Google is a multinational company that is based in the United States and specializes in Internet-related products and services (Duthel, 2008). Some of its products and services include cloud computing, search, online advertising technologies and software (Hamen, 2011). In 2011, Google acquired Motorola Mobility.
Motorola, Inc. is also a multinational company based in the US and specializes in telecommunications (März, 2004). Prior to the acquisition in 2011, the corporation was divided into two sections: Motorola Solutions and Motorola Mobility (Hamen, 2011). This paper seeks to establish Circumstances that led to the acquisition of Motorola Mobility, effects of the merger or acquisition, corporate structure after acquiring Motorola Mobility and the changes made to the human resource function.
Circumstances that led to the acquisition of Motorola Company
The merger between Motorola Inc and Google took place in 2011. This was an approach by Google to add some value to its operations. In fact, at that time, the company had more than 20,000 patents with many more in the pipeline (Kurtz & Boone, 2013).
For Google, the enhanced portfolio was to protect its Android operating system, which at that time was suffering from a number of patent violation complaints between producers of the product and other corporations like Oracle Company, Microsoft and even apple. In short, the gesture by Microsoft and Apple to band together in anti-competitive patent attacks on Google’s Android is the one reason that prompted Google to acquire Motorola Mobility.
The other reason was to enhance the Android system in order to counter the influence of competitors in the market. Google wanted to draw on Motorola’s great history of novelty to reinforce its Android to enable it compete well with other established companies (Duthel, 2008). Specifically, the Android team at Google wanted to use the Nexus program of Motorola to create high-end devices that would enable it to compete strongly with Samsung which at that time was the leader in Android market.
Effects of the merger/acquisition
One of the main reasons why Motorola Mobility was acquired by Google was to help salve its patent portfolio that was suffering from a number of lawsuits and more especially, counter the influence of Microsoft in Android market. In this regard, Google and Motorola claimed only a single victory against Microsoft.
It was ruled in the Mannheim court that Google was not in any way infringing on a patent owned by Microsoft. On a sad note, Google and Motorola lost three lawsuits to Microsoft an aspect that saw Motorola pull its Android devices out of Germany. This was a blow to Google as the company had hoped to enhance its presence in the market (Kurtz & Boone, 2013).
Through the acquisition, Google hoped to enhance its position and influence the market in order to keep Android market open. This would have worked in its favor. However, many months following the acquisition, Google had not achieved its goal. Instead, its main rival, Microsoft, had managed to leverage its patent portfolio in a way that enabled it to negotiate license contracts without any challenge.
In addition, Motorola still paid Microsoft for all devices they produced as the patent fee. This means that the acquisition did not work out for Google and this could have been the reason why barely two years after the acquisition, Google was ready to sell it to Lenovo.
Corporate structure after acquiring Motorola Mobility
The corporate structure of Google entails management positions that are mainly specialized in terms of activity (Hamen, 2011). It also has a multidivisional structure, within each managerial position, where small units of business or operation are divided in terms of product market or geography (Duthel, 2008). In other words, its organizational structure ensures the centralized planning whilst giving other units in different parts of the world the flexibility to innovate.
The original structure of Motorola, on the other hand, company is structured into two divisions: Enterprise where Motorola Company developed wireless infrastructure, highly advanced data capture, barcode scanning, and wireless broadband networks. Under the public utility section, products that were produced were mainly supplied to governments for general use. Under this section, the acquired company also concentrated in developing other products including mobile computing.
Upon acquiring Motorola Mobility, Google reorganized its business line mainly into four divisions: advertising, cloud computing services or simply internet, mobile/Smartphone/android, and ecosystem (Hamen, 2011). The cloud services division and ecosystem division mainly focus on services and content. Accordingly, the new structure was meant to help the organization streamline its internal processes and focus on major market opportunities in the Android market.
Organization of Human Resource
This was a Vertical Merger, which means that all activities including employees of Motorola mobility were fully acquired by Google. In this case, Google added more than 19000 employees to its business from Motorola Mobility (Hamen, 2011). Because this was likely to result in organizational conflicts owing to the difference in mindset between them, the human resource at Google had to be reorganized to fit its current state.
To begin with, the company had to change its HR operations to data-based people management. According to Hamen (2011) the main reason for adopting this approach is that it encourages accurate decision making in terms of people management. In other words, it is not feasibly for a business to register great results unless is able to make accurate decisions on how to manage its people.
Therefore, the Human Resource at Google after the acquisition process became different from the previous HR functions. To begin with, the term “people operations” was used to refer to human resource. In this case, all decision made by employees based on analytics and quantifiable data, and are overseen by a team branded as “Analytics Team” (Hamen, 2011).
Each division including the acquired section had its own analytics team that was accountable to the Vice president of the company. Another function of the team was to carry out employee surveys. In other words, it is the responsibility of the team to identify areas where employees as well as other people in the can collaborate but also. The following aspects were also created:
Google’s PiLab which was responsible for carrying out applied experiments within the resultant company in order to determine approaches that are most effective for managing employees because they came from two different environments (Hamen, 2011).
Employment Algorithm was adopted to help solve problems associated with diversity. With this organization, analytics team consistently carried out analysis in order to identify all factors undermining diversity in terms of promotions and retention particularly from the acquired Motorola section.
Collaborative workplace design was also initiated in order to enable the company focus on enhancing cooperation between staff from the two different divisions (Kurtz & Boone, 2013). With this, it the team established that for the two companies to work together in harmony, learning and collaboration would important. The company, thus, transformed its workplace designs in order to capitalize on collaboration and learning.
In a nutshell, upon acquiring Motorola Mobility, Google was and has still continued to register positive results thanks to its data-driven HR function. Its approach also enabled Google to produce great results. For instance, when it acquired Motorola Mobility, the section was already registering losses but the company managed to record some encouraging results in its first financial year.
In conclusion, Google acquired Motorola Mobility for two good reasons: help it counter its competitors in the protracted patent wars. The company many lawsuits against its rivals such as Microsoft and wanted to win in order to keep in the business. The other reason was to take advantage of Motorola’s long experience in Android business to enhance its Android product which was facing stiff competition particularly from other established companies like Apple and Microsoft.
However, things did not end up as initially envisaged and Google ended up selling the Motorola section to Lenovo. One thing that must be noted is that upon acquiring Motorola Mobility, it had to reorganize some of its processes and one of them is the human resource function. It was changed to people analytics and was overseen by analytics team which reports directly to the vice president of the company.
References
Duthel, H. (2008). Google Inc. Services. New York: Lulu.com.
Hamen, H. (2011). Google: the company and its founders. Edina, Minn.: ABDO Pub. Co.
Kurtz, D., & Boone, L. (2013). Contemporary business. Hoboken, N.J: Wiley.
März, M. (2004). Motorola. New York: GRIN Verlag.