Google Stakeholder Analysis Research Paper

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Introduction

The global entity being studied is Google. This is a company that operates around the world, with a number of different products and business lines. It is also one of the richest companies in the world, with massive revenue and profits. This essay will perform a stakeholder analysis of Google.

Stakeholder #1 – Employees

The company's employees are a major stakeholder. They depend on Google for their livelihoods. This has a few different dimensions, too, and we can look at this through the hierarchy of needs lens. Most certainly the employees rely on Google to succeed so that they can still have jobs, to pay the rent and buy food. But at Google, employees are also there specifically because of the company culture, and the opportunities that they might have there. Many employees see Google as an employer of choice, and so for them the stakes are a bit higher than just a job; they can make money elsewhere, but they might not be able to fulfill their higher order needs at just any old company.

Employees are a powerful stakeholder group because they are how the company runs. A strong employee base is necessary for a company like Google to continue to enjoy competitive advantage in the marketplace. If employees feel that the company is not meeting their needs, they can choose another company at which to work, especially true if the reputation that Google has of being able to attract the best people is true. The company therefore has to ensure that the needs of this stakeholder group are being met in order for the company itself to continue to thrive.

Stakeholder #2 – Shareholders

As with all publicly-traded companies, Google is beholden to the interests of its shareholders. The simple view of management's obligation to the shareholders is the Milton Friedman view that the sole responsibility of business is to increase its profits. The thinking goes that shareholders invest in Google specifically for its ability to make money. Indeed, if it is assumed that the price someone pays today for a Google share is fair value, then they would want the company to increase its wealth so that the value of their investment grows.

Shareholders typically exercise their power over the company via the Board of Directors. Shareholders vote for the Board, and the Board exerts control over management. If the shareholders are unhappy – especially the larger institutional ones- then they are likely to install a Board more friendly to their needs. Thus, one of the things management has to do is to keep the shareholders happy, which typically means recording strong financial performance, successfully introducing new products, and that sort of thing. As long as the company is profitable and the value of the shares is increasing, then there is little reason to think that this shareholder group will become disgruntled. For the most part, Google's shareholders are probably pretty happy with the overall performance of the company.

Stakeholder #3 – the US Government

Google is an American company, so the American government is the beneficiary of the taxes that Google pays. The California government is also a beneficiary as are the governments of the counties and municipalities where Google operates. If the intense competition over Amazon's second headquarters in any indication, there is high perceived value of having that sort of elite company in a particular jurisdiction. The US government not only receives federal taxes on the income that Google earns (which is a lot), but it also receives taxes on things like employee salaries, and shareholders' capital gains. As such, the US government should ideally want to see Google succeed, especially if it earns money overseas and uses American talent to make that happen. Also, since Google is one of the highest-profile American companies in the world now, there is considerable interest that the US has that Google should be seen performing well. Exceptional performance reinforces things like the global desirability of America as a place to start a business, for example.

Stakeholder #4 – Foreign Governments

Google has an interesting relationship with some foreign governments, particularly the People's Republic of China.

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There are many places in the world where totalitarian regimes have sought to control the flow of information to their people. The reality is that the PRC is one of the few places where they have been able to so successfully. As a consequence, foreign governments are often stakeholders in Google, because Google represents open access to information, the ability to counter spin and verify facts. For governments that lie to their people, Google is very much an enemy, and this is no more obvious than in China, where Google has had to censor search results in order to do business in the country.

Stakeholders #5 – Advertisers

Advertisers are a stakeholder as well. They pay Google for ad placement. Google earns most of its money from these advertisers. The relevance to management is simple – the advertisers are who pays the bills. Thus, Google needs to ensure that their needs are taken care of. This means that Google needs a well-priced offering, cheap enough that it provides good value to the customer, but pricey enough that the company can earn good margins. The reality is that Google has become quite adept at pricing. It still adds value for advertisers, and has become one of the world's dominant advertising platforms.

Advertisers want to get to audiences. The search function, along with the other array of features that Google provides to Internet users, are the key to bringing in the traffic. Google also needs to know as much as possible about the traffic in order to serve ads most effectively. At the end of the day, the ability of Google to meet the needs of advertisers, including competitive pricing and ROI, must be juxtaposed against the needs of other groups.

Reconciling Stakeholders Demands

For the most part, the stakeholder demands are not mutually exclusive. For a global company, the real challenge comes from finding a way to align the interests of the major stakeholder groups. When the stakeholder groups of Google are examined, it is clear that each one plays a critical role in the survival of the company. Advertisers pay the bills. Shareholders and employees need the company to thrive, as does the US government. The one wild card are the foreign governments, who have much less stake in the ongoing success of Google. This is where the greatest tension lies.

First, however, the synergy between the interests of most of Google's major stakeholder groups should be discussed. Google's employees benefit from the company giving them jobs, in particular if they are finding that those jobs offer them more in terms of pay and opportunity that equivalent jobs elsewhere. The thing about employees is that they need to get paid. So there is a mutual interest between employees and advertisers – the customers need Google to deliver a great product, and the employees need to deliver this great product in that the company continues to have customers.

The needs of the shareholders are just as aligned with the needs of the advertisers/customers. The shareholders need there to be customers, lots of them. However, shareholders want Google to maximize profit. That puts them at odds with customers who would prefer that Google takes a minimal margin, and employees who want to get paid as much as possible. For now, however, everybody seems happy with the balance that Google has struck between these three different interests.

The US government's interest is, well, interesting. The company provides taxes, and taxpayers, so obviously the US government would like to see Google succeed. That said, it legitimately has no reason to care if Google succeeds or if some other company succeeds. Maybe there is a point where the US has built up a national security relationship with Google and would like the company to succeed simply so it doesn't have to build the relationship from scratch with someone else. But the government's interest in Google is more in the generic sense of the economic value that the company creates, and government's ability to take advantage of that.

The major tension between the different stakeholders is with foreign….....

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