Table of Contents

Introduction 3

Brief about Google Inc., the case study organization 3

Factors that have led to the change in the organization 4

Analysis for change 5

The change implemented 5

The approach adopted 6

The theory that underpins the approach of Google Inc. 7

Gaps in change implementation approach 7

Recommendations 9

Conclusion 9

References 11


When the need for managing an organizational change arises, it is guided by many theories, the application of which leads to the management of tools depending on the kind of business that operates. The present assessment will be covering the aspects of Douglas McGregor and Theory X and Theory Y. The major argument of this theory is that the behavior of an employee can be judged by looking at two aspects of human behavior at the workplace. In other words, the employees can be bifurcated and analyzed by two diverse viewpoints of the employees. One such aspect or viewpoint is known by the name of Theory X, which relates to the negative aspects (Treviño et al. 1998). The second aspect or viewpoint is known by the name of Theory Y, which relates to the positive aspects (Treviño et al. 1998). This theory is going to be applied to the company Google Inc. with regard to the contextual change required by Google management. Thus, some of the aspects of a change in the environment of the organization and the significance of the implementation of organizational changes within the organization will be analyzed. Keeping in mind to address all the above points, the structure of the report will be as follows. In the first part of the report, a brief about the case study organization will be discussed along with its environment and context that have led to the need for organizational change. In the second part, the required change will be identified and analyzed that has already been or is in the process of being implemented along with the approach adopted. The third part of the report will contain the gaps, if any, which are prevalent in the factors of the organization, situation, and contextual aspects. The fourth part of the report will contain certain recommendations to the senior management and leadership of Google Inc. Lastly, a conclusion will be drawn to summarise the content of the entire report.

Brief about Google Inc., the case study organization

Google Inc. is considered to be one of the topmost digital search engines. It is the most transnational business organization and is a provider of a diverse set of services and products for millions of organizations. By collaborating with Google Inc., many of these organizations grab the opportunity of great earnings and investments. Such earnings are in the form of an increase in the customer base because of advertisements that are displayed on the various applications of Google Inc. On the other hand, these companies invest in the form of making certain payments to Google Inc. for getting their ads displayed on these applications. The company, Google Inc., started as an IT company but it slowly and steadily got inclined towards adopting creativity, flexibility, and inimitability (Alhajri 2016). The dedication of Google Inc. to expansion became one of the key characteristics of the company with regard to the development of the organization and leadership. However, with such an increase in the business, it became very important to have a sound understanding of the employees and how they were affected by such an expansion. Thus, the aim of the present paper is to look at Google Inc. through the lens of the theory by Douglas McGregor (Theory X and Theory Y) and thereafter, offer some useful practical recommendations to the senior management of Google Inc. as to how the performance of the employees of the chosen firm can be improved considering its open-world perspective.

The company is into practicing diversity in all possible aspects. Some of these aspects include race, disabilities, sex, religion, cultural background, age, physical abilities, and sexual orientation. Google Inc. is an international company that focuses on workforce diversity. Due to the adoption of this approach, the company has been able to have more than 70 offices in a minimum of 40 countries along with a diverse customer base. The diverse set of employees are able to contribute to the success of the organization in many ways such as by giving inputs based on the unique knowledge acquired by professing a different background. The management of Google Inc. is of the mindset that stringent measures may need to be taken at some times but it is possible only with the help of the support of its employees and also by fitting in the needs of the diverse customer base.

The government policies and regulations are in favour of online search market. The industry is experiencing growth in the online service providers. The consumers are nowadays shifting to online platforms for almost everything and so, the focus of the consumers is shifting to the digital experiences. The operations in Australia will be impacted by the latest regulations such as GDPR. The operations have to be carried out in a manner that there is no harm to the environment and so, a strategy must be implemented that is climate-resilient.


Factors that have led to the change in the organization

Many factors in the organization, situation, and contextual aspects have led to the need of change in the way the company, Google Inc., operates. For instance, one of the factors is that the company constantly aims at bringing in innovation and flexibility in its working (Kim 2020).

Another factor is that the company constantly looks for changed ideas and concepts so as to be supportive of their present situation and also, to continue using the latest technologies to the maximum. Thus, these are some of the factors as to why Google Inc. has thought of managing a change and has adopted the most appropriate theory to serve the implementation of their intended change. An example of this is that Google Inc. has applied Theory Y by Douglas McGregor as their leadership style and to less supervise their employees. By doing so, the present report will set out the effectiveness or non-effectiveness of the application of this approach on the success of Google Inc. and the achievement of the goals, which are set by them.

The third factor that has led to a change in the leadership style within the company, Google Inc. is the disadvantages that were the consequences of the workforce diversity. Such diversity did not lead to teamwork but rather competition. The main issue arose when the employees of Google Inc. were not open and were reluctant to accept other’s cultures. Such reluctance on part of the employees brought a negative effect to the operations and so, to the success of the company temporarily. An example of this can be that the employees are working together to complete a given project but they worked separately. Such separate working was evident in the form that each employee was in the race of bringing in some useful and innovative ideas. Such a competition had a negative impact on the project of prolonging the completion time of the process. The next example is the freedom of speech, which was impaired. This means that it is a type of setting where the staff and the employees of Google cannot be free to crack a joke, or tell some tales, or give their opinion. Such restraint was there because of the insecurity the employees had that they might be judged and discriminated against.

