Google's Operational Management: A case study
Word Count: 2747 (Excluding references)
Introduction
The Business World is a competitive and dynamic environment that requires corporations to
continuously aim to improve and enhance their business capabilities and performance. A major
determinant of the survival of a company is its operational management (Hill and Hill, 2012).
It is no secret that Google has a unique and well developed management system. This unique
management system was released to the public sometime in 2017 (Fessler, 2017). Their
management tools focus on the basics such as how to set goals, run meetings, and have
conversations (Sadun, 2017).
Google uses distributed leadership style and is based on turning your dreams into reality
(Manimala and Wasdani, 2017). Larry Page, Google's former CEO, once said that it is impossible
to lose a dream, however, it is incubated as a hobby (Google, 2017). This statement is at the core
of their management style. They provide their employees with necessities to explore their dreams,
make them come true, and then convert these dreams turned reality into a money-making machine.
We can't talk about Google's Operational Management without mentioning its organizational
culture and organizational structure (Lee et al. 2015). Google's success stems from how effective
its organazational culture and structure support innovation and growth. Unlike most companies,
Google's organizational structure emphasizes flatness. The synergy between Google's corporate
structure and culture led to its dominant position in the industry today. This close relationship and
alignment led to the effective use of its corporate culture and structure in the achievement of well
planned objectives when it came to the development of competencies for business development
and growth (Smithson, 2019). In other words, the end result of this alignment is business growth
for the fulfilment of both Google's Mission statement and its Vision Statement.
Google implements the Ten decisions of operations management in all of its business operations,
and addresses these areas with a holistic/integrative approach. (Gregory, 2017). By applying these
operational management decision areas, Google maintains efficient and effective operations
management that leads to profit.
Operational Management in Google
The ten decision areas of operational management that Google applies are:
a. Quality Management: Google invites its customers to share their opinion and send in their
reviews and critics to enable the company find out how it can improve its products.
b. Design of Goods and Services: An example of this area of operational management is where
Google develops apps to help its customers after analysing forecasts of its customer’s future
expectations.
c. Process and Capacity Design, where Google uses standardized conventional processes in
software development to address capacity design.
d. Location Strategy, where Google choose their decision area of operations management based
on whether their products will be distributed through the internet or whether it is for support
activities.
e. Layout Design and Strategy, where the Company uses workflows mixed with creative ideas
to design its workspace and develop web-based and software products.
f. Human Resources and Job Design, where Google chooses smartness and excellence in
employees over their experience.
g. Supply Chain Management, where the company manages its supply chain through advanced
information systems.
h. Inventory Management, where Google uses different types of inventory that best suits its
various businesses.
i. Maintenance, where its employees keep all equipment and facilities running smoothly.
j. Scheduling, where Google uses automation to schedule check-ins and to monitor productivity
levels.
Quality Management
Quality management is the act of overseeing all activities of a company to ensure consistency in
the company, its product, or service. Its main focus is on product and service quality and the
method required for its achievement. It has four main parts: Quality assurance, planning, control,
and improvement (Colquitt et al. 2009).
Google and TQM
Google has benefited a lot from the practice of TQM (Annika and Sverker, 2013). When we look
at the working environment at Google, there is no single doubt that it embraced the principles of
Total Quality Management (Colquitt et al. 2009). Human resource has the freedom to come to
work anytime they want. They get to choose their working hours, which is unheard of in most
companies. No mental pressures are exerted on the employees to create a workspace filled with
fear. This strategy is great as it helps the employees have a fresh mind and to be relaxed and
comfortable when working on the activities and operations they are responsible for. Google
encourages its human resource to come up with fresh and innovative ideas that aid in the growth
of the organization. The no-pressure practice helps get the job done fast.
Engaging all the employees in the organizational decision-making is also one of the TQM
principles that Google practices (Steiber and Alange, 2013). The company lets the employees in
on the organizational decision-making process with some power given to them (Richards, 2012).
Google's organizational structure is decentralized which helps in facilitating creativity and loyalty
from its human resource. Both Twitter and Facebook have adopted this strategy and it has also
contributed to their success.
There is no denying that the way that Google's offices are set up affects how its human resources
live. Its headquarters in California, USA is a prime example of a stress free and laid back work
environment. Its offices have most of the luxuries available to humans, from the different kinds of
foods available to the luxury electric cars one can drive without cost.
