Organizational Behavior 2

Submitted to: Prof. Subhashis Sinha

MBA Core Division B

Group 6
Members:
B016 - Ankit Jha
B026 - Gobind Agarwal
B031 - Md Faisal Haque
B036 - Himanshu Patil
B046 - Akshay Katiyar
B056 - Devanshi Jain
B066 - Cheshta.
 Table of Contents
S No. CONTENT Page No.

1. Executive Summary 2

2. Introduction of Google 3

Detailed Description of organizational structure of the protagonist

3. company 4

How has the structure influenced and has been instrumental in the
4. company’s growth? 7

5. Critiquing the effectiveness of the current structure 9

6. Recommendations for the above 11

7. Conclusion 13

1
1.Executive Summary
This project analyses Google’s organizational structure, its evolution over time, and its role in driving
growth and innovation. Primary and secondary research focuses on Google’s transition from a flat hierarchy
to a matrix structure and eventually to a decentralized model under Alphabet Inc. The study highlights key
frameworks from Robbins and Vohra's Organizational Behaviour, including authority, role clarity, and
collaboration, to assess the effectiveness of Google’s structure in supporting its growth in emerging
technologies like AI and cloud computing. Key outcomes indicate that while Google's structure promotes
innovation, clearer accountability and strategic alignment are needed for future scalability. For an MBA
graduate, the project provides valuable insights into real-world organizational dynamics, emphasizing the
balance between innovation and structure in a global tech giant.
2
Google was founded in 1998 by Larry Page and Sergey Brin while they were Ph.D. students at Stanford
University1. Initially, it started as a search engine called "BackRub" but later rebranded as Google, inspired
by the mathematical term "googol," symbolizing its mission to organize a seemingly infinite amount of
information on the web.

2.Introduction to Google - Evolution of its organizational structure :

2.1 Early Structure (1998–2010):
In the early days, Google operated with an "ultra-flat" structure, where founders Larry Page and Sergey Brin
encouraged minimal hierarchy. They even experimented with removing middle management altogether in
the early 2000s2. However, this led to confusion, as employees began turning directly to Page with trivial
administrative issues, forcing them reinstate some level of management to maintain order. This experiment
demonstrated the importance of limited but functional middle management.

1
Google (2023). Google - About Google, Our Culture & Company News. [online] about.google. Available at:
https://about.google/intl/ALL_in/.
2
Ozioma Onwumah (2024). Inside Google’s Organisational Structure: Everything You Need to Know. [online] Talk Magnet.
Available at: https://www.talkmagnet.com/blog/google-organisational-structure/.
3
2.2 Introduction of a Matrix Structure (2010–2015):
Google then transitioned to a matrix organizational structure. This structure incorporated both function-
based and product-based groupings, which allowed the company to maintain flexibility while managing its
growing product portfolio, including Search, Ads, Chrome, and Android. The matrix structure meant that
employees were grouped based on their function (e.g., marketing, engineering) but also aligned with specific
product lines like YouTube or Google Cloud.

2.3 Alphabet Formation (2015):

In 2015, Google underwent its most significant structural shift by creating Alphabet Inc. as its parent
company. This move was designed to streamline operations, improve transparency for investors, and
separate the core Google business from its "Other Bets" (such as Waymo and DeepMind) 3. Alphabet's
structure now includes two main segments: Google and Other Bets. Sundar Pichai, previously overseeing
Chrome, and Android, became Google's CEO, while Page and Brin stepped back from daily operations.

2.4 Post-Alphabet Adjustments (2015–2020):

After the Alphabet restructuring, Google retained its matrix-style organization but refined it to better balance
innovation with operational efficiency. Product-based divisions, such as Google Ads, Google Cloud, and
YouTube, were given more autonomy to pursue their strategic goals. 4At the same time, functional areas
like marketing and corporate affairs continued to provide.

