this process included Google News, Google Earth, Google Maps, Gmail, and Google Apps.
By 2011, it was becoming increasingly clear that there were limitations to this structure. There was a lack of accountability for products once they had been developed. The core engineers might move on to other projects. Projects could stay in the beta stage for years, essentially unfinished offerings. No one was really responsible for taking products and making them into stand-alone businesses. Many engineers complained that the process for approving new products had become mired in red tape. It was too slow. A structure that had worked well when Google was still a small start-up was no longer scaling. Furthermore, the structure did not reflect the fact that Google had become a multibusiness enterprise, albeit one in which search-based advertising income was still the main driver of the company’s revenues. Indeed, that in itself was viewed as an issue, for despite creating many new-product offerings, Google was still dependent upon search-based advertising for the bulk of its income.
Page’s solution to this problem was to reorganize Google into seven core business units: Search, Advertising, YouTube, Mobile (Android), Chrome, Social (Google + and Blogger), and Commerce (Google Apps). Senior vice presidents who report directly to Page head each unit. Each VP has full responsibility (and accountability) for the fate of his or her unit. Getting a new product started no longer requires convincing executives from across the company to get on board. And once a product ships, engineers and managers can’t jump to the next thing and leave important products like Gmail in unfinished beta for years. “Now you are accountable not only for delivering something, but for revising and fixing it,” said one Google spokesperson.
In 2015, Google reorganized again. A new corporate entity was created, Alphabet, which functions as a holding company for Google’s core businesses and several “moonshot bets” that the company is pursuing. Under the holding company structure, the Google subsidiary continues to be organized on a divisional basis (which now includes divisions for Internet Search, Google Cloud, YouTube, Android, and Chrome). In addition, as of 2018 there are 11 other subsidiaries that Larry Page refers to as “bets in area that might seem speculative or even strange.”
These businesses have included its self-driving car unit, a robotics unit, an artificial intelligence business, a unit focusing on longevity research, smart home technology maker Nest, and Google ventures (the company’s own venture capital unit). Page argued that the reorganization helped to separate out the core revenue generating businesses from the moonshots, which allowed for greater transparency, particularly for investors. He also stated that the reorganization created a leaner more efficient Alphabet. Currently the Google subsidiary generates 99% of Alphabet’s revenues and all of its profits.
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Closing case. Org Change at Google
0. 2010
0. What was Google’s original organizational structure in 2010?
In 2010, Google’s organizational structure was basically divided into two parts: an engineering function and product management function. Engineering group focused on creating, building, and maintaining Google’s products, and the product managers focused on selling Google’s products.
0. What were its advantages?
The advantages of Google’s original organizational structure are it had a few layers in the hierarchy where engineers focused on building products and project managers focused on selling those products. Another advantage is flexibility among the engineer and product managers where they can move around and work on products as necessary. Also, innovative ideas were created by engineers who led to successful products such as Google News, Google Earth, etc. Moreover, it encouraged engineers to be more responsible for creating new products that they could have ownership of.
0. What was the problem?
In 2010, Google's organizational structure led to silos that prevented departmental collaboration and information sharing, which could have stifled innovation and growth in the quickly developing tech sector. The organizational structure made it challenging to coordinate the firm around shared objectives and goals, and each department had its own success criteria. There was a lack of accountability for work that was being done. Most of the works were left unfinished for years. Product approval was taking longer time and the structure didn’t show the multi business enterprise.
1. What was the realization about what Google had become? The functional organizational structure that Google developed because of its quick expansion led to silos and made it challenging for different departments to communicate and share information. As the organization became too big and complex, it was realized that a more product-oriented structure was needed to align teams around specific products and services and improve collaboration and communication. To better manage its growth and complexity and keep innovating and expanding in the quickly evolving technology sector, Google conducted a significant organizational reorganization in 2011.
1. 2011
2. So how did they restructure? The company switched from a functional structure to a more product-oriented structure to have six main product areas: search, ads, commerce, maps, YouTube, and Android. Each product area was headed by a senior vice president (SVP) and had its own engineering, design, and product management teams.
2. How did the responsibilities of the senior managers change?
The responsibilities of the senior managers changed from overseeing functional areas to overseeing product areas and collaborating with other product teams to ensure alignment and integration.
· Draw organization charts for the old and the new structure. I have provided templates below.
· Fill the boxes with appropriate titles.
· Here is a list: Division; BU (business unit); function; SVP (senior vice president); names of specific functions; names of specific BUs.
· Feel free to add boxes, if needed.
· Hint: see my lecture recording of Chapter 9 and the charts I drew to depict single and multi-business firms.
Google 2010. CEO: Eric Schmidt
Original structure
Engineering
Product Management
Engineering
Product Management
Google Maps
Google Maps
Gmail
Google Advertising Services
New structure
Senior Vice President
(Youtube)
Senior Vice President
(Advertising)
Senior Vice President
(Search)
Senior Vice President
(Mobile)
Senior Vice President
(Social)
Senior Vice President
(Chrome)
Senior Vice President
(Commerce)
Google 2011. CEO: Larry Page
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