Google and Inventory Management
Since Google has many varied businesses, its inventory management involves diverse activities.
The company's aim is to optimize its operational capacity, which is why most of its businesses use
different supply chains. Google works towards reducing the costs of its inventory since one needs
funds to maintain inventory. The bigger the inventory, the more expensive it is. With its large
organizational size, important position in the global market, and diverse product lines, Google has
adopted tailored efficient inventory management practices and strategies that help reduce the
amount of money spent. The more the company grows and diversifies, the more its inventory
management increases. Google's inventory management is commendable as it reflects strategic
choices and a successful inventory design (Gregory, 2017).
Google has different products so they use inventory types that fulfill a function in the business.
Google uses the following inventory (Gregory, 2017):
Raw Materials Inventory: This inventory consists of input materials used in the production of
some of its goods. Examples of these materials are fiber optic cables for cable television service
and Google Fiber Internet. This inventory acts as a support to the production operations at Google
(Gregory, 2017).
Work-in-Progress Inventory: The company also uses this inventory type when producing some
of its products. Its role is to help Google maintain a steady production rate (Gregory, 2017).
Finished Goods Inventory: Google uses this iinventory type to keep track of its finished goods
before they are sent out to customers. An example of this is the storage of Chromecast units and
Google Nexus before they are shipped off to sellers. This inventory helps the company address the
demands of sellers for these goods (Gregory, 2017).
Transit Inventory. Google's Inventory Management System also uses transit inventory. An
example of this is where a Chromecast unit is being transported from warehouses to sellers. They
become transit inventory on the way between the warehouses and sellers. This inventory also helps
the company address the demands of sellers for these goods.
MRO Goods Inventory: This inventory type consists of the items used for supporting Google'
operations. Google's inventory management uses MRO inventory, also known as maintenance,
repair, and operating goods inventory, in all of its business areas. This inventory supports Google's
operation both directly and indirectly (Gregory, 2017).
Google and Process and Capacity Design
One of the key determinants of a production system's performance is its organizational design.
Google deals in both software and hardware products. The Process and Capacity Design of
operations management is of little consideration when it comes to Google's web-based and
software products. This is because the rise in demands for these products barely has any effect,
and Google still maintains almost the same number of workers nonetheless. Google addresses
capacity design by using standard and conventional processes in the development of its software
products. For hardware like Chrome cast and Google Nexus, Process and Capacity Design has a
larger impact. Google uses contract manufacturing in its process and capacity design. An example
of this is where the company developed its Nexus phones but outsourced the production to OEMs
(original equipment manufacturers). This means that these original equipment manufacturers end
up deciding the process and capacity design for these Google products (Gregory, 2017).
Google, Bing, and the 4vs
Volume
Big Data was once just a buzzy concept but now significantly impacts how human society lives
and works. Doug Laney an analyst stated thus ‘big data is defined by three Vs: volume, velocity,
and variety’ (Piatetsky, 2018). The impact of big data is immense notwithstanding the industry. It
has made what used to be holistic concepts, such as 'consumer wants' more measurable. It can be
used to shine a light on hidden trends and patterns, which will help companies to know more about
their customers' behaviors and wants. Big data provides competitive advantages and helps
corporations find new directions for innovation.
Google as a company uses big data. It accesss user information via its Gmail products and Chrome
Browser. It also receives millions of search requests every hour. The firm trains its algorithms with
the help of that data, which in turn helps it get better at correcting misspellings, parsing sentences,
auto entry and completion, and generally understanding what a user wants to search for. Google
recommends things to people before they finish asking questions by using data on these user's
current and even historical search terms (Rice, 2019).
As it holds a lot of answers to answer all kinds of questions asked, Google is at the top of Big Data.
On average, Google currently processes more than 40,000 search queries every second, which is
appropriately 3.5 billion searches per day and 1.2 trillion searches per year all over the world
(Preetipatel, 2020). Google stores and handles all its data at its DataCenter. Also, the Google
Search index contains hundreds of billions of web pages and is well over 100,000,000 gigabytes
in size (Preetipatel, 2020).
Microsoft Bing, a similar search engine to Google is yet to release similar figures. However,
Microsoft Bing Index has been estimated to be in the middle of eight to fourteen billion web pages.
