This document is a piece of work dated 2009 outlining an analysis of the strategic activity within a major international organisation, more specifically Google. It includes an analysis of the advantages and disadvantages associated with using chaos integration perspectives.

1. How has Google used chaos integrating
perspectives and what are the benefits
and disadvantages of such perspectives?
Richmond, The American International University in
London
MGT 403 Competition & Strategy
Dr. Robert M. Mulligan
Tagaris Cheikh Ali, M 036 307
09/12/09
Word Count: 2865
A

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TABLE OF CONTENTS
Introduction 3
Chaos Integrating Perspectives 4
Google’s Chaos Integrating Perspective 6
Advantages vs. Disadvantages 13
Conclusion 13
References 15
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Introduction
Google’s Marissa Mayer, keynoting at Harvard's Cyber|West conference, unveiled
the four strategies driving Google development; more content, easier computing,
personalization and better search. Apparently, what Google believes in is that despite
their chaotic behavior, their development efforts will comply with at least one of those
four themes, and achieve success. Chaotic it may seem, but behind it all is the simple
belief that, ‘What's good for the web is good for Google.’
Professor Ralph Stacey, the principal exponent of the development of strategies
from chaotic systems, views companies as dynamic feedback systems, because of which,
it is hard for managers to plan or envision the long-term future of innovative
organisations, such as Google, involved in rapidly changing and chaotic environments.
Therefore, they have to create and discover a future using their ability to learn together in
groups and interact politically in a spontaneous self-organising manner. Professor Stacey
states that where a provocative, but positive atmosphere conducive to complex learning
exists in a company, that company will succeed due to its constant new strategic
development plans. Where such an atmosphere is absent, the atmosphere is not conducive
for such innovations, which lead to static failure.
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Chaos Integrating Perspectives
Chaos is a fundamental property of non-linear feedback systems, which include
organisations run by human beings. Non-linear systems are those that use amplifying
(positive) feedback in some way. Thus, when a new strategy or product is developed and
introduced in the market, the success or failure of it is the dynamic feedback. Chaos in
the scientific sense is “an irregular pattern of behaviour generated by well-defined non-
linear feedback rules commonly found in nature and human society.” When systems
driven by such rules operate away from equilibrium they react to changes in their
environments and amplify them into self-reinforcing virtuous and vicious circles that
alter the behaviour of the system.”
What normally happens in the business world is that companies compete with
each other for market supremacy and share. They strive to bring to the market products
and services which alleviate human efforts and bring positive returns. Happy customers
mean more business and more business means, success. In a normal R&D framework,
researchers, engineers and managers create and shape the requirements of customers
using the positive feedback, and the negative feedback controls, to meet cost and quality
targets. Thus, businesses are clearly characterised by feedback processes that sway
between the negative and positive, or the amplifying and damping processes. Thus, these
feedbacks produce chaos, but, they do not illustrate what the long-term future would be.
The future remains illusionary and this is what Google chaos integrating perspective
looks to achieve through their ‘groupism’ effort.
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There are eight steps to create order out of chaos:
1. Develop new perspectives on the meaning of control (promotion of groups)
2. Design the use of power (allowing group dynamics which are conducive to
learning and problem solving)
3. Encourage self-organising groups (autonomy in setting their own challengers,
goals and objectives)
4. Provoke multiple cultures (rotation of people between functions and business
units to create cultural diversity)
5. Present ambiguous challenges instead of clear long-term objectives or visions
6. Expose the business to challenging situations
7. Devote explicit attention to improving group learning skills
8. Create resource slack (favourable attitude and support from managers lead to
individual initiative and intuition)
According to Bechtold (1997), a company’s strategic planning process must be
continuous and also involve all the members of that organisation as a part of its corporate
culture. The process must be real-time and not annualised. The strategic process will:
• Accept uncertainty
• Have the ability to address emergent issues
• Recognise that environmental change can mean a new direction
• The process must provide a means to handle change:
