Tuesday, March 16, 2010

Two points on Google's Corp Structure:

One of the key benefits of a bureaucratic structure is that it slows down the decision making process which limits the risk of bad decisions. More structure, more rules and processes to adhere to ensure “uniformity”. Typically, you don’t see much bureaucracy in a small company and even less in a “tech” company. It just seems to go against everything that makes them successful. However, many successful companies feel the need to implement more and more bureaucracy as they get larger and larger. Right or wrong, Google has intentionally avoided making that shift. Their goal is to attract the best and brightest, and give them the opportunity to “experiment” with their ideas. Ultimately, it’s not that Google wants a different result than any of their competitors; it’s that they believe there is additional value that can be gained by giving their employees latitude.

The way that Google deals with their investors is another story. Currently, they can get away with being aloof with Wall Street, because they are so successful that nobody really can question what they are doing or how they are doing it. However, I don’t think Wall Street is going to be very willing to put up with this kind of communication if Google makes any strategic mistakes. One bad strategic decision and they will have to change their behavior. Google is big, but Wall Street is bigger and today they can do no wrong, but that could change real quickly.

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