There is a huge gap between Microsoft Bing and Google when it comes to market share. Sometime
in 2021, Statista stated that Google accounted for a whopping 86.6% of the global search market
while Bing took 6.7% (Statista, 2021). Mind you, that 6.7% is equivalent to millions of people
who use Bing daily. Also, Ahrefs found that Google was the most searched query on Bing
(Johnson, 2022).
Variety
When we talk about variety, Google with its 271+ products, including its search engine is at the
forefront. Google also acquires an average of one company every week, which has gone a long
way in improving its revenue and visibility (WebsiteBuilder, 2022).
Bing also provides a variety of search services, including video, web, map, and image search
products. It also has Microsoft Shopping amongst others. It does not have even half of what Google
has, but it still has a variety of products that users can make use of.
Visibility
There is no doubt that Google with more than 80% of the search market share, is the most popular
and well known search engine. It has 80+ mobile traffic and has different products and services
that add to its visibility. Interestingly, the operational management system has also put Google
under the spotlight (Ball, 2011). Also, its address is not hidden, it has clear signage, and it is visible,
making it easy for visitors to locate it.
Not only does Microsoft Bing dominate 33% of U.S. searches, it also powers Yahoo, America’s
third most popular search engine. Apart from Yahoo, it also partners with dozens of search engines
such as Lycos, MSN, DuckDuckGo, etc. The breakdown of it is that if you are not searching on
Google, you are likely using a search experience that is partially powered by Bing (Barysevich,
2022).
Variation
Google is the giant of the search engine industry. The corporation always updates its products and
search algorithm to sustain and manage its position at the Search World. Google's algorithm
consists of an average of 200 factors it considers in every search (Webfx, 2022). It regularly
updates its algorithm and it generally values user experience above everything else. Google is
generally more text-based.
Bing also considers an average of 200 ranking factors in each search results and is generally much
more visual-based.
How Operational Performance in Google can be Improved
Google makes sure that its products not only meet up to the industry standards but are also leading
in innovation and technological development. These factors contribute to the powerhouse nature
of the company. Google is an example of effective and efficient operational performance and
human resources development (Google, 2022).
It is no easy feat for a company to improve its operational performance. An enhanced operational
efficient company needs to have an intelligent resource allocation, a culture of psychological
safety, and higher billable utilization rates, among other factors (Viter, 2021; Henderson, 2020).
Improving operations is a combined effort that requires Directors of Operations to optimize people,
processes, technology, and financials. There is unfortunately no universal remedy that magically
turns a company into a well-oiled machine overnight (Viter, 2021).
Google can improve on its operational performance by further intensifying information sharing.
The corporation supports information sharing and communication, but controls both strictly. How
can google intensify information sharing? The answer is simple. Increasing employees' degree of
freedom in communications and information sharing helps knowledge transfer to be speedy and
efficient. This will help increase the innovation rate of Google's product development processes.
Google can also improve its operational performance by creating more innovative programs that
can support more special functions among the human resources. This will help increase the skills,
innovation ability, and knowledge of these employees.
Google's operational management promotes innovation using knowledge shared within the
organization. Despite this advantage, Google's operational performance has room for improvement
concerning flexibility. Google can improve its operational performance by working of its
flexibility. Google can increase its flexibility by making policies and adjustments in the corporate
structure of the company. More positions within groups can help in creating flexibility. This
recommendation is to aid in Google's ability to satisfy market characteristics.
Google has a cultural standard that encourages frank, open dissent and Open internal
communications. This is all good, but also comes with disadvantages. This openness created a hole
where employees get into political arguments capable of causing division in the firm. This has led
to many former Google employees suing the company on the basis of it censoring their opinions
on politics. A company encouraging openness is commendable, but there should always be a limit.
Google chose to tackle this problem by banning political debate at the office, but this is an extreme
way to do it. The better way is to develop a culture of civility in the company to disarm the divisions
that arise from political discussions. The company can go further by having common-sense
practices for guiding conversations. There is a difference between controlling what and how an
employee thinks and managing their behavior. Companies should do the latter by creating specific
behavioral standards for civility. This will create a safe environment for all employees
notwithstanding their rank or position.
Google's operational management system has been applauded by a plethora of companies and
people because of the encouragement and opportunity it gives its human resource to create,
improve, and grow as much as they want.
However, no company is perfect. Every company in pursuit of growth and success need to
implement change and improve with time to avoid the deterioration that comes from a lack of
adaptability with time. Even Google, a technological titan need to be diverse and open to change
if it wants to grow and remain profitable.
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