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GOOGLE AND THE CHALLENGES AHEAD BACHELORPROJECT BY ANNE MARGRETHE ESKESEN 2/ 34 TABLE OF CONTENTS Table of contents ________________________________...
Author: Alan Bradley
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GOOGLE AND THE CHALLENGES AHEAD BACHELORPROJECT BY ANNE MARGRETHE ESKESEN 2/ 34

TABLE OF CONTENTS Table of contents ________________________________________________________________ 3 1.0 Introduction _________________________________________________________________ 5 1.1 Problem statement ________________________________________________________________ 5 1.2 Method __________________________________________________________________________ 6 1.3 Delimitation ______________________________________________________________________ 6

2.0 Company profile _____________________________________________________________ 7 2.1 Timeline _________________________________________________________________________ 8

3.0 Challenges for Google_________________________________________________________ 8 3.1 An account of Lunde’s analysis ______________________________________________________ 8 3.1.1 Spreading your activities or sticking to the core_______________________________________ 9 3.1.2 Competition and innovation ______________________________________________________ 10 3.1.3 Management___________________________________________________________________ 10 3.1.4 Monopolies and ethics ___________________________________________________________ 11 3.1.5 Safety and trust ________________________________________________________________ 11 3.1.6 Other challenges _______________________________________________________________ 12 3.2 Partial Conclusion _______________________________________________________________ 12

4.0 Organizational culture _______________________________________________________ 13 4.1 Perspective on organizational culture________________________________________________ 13 4.2 Theories on organizational culture __________________________________________________ 13 4.3 Partial Conclusion _______________________________________________________________ 16

5.0 Corporate Social Responsibility ________________________________________________ 16 5.1 Partial Conclusion _______________________________________________________________ 17

6.0 Managing Organizational Culture ______________________________________________ 17 6.1 Theoretical base _________________________________________________________________ 18 6.2 Google’s self image _______________________________________________________________ 18 6.3 Employee interest groups __________________________________________________________ 19 6.4 Cultural implications of monopolistic situations _______________________________________ 20 6.4.1 Innovation ____________________________________________________________________ 20 6.5 Critique ________________________________________________________________________ 22 6.6 partial Conclusion _______________________________________________________________ 22

7.0 Ethics _____________________________________________________________________ 23 7.1 Ethical definition ________________________________________________________________ 23 7.2 Google’s ethics __________________________________________________________________ 24 3/ 34

7.3 Partial Conclusion _______________________________________________________________ 26

8.0 Discussion _________________________________________________________________ 26 9.0 Conclusion _________________________________________________________________ 27 10.0 Abstract __________________________________________________________________ 29 11.0 Bibliography ______________________________________________________________ 31 12.0 Web pages ________________________________________________________________ 32

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GOOGLE AND THE CHALLENGES AHEAD 1.0 INTRODUCTION Google represents a dream come true for all entrepreneurs. The company showed promise at its launch and prosperity was soon a fact. The company was launched in 1998 and made its first profit already in 2001. It is by now generating a large profit that grows even larger year by year. The bar chart to the right shows Google’s revenue from 2005 till 2008, and the division of its revenue sources in that period of time. The increase is notable, but so is the division of income sources – the majority is from a single product, the search engine Google.com.

Figure 1 - http://news.cnet.com/8301-1023_3-10068142-93.html -Seen April 18 2011

Generating such profit in these financially tough times is enviable, but there are challenges ahead for the company. Its massive reliance on a single product, ads on Google.com, makes it vulnerable to change in that particular field, and windows of opportunity such as the one that Google.com thrived on will be seen by others and competed for. Therefore Google needs to stay alert to future challenges in order to stay ahead. A way for the company to face the challenges and keep its competitive advantage is to work with the more intangible elements of the company which cannot be copied as easily, for instance the organizational culture. Organizational culture is an abstract matter which can make it difficult to work with. However, it can also function as a significant resource and give companies an important competitive edge because of its effects on a multitude of areas such as attracting the best employees, ensuring an effective workforce, furthering innovation et cetera. Thus, in order to stay profitable in the future and overcome various challenges, it is advisable to actively work with organizational culture. This train of thought leads us to the following problem statement:

1.1 PROBLEM STATEMENT To what extent does Google’s organizational culture play a role in facing future challenges?

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1.2 METHOD The purpose of this thesis is to generate an overview of knowledge on Google’s organizational culture in order to produce a conclusion to the thesis statement above. In order for the conclusion to achieve validity the method of knowledge gaining must be scientific, since “science seeks to generate knowledge that is objective” (Pawar 2010: 4). This view of science is the positivistic view (Pawar 2010: 7), developed by Auguste Comte in an attempt to universalize scientific thinking (Kirkpatrick 1987: 6). Comte’s idea was that “The laws of mathematics and physics would be extended to the study of society, religion and politics” (ibid.). As this paper is on a cultural topic, its conclusions will always be subject to discussion as they cannot be falsified, but it will attempt to minimize subjectivity as much as possible with the use of theorists. The thesis will assume a functionalist perspective on culture, as it will be concerned with the functions that are served by organizational culture. It will examine the most prominent cultural theories chronologically to provide an overview of the development in this field. This will be elaborated in detail in section 4.0 “Organizational Culture” which is a purely theoretical section. In providing an answer to the above problem statement these different theories will be applied to Google’s case. As mentioned, these theories are mostly cultural, but will be supplemented with theories from ethical philosophy and economical theory. The paper will be conceptual, since it is based on the work of others instead of independent empirical data (Pawar 2010: 33-34). The thesis is structured in the following way: It will begin with an introductory company profile, and then go through some challenges for Google based on an analysis by business commentator Niels Lunde. It will then continue into two theoretical sections on organizational culture and corporate social responsibility (CSR) respectively. This will lead to a section on specific cultural initiatives at Google, and what the effects of them have been. This section will include an argument stating that because of Google’s monopolistic situation it needs to pay extra attention to innovation, followed by a paragraph on how management can further innovation. Subsequently there will be a section on ethics with a brief introduction to ethical theory and a discussion of Google’s concrete ethical situation. The thesis will then provide a critical discussion of its chosen cultural perspective. Finally, it will give a conclusion to the introductory problem statement.

1.3 DELIMITATION Organizational culture is a broad topic. As a theoretical field it is still young, but it is based on the field of cultural studies which has roots that are thousands of years old. I have chosen theories that I find both relevant for this thesis and descriptive of the entire field. 6/ 34

The thesis will not look into technical matters as the focus will be on culture. Competition will be mentioned, but I will not perform analyses of specific companies because Google has many different competitors on the different fields which it is trying to enter, and because there are technical difficulties to comparing organizational cultures. Also, the thesis will limit itself to the challenges mentioned by Lunde and only focus on the aspects of these which are related to organizational culture. As mentioned, it will be based on the functionalistic perspective. However, a full analysis based on the functionalistic perspective is not possible as the amount of data required is too big and this thesis has no opportunity to examine all artifacts. Therefore the analysis will be based on a few selected artifacts. This concern will be discussed further in the discussion paragraph.

