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Evolution of Google's Organizational Structure

Google's organizational structure has evolved significantly since its founding in 1998, transitioning from a centralized model to a more decentralized and flexible matrix structure by the mid-2000s. The major restructuring in 2015 led to the formation of Alphabet Inc., allowing Google to focus on its core web-related business while other divisions operated autonomously. This evolution has fostered innovation, flexibility, and specialization across various product lines.

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22 views1 page

Evolution of Google's Organizational Structure

Google's organizational structure has evolved significantly since its founding in 1998, transitioning from a centralized model to a more decentralized and flexible matrix structure by the mid-2000s. The major restructuring in 2015 led to the formation of Alphabet Inc., allowing Google to focus on its core web-related business while other divisions operated autonomously. This evolution has fostered innovation, flexibility, and specialization across various product lines.

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Introduction

The organisational structure of Google has drastically changed since the company was started in
1998. Google in its initial years had a typical organisational structure with the founder Larry Page and
Sergey Brin firmly controlling major decisions. Such a structure was appropriate for a relatively small
business manufacturing a single product, a search engine. This centralised structure, when Google
started expanding, was not sustainable any longer, for several reasons: the company is a much more
complex business now, and the projects cannot be managed in a single point alone.

 The matrix structure started to evolve at Google by the mid-2000s, in which the company
tried a flexible and centralised model based on both functions and product lines. This change
brought specialisation at the function level across engineering, marketing, and sales
functions and also led to the formation of self-contained units or centres of excellence for
major product lines, namely Search, YouTube, Android, and Ads. This change allowed the
individual teams to take control of strategies and decisions, resulting in faster product cycles
and product line expansion.

 The biggest restructuring took place in 2015 when Google split into Alphabet Inc., a holding
company. During Alphabet, Google was simply one of the many companies, with the internet
giant focusing on web-related business, while other divisions such as Waymo (automobiles),
Verily (healthcare), and others functioned autonomously. Second, organisational structural
change permitted the focus on the key product and service lines at Google and Alphabet,
which at the same time oversaw and coordinated a wider range of business ventures.

 Google’s organisation structure has evolved over the years from a centralised start-up
company organisation structure to a decentralised technology company organisation
structure, in order to encourage innovation, flexibility and specificity.

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