Strategic Human Resource Management - Analyzing the Google Strategies - Case Study Example

Strategic Human Resource Management: Analyzing the Google Strategic Plan Name: Course Unit: Name of Supervisor: Date: Executive Summary The following paper is an analysis of Google’s strategic plan from the perspective of Human Resources. The field of strategic management became mainstream in the last two decades of the last century, with many concepts on the subject being outlined (Hofer & Schendel, 1978); (Snow, 1978); and (Porter, 1980). The focus on strategic management has seen many organisations integrating each department into its strategic management procedure. The Human Resource Management sector has also sought to integrate into the strategic management field resulting in the Strategic Human Resource Management (SHRM) concept. These two inter related fields have led to various researches to determine how best they can be utilised together according to Miles & Snow; (1984); Schuler & Jackson (1987); Wils & Dyer (1984). The consequence of a strategic plan that is well thought out, developed and implemented is a competitive advantage in the market. The understanding and exploitation of this competitive advantage is critical to the success of the business. Analysis of Strategic Plan The mission statement for Google is stated simply thus: “Organise the world’s information and make it universally accessible and useful” (Google, 2005b). Although they do not outline a vision on the Google website, they do outline a set of philosophies to go with the mission statement as being the following: The spotlight should be on the user, and everything else will fall into place. It pays to focus on your core competency and over-excel at it. It is better to have speed than be slow. On the World Wide Web, it is best to be democratic. It is not necessary to be at your desk to require a response. It is possibly to make a living honestly and honourably. There is no end to availability of information It’s possible to be serious without wearing a suit. Great is not sufficiently first-rate. Pop-ups not allowed (Google, 2005c). Google’s employment policy is geared toward obtaining and retaining highly qualified staff. It also seeks to motivate the best performers through incentives. It operates with the 70-20-10 rule; core business takes 70% of employee time, 20% for related sectors like Gmail and Google desktop search; finally, 10% dedicated to creativity and innovation. Internal Environmental factors and how they impact on the plan STRENGTHS WEAKNESSES Strong trademark Challenges of growth e.g. finding the right employees, etc. Popular appeal Highly reliant on advertising income Pioneering search expertise Social Networks from Google lack appeal Good return on investment for advertisers. Position in China is not strong. Only one major revenue stream (search) Experiential deficiency. OPPORTUNITIES THREATS Some countries remain unmapped which means expansion of services. Yahoo and Microsoft offer competition due to possession of more resources and customer appeal. A new format for advertisement and tracking apparatus. Legal issues Market shares size means leveraging of advertising agreements is possible. Reduced margins due to increased competition. Diminishing advertising budgets from firms. Increased competition from other global players. New regulations on the local and international arena. Source: Google (2005a p.22) External Environmental factors and how they impact the plan. Human Resource Implications Appleby & Mavin (2000) define human resources as the hard work, technical knowledge, and abilities that employees bring to an organisation which facilitates its continuing survival. SHRM, although quite amorphous is perceived as a characteristic system of management that seeks to harness the domination of its niche by the advancement of a capable and committed staff. The movement of human resource toward this goal is what is known as Strategic Human Resource Management. In the case of Google, we see this applied in the system of rewarding outstanding employees who are thus motivated to perform even better. Google Inc. operates as a single-product line company; that of search engine expertise. It has as its competition, much more resource-rich companies such as Microsoft and Yahoo! In order to create that niche for itself, Google has endeavored to “understand exactly what you mean and give you back exactly what you want” in the words of co-founder, Larry Page (Google, 2005d). In an attempt to determine how the strategic planning integrates with human resources, an analysis of one of the models that explains SHRM is necessary. The open systems theory avers that a firm processes input that it acquires from customers, competitors, suppliers, etc and then applies that information to map changes in its operations. Wright & Snell (2001) explain it thus; there is emphasis on two key aspects of the organization – the system character which ensures that progress in any one part of the system triggers progress in the other parts; and the receptivity to environmental feedback. In Google’s case, application of concentric diversification by having the search engine as core product as the focal point, it has built a niche for itself as the engine with quicker reaction times, less expensive and with more scalability. Google (2005d). One important element in the future of Google according to Allen Weiner (2004) is to increase the relevance and utility of searches to the end users; while guarding its advantage over other search engines and increasing its market size. This may imply further training of staff or addition of new