1. All members come together and learn from each other.
2. Fluid planning
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3. Use of groups
4. Involvement
Google’s Chaos Integrating Perspective
What is worth studying about Google’s chaos integrating perspective is its
mission to organize the world’s information and make it universally accessible. This is
far-thinking, but then, that’s what chaos integration is all about. Google doesn’t have the
traditional hierarchical management system found in other companies. With minimal
hierarchy but extensive formal and informal communication networks, just about every
employee in the company is individual entrepreneurs. Half the staffs are product
development engineers who work in small autonomous teams. Product and service
development is a team-based approach, and every team within the company work to
develop the next big breakthrough solution on the internet. They operate on a resource
allocation policy based upon the formula 70-20-10, where, 70 percent of the development
resources is allotted for enhancement of the core business products, 20 percent is allotted
to services which significantly extend these core products, and 10 percent to other
ventures. Every development engineer is encouraged to spend up to 20 percent of their
time on their own initiatives to develop non-core products. As Google targets about a
dozen or more new services or significant product enhancements every quarter, every
development engineer is consulted, and made sure are available when decisions are made.
Each quarter project teams are considered for ‘Founders Awards’. These have a budget of
millions of dollars of Google stock (shares) and go to those employees who have made
remarkable contributions to the company’s performance. No employee has to leave the
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company to pursue their own projects, as Google offers them the time, support and
rewards to pursue it at work itself. Employees are encouraged to email ideas for new
products or services, including the way they are developed, to a company-wide
suggestion box. This is very similar to the initiative taken by Infosys of India in their
K2mail. Every employee has the privilege to drop their suggestions or ideas and also read
and respond to these suggestions and rate them.
The culture of the company is largely technocratic with individual engineers
succeeding based upon the quality of their ideas and technological acumen. The company
recognizes the importance of their engineers as the most important asset and encourages
them to develop rather than waste away. Breakthroughs come from questioning
assumptions and challenging paradigms, and the company corporate credo challenges
every employee to put their customer before self.
Google deliberately operate an edge-of-chaos style. The company recognises that
its internal variety and creativity must evolve at the same speed as their environment,
internet speed. It is estimated that only about 20 per cent of projects succeed which is a
low success rate but the company’s rationale is that more number of small experiments
will improve the odds of getting to the next new solution quicker and cheaper than the
more traditional rival company approach.
It is made up of highly intelligent and very knowledgeable engineers. Their fear
that one inferior engineer could drag threaten the enormous talent of other engineers
raises their selection criteria. New applicants are subjected to many interviews, often over
a period of weeks that challenge their problem-solving skills with MENSA-level tests
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“Those who avoid change and taking chances face the certainty of stagnation and
collapse simply because innovation depends significantly on chance.” Michael Porter, an
exponent of this theory says that “those companies which expose themselves to the most
demanding situations and customers are the ones that are likely to build sustainable
competitive advantage.” This theory holds good for Google as well, as this company has,
over the years, redefined what global competitive advantage means.
Google is a very successful and innovative internet based company (Iyer &
Davenport, 2008). According to the Harvard Business Review, Google ‘balances an
admittedly chaotic ideation process with a set of rigorous, data-driven methods for
evaluating ideas’ (Iyer & Davenport, 2008). Their processes are such that one would be
inclined to accept Pascale’s principles embedded in it. “Google has the strategy of letting
‘a thousand flowers bloom at the same time” said Harvard business Review following
their innovative and strategic practices which encourage all employees to participate in it
(Iyer & Davenport, 2008). As a principle, Google sets out to experiment at every possible
opportunity and while many of them fail, a percentage of it succeeds. This success rate
though negligible, is enough to keep the company ahead of its competitors. In a statement
made to the Economist by Shona Brown, just before becoming senior vice president at
Google, he said, “We kind of like the chaos. Creativity comes out of people bumping into
each other and not knowing where to go” (Iyer & Davenport, 2008). The third principle
of living systems self-organising under pressure is satisfied, as the future of Google and
its stakeholders is uncertain and which puts pressure on it to create innovative products
and services that keep the company ahead of its competitors and at the same time remain
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highly competitive. The company through its constant innovativeness and trial-and-error
methods keeps the stakeholders on their toes and challenges the impact it will have on the
unforeseen future (Pascale, 2002). To sum up the feeling within the company, Shona
Brown adds, “We at Google, encourage risk-taking and look at as the stepping stone to
success. I’m so glad that we make mistakes in the run-up to success, because we want to
be art of a company which is doing too much, too quickly, and not being too cautious and
doing too little. If we don’t have any of these mistakes, we’re just not taking enough risk”
he ended (Iyer & Davenport, 2008).
