Innovation in Business: A case study of Google Inc. (Term Paper Sample)

Innovation in Business: A case study of Google Inc. Name: Course: Institution: Date: TABLE OF CONTENTS TOC \o "1-3" \h \z \u 1.0 Introduction PAGEREF _Toc360894827 \h 32.0 Innovation today PAGEREF _Toc360894828 \h 33.0 Background of the organization PAGEREF _Toc360894829 \h 44.0 Factors that have encouraged an Innovative environment at Google PAGEREF _Toc360894830 \h 44.1 Google's organizational structure PAGEREF _Toc360894831 \h 54.2 Google's organizational Culture PAGEREF _Toc360894832 \h 74.3 Recruitment Policy PAGEREF _Toc360894833 \h 94.4 Rewarding successful innovation PAGEREF _Toc360894834 \h 104.5 Room for Failure PAGEREF _Toc360894835 \h 114.6 The nature of the environment PAGEREF _Toc360894836 \h 124.7 Market research PAGEREF _Toc360894837 \h 135.0 Lessons drawn in starting up new business PAGEREF _Toc360894838 \h 14Reference List PAGEREF _Toc360894839 \h 16 1.0 Introduction In Business, an organization has to be innovative so as to stay ahead of other competing businesses. Organizations need to be in a position to manage change, because the business world evolves on a constant basis (Håkan & Waluszewski, 2007, p.54). In the past, organizations have been capable of surviving even with quite limited levels of innovation. Such organizations have only focused on provision of quality products, then simply updating them to an extent that maintains their market competitiveness. Today, this method continues to apply to some products that have long lifecycles and very few innovation opportunities. Recently however, there are certain trends that have emerged and are now driving innovation processes. Factors such as outsourcing, globalization, and overall intensified competition have increased the push to enhance effectiveness and efficiency of organizations (Sloane, 2007, p.33). Today, organizations need, in addition to good products, good management and innovative processes in order to improve productivity and drive costs down. 2.0 Innovation today The intensity of innovation today is also driven by the high consumer expectations. Such customers are increasingly getting used to products that constantly improve to make their lives easier (Hiam, 2010, p.262). In a broader sense, innovativeness helps societies around the world to advance; consumers are increasingly attracted to innovative products as they enhance their living standards. It therefore seems quite realistic to state that consumers will judge an organization by its innovativeness. It is therefore important to explore the aspects of innovation in business and how modern organizations are structuring themselves to support innovativeness. Google is one of the organizations that have high levels of innovation; the purpose of this paper is to explore how the company maintains and encourages an environment of innovation. 3.0 Background of the organization The founding of Google dates back to 1996 when Sergey Brin and Larry Page developed a search engine known as Backrub. About a year later, the name of the search engine was changed to Google. It was then incorporated as a company on September 7, 1998. Google has continued to grow over the years and is today among the largest companies experiencing substantial growth in the United States. The company's income in 2009 was $23.65 billion (Christensen, 2013). Much of its income comes from advertising. Google has millions of servers across the world and has grown to become the market leader in its field, which is search engine. Over the years, the company has expanded into other areas of internet services such as Google Voice Google Books, and email service (Christensen, 2013). The company also offers other applications such as Google Chrome, Google Earth, YouTube, and Google Docs. Google is today, among the global leaders in computing. The all-inclusive search engine, also known as Google, provides an easy, quick, and efficient way of research. 4.0 Factors that have encouraged an Innovative environment at Google There are various aspects of Google's organizational culture and structure that support the company's well known and admired environment of creativity and innovativeness. Such supportive factors are clearly evident in the company's organizational structure, organizational culture, and other areas such as its recruitment policy, use of market research, systems of gathering and developing new ideas, and its specific policies regarding innovation. According to Tanner (2013), there also various principles that Google embraces in the efforts to enhance innovation: they include; working in small groups, valuing the wisdom of the individual workers, making the appropriate recruitment and hire decisions, employing a flat organizational structure, supporting meritocracy whenever it is present, and valuing transparency. 4.1 Google's organizational structure With regard to Google's innovativeness, the organizational structure it manages and maintains is one of the biggest supports factors. Google has been ranked by magazines such as Fortune and All Business, as one of the most admired companies in the United States. In 2007 and 2008, these magazines listed Google as the best company to work for (Frenz, 2013). This was largely due to the extensive employee admiration that can be attributed to the company's cross-functional or flat organizational structure. For a large company, such an organizational structure is usually very rare and unique; this is one of the factors that have given the company an impressive standing as regards innovation relative to other large companies (Warren, 2008). Google's considerably flat organizational design has just four levels namely, CEO (founders), Vice President, middle managers, and individual workers. The outcome of this flat structure is a wide average span of control; this not only explains why most of the decision making in the company is decentralized, but also why most of workers undertake their tasks with very little or no supervision. Griffin and Moorehead (2009, p.552), describe Google's organizational structure as being closely aligned with Mintzberg' ideas regarding adhocracy. Further, the flat organizational structure is an immediate clear evidence of the company's policies and strategies of entrepreneurial innovation, as well as the related management philosophy (Savoia & Copeland, 2011, p.58). Google, on the surface, is managed just like most other large companies. For example, there are different groups such as operations, human resources, finance, engineering, sales, product management, and many others. Additionally, within each group, there are positions such as Vice presidents, project leads, managers, directors, and so on. In terms of organizational structural aspects, this is as far as the similarities between Google and other companies go. Another special aspect about Google's organizational structure, and which plays a significant role in Google's innovativeness, is the quite high ratio of individual contributors such as Engineers, project leads, and so on, to managers. It is not unusual for more than thirty people to directly report to a manager, a director, or a VP (Savoia & Copeland, 2011, p.58). Additionally, the main role of the managers at the company is to connect and guide rather than control. No two managers, groups, or positions at the company are exactly alike, while seniority and titles do not carry as much emphasis or weight as they do at most large business organizations; this is especially in regard to assigning or launching activities, making product decisions, and deciding on other matters which is popular with other large companies. The large number of engineers that the company hires enjoys a lot of freedom with the organizational structure; the engineers have freedom to decide which projects are of interest to them and the ones they would like to pursue (Mediratta, 2007). This substantially creates an environment for the employees to come up with innovative products (Helft, 2013). Though a certain degree of chaos is one of the most noteworthy effects of this cross-functional management hierarchy, Google is quite comfortable with it and in fact sees it as an essential ingredient for keeping up with its pace of innovation. Overall, the organizational structure at Google not only supports innovativeness directly but also facilitates the growth of other factors that support innovation. 4.2 Google's organizational Culture Thompson (2013) explains how Google has been lauded for an organizational culture he terms as ‘unusual'. He states that such culture has been designed to foster and creativity, loyalty, and commitment. Most of the company's products Google Maps, Google Chrome, and even the Google search engine have been created and enhanced through the emphasis on a culture of innovation. Indeed, there are many aspects of Google's organizational culture that can be regarded as having played a substantial role in establishing and sustaining an environment of innovativeness. It is also due to the existing culture the company is considered among the best to work for in the United States; the company's culture can be described as being equal and informal, while sustaining its employee empowerment and distaste of bureaucracy. Most importantly, the company has always felt that by limiting bureaucratic tendencies, it would encourage its engineers to come up good and innovative ideas at an accelerated pace. One of the factors that have guided the growth of the company's culture is its mission of indexing all the global the global information (Morrow, 2009). The company clearly recognizes how challenging this is going to be; at one time, the company's chief executive stated that it would take three hundred years for such a mission to be realized, which would be sometimes in the 24th ...