skill sets into the workplace. Van Donk & Esser (2001:302) have stated that the view of human resource management is often that the concept of management of human resource falls in certain pertinent categories to do with company employee policy. These categories encompass any power the company may bestow on its employee units or unions, the distribution around the various departments, any awards or bonuses earned or the actual job description or type of work done by the employee. In Google’s strategy, there are plans to enlarge the staff in readiness for the projected growth, to penetrate new markets, and the creation of innovative products. While this is to be done in the short term, it is expected to facilitate achievement of long term strategy to come up with original advertising technology. Thus the role of SHRM here is clear in that it must seek to find those employees who can deliver on this promise. It does this by choosing the brightest and best; taking them through complex evaluations, and exhaustive interviews. In return, it offers munificent stock options which encourage employee loyalty to the shareholders. Human Resource Policy Statement for Enlargement of Staff and Enhancing Competitive Edge An examination of the strengths, weaknesses, opportunities, and threats (SWOT) shows that the next decade will determine the sustainability and endurance of Google Inc. the changes in Information Technology are lightening fast and in order to keep on the cutting edge, Google must: do the following deliver on innovative advertising coming up with effective tracking systems Widen the search base for consumers Patent products and register intellectual property as the way to gain an edge over the competition. The ability to obtain and retain the highest qualified and best human resources is vital to respond to the volatile needs of the market. Relevance to Strategic Plan In order to be successful going forward, it is crucial that Google attracts and retains the best technical expertise available, as the portfolio diversifies into related areas such as Google Video Store in partnership with others. Each prospect signifies billions of dollars in investment capital and so the risks involved in each venture are very high, and success is the only option (Google, 2005e). Relevance to wider environmental factors Strategy can be significantly impacted by environmental factors. A power failure of significant proportion for example, could negatively affect services. In November 2003, there was a failure by Google to provide 20% of search results traffic for about half an hour (Google, 2005a, p. 40). These and other disruptions will influence the whole system and cause loss of revenue (Google, 2005a). Secondly, an environmental issue that is cause for concern for users is the emergence of new interphases that do not support Google. The expansion of Google services to adapt to new media will eliminate this threat. For Google to be able to keep up to date, it again goes back to the human resource; employing the best and brightest. Ethical Considerations It is important for Google to stay true to their reputation if they wish to continue to reap the success and growth that they have so far. This reputation is built on simplicity of usage, and the most effective search engine available according to Larry Page, co-founder. They must also continue to only hire the best and brightest to keep their competitive edge and innovate new products for users and advertisers, as they continue in the search for the ultimate search engine. Developing a strategic human resource plan To apply strategic human resource management to an organization requires that employees are apprised of the entire spectrum of duties and expectation bestowed upon them upon employment. In fact, the human resource department needs to identify employees who relish the opportunity to work outside their own purview so that the company culture is one of multi-skilled workers (McMahan, Bell & Virick, 1998: 198). This distinguishing of a certain type of employee must be partnered with commensurate remuneration and appropriate management. For Google this is illustrated in the culture of the workplace. This has been described as laissez-faire, hassle-free, and appealing. Employees are not required to dress formally, and are ferried to work in a company bus. Their meals are catered and free of charge and an atmosphere of creativity is encouraged. The employees are housed at the ‘Googleplex’ which is a collection of four buildings containing not just offices, but swimming pools, gymnasiums, a barber shop, restaurants, lounges etc. This atmosphere is intended to enhance the creative culture at Google. Life at Google (2009). It is also an attractive proposition to potential recruits whose typical profile is a young intellectual not given to formality, creative and unconventional. This would serve as a means of retaining this talent as well since the workplace atmosphere is very conducive. Recruitment A Background Google has a company framework that is functional although a few geographical ones do exist. Most Google manager’s have about twenty people directly under them and the human resources endeavors to select only the most brilliant minds. This is done by taking candidates through intricate assessment tests and exhaustive interviews. Successful talents are offered a generous package including stock options. This ensures that the interests of the employee and that of the shareholders are aligned. The style of operation at Google is through minimalist, focused groups working together on a project for a few weeks before being reassigned elsewhere (Hardy, 2005). Hardy (2005) further adds that Google promotes the generation of ideas through its distinctive policies. It has employees upload a weekly review of their activities onto the company website for feedback. It also encourages the company-wide emailing of ideas so that each employee can comment and enhance it. Undoubtedly, Google’s employees are the bedrock of its success and this has been recognized by the founders, Larry Page and Sergey Brin who have deliberately gone out of their way to nurture a small company culture. Time, Resources, and Ethical Allocations As stated earlier, the Google culture is one that any student of computer science dreams of joining. In order to facilitate the recruitment of the most brilliant in the industry, Google uses some very aggressive means which include a sojourn to the best global universities to source for the next big thing. This is because Google is aware that its reputation as the biggest and best Name in search engine technology is only as good as the human resources who run it. Ethical Considerations in Implementation While we cannot claim to have absolute ethical tenets that must be followed, there are certain important ethical considerations that should be included in strategic planning. These are: Stakeholder input Organizational principles Personal standards Dealing with change (Robinson, 2003). Stakeholder input The asset base at Google is more than adequate, starting with name recognition, its reputation for living up to the company mission i.e. “to organise the world’s information and make it universally accessible and useful”. All this would however not be possible without the outstanding employee culture and unique attitude. Ideas are encouraged from every employee and the relaxed atmosphere gives opportunity to brainstorm with everyone including the founders. Organisational principles There is a 70-20-10 rule in force at Google Inc. This states that seventy per cent of employee time should be spent on core business i.e. search engine. Twenty percent is utilised on adjacent sectors such as Gmail or Google Desktop, and ten percent is dedicated to creativity and innovation. Thus there is room for every employee to come up with new ideas, while still taking care of business. The philosophy at Google has always been, “take care of the user and everything else will follow”. This has led to consumers having great trust in the brand and given it a reputation as a business that cares. Personal Standards By employing only the best and then fostering that creativity with an office atmosphere designed to jump start it, Google’s personality is happy. Happy employees leading to more effective research and development fostered by the free-thinking mindset; this results in innovation and better service. That in turn produces happy clients leading to more money for Google. Good profits leads to more investment hence the cycle continues. A simple idea yet complex to implement with any success. Dealing with change Continued recruitment of only the best minds will ensure that Google remains at the cutting edge of innovation thus not just keeping up with new changes in technology, but actually fostering that change. Strategic Human Resources Plan OBJECTIVES STRATEGIC ALIGNMENT TIMING AND RESOURCES MILESTONES MEASURES 1. Recruitment of graduates who are creative, innovative and have new ideas. 1.1 In order to keep in the forefront of innovation and enhance reputation as market leader. 1.2 Intensive and rigorous recruitment rituals to weed out unsuitable candidates and get the best. This ongoing process takes place annually. Percentage of employees retained after three, six, and nine months. Number of new ideas and innovations that have converted successfully. 2. Enhancement of Competitive Advantage. 2.1 Source and retain high caliber employees through campus recruitment of outstanding students. 2.2 Reward the work of over-achieving employees with incentives, stock options, and promotions. 2.3 Foster an atmosphere of relaxation and creativity to keep the creative juices flowing and new ideas coming in via weekly email and website posts. Every academic year when a new crop of graduates emerges, together with investigation of potential future graduates who may have incepted new ideas. Appraisals are done every quarter, plus monitoring and evaluation of weekly postings. Inception of new ideas apparent in the market such as Google Chrome, Orkut, etc. Does Google preserve its market share, or has the market share increased, or decreased? Measurement of employee enthusiasm for working at Google. Is it still a prized position? Recommendations and Conclusions Judging by the projections, Google seems to be on the right track, with a strong financial backbone to lean on. They have a good reservoir of cash to fund their research and development projects as well as finance the lucrative remuneration packages it offers to retain the best. The stock price is strong as is support from investors. As long as they continue to be on the cutting edge of innovation, while still catering to their core business with dedication; well then this leads to a natural progression of happy customers, advertisers and consequently investors. A cycle that is likely to lead to Google continuing to excel at what it does best – ‘googling’. References Cummings, J. N., Butler, B., & Kraut, R. (2002). The quality of online social Relationships. Communications of the ACM, 45(7), 103-108. Hu, Y., Wood, J. F., Smith, V., & Westbrook, N. (2004). Friendships through IM: Examining the relationship between instant messaging and intimacy. 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