Though there are many on-the-job methods to develop one’s skills, the
management at Google wishes to encourage innovation, creativity and a holistic
organisational perspective. The best production practices worldwide have a common
ideology, an ideology based on the investigation in reduction of cycle time, reduction of
variability, increase in transparency, and continuous improvement in the production
process. The rationale underlying these principles is uniformity, wherein production is an
amalgamation of hibernation, transportation, inspection, and transformation. According to
this concept, transformation activities are the only ones that actually add value. Hence, all
other activities should be reduced or eliminated from the assembly-line to increase the
efficiency of transformation activities (Berawi M. A, and Woodhead R. M, 2005)1
The modern business world is characterised by changing global markets and
technological advances. In order to compete is such a highly competitive environment,
organisational structures and culture has to change to bring about flexibility.
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Thus, knowledge becomes an imperative tool in value creation. Importance is placed in
developing the organisational knowledge base either by learning from others in the
organisation, or through individual innovations, as seen in Google. Both these methods
help the organisation acquire the technological edge to excel in their respective fields
(Wissensmanager, n.d).
Decision-making is an option to choose among various actions that provide
positive results. They stressed that the need to decide hanged on the necessity to opt
whether to decide on initiating an action or not, and that when a decision was taken, it
was made in concurrence of the knowledge that it would be a combination of competing
values and strategic goals.
Performance is the cornerstone to success and productivity. Performance comes
about through the wholehearted and sincere effort of employees of an organisation. This
is possible only if the employees are kept happy and cared for. Strategies that favour
employee retention, elicit competitive bonus schemes, and creates healthy work
environment are pre-requisites for employee performance, culminating in higher
production.
A company’s best asset is its people, so there is a good reason why the company
needs to do what is right for them. A point of contention to performance and productivity
is the way one works; the ability to work remotely, where enterprise convergence gains
momentum. Organisations and structures have become more fluid. Mobility not just of
the people involved, but their virtual working environment has become synonymous for
productivity. For business bosses and their employees, a converged environment makes
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work location and distance irrelevant. The impetus to work for the benefit of the
organisation must come from within the individuals concerned. Just as a student finds his/
her studies important and strive for excellence, employees must find the inclination to
work from within their heart. This can come about with the sustained effort of the
management to bring changes that enliven the workplace (Randery, 2006).
Fostering a healthy workplace can substantially increase productivity and decrease
absenteeism says Dr.Les Mathers, of Carle Clinic. A little care by the employer to his/her
employees can create a work environment that encourages employees to stay healthy,
thereby keeping the company running smoothly. Health has a direct bearing on the way
an employee works. Despite his or her best effort to work hard, an employee who suffers
from an unhealthy lifestyle may find difficulty in concentrating, can make unintentional
mistakes that can harm the organisation, feel stressed and exhausted and skip work
periodically (Mathers, 2006).
A Brazilian company, Semco, has a large proportion of blue collar workers. The
company gives its workers an unusually large degree of freedom and responsibility,
which includes, planning their production, setting their own work hours, and selecting
sites and designs for the factories they work in. The results were phenomenal. The results
showed very high profits; the workers developed and implemented their own ideas in
new products or improving existing processes, and annual employee turnover hovered
around 1%. What more could the management have asked for from their workers?
