Management practice and organizational effectiveness

Management Practice

Point and click managerial success: Google

'Camp Google.' This phrase underlines the unique managerial philosophy of the search engine pioneer company known simply as 'Google." Google has not only transformed the way Americans seek information, but also conventional assumptions about management. At Google, there is no pressure to punch a time clock, or to look busy when you are not -- instead, the ethos of the company is to make work so much fun, by offering yoga classes, gourmet meals, and even free massages that its employees never want to go home and stop working. The company recruits young people and creates a workplace environment with a laissez-faire managerial style that makes employees feel like they are enjoying all of the bonuses of living in a college dorm. At Google's cafeterias "the food is free, healthful and plentiful," much like at a campus cafeteria -- but with better-tasting fare and Google has free 'campus' shuttles, outfitted with wireless Internet access (Helft, 2007, in fierce competition, p.2). "Other amenities there include children's day care, doctors, dry cleaning, laundry, a gym, and basketball and volleyball courts" (Lohr 2005). A climbing wall and two lap pools, on-site car washes, oil changes and haircuts, not to mention free doctor checkups are also ubiquitous.

And finally, to avoid a long commute in a region famed for the worst traffic in the nation, Google, "has turned itself into Google, the mass transit operator….The company now ferries about 1,200 employees to and from Google daily -- nearly one-fourth of its local workforce -- aboard 32 shuttle buses equipped with comfortable leather seats and wireless Internet access. Bicycles are allowed on exterior racks, and dogs on forward seats, or on their owners' laps if the buses run full" (Helft, 2007, Google's busses help workers beat the rush, p.1). Yes, employees are allowed to take their pets to work -- no need to rush home in the middle of a big project to let out Fido. Of course, the wireless access on these buses and less time employees spend in traffic means more time spent working for Google, too.

And employees seem to love to work at Google, not just the perks. Students -- employees, that is, work into the wee hours of the night, but part of the work day is spent bonding and socializing. Employees feel as sense of loyalty to the institution, not to a paycheck. "In his new book, the Future of Management, London Business School professor Gary Hamel calls Google 'a modern management pioneer' that 'has much to teach us about how to build companies that are truly fit for the 21st century'" (Carr 2008, p.1). The company philosophy of "Don't be evil," means treating workers as well as suppliers, competitors, and consumers with dignity. The old adage holds true that you catch more honey with vinegar.

Even Google's recruiting practices are innovative. Instead of interviews with higher-ups, students flock to "team competition over mind-bending puzzles, Lego building problems and video games…no-pressure recruiting occasions meant to create excitement around their companies and impress potential recruits as young as college freshmen" (Helft, 2007, in fierce competition, p.1). This is one reason why in 2007, "it edged out the blue-chip consulting firm McKinsey & Company as the most desirable employer among M.B.A.'s, a position McKinsey had held for the last 12 years" (Helft, 2007, in fierce competition, p.1).

Google's attitude has translated into success: the "rise of Google from the dot-com ashes" has been described as "dizzying" as its revenues shot up from less than U.S.$500 million in 2002 to more than $10.5 billion in 2006. From 2004-2006 its stock price rose fivefold (Carr 2008, p.1). Employees have enjoyed the largesse of the company's expansion: "The retirement plan is a tax-deferred 401(k) program with employee savings matched by company contributions, as it is for new employees at I.B.M. starting this year. Annual bonuses at Google range up to 25 or 30%…Maternity or paternity leave is 12 weeks at 75% of full pay. There is also up to $500 available for takeout meals for the entire family after a newborn arrives, courtesy of Google" (Lohr 2005).

Google's revenue-generating business model allows for such generosity -- and also for employee independence. "More than 99% of its sales have come from the fees it charges advertisers for using its network to get their messages out on the Internet. Nearly everything the company does…is aimed at reducing the cost and expanding the scope of Internet use" (Carr 2008, p.2). Because of its business model, Google thrives on innovation, so it can encourage its employees to take more risks in their work and act more independently: "Google faces far less risk in product development than the usual business does. It routinely introduces half-finished products & #8230;even if the offerings fail to win a big share of the market they will still tend to produce attractive returns by generating advertising revenue and producing valuable data on customer behavior. For most companies, a failed launch of a new product is very costly. For Google, in general, it's not. Failure is cheap" (Carr 2008, p.2).

This stress on innovation and its ability to minimize financial damage from failure because of its advertisement-driven model allows one of the most substantial advantages of taking a job at Google: "The company's engineers are given 20% of their time to pursue their own ideas instead of company assignments (Lohr 2005). It also has had the revenue to acquire a variety of Internet services, including YouTube, the Weblog publisher Blogger, the virtual globe Google Earth and the talent to spot such trends and to manage them in a diffuse model of managerial control (Carr 2007, p.5). The enthusiasm for the ability to innovate and strike out on one's own also shows that employees are driven more by personal profits and promotions -- more even than company mission statements and team-building exercises that deemphasize individuality. Google encourages employees to be driven by personal creativity and the delight in creating a product that is uniquely their own. This is what makes its approach so seismically challenging to conventional business wisdom.