2.0 COMPANY PROFILE Google is a company in the IT industry with several products in its portfolio. The most prominent is the search engine Google.com, but it has launched many other initiatives, such as Google Earth, Gmail, Google docs et cetera. Thus it possesses a widespread product range of online services. The company was co-founded by Stanford students Larry Page and Sergey Brin, and officially launched in September 1998 (Morrison 2006: 378). Google’s first home was in the basement of a friend of Page and Brin (Hartley 2010: 99). The company’s mission was to create a product that would make it easier for people to find what they searched for on the web – a web which at that time was quite unorganized (Hartley 2010: 101). The result was a search engine which they named Google from the mathematical term googol representing the number 10100, a number higher than the number of atoms in the known universe. The name was meant to indicate that this search engine could handle an almost infinite number of information (google.com –a). Google soon achieved positive attention from the media, and the company started to grow fast. In 2001 the company got its first profit (Scott 2008: 9), and in 2010 the revenue was $ 29,321 million, of which $ 28,236 million were from advertising. Profit was $ 10,381 million (google.com - b). The number of employees has increased from two in 1998 to approximately 20,000 today (360.datamonitor.com - a), and there is continued growth. Recently there were changes in the structure of the top management; Larry Page became CEO, replacing Eric Schmidt, who is now in charge of external affairs. Sergey Brin is now responsible for strategies. The mission remains to be helping people find what they need.

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2.1 TIMELINE The timeline below illustrates Google’s history. It shows Google’s initiatives, acquisitions and number of pages indexed; how large an amount of web pages can be found through using Google.com.

Figure 2 http://new s.cnet.com/ 83011023_31006814293.html Seen April 28 2011

3.0 CHALLENGES FOR GOOGLE Here I will explain some of the challenges that Google faces in the near future. Understanding these challenges is relevant for the purpose of this paper, as they are elements that may impede continued growth for Google. They will be examined from a cultural perspective. This paragraph will be based mainly on an analysis by Niels Lunde, former editor in chief at the Danish newspaper Berlingske and current business commentator at the Danish newspaper Politiken. After the explanation of his main points, his analysis will be criticized in order to give as objective an image of the situation as possible. Then the section will contain a summarizing conclusion of its content.

3.1 AN ACCOUNT OF LUNDE’S ANALYSIS This paragraph is only a recount of Lunde’s views, and so it will not be validated by theories. There are several points of critique in the following analysis and they will be discussed subsequently. Lunde states that Google faces five major challenges. The first one is that, in spite of all its initiatives, some of which are mentioned in the “Company Profile”, its main source of income remains to be ads on the Google search engine. He believes that, if Google wishes to raise the price of its stock, the company needs to spread its operations so that profit comes from more than one source. The second challenge is the competition from social networks such as Facebook and Twitter. Facebook in particular poses a 8/ 34

threat because its platform is closed off for Google’s search engine and as Facebook grows larger, it results in an enlargement of information that Google cannot retrieve for its users. Thirdly, there is the recent nomination of Larry Page as CEO. Naming a CEO from within the company is a potential problem, since it can be harder for an inside CEO to see if changes are needed. Page does not have the outside perspective. The fourth challenge is that Google needs to pay attention to competition authorities across the globe. The company’s current circumstances are close to a monopoly, and externally imposed regulation may prove very costly and inconvenient. The fifth and last challenge mentioned by Lunde is the cell phone market. The Android system; Google’s operating system; have not yet proved itself profitable, and the competition in this market is fierce (politiken.com - a).

3.1.1 SPREADING YOUR ACTIVITIES OR STICKING TO THE CORE The first point is one that has been much discussed by business analysts, namely whether a company should spread its activities or stick to the core. There are different ways of spreading your activities such as line extensions, acquisitions et cetera, but for our purpose they will be treated as one entity. There are arguments for both sides. A company may wish to diversify in search for new growth potential, but on the other hand sticking to the core provides the power of focus (Zook 2004: x). As in most other dilemmas, it is likely that the answer is somewhere in the middle. This means that Google needs to remember to attend to its core service, as stated in the mission, helping people find what they need. But that innovation and research and development (R&D) is important in order not to become complacent. A concrete example of this dilemma is the IBM debacle in the early 1990’s. The example is taken from the book “Management Mistakes and Successes” by Professor Emeritus Robert F. Hartley. IBM was in the situation that after having developed its mainframe, the company was able to maintain a high profit rate from this single product for years. It rented out the mainframes, and the income from this was enough to support the whole organization. IBM actually spent a great deal of its profit on R&D, sometimes up to 10 percent of sales profit (Hartley 2010: 78), but the bureaucracy and rigid structure in the company caused too wide a gap between the R&D department and market research department, and so all the research ended up with no useable results. This meant that when the PC entered the market and quickly made IBM’s mainframe obsolete, IBM lost its main source of income and had no replacement for it at all. The company had been overly dependent on one product (Hartley 2010: 85). The fact that Google’s profit is almost only from advertising “has some investors worried that Google will forever remain an advertising company disguised in a tech firm's clothes. The other 4% of Google's revenue came mostly from selling Google Apps to corporate customers -- a business that's under pressure from Microsoft after the release of an online version of Office 2010” (cnn.com - a). This thesis will examine if the culture at Google can be a factor in keeping the company from becoming 9/ 34

stuck on one service only and will be dealt with under the paragraph “Managing Organizational Culture”.

3.1.2 COMPETITION AND INNOVATION The second point mentioned by Lunde is the competition from social networks, in particular Facebook. Google has developed a similar online service called Buzz, but that has not caught on, and a social service with no users is worthless. Google and Facebook compete for the income from personalized online marketing, but the services they offer differ immensely. Facebook focuses on online networks and Google targets a wide range of other online service needs of which the most prominent is the search engine Google.com. However, even though the companies are not competitors in the sense that they both offer the same product, the issue of Facebook not allowing Google to search the Facebook website remains to be a problem. One of the major attractions of the search engine is that it can find anything that its users desire, so the fact that such a large platform does not allow Google’s searches is a drawback. Therefore, as long as Facebook remains the primary social network of the western world and keeps its digital platform private, Google will have a hard time claiming its part of the ad income from the social network industry. The solution to this problem is not necessarily found in Google’s internal culture since it is an external threat, but promoting an innovative culture will serve a company well in keeping up with and outpacing other companies in the same industry by bringing economic advantages (Morrison 2006: 353). This problem will be dealt with in this thesis under the paragraph “Managing Organizational Culture” along with the next challenge.