Another factor that led to change was the issue of mishandling of sexual harassment cases and cracking down the employee speeches. However, on another hand, despite the advantages the company Google Inc. has experienced some disadvantages too in applying the Theory Y. For instance, one of the disadvantages is that the company will have to bear the loss of return of investment in the forms of money and time. This is because since competition is caused, not all employees will be able to provide successful innovative ideas. Also, it is a general notion that every person is different. Therefore, not all employees will be self-motivated and ambitious. Thus, the smoothness and the pace at which a particular task is being carried out will be affected.

Analysis for change

The change implemented

The concept of organizational change is measured by the researchers, academicians, and executives. The managers use such a measurement with regard to the renewal of the strategies, which can lead to the betterment in the performance within the dynamic atmosphere after having a thorough understanding of the impact of the strategical change. This involves a collective approach of incorporating new services, products, markets, and models (Amabile, M. 1997).

Google Inc. has proved to be one of those companies that aims at continuous improvement of one component to another component within their company. One of the main issues that were faced by the company was that it was not able to retain the employees. For instance, in the year 2019, Sundar Pichai, who is the Chief Executive Officer (CEO) of Google Inc., stated that thousands of employees have resigned from the organization. The main reason that was analyzed for them to resign was the change that was proposed to be brought in the organization as well as the lack of transparency at the end of the management. This happened even after the company practices its four main principles relating to the openness in the system and its strategies relating to the leadership style. These were proposed by Tran (2017). It has been claimed by Tran (2017) that the principles that Google Inc. has adopted are as follows. The very first principle is inclusive of transparency, the second is collaboration, and the third and fourth principles are sharing and building cultural empowerment. With a view of the above, the CEO of the company opined that the change was to be brought in the way the people looked at the proposed organizational changes.

Thus, it can be said that the change that was to be implemented was with regards to the leadership style in the company, Google Inc.

The approach adopted

The management of the company adopted Theory Y by Douglas McGregor and focussed on the positive views the workers had towards the company’s struggle time. This change was brought in the leadership style and the leaders assumed that the employees have some individual ambitions and self-motivation due to which they exercise self-control and are reluctant to the changes to be brought in the organization. Thus, a part of the change was also that the employees were started being treated as creative. Due to this, the environment of Google Inc was changed to one that incorporated an atmosphere that promotes creativity and participation. This was done so that the employees can be stimulated to be more productive than they currently (at that time) were and achieve the goals of the organization.

All these changes led to an increase in workforce diversity and creativeness within the company. This is because some different and unique ideas were being generated by the heterogeneous groups with Google Inc. Since the level of freedom given to the employees was changed, now more and more diverse ideas were suggested. Also, the chances of getting a suitable solution are largely improved. Another area that was to be dealt with and managed was the atmospheres when brainstorming was necessary. To manage such a situation, the employees again came up with better ideas because of the cultural diversity of the team members. Thus, the adoption of the Theory Y by Douglas McGregor proved to be advantageous for Google Inc. The underlying reason being that Google Inc. believed in hiring those employees who belong to diverse generations and cultures. This will help the organization in obtaining diverse viewpoints of the culturally diverse employees.

The theory that underpins the approach of Google Inc.

The above incident faced by Google Inc. says that the theory that underpins the approach of the company is Theory Y. The three major assumptions of the theory are as follows. Firstly, the individuals are of the mindset that they view work as being done in its natural form (Burnes 2014). The second assumption is that the employees have the potential to have full control on exercising self-control and self-direction (Burnes 2014). The third assumption is that an individual who is average in their work will generally agree to take and even seek some of the responsibilities if they are committed to the objectives being pursued (Burnes 2014). The last assumption of the theory is that it is not only the managers but the employees as well that must be given the liberty to indulge their minds in activities that lead to inventiveness, creativity, imagination, and the capability to make sound decisions (Burnes 2014).

Gaps in change implementation approach

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The above discussion is indicative of the fact that although the company Google Inc. has successfully adopted Theory Y, but still there are some gaps in its application. These gaps are listed below.

There is increased competition within the company, which may lead to a conflict of interest between the employees and the organization.

The application of the theory does not impact those who do not have any ambition or who are not motivated by themselves.

In order to get the work done innovatively by the employees, it is necessary that the company indulges itself in heavy recruitment costs. This has a negative impact on the existing employees as they feel that they are not valued.

Due to such a large number of stakeholders being given the opportunity to participate, many tend to leave the organization because of the low levels of job satisfaction.

It is generally observed that conflicts arise because of the innovative ideas provided by the employees. This is because, in innovation, the ideas that were produced by the employees to the management are used for the purposes to complete a project. However, the issue arises at the time the employee leaves the organization. The employees claim that they were their original ideas and so, they are not the property of the organization. After the employee leaves the organization, the company must ensure with strict mechanisms that the idea or the information is not disseminated without obtaining authorization from the management. Thus, the first argument is that Google must develop employee loyalty by indulging in brainstorming (Dragomir 2017).

