Chapter 5The Global Context of Business119
PART 2 THE BUSINESS OF MANAGING
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Google Keeps Growing
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Sergey Brin and Larry Page met at Stanford University in 1995, when both were graduate students in computer science. At the time, Page was working on a software development project that was designed to create an index of websites by scouring sites for keywords and other linkages. Brin joined him on the project, and when
LO
AFTER READING THIS CHAPTER, YOU SHOULD BE ABLE TO:LO-1 Describe the four activities that constitute the man- agement process.
LO-2 Identify types of managers by level and area.
LO-3 Describe the five basic management skills.
LO-4 Explain the importance of goal setting and strategic management in organizational success.
LO-5 Discuss contingency planning and crisis manage- ment in today’s business world.
LO-6 Explain the idea of corporate culture and why it is important.
they were satisfied that they had developed something with commercial value, they tried to license the technol- ogy to other search companies. As luck would have it, they couldn’t find a buyer and settled instead for procur- ing enough investment capital to keep refining and test- ing their product.
In 2000, Brin and Page ran across the description of a business model on the concept of selling advertising in the form of sponsored links and search-specific advertise- ments. They adapted it to their own concept and went into business for themselves, eventually building Google into the world’s largest search engine. Google processes more than 11 billion searches a month by a user base of 380 million people in 181 different countries using 146 lan- guages. Following an initial public offering (IPO) in 2004, the company’s market capitalization increased to more than
$43 billion by 2012, when Google controlled about two- thirds of the search market. That was more than Microsoft and Yahoo combined.
Google is much more than a search engine. Services include searches for news, shopping, local businesses,
Managing the
Business Enterprise
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Part 2The Business of Managing122
the kind of productivity and innovation for which they were hired. Although the founders avoid formal strategic plan- ning, they have managed to diversify extensively through
acquisitions and key alliances.
Typically, Google absorbs an acquired company and then improves on its technology, thereby adding variety to its own online offerings. Recent acquisitions include YouTube (a leader in online video sharing), Postini (a leader in communi- cations security products), and DoubleClick (a leader in online advertisement services). Strategic alliances include those with foreign online service providers that offer Google searches on their sites.
For the immediate future, Google plans to follow its basic proven recipe for success, competing head to head with financial service providers for stock information and with iTunes for music and videos. Also committed to the in- house development of new features and services, Google spent $2.8 billion on research and development in 2012 and another $1 billion to acquire new information technol- ogy assets. Innovations in the works include an automated universal language translator for translating documents in any language into any other language, and personal- ized home pages that will allow users to design automatic searches and display the results in personal “newspapers.”
Nobody knows for sure what else is on the drawing board.
In fact, outsiders—notably potential investors—often criti- cize Google for being a “black box” when they want a few more details about its long-range strategy. “We don’t talk about our strategy,” says Page, “because it’s strategic. I would rather have people think we’re confused than let our competitors know what we’re going to do.”
QUESTIONS FOR DISCUSSION
1. What are the functions of management? How are these functions illustrated in this case?
2. What are the skills of management? Which skills are most exemplified in Sergey Brin and Larry Page?
3. What role do goals and strategy play at Google?
4. Describe the corporate culture at Google.
interactive maps, and discussion groups as well as blogs, web-based email and voice mail, and a digital photo-man- agement system. You can access the results of any Google search from the Google website,
from your own browser’s tool- bar, from your Windows task- bar, and from wireless devices such as smartphones and tab- lets. Google estimates 15 per- cent of the searches conducted each day are new, never having been searched before.
How did two young computer scientists build this astoundingly successful company, and where will they take it in the future? Brin and Page remain in the forefront of Google’s search for technological innovations. They believe in the power of mathematics and have developed unique algorithms for just about every activity in the firm. One of the most successful is an algorithm for auctioning advertis- ing placements that ensures the highest possible prices.
Brin and Page have also been remarkably successful in attracting talented and creative employees and provid- ing them with a work environment and culture that fosters
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HOW WILL THIS HELP ME?
From the perspective of a manager, after reading this chapter you will have a clearer understanding of how to effectively carry out various management responsi- bilities. From the perspective of a consumer or inves- tor, you’ll be better able to assess and appreciate the quality of management in various companies.
Chapter 6Managing the Business Enterprise123 Managers are the people who plan, organize, lead, and control the
operations of an organization. All businesses depend on effective man- agement. Regardless of the type of organization they work in, managers perform many of the same basic functions, are responsible for many of the same tasks, and have many of the same responsibilities. Although our focus is on managers in business settings, management is impor- tant for all kinds of organizations, including charities, religious organiza- tions, community organizations, educational institutions, and government agencies. The prime minister of Canada, the president of the University