Taking into account the specifics of the situation in the sphere of the internet portals providing advertizing, entertainment and search engine services and the disparity between the internal culture and the external branding of the company, there is a critical need for quality initiative at Yahoo.
This report will discuss the main reasons for which Yahoo requires culture changes and a training program, the main parts of the program and its benefits for Yahoo.
A critical need for culture change within Yahoo
Yahoo is recognized as one of the best-known web portals with millions of page views per day and thousands of employees. Created as a hobby of two PhD candidates in electrical engineering David Filo and Jerry Yang in the early 1990s, Yahoo rather quickly grew into a rich hierarchical search directory which gained popularity among wide audience of Internet users and became a rather profitable business for its owners.
By the late 1990s, Yahoo has become a “megabrand” with its records of 50 million unique users and 3, 800 companies advertizing on the pages of the Yahoo portal (Jones, 2010, p. 453). There is evidence that the Yahoo stock price per share was astronomically high in 2000, reaching $237 per share (Jones, 2010, p. 453).
However, in early 2000s the company faced its first big problems which caused the fall of the stock price and (up to $9 per share). One of the main reasons for these problems was the dot.com bust. Another reason was the dependence of Yahoo business model upon the advertizing and e-commerce revenues.
Monster.com, MySpace and YouTube emerging in 2000s gained attention of users who previously used Yahoo for their advertizing purposes. As to the search engine dimension, the rapidly growing popularity of Google was the major threat for Yahoo. The analysis of the main reasons of popularity of its main competitors pushed Yahoo to adopting the customized search engine and advertizing strategy.
This decision allowed Yahoo to continue its battle for the Internet audiences and advertizing revenues. In 2005 Yahoo and Google received equal amounts of all Internet advertizing revenues (18%) (Jones, 2010, p. 455).
However, according to the 2006 data, Google received 25% of revenues as compared with 19% received by Yahoo. Therefore, the battle continues and there is a critical need for culture changes within Yahoo so that this company could create a competitive edge to attract more users and advertisers, increasing its revenues and value of the stock.
The uncertainty of the corporate future of Yahoo had a negative impact upon the internal branding within the organization which resulted in decreased opportunities for retaining the most capable employees and the increased turnover.
Currently, due to the rapidly changing environment and shifts with the company itself, there is a discrepancy between the internal organization and the external brand of Yahoo (Xavier & Nagarani, 2007, p. 60). Therefore, it is important to define the company’s core values, vision and to paying more attention to training and education of the personnel is critical for improving the current situation.
The launch of the program
Realization of the critical need for culture change within the organization is the first step towards implementation of the quality initiative. Hinkle (2006) noted that shaking up the internal culture of the organization can be advantageous in case if the need for the change management practices is communicated to all employees (p. 41).
The first part of the quality initiative requires creating the awareness of Yahoo employees on the importance of culture change within the organization. By educating the employees on the main threats and opportunities for Yahoo in its market sector and the importance of organizational changes for improving its competitiveness, the company can increase the effectiveness of the following training initiatives.
Kotler et al (2009) noted that to create a competitive edge, companies can consider the options of points of difference (unique features which are not provided by competitors) and points of parity (features and strategies adopted to negate the advantages of competitors) (p. 363).
By analyzing the current situation in the market sector and deciding between these two options, the company can develop a marketing strategy and communicate it to the employees.
The next part of the quality initiative is to identify the core corporate values as perceived by current Yahoo employees. Xavier and Nagarani (2007) admitted that compensation culture and an opportunity to work in one of the most progressive industries are the main values recognized by Yahoo employees (p. 60).
Combining these values and the company’s mission and the goal of becoming the most essential internet services for those who use internet for business and entertainment, the training program can be used for creating an internal corporate brand image and communicating it to the personnel. The next step is the launch of the training program and allocating time to include the training program into the working schedule.
By educating the employees on the core values of Yahoo and the mission of the company in the nearest future, the company will be able to improve the performance of the employees and their involvement into the change practices. Kull (2008) noted that the importance of the organization-level change practices should not be underestimated (p. 141).
Therefore, organizing trainings for every employee of Yahoo is critical for enhancing their understanding of the importance of the quality initiative and their role in certain change management practices. The change management practices should involve all levels of organization to reach its greatest potential.
The benefits of implementing a quality initiative
The implementation of the quality initiative can be beneficial for aligning the internal culture of Yahoo with the external branding of the company, enhancing the employees’ understanding of the mission and core values of the company, improving their performance and competitiveness of Yahoo in its market sector in general.
The alignment of the internal culture of the company with its external brand is important for positive branding of Yahoo as an employer, attracting more potential employees and retaining the current ones. Additionally, the quality initiative and improved involvement of the personnel into the change management practices can be advantageous for improving the employees’ motivation as well as their performance.
By communicating the idea of the importance of the cultural changes to every employee, Yahoo can gain their support and improve the outcomes of the quality initiative. Emphasizing the core company’s values and educating the staff on the current mission of Yahoo, the company would enhance the effectiveness of its business processes which can lead to its improved competitiveness and financial profitability at the same time.
By explaining their roles in making Yahoo the most essential service to business and entertainment internet users, the company can significantly improve its chances for achieving the main business goals.
Taking into account the current situation in the sphere of internet services and the rapidly growing popularity of Google, YouTube, Amazon.com and eBay, Yahoo cannot diminish the importance of launching an education program to provide the necessary training for all employees when implementing a quality initiative.
By educating the employees on the core values, mission of the company and the importance of culture change within the organization, Yahoo can improve their understanding of particular change management practices, enhance their involvement and reduce the resistance to the organization changes which can occur in the personnel as a response to the quality initiative.
Therefore, the launch of educational program and all expenses attributed to it would be compensated through the improved involvement and performance of the personnel and the following financial gains of the company.
In general, the main benefits of launching the quality initiative at Yahoo are the employees’ enhanced understanding of a critical need for a culture change within the organization, the improved motivation and performance of the personnel. All of these factors are important for enhancing the company’s chances for attracting more consumers and increasing its stock value and revenues.
Taking into account the critical need for culture change at Yahoo, it can be stated that the launch of quality initiative is important for success of change management practices and achievement of the company’s business purposes.
The training program can be helpful for improving the internal culture of Yahoo, enhancing the employees’ understanding of the importance of culture changes within the organization, improving their motivation and performance.
Hinkle, S. (2006). Take a quality ride: The realities of implementing a quality management system. Lincoln, NE: Universe Publishing.
Jones, G. (2010). Organizational theory, design and change. (6th ed.). New York, NY: Pearson Publishing.
Kotler, P., Keller, K., Brady, M., Goodman, M., & Hansen, T. (2009). Marketing management. (13th ed.). New York, NY: Pearson Publishing.
Kull, T. (2008). A multilevel analysis of quality management practices, cooperative cultural values and work performance. ProQuest Information and Learning Company.
Xavier, M. & Nagarani, N. (2007). Employer branding: Lessons from Southwest Airlines and Yahoo. NHRD Journal, 1 (3), pp. 58 – 61.