Google Stakeholder Analysis: Employees to Governments

Introduction

The global entity being studied here is Google — a company that operates around the world with a number of different products and business lines. It is also one of the richest companies in the world, generating massive revenue and profits. This essay performs a stakeholder analysis of Google, identifying the key groups that have an interest in the company's performance and examining how their demands interact.

Employees and Shareholders

Google's employees are a major stakeholder group. They depend on the company for their livelihoods, and this dependency has several dimensions. Viewed through the lens of Maslow's hierarchy of needs, employees certainly rely on Google's continued success to keep their jobs and meet basic needs such as paying rent and buying food. But at Google specifically, many employees are there because of the company culture and the unique opportunities it provides. Many regard Google as an employer of choice, meaning the stakes are higher than simply holding a job — they could earn money elsewhere, but they may not be able to fulfill their higher-order needs at just any company.

Employees are a powerful stakeholder group because they are how the company runs. A strong employee base is necessary for Google to maintain its competitive advantage in the marketplace. If employees feel their needs are not being met, they can choose to work elsewhere — a particularly real risk if Google's reputation for attracting top talent is accurate. The company must therefore ensure that this stakeholder group's needs are satisfied in order for the company itself to continue to thrive.

As with all publicly traded companies, Google is beholden to the interests of its shareholders. The straightforward view of management's obligation to shareholders is the Milton Friedman position: that the sole responsibility of business is to increase its profits. The reasoning is that shareholders invest in Google specifically for its ability to generate wealth. If one assumes that the price paid today for a Google share reflects fair value, then shareholders would naturally want the company to grow that value over time.

Shareholders typically exercise their power through the Board of Directors. They vote for the Board, and the Board exerts control over management. If shareholders — especially large institutional investors — become unhappy, they are likely to install a Board more aligned with their interests. Management must therefore keep shareholders satisfied, which generally means delivering strong financial performance and successfully introducing new products. As long as the company remains profitable and share values continue to rise, there is little reason to expect shareholder discontent. For the most part, Google's shareholders have likely been quite pleased with the company's overall performance.

Government Stakeholders

Google is an American company, so the US government benefits from the taxes Google pays. The California state government benefits as well, as do county and municipal governments wherever Google operates. If the intense competition for Amazon's second headquarters is any indication, there is significant perceived value in having an elite technology company located in a given jurisdiction. The federal government not only receives income taxes on Google's substantial earnings, but also collects taxes on employee salaries and shareholder capital gains. The US government therefore has a clear interest in seeing Google succeed, particularly when the company earns revenue overseas using American talent.

Beyond direct tax revenue, Google is one of the highest-profile American companies in the world. Exceptional performance by companies like Google reinforces the global perception of the United States as an attractive place to start and grow a business — a form of soft economic prestige that benefits the country broadly.

Google has a notably complex relationship with certain foreign governments, particularly the People's Republic of China. In many parts of the world, authoritarian regimes have sought to control the flow of information to their citizens, and the PRC has been unusually successful in doing so. For governments that restrict information, Google — which represents open access to information and the ability to verify facts independently — can be seen as a threat. This tension is most visible in China, where Google has at times censored search results in order to operate in the country at all. The censorship of the internet in China represents one of the most prominent real-world examples of how political stakeholders can constrain a global technology company's operations.

Conclusion

All told, Google manages a large and diverse set of stakeholders. The company has generally done a good job of balancing their competing needs. Some concessions have been made to certain foreign governments in order to maintain operations in restricted markets, but the tensions that arise from those concessions are relatively minor relative to the company's overall scale. One of the key reasons Google has achieved and sustained such extraordinary success is its ability to balance the interests of each of its major stakeholder groups effectively.

The company is enormously profitable, consistently ranked among the best places to work, and has built an advertising product that delivers genuine value to its primary customers. Government stakeholders benefit from the substantial tax revenues and the prestige associated with a company of this global stature. On balance, Google has demonstrated that managing stakeholder interests well is not merely an ethical obligation — it is a central component of long-term competitive success.