The second argument that can be raised for the company in analyzing the gap in the application of Theory Y is regarding the employees who are not much interested in working. Although the application of the theory is beneficial for the organization the theory is expected to neglect those employees who, for some reason, are not able to work properly. Thus, if they do not provide any innovative ideas, then they may feel left out. Thus, the second argument is that Google must look after such employees and modify the approach by applying Theory X (Schein 1983).

The next argument regarding the assumed gap is that when any company indulges in hiring a fresh pool of talent, it generally signifies to the existing employees that the company does recognize and value them. Thus, as a result, the motivation levels of the exiting employees are reduced as they do not have faith in the company that their efforts will be acknowledged. Thus, the third argument is that Google must keep the existing employees satisfied and it must reward them accordingly so that the rate of employee retention is the maximum.

The last argument in the gap analysis is that the application of Theory Y leads to increased competition among a large amount of staff. The problem that occurs is that some of the employees feel that they are deprived of enough opportunities. Due to this, they are not satisfied with their jobs, which in turn leads to a decrease in employee performance. The ultimate impact is on organizational performance. Thus, the fourth and the argument is that though the management of Google is at the liberty to choose from whichever innovative idea they think is the best, they must give an equal opportunity to each of the employees.


Based on the gaps that are identified in the above section, gap analysis in change management approach adopted by Google Inc., the following are some of the recommendations as to how the senior management can take steps for effectively and successfully implementing the change in leadership style:

  • The company can adopt a sub-culture and a distinctive culture.
  • The company must connect with the employees so that they can continue building a good rapport with them and so, the employees are supportive of the company in managing the implementation of change.

The very first recommendation is that Google can adopt Theory X along with Theory X. This will help the company in dealing strictly with the employees who are not that much motivated to work. By doing so, the organization will also benefit because these employees will now be more active. For this, the organization can adopt the Symbolic/interpretive perspective, which is concerned with having an understanding of how each of the individual employees is affected by different leadership behaviors of the management along with the impact of making them used to the collective processes (Frey 2004). Thus, for this, Google Inc. must focus on the behavior of its employees.

The second recommendation is that Google must practice participative management. This means that Google Inc. can develop and maintain cordial relations with the existing employees by asking them to participate and formulate some viable options as to how they think leadership can be changed and which factors will be more favorable for them. Various studies as that of Coyle-Shapiro (1990) have found that when the existing employees are involved in the process of planning organizational change, the chances of their support increases for that change.


Therefore, in order to sum up, it can be said that the theories proposed by Douglas McGregor, Theory X and Theory Y work on the assumption that the senior management can judge the behavior of an individual within the organization by taking into consideration the positive as well as the negative factors determining their behavior at the workplace. It can be observed that the company Google Inc. has specifically adopted Theory Y.

Google Inc. is the topmost digital search engine and provides a diverse set of services and products to many other organizations. The major factors that have led to a change within the organization are the constant drive for providing innovative products and services, the search for the options that can support the organization in achieving its objectives, and cultural diversity. By adopting Theory Y, the employees became more innovative. However, there were some disadvantages as well, such as increased competition, job insecurity, etc. The senior management and the leaders of the company must, therefore, look at the recommendations and modify its approach accordingly. Also, Google Inc can adopt a mix of the theories X and Y to address the concerns of all the employees, not making anyone feeling left out. In general, the lessons that have been learnt are that the changes intended to be implemented within an organization cannot be done without the support of its employees. This is important for addressing the complexities of change management at the individual, group, and organizational levels.


Alhajri, A 2016, ‘Creativity and Innovation in Google’, International Journal of Science and Research (IJSR), vol. 79, no. 57.

Amabile, T 1997, ‘Motivating Creativity in Organizations: On Doing What You Love and Loving What You Do’ California Management Review, vol. 40, no. 1, pp.39-58.

Burnes, B 2014, Managing Change, Pearson, United Kingdom.

Coyle-Shapiro, J.A. 1999, ‘Employee participation and assesment of organizational change intervention: A three-wawe study of total quality management’, The Journal of Applied Behavioral Science, vol. 35, pp. 439-456.

Dragomir, V 2017, ‘Conflicts of interest in business: A review of the concept’, Accounting and Management Information Systems, vol. 16, no. 4, pp. 472-489.

Frey, L 2004, ‘The Symbolic-Interpretive Perspective on Group Dynamics’, The Sage Journals, vol. 35, no. 3, pp. 277-306.

Kim, H 2020, ‘The Analysis of Innovation Management in Google’, Journal of Economics and Management Sciences, vol. 3, no. 4.

Schein, E. H. 1983. ‘The role of the founder in creating organizational culture’, Organ Dyn, vol. 12, pp. 13–28.

Tran, S 2017, ‘GOOGLE: a reflection of culture, leader, and management’, International Journal of Corporate Social Responsibility, vol. 2, no. 10.

Treviño, L, Butterfield, K. D., & McCabe, D. L. 1998, ‘The ethical context in organizations: Influences on employee attitudes and behaviors’, Business Ethics Quarterly, vol. 8, pp. 447–476.

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