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1.

Introduction:

In this era of developing information technology and communication, its


difficult to find people who are not familiar with Yahoo and Google.
Nowadays, almost everyone is using and relying on these two most
popular and successful websites. These websites are widely used for doing
lots of different things such as research, communication, entertainment,
business purposes etc. however, each of them is providing different
services and products. This report is attempting to compare both
companies and clarify the differences between Yahoo and Google. Yahoo
and Google are basically different in background, number of employees,
founders, founding date, services provided and so much others but, this
report would focus more on the organizational structure and design, and
organizational culture in these two big companies.
Google was co-founded by Larry Page and Sergey Brin while they were
doing their P.h.D at Stanford University in 1996. At that time it was called
Backrub and in September 4th 1998 it was registered as Google Inc.Google
is a web search engine which allows users to find other sites by entering
the keywords. Currently Google is the worlds number one search engine.
It can be said that Google gained its popularity by offering this service. It
also provides other products such as Youtube video service, Gmail, Google
maps, Google AdWords, Google Docs, Google Chrome, Google books,
Google earth and Google Scholar. Google also added a social networking
service called Google Plus (Google+) which is similar to facebook and
allows users to communicate with other members by posting pictures and
messages. Other than internet-related services, Google has services for
mobile devices as well.
Yahoo! Inc was incorporated by Jerry Yang and David Filo, two Stanford
University graduate students, in 1st of March 1995 and at first it was
called "Jerry and David's Guide to the World Wide Web". Yahoo is a search
and communication tools provider on the Web as well as mobile devices.
Like Google, Yahoo also has a search engine (Yahoo! Search) which finds
websites and links that are related to the word or phrase searched by the

users. Yahoo also offers other services such as free e-mail account with
unlimited storage space (Yahoo! Mail), Flickr which is an image and video
hosting website that allows users to share their personal photographs,
Yahoo! News which provides up-to-date news, an instant messaging
service (Yahoo! Messenger), communication and social networking tools
(Yahoo! 360), and Yahoo! Finance which offers financial data and
information.
Both of these successful internet corporations may offer some similar
services but they are two different companies and each of them has their
own goals, and strategies to fulfill their target.
Each company has its own organizational structure, organizational culture,
management and leadership in order to achieve its goals and to improve
their organizational performance. Google and Yahoos organizational
structure and design, and their organizational culture will be discussed in
more detail in this report and both companies will be compared in relation
to the mentioned topics.
Word Count: 492

2.0 Organizational culture:


Organizational culture is the set of beliefs, values and traditions that
influence the way employees in an organization think and act when facing
opportunities or problems. (Bratton, 2010)
Since the corporate culture would influence the employees morale,
productivity, unity, efficiency and loyalty, it is really important for the
managers to develop the right culture for the organization. A strong
culture will also improve the workers motivation, communication and
commitment and it helps the company to meet its long term goals.
(Fincham & Rhodes, 2005) Therefore there is a direct link between
companies growth and culture. (Gupta, 2007)

Founders Philosophy: Google was fond by Larry Page and Sergey Brin in
1996 and their goal was to provide much higher level of services to those
who seek information and their mission was to organize the worlds
information and make it universally accessible and useful. (Google Inc.,
n.d.)
Google is one of best companies in the world to work for and it has a
strong and interesting organizational culture. (Anon., 2010) It is also the
worlds number one search engine and in order to accomplish that, Google
needs to hire smart, talented and highly skilled employees who are the
best in their technical field. In order to maintain the employees health,
Googlers are encouraged to take care of their minds and bodies by
providing facilities such as gym and free massage. (Hernandez, 2008)
Google hires people from different nationality backgrounds who speak
dozens of languages but share the same goals and visions for the
company. (Google, n.d.)
This company focuses more on innovation and creativity and they have an
open culture in which everyone can contribute in solving the company
issues. Googlers are encouraged to interact with managers and share
their ideas about work. (Google, n.d.)
Google has tried to create the culture which is best for company, and the
ones working in the company. It has a very strong team-oriented and
collaborative culture and it increases the Googlers creativity in problem
solving.

(Mills, 2007) Moreover by creating such a culture, they allow

employees to share their opinions freely and it makes Google a fun place
to work. (Hernandez, 2008) Googlers are encouraged to work together
with integrity in order to fulfill the Googles overall mission which is
making information accessible to the world. (Mills, 2007) With this strong
culture Google managed to become such a successful and popular
company. Overall, it can be concluded that Google Inc has a combination
of team oriented, people oriented and innovation and risk-taking culture
however, the main characteristic of Googles culture is team oriented.

