Maximize shareholder value by maintaining a long-term focus

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Reference no: EM131069639

Opening Case

While attending Stanford University, Larry Page met Sergey Brin, a native of Moscow, and together they launched Google in 1998. With CEO Eric Schmidt, who joined in 2001, they have built Google into one of the industry's most powerful companies. Employing more than 16,000 employees, Google is available in 160 local country domains and 117 languages, and in 20 countries worldwide. Google's mission is to organize the world's information and make it universally accessible and useful. Since going public in 2004, Google has exceeded analyst estimates for its financial performance in all but one quarter, and profits topped $1 billion in the last quarter of 2006. Schmidt believes that it is the company's obligation to maximize shareholder value by maintaining a long-term focus. By providing the best user experience, Google and its leadership team believe that they can build a company that will create more value, not just for its user, but ultimately also for its shareholders.1 Page now holds the title of president of products; Brin is president of technology. Though Schmidt is the CEO, they still wield enormous influence over the way the company operates. Google's strength rests in its culture, which emphasizes teamwork, flexibility, transparency, and innovation. There is little in the way of corporate hierarchy. Google's hiring policy is aggressively nondiscriminatory and favors ability over experience. The result is a staff that reflects the global audience the search engine serves. In 2008, Google was named the best company to work for, for the second year running.2 Google continues to pursue an aggressive growth strategy. It has acquired more than 50 companies since its creation. Some of those acquisitions include YouTube (social networking software), Postini (enterprise e-mail software) that the company acquired in 2006, and DoubleClick (display advertising software) acquired in 2007.3 According to David Vise, co-author of the book The Google Story, Google has succeeded not only on the strength of technology, but because of its management style. It has focused on the end user and the quality of its search engine. Google's leaders aren't afraid to experiment-- they are willing to question conventional wisdom and trust their own judgment.4 Opening Case Questions:

1. How effective has the executive leadership team of Schmidt, Page, and Brin been in providing the kind of strategic leadership that Google has utilized so far?

2. Describe Google's business environment. How well is Google adapting to it?

3. Critique Google's mission statement.

4. How well do Google's long-term objectives balance the interests of its stakeholders?

5. What type of growth strategy is Google pursuing, and why do you think the leadership team has chosen such a course rather than the alternatives?

6. What are some of the factors contributing to Google's effective strategy implementation?

7. Does a successful company like Google still need to change?

8. Why have Schmidt, Page, and Brin encountered less resistance in bringing about changes at Google than most companies experience?

Reference no: EM131069639

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