3.1.3 MANAGEMENT The third challenge is the nomination of a CEO from within the company. There are benefits to having an inside CEO. One is that the CEO knows the company and its employees well. This includes knowing the lines of authority, unspoken rules, go-to-persons et cetera. Another is that the CEO will not have to spend time and energy on establishing an ethos and winning people over, since he or she is already known by the company’s staff. Lastly it promotes motivation, since it lets current employees know that they can make it all the way to the top (Hartley 2010: 83). The disadvantage is that the CEO risks being too influenced by personal emotions and by knowing the history of the company. Since Google’s new CEO is a co-founder, that risk might be considered especially high in this case. If the relationship between the CEO and the company is too close and personal it might prevent the CEO from seeing if changes are needed, and what these changes could be (ibid.). According to this, Larry Page faces the challenge of having to manage a culture that he is also a part of and he risks being enamored with status quo since he created that status quo himself. So far he has had a leading position all along, and so he has already played a massive role in the development of Google’s organizational 10/ 34

culture, but being in such a fast-changing industry, his history might prove to be a drawback. What the article by Lunde does not mention is the exact management structure. Former CEO Eric Schmidt will stay at Google and handle external matters and act as advisor for the two co-founders, Sergey Brin, cofounder, will handle strategic matters and future plans while Larry Page will handle the daily operational matters. So, when Lunde states that Google will loose the benefits of an outside CEO he does not mention that Eric Schmidt will stay at Google as advisor. In actuality it is similar to tripartition of power, meaning that although it is likely that Page as daily leader has higher influence on the everyday culture, Google will not necessarily loose touch with the outside world. This thesis will deal with this issue by looking at how executives can manage culture in the paragraph “Managing Organizational Culture”.

3.1.4 MONOPOLIES AND ETHICS Fourth, Lunde states that international competition authorities pose a potential threat. These authorities have the power to regulate companies’ actions against their own will, and impose large fines if their directions are not followed. If Google is accused of being a monopoly this will mean forced changes, which reduce the company’s independence. However, there are other consequences for a company with monopolistic status which are more closely related to the topic of this thesis, namely organizational culture. Companies that have possessed a dominant market position for a long period of time often become complacent, conservative and conceited (Hartley 2010: 85). They “fail to allocate resources efficiently” (Mankiw 2008: 332) and so become less effective than companies in more competitive environments. This topic will be discussed in the paragraph “Ethics” and also under “Managing Organizational Culture”.

3.1.5 SAFETY AND TRUST The last of Lunde’s concerns is the cell-phone market. Google started in the software market and has remained there since, and it states that it intends to stay there (google.com -c). So it is not directly a part of the competition to produce the best Smartphone as that would be in the hardware market. Instead Google has created an operating system, Android that is a competitor to for instance Microsoft’s or Apple’s operating systems. Google’s Android system has an application store, Android Market that is based on open-source technology. This basically means that the tools for developing applications are available for anybody online, and has resulted in a vast amount of applications. The number of applications is growing faster than all other app stores, and if the current development continues, the Android Market will be the app-store with the most applications in just five months – July 2011(wallstreetjournaldigitalnetwork.com - a). However, the open-source technology also has some inbuilt safety risks. When everybody can be a programmer, it heightens the risk of somebody 11/ 34

adding viruses or spyware to for instance a free game. Therefore Google faces the challenge of getting people to trust its services. When a company wishes to be trusted, it must prove that its services and itself are responsible and credible. One way to achieve this is by being viewed as a moral company (Aaker 2010: 133). This topic will be covered under the paragraph “Ethics”.

3.1.6 OTHER CHALLENGES Google faces other challenges than the above mentioned. Whether we define it is an IT company or an advertising company, the company still operates in a world of technology which experiences incredibly fast progress and surviving in such an environment requires the ability to adapt fast (Morrison 2006: 379). Google needs to stay in the small and lean mindset, even though it is becoming a larger company, something which it expresses a wish for itself (google.com - d). So far, the company has been lucky and prospered fast. It has not had much competition because it entered the market at a time, when there was no real alternative to its search engine and so it gained a large market share fast and without much marketing. Once customers have started using a service and grown accustomed to that service, they start feeling loyalty to the brand, but it is a passive loyalty, meaning that they use it out of habit rather than of reason (Aaker 2010: 22). The brand expert David Aaker states that: “It is simply much less costly to retain customers than to attract new ones.” (Aaker 2010: 21). Therefore there is a marketing challenge ahead for Google now that real usable alternatives exist. Google has shown signs of recognizing this challenge and is spending a growing amount of money on marketing (Bloomberg.com - a), but whether this will be enough is still too early to tell. It should be noted that in Google’s case the income is not directly from the users, but it is related as the number of users is a deciding factor when advertisers decide whether to place adverts on Google’s services. This thesis will not deal with this challenge in particular, as a full brand analysis would require its own paper. It will presuppose that furthering innovation in general will prove helpful in the marketing department as well as in other departments.

3.2 PARTIAL CONCLUSION The above section has given an account of an analysis of Google’s challenges by Niels Lunde. It has then gone through the five different challenges that is mentioned by Lunde in more detail, and has for each challenge explained which of its elements are relevant in a cultural aspect and how they will be dealt with in the next paragraphs. It has also mentioned another challenge which is not mentioned by Lunde, namely the marketing challenge. This challenge will not be dealt with in depth by this thesis,

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but branding elements will be included intermittently where it is found to be relevant for instance in the Ethics section.

4.0 ORGANIZATIONAL CULTURE The word culture is a derivative of the word cultivation, processing land to make it more fertile (Schultz 2006: 11). In the simplest definition, culture is something created by humans as opposed to something created by nature, a rather broad starting point. Therefore there is a need to dive into perspective and theories before being able to work with organizational culture in a more concrete manner. This paragraph will explain which perspective is chosen and why. Then it will give an outline of some theories within this field to give background information and to be able to analyze Google’s organizational culture and the options it brings in relation to the before mentioned current and approaching challenges. Finally, it will give a partial conclusion on this section.

4.1 PERSPECTIVE ON ORGANIZATIONAL CULTURE This thesis will assume a functionalist perspective on organizational culture. The functionalist perspective is concerned with the functions of culture in the survival of the organization. Since this thesis is in itself functionalistic because it is concerned with the functions of organizational culture in managing concrete challenges, this perspective will be the most suitable in determining the role of Google’s culture in relation to this, and find out how Google can use concrete cultural initiatives with reference to its challenges. The functionalist perspective assumes that all elements in an organization exist for a reason. Company culture is shaped to fulfill the needs of the organization. An example of this could be rituals at a workplace. A study of the National Health Service in the UK showed that some rituals, such as daily changing of bandages or multiple patient records, were counteractive to an expedient recovery of the patients. The rituals were maintained because they served a purpose on an organizational level; e.g. the daily changing was part of the nurses’ identity and what they saw as their function in the organization (Brooks 2009: 261-262). These rituals serve a purpose, but they are neither efficient nor desirable. It would benefit the patients if management saw to it that this need for identity was fulfilled in a more suitable way. Thus, it is up to management to actively work with culture in order to avoid situations such as these.