Founders Philosophy: Yahoo was found by Jerry Yang and David Filo,
two Stanford University graduate students who started their guide in
February 1994 as a way to keep track of their personal interest on the
internet. (Yahoo!, n.d.) They prepared a list of their favourite links but
their list was so long therefore, they divided them into categories and
subcategories and the core concept of Yahoo! was created. (Yahoo!, n.d.)
Yahoo!s mission is to be the most essential global Internet service for
consumers and businesses. (Hamilton, 2011)
Yahoo is another popular internet service provider with a strong
organizational culture which has the largest data base in the world.
(Schneider, n.d.) However, some people believe that there are some
shortages in the culture and Yahoo needs to change its organizational
culture to be more successful. Yahoo!s organizational culture needs help
and they have to make their decisions faster. Salim Ismael, the person
who ran the Brickhouse project at Yahoo says that "Yahoo takes too long to
make decisions." (Needleman, 2012)
Despite this, it cant be said that Yahoo is suffering from a weak
organizational culture. Yahoo is also trying to fulfil its goals and increase
the users satisfaction by providing new features. In order to be able to
compete with other competitors, Yahoo is hiring those skilful and expert
people who have experience in this field. By offering financial and nonfinancial benefits, Yahoo motivates its employees to work toward the
organizational goals. Some of these benefits are: medical, dental and
vision insurance, free food, back up care advantage program and fitness.
(Yahoo!, n.d.) Yahoo! Inc values excellence, teamwork, innovation,
community, customer fixation and fun. (Schneider, n.d.)
Yahoo! Is trying to provide so many different services and it is able to
collect more information about its users compared to other competitors
and analyze the users behaviour. Hence, it can be concluded that Yahoo!
has an innovative culture.

Typologies to evaluate organizational culture:


Culture Framework: Based on Charles Handys model of organization
culture, both Google and Yahoo! can be classified as task culture since the
firms have a strong and clear mission, expertise and skill are two valuable
things in these organizations and lastly because they are team oriented
companies so, team working is the basis on which jobs are organized.
(Fincham & Rhodes, 2005)
Four types of organizational culture:
According to Deal and Kennedy's Culture Types, it can be said that Yahoo
and Google both have Work-hard, play-hard culture because in both
companies employees are encouraged to take risk, be innovative and
bring new ideas. Moreover, both companies are providing facilities so that
employees can have fun. (Schneider, n.d.) (Flanagan, 2011) Having fun
can reduce the stress level and increase workers motivation and
productivity. (Tarkan, 2012)

Interpretive Model
Google inc. and Yahoo! organizational culture can be analyzed through
Edgar Scheins three levels of culture model and the following is the
comparison between the two companies culture.

Google Inc

Yahoo!

Newest technologies
Slogan: Do you Yahoo?
Slogan: Don`t be evil
Company events such as:
Highly skilled and motivated
summer picnic and end of
Artifacts and
employees
the year parties
creations
No
special
uniform
for Trainings
employees (casual clothes) Benefits for employees
Benefits and facilities

Values

and

beliefs

Fun place to work


Creativity
Teamwork
Excellence
People
and
customers

satisfaction
Fast
Democracy on

the

Fun
Teamwork
Excellence
Innovation
Community

web

works
Basic
assumption
s

Faith in employees
Innovation

Providing different services


Collect more information
about users
Analyze users behavior

Word Count: 978


3.0 Approach to Management and Leadership
Leadership is the action of influencing, motivating and enabling others to
contribute toward the effectiveness and success of the company of which
they are members. (Bratton, 2010) Some of the important roles of a
leader are:

Sharing organizations vision with people


Discovering talent
Building the culture of creativity and innovation
Training and retaining (Bratton, 2010)

Management is the process of organizing and coordinating activities of a


business in order to achieve organizational goals. (Anon., n.d.)
Management and Leadership are not the same things but they are linked
and both of them are and required and needed for the sustainable
development and growth of organization. (Zainal, 2009) Leadership plays
an important role in enhancing or retarding the interest and commitment

of the individuals in the organization and it also affects the effectiveness


of the organization. (Obiwuru, et al., 2011)
Distinctions between Management and Leadership
While managers have the power within the organization, a leader is
someone who can influence others and has managerial authority.
Leadership is about doing the right things while, Management is about
doing things right. Furthermore, Leaders find the path and managers
follow the path. Leadership is concerned about establishing directions and
Management is concerned about planning and budgeting. Moreover,
leadership is about motivating and inspiring whereas, management is
about controlling and problem solving. (Buchanan & Huczynski, 2010)
Larry Page is Googles chief executive officer and he is responsible for
leading the companys product development and technology strategy.
(Google Inc., n.d.) He has a clear vision and strategy for his team and he
leads everyone in the company toward that vision. He is transformational
since he makes employees motivated and empowered and they are
interested to perform their mission. (Cogdell, 2010) Page is also
inspirational as he values education and trainings to improve knowledge
and skills of the staff. As a good leader, Page has an introvert personality
and an intense passion. (Cain, 2011) He focuses more on innovation and
he encourages his team to believe in audacious ideas. Page is against
bureaucracy and he insists on teamwork as it increases creativity,
productivity

and

motivation

in

the

workforce.

