Case Study: Yahoo Inc
Case Study: Yahoo Inc
Application of Team Approach
Part I
Introduction
Yahoo Inc. is a company with a global scale based in Sunnyvale, California USA (Drohn, Bierer, Woods, & Victory, 2007). It offers services such as internet search, directory, news, mail service, advertising, video sharing, mapping, and social media services. The current chief executive officer is Marissa Mayer. The vast majority of mankind’s accomplishments has been by a group of people, and not individuals. Teamwork makes insurmountable tasks possible (Schermerhorn, J. 2011). Yahoo is a social organization; people from cross-cultural backgrounds come together to work. It has a transparent and an honest culture. It thrives in constant communication and team work. It empowers and motivates employees to interact with customers. It relies on technological innovations for efficiency in communication. These are some of the statements that describe Yahoo’s business operations.
Team Approach
The functions that define Yahoo as a social organization are collaboration, training, technology, employee empowerment, social CRM, and governance and policies (Hajdini, 2010). Application of team enhances these functions through a number of ways. It leverages the talent of individual employees by providing a platform for participation. It enhances coordination, cooperation, information sharing among individuals, divisions, and external constituencies. In the social media and information business, multicultural diversity is the key feature of client identity. Therefore, teams that are relevant are those composed of members who are sensitive to cultural diversity, innovative, analytical, and responsive to market trends. This is a business that is volatile, and, thus requires constant change and growth. Selection of members into the teams must consider qualification, commitment to participation in teams, ability to quantify trends in the market, and effectiveness in communication. Teams are a functional unit of a company, whose effectiveness determines the effectiveness of the entire organization.
Shortcomings
Psychological Stress: Yahoo is a matrix organization i.e. it is complex both in form and function (Nielsen, J. 2004). The team structure, members, roles, and interface of roles lack stability even in a project life cycle. The ability of individuals to adopt changes depends in part on the individual’s capacity or aptitude for building human relationships. In Yahoo system of organization, there is a conflict between the human need for stability and the dynamic change in function and structure of the team. Therefore, there is difficulty in implementing teams as team members are highly likely to develop psychological stress coming from the dynamic nature of the organization.
Conflict: Again, Yahoo as a matrix system organization does not exhibit clear lines of responsibility and management. The subordinate roles of the different agents do not have well defined relationships with the management structure. In this system, a cross functional team members may receive two conflicting orders from the functional head and the cross functional managers. The result is that individuals become disturbed by conflict and ambiguity. The result may be a high turnover or job dissatisfaction.
Inefficiency: The system of management of Yahoo is characterized by conflicting policies and procedures, and multiple managers, and contradictory line of responsibility can lead to inefficiency in both the system and individual levels. It does not benefit from making routine functional and structural stability. In addition, a cross-cultural manager may be unable to make crucial decisions that influence the progress of the projects.
Cost: Selection of cross-functional teams is often based on possession of a diverse set of skill. Wages earned increases with the level of skill possessed. In addition to high costs, individuals often perform functions that cut across the functional and matrix organization, which raises part time costs for the organization. The matrix organization requires employment of many specialized managers, hence increasing personal costs. Moreover, the lack of stability in structure leads to operational; difficulties.
Part II
Leadership Theory
Marissa Mayer is the top executive of Yahoo business that is currently experiencing problems related to its online business. The company was once a high flying business in the internet services. In recent years Yahoo has struggled to match its rivals such as Google who are dominant in the search engine market and email services. Therefore, there have been several changes in the top leadership in the recent years but Yahoo did not achieve a turnaround. Mayer is introducing a different culture at Yahoo during her initial days. Her leadership style is unique. She aims to refocus the effort of employees away from the obsession with financial performance. For instance, Mayer is set to replace the displays of the struggling share price from the office walls at the company (Lane & Daft, 2008). The aim is to focus high attention on the customer in order to be able to build services based on innovative solutions that draw from customer needs.
She joins Yahoo from Google and is introducing consumer friendly policies that reflect the culture at Google. For example, she introduced free meals at the Yahoo and improved the frequency and quality of internal communication. Her focus is on pivotal employees who, according to her are likely to drive change in the market share and help the company enter new markets. These are programmers and engineers who are the engine of the web services. Mayer gives hope to a situation that seemed an identity crisis. Her aggressive approach is culture-driven moving fast to cause a fast transformation required to turnaround events in a market dominated by giants. Mayer has an aim to revamp Yahoo’s web search services of which she was an executive at Google. The history of Yahoo’s leadership had the prime focus on share price as seen through the displays of its share price on the walls of the offices. She is changing the trend and introducing a different culture that motivates employees and shifts pressure associated with the expectation of the falling share price. She intends to move fast and capture companies and add to its participation in the advertising business that requires repairs at the moment.
