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Closing case. Org Change at Google

0. 2010

0. What was Google’s original organizational structure in 2010?

In 2010, Google’s organizational structure was basically divided into two parts: an engineering function and product management function. Engineering group focused on creating, building, and maintaining Google’s products, and the product managers focused on selling Google’s products.

0. What were its advantages?

The advantages of Google’s original organizational structure are it had a few layers in the hierarchy where engineers focused on building products and project managers focused on selling those products. Another advantage is flexibility among the engineer and product managers where they can move around and work on products as necessary. Also, innovative ideas were created by engineers who led to successful products such as Google News, Google Earth, etc. Moreover, it encouraged engineers to be more responsible for creating new products that they could have ownership of.

0. What was the problem?

In 2010, Google's organizational structure led to silos that prevented departmental collaboration and information sharing, which could have stifled innovation and growth in the quickly developing tech sector. The organizational structure made it challenging to coordinate the firm around shared objectives and goals, and each department had its own success criteria. There was a lack of accountability for work that was being done. Most of the works were left unfinished for years. Product approval was taking longer time and the structure didn’t show the multi business enterprise.

1. What was the realization about what Google had become? The functional organizational structure that Google developed because of its quick expansion led to silos and made it challenging for different departments to communicate and share information. As the organization became too big and complex, it was realized that a more product-oriented structure was needed to align teams around specific products and services and improve collaboration and communication. To better manage its growth and complexity and keep innovating and expanding in the quickly evolving technology sector, Google conducted a significant organizational reorganization in 2011.

1. 2011

2. So how did they restructure? The company switched from a functional structure to a more product-oriented structure to have six main product areas: search, ads, commerce, maps, YouTube, and Android. Each product area was headed by a senior vice president (SVP) and had its own engineering, design, and product management teams.

2. How did the responsibilities of the senior managers change?

The responsibilities of the senior managers changed from overseeing functional areas to overseeing product areas and collaborating with other product teams to ensure alignment and integration.

· Draw organization charts for the old and the new structure. I have provided templates below.

· Fill the boxes with appropriate titles.

· Here is a list: Division; BU (business unit); function; SVP (senior vice president); names of specific functions; names of specific BUs.

· Feel free to add boxes, if needed.

· Hint: see my lecture recording of Chapter 9 and the charts I drew to depict single and multi-business firms.

Google 2010. CEO: Eric Schmidt

Original structure

Engineering

Product Management

Engineering

Product Management

Google Maps

Google Maps

Gmail

Google Advertising Services

New structure

Senior Vice President

(Youtube)

Senior Vice President

(Advertising)

Senior Vice President

(Search)

Senior Vice President

(Mobile)

Senior Vice President

(Social)

Senior Vice President

(Chrome)

Senior Vice President

(Commerce)

Google 2011. CEO: Larry Page