4.2 THEORIES ON ORGANIZATIONAL CULTURE To work with culture it is beneficial to obtain background knowledge of culture theories. This paper will take its starting point in Edgar Schein’s very general definition of organizational culture: 13/ 34

“The culture of a group can now be defined as: A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems” (Schein 2010: 18) Schein’s viewpoint was mainly functionalistic, but he has reservations regarding the perspective’s comprehensive view of matters (Schultz 2006: 27). The definition mentions that culture is something that is taught and that it is something which serves a function as a problem solving method. These mentions will be useful when examining concrete initiatives. To obtain a deeper insight into how the concept of organizational culture has evolved, we will now take a look at some historically prominent theories within this subject. Before the 1980s culture was not viewed as something that should be a part of a company’s strategic planning. Companies of course had a culture, but managers seldom had an active strategy to improve the company culture, since it was not managerial task (Schultz 2006:15) Sociologist and psychologists had been researching the more intangible matters of an organization since the 1950s, for instance behavioral matters, but it took 30 years for organizational culture to be truly reckoned as an important factor for effectiveness and company growth, and thereby be taken serious by managers (encyclopedia.com - a). One of the first ideas in this conceptual universe was the idea of strong and weak cultures. Inspiration came from studies of Japanese companies with very cohesive organizational worlds. A strong culture existed in companies with “a close fit between themselves and their environment, [...] a rich and complex system of shared values, a well-specified and routine set of behavioural rituals and an articulate cultural network” (Brooks 2009: 264), while weak cultures displayed the opposite characteristics. Deal and Kennedy indicated that having a strong culture improved a company’s performance (Brooks 2009: 264). It was now acknowledged that culture showed itself on the financial bottom line. Schein provides us with a theory on how culture is formed. He suggests that culture is found at three levels, as shown in the model placed to the left. Figure 3- http://patrickdunn.squarespace.com/occasionalrants/2009/12/17/the-nature-of-the-chasm-is-cultural-not-technical.html - seen May 3 2011

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The inner level is our assumptions of the world. This level is not reflected upon, but is simply our ideas of our surroundings. Assumptions influence our cultural values, which is the intermediate level and of which we are aware. The outer level is the manifestation of these cultural values, i.e. when it shows in our behavior for instance traditions or the objects we surround ourselves with. This level is called artifacts. This might be a quite static view of culture, but it has the good quality of showing us that culture comes from somewhere before manifesting itself perceptibly (Brooks 2009: 265). Another view of culture is the structural view; exemplified by the work of Charles Handy. He suggested four different types of culture based on the structural design of the organization. For instance he indicated that small entrepreneurial organizations would often have what he termed power culture: a culture that relies on trust and informal information. This culture is possible because the organization is flexible and free of bureaucracy. The other three cultures are role culture, task culture and person culture, and all are dependent on the structure of the organization (Brooks 2009: 266-267). The main point here is that culture is seen as being dependent on structural factors. Critics of this theory state that it is a rather simplified view of culture because culture is created by many other factors than organizational structure. Also the theory is deemed too deterministic since it states that a company with a certain structure is predestined for a certain type of culture. Along the lines of the structural view comes the view that culture is shaped by the strategic outlook of the manager(s). The outlook restricts how the organization views the world, and through that the organization becomes e.g. conservative, innovative et cetera. Once again, this theory can easily be criticized as being too simple in its categorization, and thereby of limited use (Brooks 2009: 267). Johnson and Scholes provide a theory that tries to illustrate exactly how complex culture is. The figure depicted to the right illustrates the number and diversity of influences on cultural matters. It includes both concrete elements such as control systems and intangible elements such as rituals (Brooks 2009: 268). Figure 4 -http://www.jamesford.co.uk/methodologies/structure.htm seen april 13 2011

However, the sheer diversity of this model also makes it hard to use functionally, and therefore it might prove unhelpful when working with concrete initiatives.

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4.3 PARTIAL CONCLUSION This paragraph has examined the functionalist perspective, and explained why this perspective is suitable for this particular thesis. It has also gone through a selection of cultural theories to show the different perceptions of culture and the formation of culture. There has been a chronological movement towards a more complex view of culture where numerous factors are important. The goal was to illustrate the different approaches to working with organizational culture, and to provide background information for the concrete analysis of Google’s culture. The theories will later be used on concrete features of Google’s organizational culture.

5.0 CORPORATE SOCIAL RESPONSIBILITY The unofficial Google slogan is “Don’t be evil” (google.com - e). This is also a rather simplified summation of the thoughts behind the concept CSR; corporate social responsibility. Accordingly Google’s reputation as ‘one of the good guys’ makes it logical to include a review of CSR before beginning the cultural analysis. In addition, a company’s CSR strategy influences its ability to attract new employees. A recent study on the subject showed that 53 percent of respondents in the study regarded CSR elements as ‘very important’ and 42 percent regarded it as ‘important’ when assessing future employers (Bueble 2009: 53). CSR is one of the newer concepts in the field of organizational theory. It is the idea that corporations hold a responsibility towards their surroundings both locally and globally. Some political economists object to the headway of CSR and their objections are usually founded on the theories of Milton Friedman (May 2007: 207). Friedman stated that society’s interests were best served if the market was left by itself with no externally imposed regulations, and that companies’ only responsibility was to make profit (ibid.). The reason was that if people and companies were free to pursue their own interests in a liberalized market, it would ultimately end up also serving society. Friedman’s main premise is that: “Government or corporate interference with the natural working of the market prevents resources from flowing to their most valued uses” (May 2007: 208) CSR can be classified as corporate interference, and as such, Friedman states, it should be avoided. This laissez-faire economic theory is contradicted by the CSR movement which states that corporations should acknowledge that their foremost responsibility is not towards their shareholders, but towards all stakeholders. The essential goal should not be profit, but social responsibility. The movement argues that these two; profit and social responsibility; can be consistent. According to Sri Urip, author and former CEO, acting in a socially responsible way can increase profit (Urip 2010: 14). To give an example, an examination of 50,000 companies worldwide in 2005 showed that 70 per cent 16/ 34

of the companies in the survey had an organizational culture that worked against efficiency and productivity (Bendell 2009: 320). Another survey shows that many employees are indifferent to the goals of their organization, which affects their work effort negatively (Bendell 2009: 321). Commencement of CSR activities changes that by bringing a non-profit-oriented goal into the company, and often a goal that is more relatable for the employees, making the workplace a source of moral pride instead of merely a source of pay (Urip 2010: 65). Another way for CSR to work in favor of both goals is when it comes to attracting the best employees. Competent employees are often said to be the most important resource of the organization (Torrington 2008: 31), and according to this, being able to attract employees is a competitive advantage (ibid.). Another benefit of CSR is that it boosts the company’s external image. By attending to the needs and wants of external stakeholders as well as internal shareholders the reputation of a company improve. A well communicated CSR strategy improves customer equity (Bueble 2009: 14). In relation to Google’s case, its users are its customers, but its source of income is its advertisers. By boosting the number of users, there will be more reason for the advertisers to buy ads on Google’s products.