He

believes

that

communicating with employees and listening to their ideas is one of the


main factors of success. (Elmer, 2011) Besides that Page is working to
make everything faster in Google Inc and being quick and concise but
precise is one of his leadership strategies. (Elmer, 2011) In Pages opinion
even small moves can make huge differences and its essential to
recognize the importance of small moves. Another important thing for
Page is the tolerance and perseverance and when he thinks that
something is possible, he keeps working on convincing others.

Googles today success and growth is mainly because of Larry Pages


leadership style. He made the environment in a way that all employees
see Google as their home and Googlers as their family.
Marissa Mayer is the new chief executive officer in Yahoo and her
leadership style plays an important role in companys performance since
Yahoo is struggling with some strategy problems ant it has experienced
five different CEOs in five years and it wasnt a good thing for the
company. (McGregor, 2013) Although Yahoo is still one of the top five most
popular websites, it has experienced some difficulties and leaders are
trying to rebuild its good reputation. Mayer is more focused on employees
academic qualifications and skills and she is getting involved in all the
hires that the company makes. Mayer has a transactional leadership style
and she assumes that employees would respond to the given task
according to their expected reward or punishment. Workers would be
rewarded if their task is well done and they will be punished if they fail to
perform the task effectively. (Cogdell, 2010) Employees in Yahoo! were
used to working remotely from home but Mayer made her decision that
workers should come to office and collaborate with each other and it
increases their productivity. (Fiegerman, 2013) Mayer believes that by
hiring some high-tech innovators who can create a home-like environment
in the workplace, Yahoo! can build a team spirit and stronger relationships
between employees. By doing so they can also make the workplace so
attractive that employees would come willingly and enjoy their time while
they are working although they may prefer being at home. (Guthrie, 2013)
It seems that Google Inc. has followed Henri Fayol Managerial functions
because Larry Page has a clear vision of what he wants to achieve and
everything is planned and organized in order to reach those goals. He also
tries to allocate resources in the way that goals could be accomplished
and meet the highest level of performance. Whereas, Yahoo too has some
of the fundamental principles of management but at a weaker level.
Marissa Mayer aims to concentrate more on Mobile and she believes this
is the key factor for Yahoos strategy to move forward. She states that

Yahoo has all the information that people want on their phones and they
only need to make it relevant and easy to use on mobile. (CNNMoney,
2013) Mayer attempted to identify the companys weaknesses and to
overcome them by making some changes in plans, policies and
instructions. She also tries to motivate the workforce to achieve the
companys target. (Guthrie, 2013)
Word Count: 841

5.0 Conclusion
Google and Yahoo are two companies in a similar industry which are
providing some same services; however, evidences show that Google was
guided by stronger leaders and their direction was a more successful path.
They are also different in some other key aspects such as structure,
organizational culture and leadership styles. According to Stacy Savides
Sullivan -Googles chief culture officer- Google Inc has a team oriented
culture where employees are encouraged to collaborate with each other
and think untraditionally and different from where they used to work.
(Mills, 2007) However they also value innovation and risk taking and they
respect

their

employees.

Top

executives

arrange

meetings

in

headquarters so that employees can directly notify them about different


matters in the workplace. It helps managers to recognize the existing
problems in the organization and it lets them to plan and organize things
to overcome the problem. Therefore Googles culture is a mixture of
people oriented, team oriented and innovation culture while it is more
focused on team work. The strong culture in Google leads to increase in
employees satisfaction, motivation, enthusiasm, harmonization and
confidence. On the other hand, Yahoo!s culture is more focused on
innovation and risk taking. They try to provide lots of different services so
that no business opportunity is left unexplored. (Karmasnack, n.d.) Yahoo
and Google are both trying to hire skilful people and use their expertise to
fulfil their organizational goals. Both companies are also providing

financial and nonfinancial benefits to their staff to keep them motivated.


Furthermore, a large proportion of both companies income is derived from
advertising.
Companys performance can be also affected by management and
leadership approach. Google now has more than 53,000 employees
worldwide with the management of Larry Page. (Cohan, 2013) Interacting
with employees, understanding their needs and working close with them
are the key factors of successful management and leadership in Google
which results in high staff employee motivation and low employee
turnover. (Kedrosky, 2008) On the other hand Yahoo! has around 14,500
employees under management of Marissa Mayer, former Google Inc
executive. (Cohan, 2013) Yahoo was struggling to find the right managers
for five years and Mayer, the new CEO, sounds the right leader for Yahoo.
She started her work in Yahoo in July 2012 and since then she tried to
develop the companys strategies and management programs. Mayer has
changed the work-from-home policy to work-in-office as she believes that
working in office and meeting people can increase the quality of decisions
and ideas. (Pimentel, 2013)
Overall by comparing different aspects of organizational effectiveness and
both companies stock prices (Google Inc has a stock price of $833.55 and
Yahoo! Inc has a stock price of $24.77 at 2 May 2013 (Yahoo! Finance,
2013)), it can be concluded that both companies are successful in their
ways whereas, Google is a more effective and more successful company
as they have a stronger corporate culture and leadership styles.

Word Count: 470


Word Count: 2781