Organizational design and change management inputs

Nadler Tushman

Resources and environment are two the inputs in the Nadler Tushman congruence model. The company's strategy should reflect, among other factors, its external environment and its internal resources. The environment for Google is generally positive. Google operates in an environment characterized by a rapid pace of technological change. Thus, there is considerable emphasis on innovation as a means of maintaining competitive advantage. Over the years, Google has added a number of different methods to drive traffic, including expansion of its content offerings and the introduction of Android and Chrome, as a means of leveraging innovation to achieve its desired outputs.

The environment is also highly competitive, because Google operates in the advertising industry. The company must compete not only against other online advertisers, but Google must also compete against conventional media. While it uses its data superiority to outcompete traditional media there is little doubt that winning advertiser dollars is going to require Google to deliver superior value to advertisers, who have many competitive options with respect to where to put their advertising spending.

Another facet of the environment is that Google's business should fluctuate with the business cycle. The company was still growing rapidly through the last recession, but Google will need a strategy to survive and thrive should the next recession arrive when the company is in a mature stage of business without the industry growth to propel it.

Google is, thankfully, blessed with many resources. First up are the financial resources. Google is tremendously wealthy. Its balance sheet shows $58.7 billion in cash (MSN Moneycentral, 2014). If Google needs to innovate, it can afford to increase R&D spending. If Google needs to ride out a recession, or engage in predatory pricing, it can do those things as well. That kind of financial strength is a tremendous resource that allows Google the flexibility to adopt any strategy that it wants.

Another key resource for Google is its people. Google has become an employer of choice, something that not only improves its innovative capabilities, but will also allow it to hire the advertising sales people with the best contacts. Google offers the most attractive packages, both to engineers and to marketers. As such, Google's human resources capabilities are one of the reasons it continues to excel against some very strong competitors -- it has better people.

The Google brand is becoming a major resource as well for the company. Google's rapid emergence comes with a reputation for excellence. It delivers good value for its advertising customers because it offers superior data and analytic capabilities. With a reputation for delivering on value, Google is now becoming the first place companies look to for their advertising, and in particular for their online advertising. The brand reputation of Google also makes it a trusted partner, and people respect the company and therefore are more willing to do business with them.