5.1 PARTIAL CONCLUSION This section has examined CSR and arguments for and against the concept. The argument against is that companies should first and foremost pursue profit, not CSR, and that this will maintain a natural regulation of markets. Arguments for are that CSR as a strategy can bring extra profit to a company which ruins the foundation of the argument against. This extra profit is said to be brought both from more efficient employees and from an improved image. In addition, in order for the companies to attract the most suitable in each of their industries to obtain the best possible employee resource, it is often necessary to offer something more than just high wages, for instance being a socially responsible company.

6.0 MANAGING ORGANIZATIONAL CULTURE Management and culture are closely linked, meaning that the management style have an immense impact on the culture of the entire organization. We have established that culture is important in obtaining an effective workforce, which subsequently increases profit. Innovation is also grounded in the organizational culture. Therefore it is important that managers recognize their responsibility in this regard and act accordingly (Brooks 2009: 278).

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This section will briefly recount its theoretical base, and then take a brief look at how Google portrays itself with regards to culture. This will be followed by a look at the employee interest groups at Google as these are concrete initiatives supported by Google’s management, and are of importance to the organizational culture. Next it will look at Google’s external situation in regards to being a monopoly and how this situation demands extra attention to furthering innovation. That will lead to a paragraph on which type of leadership is required to do that and if Google has that with substantiation in the initiative called ‘Pet Project’. It will then offer some critique before concluding on this section.

6.1 THEORETICAL BASE As mentioned earlier in the paragraph 4.2 Theories on organizational culture this thesis has Schein’s model as basis for its cultural understanding. Schein sees artifacts as an expression of cultural values which again are an expression of unexpressed subconscious assumptions of the world. Consequently this thesis will examine some of the cultural artifacts displayed at Google. Artifacts are not just objects, but also traditions and norms. Accordingly the following paragraphs will examine some of the traditions and norms at Google.

6.2 GOOGLE’S SELF IMAGE Google prides itself on maintaining “a small company feel” (google.com - d), where all employees are on equal terms and everyone feels comfortable speaking with everyone, regardless of rank. It declares a belief that uninhibited sharing of ideas promotes innovation and that each employee is equally important (ibid.). It uses the term ‘Googler’ to describe its employees (ibid.), thus displaying a mentality that working at Google is not just a job, but rather a personality trait. Schein’s model shows that artifacts are perceivable signs of the underlying assumptions that constitute culture. Some of the artifacts that Google mentions in its own description of its culture are “lava lamps; massage chairs; large inflatable balls” (ibid.). By mentioning these objects in its selfdescription, Google is showing a wish to display itself as a fun and untraditional company. Additional artifacts of interest could be that Google employs a flock of goats and a goat herder instead of a lawn mover and encourage people to bring their dogs to work (mashable.com - a). To the left is a picture of the company dinosaur, as a visual demonstration. Figure 5 - http://mashable.com/2010/06/19/10-google-facts/ - seen april 2 2011

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6.3 EMPLOYEE INTEREST GROUPS Google has employee groups for many different ethnicities, interests and sexual preferences, and the creation of these is encouraged by management. An example of such a group is the GLBT group for Google employees who belong to the gay, lesbian, bisexual or transsexual community. Other examples are a salsa group, a wine tasting group, et cetera. The common denominator for most of these groups is that they are supported by Google, but not actually work related. This makes the groups informal groups which are defined as:”a collection of individuals who become a group when members develop certain interdependencies, influence one another’s behaviour and contribute to mutual need satisfaction” (Brooks 2009: 121-122). So, what can Google gain from supporting these employee interest groups. One effect is engagement in the company. When Google becomes a bigger part of people’s life, and starts to have more meaning than just being another place of work, employees become more involved in the company and more committed in reaching goals and ensuring success for the company (Urip 2010: 65). Efficient workers are an important resource for any company, and a resource that is hard to bring about by structural measures such as rules and regulations. How to achieve efficiency in your workforce has been debated for decades and there is no foolproof recipe. However, theories suggest that effective social networks can improve employee’s performance. They are a resource in the sense that they are a way to generate a sense of belonging by making the employees feel that they are wanted at the organization for more than their work related capabilities, but for personal reasons as well (Brooks 2009: 122). Theorist Douglas McGregor states that “An individual who identifies with a cause, person, group, or organization is in affect saying that goals and values associated with that cause have become his/her own. He/she then self-consciously directs his/her efforts toward those goals and gains intrinsic satisfaction through their achievement (McGregor 1967, 145)” (academicleadership.org - a). Getting your employees to share the goals of the organization is a good motivating factor. As a result more work gets done in less time as the work force becomes more efficient due to being more motivated than without these groups. This is one payoff from the multitude of employee interest groups. Another benefit brought by the groups is that they add to Google’s attractiveness as an employer. Companies often compete for resourceful employees, and cultural initiatives, such as the groups, weigh in on the decision making of such potential employees (Bueble 2009: 53). Google’s managerial involvement in the groups also gives the company a possibility to influence the groups. Organizational norms are often created and reinforced in informal groups (Brooks 2009: 122), so managerial involvement provides a chance to further preferred behavior (Brooks 2009: 149).

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On the negative side, Google exceeds the boundary between the private sphere and work sphere of the employees and becomes a part of their personal life. This brings a new symbolism into play as the corporation goes from being a place of work to being a way of life. People are not merely employed at Google; they are ‘Googlers’. This puts us right in the middle of a current and ongoing discussion on the subject of the need for a division between work life and personal life. When the organization transcends into the private zone, it might cause a situation where people are always at work and lose sight of the border between work life and personal life, which can lead to stress and stress related illnesses (Clutterbuck 2003: 1-2). This is of course bad for the employees, but also bad for the organization for instances given the cost of interviewing and training new employees (Herman 1994: xv) or the factor that stressed employees can detract from the company’s ability to reach goals as employee motivation and creativity drops (Clutterbuck 2003: 1-2). Employee groups are artifacts, the top level of Schein’s model. They show that social networks are a value. The underlying assumption is that social needs have a place in a work environment – an acknowledgement to humans as social beings.

6.4 CULTURAL IMPLICATIONS OF MONOPOLISTIC SITUATIONS Google is the most dominant player in the search engine market. When a company operates under near-monopolistic conditions it affects the internal organizational culture (Hartley 2010: 85). An example of how a company was influenced by dominating the market is found in the section Challenges for Google, i.e. the case of IBM and its overdependence of a single product. IBM did not need to develop new products because there was no competition in its field. Its dominance lulled it to sleep, as it was not pressed by competitors to evolve. Google faces the same challenge as it too is dependent on one product and is currently not particularly pressed by competition. According to the company itself, it sees innovation as an extremely important quality (see paragraph Google’s self image), which is a significant factor in avoiding complacency. Valuing innovation is, although important, not the same as being innovative. Innovation takes an active effort, and the next section will discuss how management can further innovation.

