Google’s PESTLE and SWOT Analysis and Human Resources

Introduction

            The success of Google in the internet technologies industry is partly attributed to the way the company strategizes its human resources consistent with the business environment. Notably, human capital and its management have become very contributory to the success of any business in the 21st century, hence, the likes of Google must abide by the current conditions in order to thrive. Google generally highlights the value of smartness and greatness among its workforces. The company’s human resource management utilizes carefully selected strategies in recruitment, orientation, training, and retention of employees. The recruitment and selection process is particularly designed to ensure that the workforce is adequate at all times and propels the organization toward its goals. Retention programs are also shaped to attract and retain high quality workers who add value to the organization. In general, Google’s Human Resources department is responsive to the internal and external environmental conditions and this has resulted in unsurpassed success. This paper analyzes how internal and external environments influence the company’s Human Resources strategy as well as how it responds to specific changes in the environment.

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PESTLE Analysis

            Although Google’s primary product is its popular search engine (Shiv, 2017), the company has grown over the years to extend its brand to other emerging areas of technology like maps, smartphones, cloud services, and laptops. The company also runs an ad business that empowers other firms to promote their services in the internet environment and enables publishers to earn income from selling ad space on their online publications. While Google continues to expand into varied subindustries, it will face various pressures in the external environment, ranging from economic, political, technological, environmental, legal, to social factors. The following PESTEL analysis highlights these factors.

Political Factors

            As an internet-based company, Google is not immune to political influences. Political forces can directly or indirectly affect the manner in which the company runs its operations. A case in point is EU’s regulation against American technological multinationals. In the recent years, the EU has targeted Google with anti-trust laws that have led to the company facing huge fines of up to 3 billion euros (Boffey, 2017). This shows that the political environment is quite distinctive and may not be as friendly as the business environment. In regions where governments are increasingly exhibiting anti-US sentiments, Google is bound to face challenges as far as the political environment is concerned.

Economic Factors

            Economic factors are also significant when it comes to Google’s success. During the recession for example, the percentage of people willing to spend their money on products and services dwindled greatly because of the hard economic conditions. Consequently, the whole economy shrunk as a result and negatively affected the profitability of large companies such as Google. Since Google has expanded its operations to many niches in the technology industry, the company’s success relies on the state of economic scenario. The more the consumers are willing to consume, the more likely it is for Google to record high profits. Good economic activities in the past have also been accompanied by more spending on advertising behavior which is good for Google’s profitability (Rosenberg, 2017). Other economic factors that can affect the company include changing interest rates and fluctuations of dollar rates worldwide.

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Social Factors

            New social trends and patterns can impact Google’s business either positively or negatively. For instance, in the past decade, the use of social media has led to the evolution of new technology giants such as Facebook which offer substitute products (Molla, 2017). Another disruptive social trend is the use of smartphones. Although smartphones have brought new opportunities for Google, they have intensified competition between Google and Facebook especially because the latter is a leader in offering mobile advertising (Molla, 2017). The changing attitudes toward online services have also impacted Google in various ways. Millennials are so far the most important customers for Google owing to their consumption of a wide range of online services. In the general, the social perception of Google’s search engine and other products by various cultures dictates its success (Shiv, 2017).

Technological Factors

            Google is leader in the provision of technology-related products and, therefore, any change in technology can affect its operations and profitability immensely. The company is modelled around innovation and as such has invested a significant amount of its resources in research to stay ahead of its competitors. Nevertheless, the competitors are equally relentless, with the likes of Microsoft and Amazon capitalizing on new technologies as well. This has intensified competition to a considerable degree. Indeed, Apple is attempting to invent new products and services to fully cater for the needs of its customers and discourage the use of services from third parties such as Google. A good example is the incorporation of Artificial Intelligence in Apple devices.

Environmental Factors

            Sustainability is crucial to all businesses that run operations in the modern business environment. Google has improved its brand image and reduced its operational costs by investing in sustainability. The company has invested in renewable energy products as well as focused at building goods and services to help other businesses to thrive. One of the most notable sustainability projects the company has financed is the creation of a living map of forest loss and the tracking of illegal fishing in the ocean. Google is not only dedicated to expanding its brand but also protecting the environment through innumerable ways among which is the use of renewable energy.

Legal Factors

            Legal compliance in the business world is instrumental to the success of any business, especially in the current era. If a company fails to comply with existing laws, it is bound to face charges and incur huge fines such as in the case between Google and the EU, which saw fines accumulate up to 3 billion Euros (Boffey, 2017). Notable, many services provided by Google depend on the collection of user information. The company must therefore revise its privacy policies regularly and add new guidelines on adding more services.

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SWOT Analysis

            Google confronts various strengths, weaknesses, opportunities, and threats in its internal environment. The following SWOT analysis gives an account of each.