2.5 Recent Developments (2020–2023):

In recent years, under Pichai’s leadership, Google introduced the OKR (Objectives and Key Results) system
across the organization 5.This system emphasizes goal clarity and accountability at every level, from the
CEO down to junior employees, reinforcing a performance-driven culture that balances Google's innovative
edge with operational discipline. Additionally, there has been a greater emphasis on AI and cloud
computing, with Google Cloud and AI emerging as critical product divisions.

3.Detailed Description of organizational structure of the protagonist company

Google's organizational structure is a matrix-based model (Exhibit 1) that combines functional and product
divisions, fostering flexibility, innovation, and communication across teams. Here are the key highlights of
Google’s organizational structure, based on various testimonials and insights from former employees:

3.1 Matrix Structure:

3
Wikipedia Contributors (2019). Larry Page. [online] Wikipedia. Available at: https://en.wikipedia.org/wiki/Larry_Page.
4

4
Function-Based: Employees are grouped into functional areas like engineering, marketing, or corporate
affairs. This function-based approach allows for specialization, with experts in the same domain working
closely together to drive innovation.
Product-Based: Google’s structure is also product-driven, with groups focused on individual product lines
like Google Search, YouTube, Google Ads, and Google Cloud. Each division operates semi-autonomously,
facilitating innovation and market responsiveness.6

3.2 Open Culture and Innovation:

Employees are encouraged to share ideas openly, experiment with new solutions, and engage in creative
problem-solving, making HR at Google data-driven science. This approach is evident in initiatives like
Project Oxygen, which studied the role of managers and optimized their involvement without
micromanagement.

3.3 Career Growth Challenges:

The reduced presence of middle management means that employees often have large teams reporting to
a few managers, which can slow down promotions and career progression. Additionally, the high autonomy
provided can lead some organizational challenges in managing large-scale, cross-team collaborations
effectively.

3.4 Transparency and Trust:

Weekly TGIF meetings7, hosted by senior executives, encourage open discussions on company strategies
and product roadmaps, creating a sense of trust and inclusion among employees. This open-door policy
fosters a sense of ownership and accountability, aligning employees with the company’s mission to
"organize the world's information and make it universally accessible and useful" (Although nowadays they
happen on Thursday instead of Friday). Google’s internal culture of "20% time", which allows employees to
dedicate time to side projects, flourished under this structure, leading to innovations like Gmail, Google
Maps, and AdSense. The Informal Network of communication in Google .

3.5 Autonomy and OKRs:

Google’s management philosophy emphasizes Objective and Key Results (OKR), a system where
employees set measurable goals and have the autonomy to pursue them. This system, refined by current
CEO Sundar Pichai8, is designed to keep teams focused on impactful, measurable outcomes without
micromanagement. Employees often share stories on platforms like Reddit about Google's ability to
innovate rapidly due to this structure. One former employee mentioned how teams from Cloud and AI could
collaborate seamlessly without being bogged down by rigid hierarchical constraints.

6
Bayucca, R. (2024). Google Organizational Structure: Everything You Need to Know. [online] Correct Digital. Available at:
https://correctdigital.com/google-organizational-structure/.

7
NOBL (2017). How Google’s TGIF Meetings Empower Employees. [online] NOBL. Available at: https://nobl.io/changemaker/how-
googles-tgif-meetings-empower-employees/.
8
Bhardwaj, P. (2018). Google sets goals differently under Sundar Pichai than it did under Larry Page, and it reflects a difference in
managerial tactics | Business Insider India. [online] Business Insider. Available at:
https://www.businessinsider.in/google-sets-goals-differently-under-sundar-pichai-than-it-did-under-larry-page-and-it-reflects-a-
difference-in-managerial-tactics/articleshow/64689300.cms [Accessed 7 Oct. 2024].
5
Exhibit 1 :

Exhibit 2 :

6
4.How has the structure influenced and has been instrumental in the company’s
growth?