6.4.1 INNOVATION Innovation has been a buzzword in the world of business for a while, but it is an abstract matter that is hard to define and hard to achieve. Perhaps the most accurate definition is the one that states that innovation is: “significant positive change” (Berkun 2010: xvii). By this definition, much can be considered innovative as long as it means a significant positive change to someone. An example of innovation could be the story of a Nokia employee in trouble in 1993. Back then, the cell phone was a 20/ 34

recent invention and all cell phones were black and of a standard size and design. This meant that when the Nokia employees gathered in a bar after work, their cell phones quickly got mixed up and they could not tell one from the other. So, one of them got the idea to use car paint to paint each phone a different color which was how customized cell phones started (Rogers 2003: 260). This example demonstrates that innovation does not necessarily consist of major inventions, but can also be minor changes to existing products. Innovation is a quality that many companies strive for. History has given us several examples of how companies have made money by being innovative, for instance Gillette with its invention of the modern razorblade or Amazon with its idea to sell books online. Innovation is advantageous in all industries, but especially so for a company that have so far thrived on being first with new technology (Hartley 2010: 114). Innovation can happen almost by chance, as in the above example of colored cell phones, but instead of just waiting around for that to happen, it is advisable that companies take active steps to promote innovation. These steps must be initiated by management. Google’s top management is, as described earlier, divided in three. This is divided as follows: Larry Page, who as CEO handles the daily operations, Sergey Brin, who is in charge of strategic matters and Eric Schmidt who handles external matters and acts as advisor for the other two. Brin’s and Page’s roles are strikingly similar to Douglas McGregor’s theory on X and Y leaders, which we today often hear spoken of as leaders (Y) vs. managers (X)1. An X leader is a task oriented leader that ensures the job gets done and that subordinates are kept under control. A Y leader is more of a visionary, and here the focus is on inspiration rather than control. The two are not to be seen as different ends of a scale, but rather as different cosmologies altogether – opposite assumptions of the world (Schermerhorn 2010: 38). According to McGregor, the Y leader’s perception of the world is the more efficient in getting people motivated to work, and in making the workforce efficient because the mind sets are self-fulfilling. If the leader assumes that people can do a job independently, there is a larger chance that this will be true (ibid.) Today, researchers tend to agree that elements from both cosmologies are important in motivating your workforce. People often wish to be under some sort of management, and not be left to control themselves entirely (politiken.com -b). However, being under too strict control can work against the purpose, and create an organizational culture where employees show no initiative and become passive whenever they are not supervised, again as a result of a self-fulfilling prophecy (Schermerhorn 2010: 38).

1

McGregor himself defied this interpretation (academicleadership.org – a).

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The management at Google displays a Y leader mentality which can be seen in the fact that Google employees are allowed much self management. Google employees are given 20 per cent of their work time to work on projects of their own choice. This is known as ‘Pet Projects’, an initiative that reveals the thought that the employees are capable of self management. The outcome of the ‘Pet Projects’ belongs legally to Google, but the personal outcome of working with a project of your own choice of course befalls the employee. This initiative was taken to encourage innovation and in general Google does a lot in this respect. It is of course risky for a company to give away control as it makes it harder for said company to control the overall direction (Brooks 2009: 196), but it increases the number of people with a possibility to bring their ideas to life, and so the overall number of ideas being worked with increases (Farmer 2008: 9). Also, this type of leadership is less expensive as it requires less meetings and bureaucracy (ibid.). The ‘Pet Projects’ is an artifact revealing that capability of self-management is an underlying value. This value shows an underlying assumption that Google employees are independent and that working for yourself is likely to bring better results than working for a company.

6.5 CRITIQUE It should be noted that many cultural theorists, including Schein, were critical towards the idea that culture could be managed top-down (Brooks 2009: 272). The preceding paragraphs have all been on the topic of managing culture, but it is regarded as implicit that culture is not only influenced by management, but by a multitude of other factors as well, as shown in the model by Johnson and Scholes. This thesis has chosen to focus on matters where management has the ability to exercise its influence, but is aware that external factors play an important role as well.

6.6 PARTIAL CONCLUSION This section has restated the theoretical base and looked at how Google itself displays its organizational culture, before examining a concrete artifact at Google, i.e. its employee interest groups. The section has then stated that because of Google’s situation with regards to being a near-monopolist there is a special need to be attentive to innovation, upon which it has used McGregor to discuss how a leadership type can further innovation and what type of leadership Google displays. Lastly, it has briefly mentioned that there can be problems in managing something as complex as culture, but that management does have the ability to influence the organizational culture.

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7.0 ETHICS As mentioned earlier, Google sees itself as an ethically responsible company (google.com - e). This helps it in attracting resourceful employees (Bueble 2009: 53) and improves its reputation, which adds to the value of the company (Torrington 2008: 31). When a company brands itself as being ethical, it is important that this strategy is fully implemented so that the users do not view it as something done solely for the marketing value (Bueble 2009: 21). This paragraph will use ethical philosophy to examine the validity of Google’s moral claims. This examination will include an assessment of the company’s situation with regards to it being a monopolist and it will examine how ethics influences customer’s level of trust.

7.1 ETHICAL DEFINITION Through our philosophic history there have been many different definitions of ethics. One instance is Kant, who defined doing good as trying to live up to the categorical imperatives, which were universal laws (Driver 2006: 80). His theory was deontological; meaning that the thought counts, not the result (ibid.). An example of a categorical imperative is “Thou shalt not lie” (Driver 2006:81). This thesis has chosen consequentialism as its ethical definition. Consequentialism states that the morally correct action is the action that benefits as many as possible, as much as possible. Thus it is a teleological theory, meaning that it is the outcome that counts (Driver 2006: 80). The deciding factor of whether an act is good or bad is the consequences of said act. This ism was an attempt by philosophers to create a tool to decide whether an action was good or bad. This tool was to make it possible to decide the goodness of an action by objective calculation, so that whenever someone is faced with a choice between two actions that person can calculate a value for each action correlating to the amount of good brought to the world by each action and so the moral choice is the choice with the highest value (Darwall 2003: 98). An example of the method in use could be the following: a poor person receives a small loan from a rich person. After spending the money, the person is faced with a choice; paying the money back or not. Because the negative consequences are minor for the loan giver, and the positive consequences are major for the loan taker, the correct and good choice would be for the loan taker to keep the money (Driver 2006: 80-81) although this is technically stealing. There are several things to criticize about this model, of which few will now be listed. One point of critique is the trouble of deciding a numeral value for how much an action benefits someone. Another is calculating with the future consequences, which will always be unknown at the time of the action. Thirdly, there is the issue that people will have different perspectives on what a benefit is. 23/ 34

Consequentialism has been chosen because it works well as a functional definition that allows us to take multiple shareholders into account which also matches the CSR perspective.