Strengths

            Google has four major strengths. First, it is a leader in the world of internet searches. The company holds a domineering share of all internet searches worldwide, with the precise market share being 65% of all searches. Indeed, Google does not face any threatening competition in this field. Second, the company has a big ability to generate user traffic. The household brand averages over one billion hits a month from unique searches alone, giving it an unparalleled edge over other search engines in the market (Shiv, 2017). Third, Google enjoys a high amount of revenue from advertising and display. The firm has maintained a culture of collaboration with third-party publishers to promote and publish ads wherein it shares its profits with partners and garners humongous amounts of profits. Lastly, the introduction of Android and mobile technologies have raised google to the status of an industry leader as far as these technologies are concerned.

Weaknesses

            As a giant company, Google does not only enjoy strengths but also suffers various weaknesses. Excessive reliance on secrecy is perhaps the most profound. So far, Google has refused to reveal it algorithm for searches leading to many experts slamming the company for hiding behind a veneer of secrecy. Nevertheless, the company has attempted to change it position by providing a basic version the algorithm. The next weaknesses relates to the falling Ad rates. Since 2013, the company has recorded dropping revenues from its ads business, which has negatively affected its profitability. This trend is partly attributed to the slowing state of the world economy and partly because of stiffening competition. Moreover, Google relies heavily on advertising and 90% percent of its revenues emerge from its advertising business alone (Rosenberg, 2017). This implies that the potential decline of ad rates may impact the business destructively. Otherwise, the company will be compelled to create a more robust business model that embraces e-commerce along with the current ad business. Lastly, the company lacks compatibility with net generation devices in the mobile and tablet computing platforms.

Opportunities

            The internal environment provides four main opportunities for Google. They include the Android operating system, diversification into non-ad business models, google play and google play, and cloud computing. The biggest opportunity is the Android operating system which empowers Google to be a major competitors for other giant competitors like Apple and Samsung. The company also seems to be diversifying into other non-ad business models. It has done so through the launch of numerous services sites like Google Maps, and Google books, as well as participating in other sectors like smartphones and self-driving cars. Google’s Google Play and Google Glasses also have the potential to grow into big business departments for the company. Finally, cloud computing remains a major opportunity for Google owing to the rising need of cloud computing services. The company has demonstrated its capabilities in offering cloud storage and solutions.

Threats

            Two major threats that could compromise Google’s business strategy are competition from Facebook and mobile computing (Molla, 2017). Notably, the advent of social media has threatened Google’s dominance in the advertising industry (Rosenberg, 2017). Similarly, the growth of mobile computing means that other companies are establishing their presence in the technology industry.

Google HR Strategies

            Google has modelled its HR function according to the conditions of its internal and external environment. The company’s recruitment practices involve a mixture of sources and methods that harmonize well with the needs of the organization. With regard to the sources, Google relies on a mixture of internal and external recruitment sources to constantly fulfill the needs of its human resources. Some of the strategies the company uses to recruit employees include transfers, promotions, and trainees or interns. External recruitment practices comprise educational institutions and individuals who respond to advertisements. The advertisements are published in the careers section of Google’s website (John et al., 2017). The consideration of internal and external sources of recruits compels the company to use direct and indirect methods of recruitment. Direct methods include direct contacts with employees through academic institutions while indirect methods comprise advertisements on the company’s website. His combination of various recruitment methods is properly aligned with internal and external sources of recruitment to adequately cater for the human resources.

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            The most common criteria of employee selection at Google’s HR Management is smartness, drive for excellence, creativity, and alignment with the firm’s needs. Rather than relying on work experience a criterion the company uses its culture of innovation and differentiation to select new workers. Moreover, the election process is compose diverse processes that involve background checks, on-the-job tests, interviews, and preliminary screening. Google’s HR utilizes various procedures and techniques for various job positions with on-the-job tests being a primary method for internship programs (John et al., 2017). With regard to retention programs, Google’s compensation packages are a major tool for the company. The firm’s compensation scheme is above the average used in big corporations with high salaries and wages being the major enticers. Additionally, employees enjoy a range of other benefits and incentives among which are free meals and a typical workplace design that encourages fun and creativity. The HR department also employs coaching and mentoring as strategies of retaining and developing employees who have a leadership potential.

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Conclusion            

One major secret to the success of Google as a technology company is its innovative work culture. In general, the company’s work culture uses innovation and exemplary performance to inspire and empower others. The strategic role of the HR is particularly contributory to the company’s center of smart design. The firm’s technology ensures that the culture is adopted by new employees within a short period. It is evident that Google is a company that values it human capital. Its salary and compensation scheme is exceptional. Even so, the company faces numerous challenges which must be tackled by innovating further to match the expectation of the next generations. Despite this, the company has succeeded in managing its highly complicated work environment and integrating its workforce in its structure to propel the organization toward the goals.

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