Mayer’s style of management and policy follows the theory of the transformative leader theory. She believes that a combination of vision and passion can cause organizational change by injecting motivation or inspiration on employees. Her focus is on transforming the individual first and then translating that to the achievement of group goals. The policies that she is putting in place like making meals free for the employees serve to motivate employees and make them enthusiastic and committed to the company’s cause. Although, Mayer’s leadership is transformational, there are aspects of her leadership that points to participatory leadership. She engages programmers and engineers in a bid to align their contribution to her goals. The former chief executive officers focused their leadership on transactional leadership which bases management on rewarding and punishing outcome.
Her approach to transformation of Yahoo is appropriate. She is taking lessons from the best practices i.e. from the market leader Google. She engages the actions of employees, thus enhancing ownership and collective responsibility. However, her approaches seem to copy the way of business at Google in its entirety. From this perspective, her strategies may create some improvement but is unlikely to capture a significant market share. The market is volatile and the other companies are changing with time maintaining a gap between them and Yahoo (Pride, Hughes, & Kapoor, 2006). A better approach is a shift in focus to investment in businesses that it is likely to succeed. Advertising is one such option as Mayer has rightly identified and made it a priority. Search engine business is where stiff competition is and Google is unlikely to surrender its market share considering the resources and the progress that it has made.
Yahoo Action Plan 2012/2013
| Performance | Weight | Measure | Target | Time Frame | |
| Culture & Innovation | 0.15 | Percentage of the Total Market | 0.30 | Dec. 12, 2013. | |
| Advertising | 0.20 | “ | 0.50 | “ | |
| Customer Loyalty | 0.10 | “ | 0.70 | “ | |
| Talent Base | 0.20 | “ | 0.40 | “ | |
| Strong Brand | 0.10 | “ | 0.70 | “ | |
| Market Share | 0.15 | “ | 0.40 | “ | |
| 1.0 | “ | 3.0 | “ |
The figures in the target and weight column of the action plan are based on the current level of performance of Yahoo, in the market. The targets reflect the market potential and Yahoo’s investment resources.
Conclusion
Yahoo is experiencing challenges in four fronts that all relate to search business (Davis, 2010). They are low revenues from advertisements due to competitor networks, inefficiency in search results, Google’s domination of advertising space and search engine business, and the changing dynamics of portals. The business that holds the potential for future success is the search development. The company needs to shift its competencies from the portal strategy to a strategy based on the dependence on search algorithm. The company’s weakness in the portal services is that there are other companies doing extremely well. At the current level of competition, Yahoo cannot match the muscle of companies providing this service .Once they achieve this shift, they can begin to roll out their advertising strategies. These strategies are useful in integration of banner advertisement, for their contextual advertising market. Leadership is pivotal to Yahoo’s transformation to its past glory in the search business. However, there is evidence that the new chief executive officer is exerting power along the line of cultural change. This will be pivotal in streamlining the company’s resources towards the vision of the company. Future research needs to focus on Google’s strategy relative to Yahoo’s.
References
Davis, R. (2010). “The intangible leadership”. New York, NY: John Wiley & Sons.
Drohn, J., Bierer, B., Victory, M. & Woods, C. (2007). “Yahoo! Case Analysis”, 1-47.
DuBrin, A. (2012). “Leadership.Cengage”. Mason, OH: Cengage Learning.
Hajdini, I. (2010). “Innovation management”. New York, NY: GRIN Verlag.
Lane, P. & Daft, R. (2008). The leadership experience. Mason, OH: Cengage Learning.
Nielsen, J. (2004). “The myths of leadership”. New York, NY: Davies-Black Publishing.
Pride, W., Hughes, R., & Kapoor, J. (2006). “Marketing Management”. Mason, OH: Cengage Learning.
Schermerhorn, J. (2011). “Exploring management”. Hoboken, NJ: John Wiley & Sons.
Werner, S., Randall, S., & Jackson, S. (2011). “Managing human resources”. Mason, OH: Cengage Learning.
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