7.2 GOOGLE’S ETHICS The informal Google slogan “Don’t be evil” may sound good. Nevertheless, it is a rather passive statement that does not incite active moral actions. Not being evil is not necessarily the same as being good. Although Google is known for its good treatment of its workforce, there are also several points where its moral can be seen as tainted. One example is Google’s tax politics. Like many other multinational companies, Google uses the different tax laws in different countries to obtain the most favorable tax rate, arriving at the low tax rate of merely 2.4 percent (Bloomberg.co - b). While this may be an acknowledged standard among large corporations (ibid.), it can be questioned whether this procedure is morally right. If, as according to Friedman’s liberalism, the company’s responsibility is only towards its employees and stakeholders, then this procedure is the most morally correct, since it is likely to attain a higher profit, but, if the underlying assumption of morality states that a company also holds a moral responsibility towards other involved, explicitly all stakeholders, the tax procedure is immoral and should be discontinued. So, if consequentialism is right, then Google is doing wrong with its tax procedure, and therefore not living up to the before mentioned motto “Don’t be evil”. Other actions are less straightforward. One action that has been criticized world wide is the current project called Google Street View. Google takes photographs of streets and places all over the world and uploads them so that everybody has access to the photographs online. This is considered an obtrusion of the private sphere because some are upset that the images of people who are in the pictures are suddenly available to the world. In some cases it has even led to law suits against Google. Google has agreed to blur license plates and faces, but has refused to quit the project. Its official position is that there are more benefits from Google Street View than drawbacks, and that the project will therefore be continued. Unofficially, the then CEO Eric Schmidt made a more controversial statement: ““Street View, we drive exactly once,” Schmidt said, referring to the vehicles mounted with cameras sent out to take photos for the service. “So, you can just move, right?”” (wallstreetjournaldigitalnetwork.com - b). Though it was uncertain whether this remark was meant in earnest, it received a lot of attention, and afterwards Schmidt went out and emphasized that he took people’s concerns seriously, and that Google would accommodate the requests of everyone who wished to have their houses removed from Street View. His statement caused Google a loss of credibility though, especially since the statement coincided with another unfortunate disclosure, namely that the electronic equipment in the Google Street View cars had been picking up private information such as emails and passwords from wireless networks along their ways (ibid.). According 24/ 34

to Google, it happened by accident, and the gathered information was deleted, but the company’s ethical reputation was damaged. The statement is an artefact displaying that public access to photos is valued highly. This value points to a basic assumptions that information is more important than privacy. Another situation which is likely to be causing damage to Google’s ethical brand is the monopolylike conditions it is currently operating under. Google.com is the dominating search engine, with for instance approximately 66 percent of searches in the US (comscore.com - a) and recently Microsoft, one of Google’s biggest competitors, filed a complaint to the European Commission on the grounds that Google had become too dominant. Market dominance can be dangerous for a company in different ways. As mentioned in an earlier paragraph, companies that experience near-monopolistic circumstances have a tendency to become complacent after a while, thus creating opportunities for other companies to take over. Another way it can be damaging for companies is with respect to the company’s brand. In the section on CSR it was established that implementing a CSR strategy will improve a company’s reputation, but if that strategy is not followed through properly, it will instead damage the reputation as consumers will see it as merely a marketing strategy (Bueble 2009: 21). An example of the ethical ambivalence of this topic will now be described. In 2010 Google was close to being declared a monopoly by the French government as a result of a lawsuit. Google was sued by the French company Navx that sells access to information about where the French police are likely to have radar traps. Google held this business to be unethical, and decided to remove the company’s ads from Google.com. Navx then lost much of its sales, and responded by taking legal action against Google. Navx’ assertion was that Google held a dominant market position and was misusing it. The French court seemed to agree that Google held a dominant market position and this meant that it was obliged to bring Navx’ ads and not doing so would be considered discriminatory action. However, the case ended in a settlement, where Google promised to clarify its rules and regulations towards advertisers and so it was never declared a monopoly (wallstreetjournaldigitalnetwork.com - c). This sequence of events is an artifact showing that Google value its own ethics over customers. This value shows a basic assumption that Google’s ethics are correct. According to the ethical definition of this paper, the aspect of Navx’ business that allows people to avoid speeding traps would likely be unethical as the benefit is avoiding a fine while the disadvantage may be bodily harm or deathly injury. This conclusion can only be likely since we cannot exclude the possibility that no extra harm has come from avoiding speed traps, in which case Navx’ product would bring more benefit than disadvantage. 25/ 34

7.3 PARTIAL CONCLUSION This section has determined that because Google defines itself as an ethical company it will be appropriate to look at some of the ethical challenges for Google both now and in the near future. It has also chosen an ethical definition and stated the reasons for choosing that definition, in order to review the actions of Google. Subsequently it has looked at different actions with moral content, and discussed what the ethical implications were and what the effects could be both regarding Google’s external brand and its internal employee morale.

8.0 DISCUSSION Earlier it was stated that this thesis would be based on a functionalistic perspective meaning that it would presume that the features of organizational culture serves different functions in the company. This was a choice between three perspectives which are central in the cultural debate. These three are rationalism, functionalism and symbolism (Schultz 2006: 19) Rationalism is based on the idea that the organization functions like a machine. Here it is believed that organizational culture works as a means to achieve a goal and that it is one variable among others. Culture is in the shared values of the organization, and subcultures are viewed as often being counterproductive with regards to reaching the goal. Functionalism is described earlier. It is based on the idea that the organization functions like an organism. This perspective views culture in terms of the functions served by culture, and culture is not one variable among others, but several variables pervading the entire organization and thus putting its mark on all the other factors. Culture is a way to generate consensus and create integration. Subcultures serve smaller functions that do not need to be served on an overall level. The last perspective is symbolism. Here culture is viewed as something actively generated by human, as opposed to either a machine or an organism. Culture is a type of language generating common understanding, and subcultures are, sometimes competing, dialects (Schultz 2006: 20-21). Although this thesis has already chosen a perspective it now seeks to recognize the fact that a different choice of perspective would have affected the outcome of the analysis. It was regarded that the aim of the thesis, to examine the extent to which cultural elements can play/plays a role in facing the challenges ahead of Google, could best be answered on the basis of the functionalistic perspective. It can now be concluded that there are flaws to this choice. The functionalistic perspective requires examining a large amount of data on three levels, where the symbolic perspective is more holistic in its approach and sees meaning in individual data from the beginning of the analysis (Schultz 2006: 120). This thesis has only examined a limited number of artifacts, such as employee interest groups or

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leadership style, and so it cannot define itself as a methodically composed cultural functionalistic thesis. Another problem with functionalism is the transference of meaning from one cultural level to the next. The artifacts themselves are tangible or easily observable, whereas the value and assumption level require the thesis to draw conclusions that involve some conjecture. No matter how rational the observer, the conjectures will exist. This is a critique point of this thesis and of cultural theory in general that its conclusions are not falsifiable. However, this does not equal complete randomness in conclusions. They are built on observations, secondary empirical data and theorists which ensure them to be as credible as possible.