4.1 Matrix Structure for Flexibility and Innovation:

As per Robbins and Vohra’s theory, matrix structures promote efficiency and creativity by allowing
different departments (engineering, marketing, sales) to collaborate across various products (like YouTube,
Cloud, and Android). This setup enabled Google to launch new products, acquire startups (like YouTube
and Android), and scale its operations globally, all while maintaining its innovative edge.

Example: This culture of experimentation led to the creation of successful products like Gmail, Google
Maps, and Android

4.2 Flat Structure for Rapid Decision-Making:

Google has traditionally maintained a relatively flat structure, minimizing hierarchical levels. This
encourages open communication between employees at all levels and facilitates faster decision-making.
According to S. Robbins, flat organizations are more adaptable and responsive to change, which has been
essential for Google’s ability to pivot quickly in the fast-moving tech industry.

Example: Google have an internal culture of "20% time," which allows employees to spend a percentage of
their work hours on side projects-in this case-facilitating companies like Gmail, Google Maps, and AdSense.

4.3 Decentralization for Product Autonomy:

Google's organization structure signals decentralization in its product segments, among them Google Ads,
YouTube, and Google Cloud. These business ventures are considerable in power to continue with their
agendas. According to Robbins, this is the most appropriate organizational structure for large, complex
organizations dealing with dynamic industries. This is because it enables them to respond to changes in the
market and to contribute effectively to making up for customer demands.

7
Example: The separation into Alphabet Inc. in 2015 made it possible to continue with further
decentralization by placing non-core units-that is, Waymo or Verily-under the heading "Other Bets" and
allowing them to do their thing without being hampered by the operations of the core business.

4.4 Revenue Growth:

Since the formation of Alphabet Inc. in 2015, Google has seen substantial revenue growth. In 2022,
Alphabet reported revenues of over $282 billion, a significant increase from the $75 billion reported in
20159.

4.5 Market Dominance:

Google’s dominance in the search engine and digital advertising markets is largely due to its matrix
structure, which allowed the Ads division to operate independently while being integrated with Search and
YouTube. As of 2023, Google holds over 90% of the global search engine market and generates 80% of
its total revenue from ads. This structure enables efficient data sharing across product lines, allowing for
seamless ad integration across platforms.

4.6 Product Diversification:

The company has expanded into cloud computing, hardware (e.g., Pixel devices), and even experimental
technologies like Waymo’s autonomous vehicles. Each division operates semi-independently, supported by
functional teams in engineering, marketing, and finance. This decentralized approach has led to faster
development cycles, contributing to Google's sustained 20% year-on-year growth in new ventures.

9
Bianchi, T. (2011). Alphabet (Google): annual revenue 2011-2018 | Statista. [online] Statista. Available at:
https://www.statista.com/statistics/507742/alphabet-annual-global-revenue/.
8
5.Critiquing the effectiveness of the current structure

5.1 Complexity and Coordination Issues:

As Google continues to grow and diversify, the matrix structure might lead to greater complexity,
particularly in terms of coordinating between functions and products. Robbins and Vohra warn that large
matrix organizations can suffer from role ambiguity and conflicts over authority, which may slow decision-
making or create inefficiencies.

Example: Some ex-Google employees have reported on Quora and LinkedIn that decision-making can
become convoluted in such a large matrix structure, with unclear lines of responsibility between product
teams and functional heads10. This could potentially hinder growth as Google scales further, especially in
areas like AI or hardware development where cross-functional collaboration is critical.

5.2 Balancing Centralization and Autonomy:

While decentralization has worked well for Google so far, it could become a challenge if the core business
units and Other Bets operate too independently. Alphabet’s decentralized approach could lead to a lack of
cohesive strategy across the entire company, making it difficult for Google to respond to external threats,
regulatory scrutiny, or industry shifts.

Example: Waymo, a significant part of Google’s long-term strategy in autonomous driving, operates
independently under Alphabet. If such divisions diverge too much from Google’s core business strategy, it
could lead to fragmentation in the overall corporate direction.