(Kjerulf, 2007) This went to show that blue collar workers who were treated on par didn’t
need the motivation to be happy at their workplace, they were more than happy to
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innovate and do what they thought was best for them and the company, which
subsequently benefited from it.
“People are business’s most important asset” wrote Dave Gartenberg, in
‘Destination Workplace. This is a universally accepted fact among business leaders. It is
people who innovate, it is the same employees who develop business relationships, it is
also the same employees who market, service and find new ways to improve efficiency
and productivity. In a world where intangible constitute more than three-quarters of the
total market value, where the talent pool is shrinking, and the attitudes to work and the
work/life balance changes, any company with an inferior workforce is a misfit and will
be consumed by competition.
There are three points which can be considered in exploring an individual's thoughts,
actions, and conceptualisation at workplace:
• An individual lives by his/her emotions, motivations, and perceptions of the work
environment that permeate their behaviour at work
• These feelings affect their day-to-day performance
• These feelings are paramount to their performance at work
Individuals found in a happy and entertaining atmosphere tend to be more creative
and involved in their work than in places where they face admonishment and pressure.
Research claims that individuals who ‘feel good’ are prone to a cognitive process that
instigates a more flexible, fluent, and original thinking. This can have a positive influence
on other individuals around them. Individual behavior impacts the environment, but what
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about workplace relationships and its effect on self, co-workers and the work
environment?
When effective laws, rules and regulations, financial incentives or penalties, and
social pressure leave little room for personal values; it has an un-telling influence on an
individual’s behavior. And because a variety of factors influence an individual’s behavior,
creative approaches involving multiple influences on behavior offer the greatest potential
for change (Stern P.C, 2005).
Advantages vs. Disadvantages
The problem with such a practice is that not too many opportunities will arise for
those who are of lesser talent or qualification. The level of professionalism will no doubt
be very good and beneficial for the company, and it will help the company maintain its
place through its competitiveness and innovativeness.
Conclusion
A highly motivated team can raise its performance to enhance production levels
significantly to the point that many employees may well go beyond their leaders’
expectations, individual accountability, financial results and short-term market objectives.
The most noticeable difference between a high-performance workforce and an average
workforce is their energetic and emotional commitment. Make no mistake, all these
qualities are inhibited in every individual on earth, but it’s the way companies implement
these that matters. If this energy is not properly channelised, it could lead to confusion,
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causing undue damage to the organisation. This is Google’s chaos integrity perspective,
and something which the company is proud to flout.
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References
Berawi M. A, and Woodhead R. M, (2005), Application of knowledge management in
production management: Research Articles, Human Factors in Ergonomics &
Manufacturing, Volume 15 , Issue 3, John Wiley and Sons Ltd, UK ISSN:1090-8471
Kjerulf, A, (2007), Ask the CHO: Motivation for Production Workers?
http://www.positivesharing.com/2007/01/ask-the-cho-motivation-for-production-workers/
Mathers, L. Dr., (2007), Pantagraph.com, Occupational Medicine: Making Wellness a
Priority, www.pantagraph.com/articles/2007/01/16/money/b2b/
doc4586c86ad6bda868290791.txt
Randery, T, (2006), Convergence, A New Way of Working, Management Today, Journal.
RMM, Adapted from Bechtold, B.L, (1997), Chaos Theory as a Model Strategy
development, Empowerment in organisations, Vol. 5, No 4, 193-201
Stern, Paul C, (2005), Understanding Individuals’ Environmentally Significant Behavior,
ELR News and Analysis, www7.nationalacademies.org/dbasse/Environmental%20Law
%20Review%20PDF.pdf 2005
tutor2u, Motivating Employees-non financial rewards, www.tutor2u.net/business/gcse/
people_motivation_non_financial_rewards.htm
Wissensmanager, An Illustrated Guide to Knowledge Management, http://www.wm-
forum.org/files/Handbuch/An_Illustrated_Guide_to_Knowledge_Management.pdf
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