1.0Introduction:

In this era of developing information technology and communication, it’s 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 world’s 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 Yahoo’s 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.

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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 world’s 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 world’s 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 employee’s 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 Googler’s 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 Google’s 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 Google’s

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 can’t 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 non-financial 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 Handy’s 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

Schein’s three levels of culture model and the following is the comparison between

the two companies’ culture.

Artifacts and creations

Google Inc Yahoo!

Newest technologies

Slogan: “Don`t be evil”

Highly skilled and motivated

employees

No special uniform for

employees (casual clothes)

Benefits and facilities

Slogan: “Do you Yahoo?”

Company events such as:

summer picnic and end of the

year parties

Trainings

Benefits for employees

Values and beliefs

Fun place to work

Creativity

Teamwork

Excellence

People and customers

satisfaction

Fast

Democracy on the web works

Fun

Teamwork

Excellence

Innovation

Community

Basic assumptions

Faith in employees

Innovation

Providing different services

Collect more information about

users

Analyze users behavior

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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 organization’s 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 Google’s chief executive officer and he is responsible for leading the

company’s 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 Page’s opinion even small moves can make huge

differences and it’s 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.

Google’s today success and growth is mainly because of Larry Page’s 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 company’s performance since Yahoo is struggling with

some strategy problems ant it has experienced five different CEOs in five years and

it wasn’t 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 Yahoo’s 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 company’s weaknesses and to overcome them by

making some changes in plans, policies and instructions. She also tries to motivate

the workforce to achieve the company’s target. (Guthrie, 2013)

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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 -Google’s 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 Google’s 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.

Company’s 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

company’s 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.

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