9.0 CONCLUSION In the introduction we proposed the following problem statement:

To what extent does Google’s organizational culture play a role in facing future challenges?

All the preceding sections have contributed to providing answers to this problem. We have first established some of the challenges that lie ahead for Google. Then it was established what organizational culture is and what theories have characterized the field. Simultaneously, it was ascertained that organizational culture does influence organizational performance. This has also been documented throughout the thesis with secondary data. Next, it was examined whether or not organizational culture was even suitable for active management, and it was found that even though culture is difficult to manage it can be influenced positively by leadership style or initiatives such as employee interest groups. The ethical perspective showed us that moral matters influence organizational culture and staff morale, and therefore is an important part of the organizations culture. On the basis of the theoretical background and concrete analysis it can be ascertained that Google’s organizational culture plays a role in certain aspects of the organization’s resources. It impacts work force efficiency and in this way it helps the organization meet its challenges. It also impacts the organizations capability to be innovative in a positive way. For the organizational culture to be a resource it is important that the company attends to ethical matters as well. As a company claiming to 27/ 34

be ethical, it is crucial that Google acts accordingly as doing otherwise will affect both internal and external stakeholders adversely, and as a result lessen the positive effect created by its internal culture.

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10.0 ABSTRACT This thesis “Google and the Challenges Ahead” is a case study of Google in relation to using organizational culture as a resource. It takes its point of departure in the following problem statement:

To which extent does Google’s organizational culture play a role in facing future challenges? It is written to examine to which extent culture plays a role in organizational performance, and uses Google as a case because of the company’s impressive growth rate and its reputation as a company implementing numerous cultural initiatives. The thesis is structured along five challenges that Google either already faces or will likely face in the near future, and focuses on the cultural aspects of these challenges. That is, aspects where the organizational culture can play a role in overcoming the challenge. The theoretical basis of the thesis is established to be the functional perspective due to the concrete nature of the study. A number of prominent cultural theories pertaining organizational culture is then reviewed in chronological order to form a basis for the analysis. This exposition includes a review of CSR theories which is relevant as Google displays itself as an ethically correct company. All of the above form the basis of the concrete analysis of Google. Here the theoretical base is briefly recounted and Google’s self image is demonstrated by use of examples in a short paragraph. Then a concrete example is examined, namely the employee interest groups at Google. The effects of the groups is explored and it is found that the groups can further employee job satisfaction, work force efficiency and employee loyalty. On the negative side it is found that the groups risk transcending the boundaries between work and personal life and in doing so stressing the employees. Then it is determined that Google’s situation as a near-monopoly gives reason for the company to pay extra attention to innovation. Google’s management is examined to determine the leadership style which is found to have focus on self management, and it is established that Google’s leadership style is effective with regards to achieving an innovative culture. It is simultaneously established that most people prefer to be under some management, and so Google should ensure to maintain some guidelines. Next, the thesis offer some critique of the above-mentioned conclusions.

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Then it is determined which ethical theory the thesis will have as its standard, before examining some of Google’s actions in the moral domain. The specific topics examined are tax politics, privacy politics and market dominance politics. It is shown that ethical implications are hard to judge and that not all Google’s actions live up to their informal motto “Don’t be evil”. Afterwards there is a discussion section where the choice of cultural perspective is discussed in a critical manner. Finally, it is concluded that Google’s organizational culture and ethics is a positive resource in facing the organizations challenges, but that it is a complex matter.

Characters in abstract: 2,485

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19. Schermerhorn Jr., John R; Management; 2010; Eleventh edition; John Wiley and Sons 20. Schultz, Majken; Kultur i organisationer; 2006; Handelshøjskolens forlag 21. Scott, Virginia A.; Google; 2008; Greenwood Publishing Group 22. Torrington, Derek et al; Human Resource Management; 2008; Seventh edition Pearson Education 23. Urip, Sri; CSR Strategies; 2010; John Wiley and Sons 24. Zook, Chris; Beyond the Core: Expand Your Market Without Abandoning Your Roots; 2004; Harvard Business Press

12.0 WEB PAGES 1. 360.Datamonitor.com a. 360.Datamonitor.com – Company View; http://360.datamonitor.com/Product?pid=5B199F61-608D-4923-B4A3F5EE15285ADE&view=CompanyView; seen April 22. 2011 2. Academicleadership.org a. Academicleadership.org – The Online Journal - Volume 7 Issue 4 Fall 2009; Douglas McGregor’s Theoretical Model: Their Application in Assesing Leadership Styles; http://www.academicleadership.org/article/Douglas_McGregor_s_Theoretical_Models_Thei r_Application_in_assessing_Leadership_Styles; seen April 13. 2011 3. Bloomberg.com a. Bloomberg.com – News; Womack, Brian; April 14. 2011; Google Profit Misses Estimates on Hiring, Marketing Costs; Shares Decline; http://www.bloomberg.com/news/2011-04-14/google-s-profit-misses-estimates-asemployee-costs-climb-shares-decline.html; seen April 24. 2011 b. Businessweek.com – Bloomberg Businessweek – Technology; Drucker, Jesse; October 21. 2010; The Tax Haven That’s Saving Google Billions; http://www.businessweek.com/magazine/content/10_44/b4201043146825.htm; seen April 29. 2011 32/ 34

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9. Politiken.com a. Politiken.com – Blogs; Lunde, Niels; April 6. 2011; Ny topchef hos Google: Her er Larry Page’ udfordringer; http://blog.politiken.dk/lunde/2011/04/06/ny-topchef-hosgoogle-her-er-larry-page-udfordringer/; seen April 10. 2011 b. Politiken.com – Blogs; Lunde, Niels; April 5. 2011; Vi trives med hierarkisk virksomhedsstruktur; http://blog.politiken.dk/lunde/2011/04/05/vi-trives-medhierarkisk-virksomhedsstruktur/; seen April 10. 2011 10. Wallstreetjournaldigitialnetwork.com a. Allthingsdigital.com – digital daily; Paczkowski, John; April 27. 2011; Google to Claim “World’s biggest App Store” Title From Apple in Five Months; http://digitaldaily.allthingsd.com/20110427/google-to-claim-worlds-biggest-app-store-titlefrom-apple-in-five-months/?mod=ATD_rss; seen April 29. 2011 b. Marketwatch.com; Letzing, John; October 22, 2010; Wary of Google Street View? Move, CEO says; http://www.marketwatch.com/story/wary-of-google-street-view-moveceo-says-2010-10-22; seen April 28. 2011 c. Wallstreetjournal.com – Technology; Varela, Thomas; October 28. 2010; Google Settles Navx Case With French Agency; http://online.wsj.com/article/SB10001424052702303362404575580282968250468.html; seen April 26. 2011

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