5.3 Ambiguity:

One potential weakness of Google’s matrix structure is the ambiguity in authority and role
responsibilities across functional and product teams. According to Robbins and Vohra, organizations that
rely on a matrix structure often face conflicts regarding authority and accountability, as employees report to
both functional and product managers.

5.4 Addressing Employee Retention and Motivation:

One of the biggest challenges faced by tech giants like Google is retaining top talent, especially as
competition for skilled employees intensifies. While Google’s culture of openness and innovation has
attracted talent, issues with work-life balance and burnout have been reported on various employee
platforms.11
10
Quora.com. (2019). What is the organizational structure of Google? - Quora. [online] Available at:
https://www.quora.com/What-is-the-organizational-structure-of-Google.
11
Business Today Desk (2024). [online] Business Today. Available at:
https://www.businesstoday.in/technology/news/story/google-assures-employees-no-immediate-plans-for-five-day-office-return-
after-amazons-strict-rto-policy-448475-2024-10-03 [Accessed 7 Oct. 2024].
9
Robbins’ motivation theories (e.g., Herzberg’s two-factor theory) 12suggest that to maintain high
motivation and retention, organizations must address both hygiene factors (such as workload and working
conditions) and motivators (such as opportunities for advancement and recognition).

6.Recommendations

6.1 To Enhance Role Clarity and Accountability:

1. Establish clearer lines of reporting by refining the role responsibilities within cross-functional
teams. While maintaining the flexibility of the matrix structure, Google could improve coordination
by ensuring clearer distinctions between the roles of functional heads and product managers.
2. Develop a more formalized chain of command to enhance accountability within its diverse teams,
without sacrificing the flatness that drives innovation.

6.2 Balancing Centralization and Decentralization:

1. Revive strategic alignment meetings within all divisions of Alphabet, with the top
management reassuring the independent projects to be in line with Google's vision.
2. Construct mechanisms of integration through cross-divisional task forces so that while
decisions are taken in an autonomous manner, the key decisions remain aligned for meeting
long-term goals.

6.3 Manage Scalability Issues:

1.Reduce the team size of cross-functional teams small enough to maintain high quality of
communication but big enough to leverage benefits of diverse views. Implement more agile
approaches across the divisions where small teams work in sprints on fast iteration of the
projects with regular feedback loops for course correction.

6.4 Improving Employee Retention and Motivation

1. Work-Life Balance Offer comprehensive wellness programs that include mental health
resources to aid employees in managing stress, maintaining their wellbeing during daily tasks.

2. Professional Development Invest in ongoing education and training that will keep
employees abreast with new technologies and the acquisition of new skills. A defined career
map and mentoring should be offered as a resource to enable each employee to learn where they
could develop within the organization.

12
Organization behavior Pearson
10
7.Conclusion
Such a matrix structure has served Google well to-date, but it is hardly without either strength or difficulty
as the firm continues to expand in areas such as AI, cloud computing, and autonomous vehicles. This matrix
arrangement of functional and product-based teams enables cross-functional cooperation and adaptability,
key elements in the launching of new products and services. It encourages open and autonomies: the flat
hierarchy promotes the speed of decisions, and it is open to innovation.

11
However, the matrix structure at Google also makes it increasingly complicated and fuzzy in terms of
authority and accountability across functions and product teams. In some cases, employees may become
uncertain over whom to decide and report to, which slows down collaboration and growth. Moreover,
Alphabet's decentralization, although encouraging innovation, runs the risk of fragmenting alignment on
strategies across the company's business units.

For the future, Google's structure will have to change, paying particular focus to the coordination and clarity
challenges that arise in the organization. Refining the roles, ensuring strategic alignment across Alphabet's
units, and further promoting scalability through agile methodologies and role clarity would further increase
Google's organizational effectiveness. Although the current organizational structure has helped Google thus
far, changes will make it adaptive, innovative, and aligned with long-term goals in the changing landscape
of technology.

12