my question: The related case is put below with images.

Can you describe trivago's organization design since 2010 by considering its structural dimensions such as formalization, specialization, hierarchy of authority, centralization, professionalism, and personnel ratio. As well contextual dimensions such as culture, environment, goals & strategy, size, and technology.

The trivago Way-Growing Without Growing Up? HHL Leipzig Graduate School of Management is a functioned on the basis of bureaucratic processes and university-level institution and ranks among the lead- rigid routines. As such, these corporations were not open ing international business schools. The goal of the old- to change or innovation, and Rolf and his associates felt est business school in German-speaking Europe is to they were not desirable places to work. Consequently, the educate effective, responsible, and entrepreneurially- goal of not "becoming corporate" became a core premise minded leaders. HHL stands out for its excellent teach- for building trivago. The task had been easy when trivago ing, its clear research focus, its effective knowledge was still a small start-up, but its rapid growth made pre- transfer into practice as well as its outstanding student serving the firm's entrepreneurial capacity an increasingly services. According to the Financial Times, HHL ranks challenging task. first in Germany and fifth globally for its entrepreneur- ship focus within the M.Sc. and EMBA programs. HHL Business Model is accredited by AACSB International. www.hhl.de In 2016, trivago's field of business could be described On the night of December 16, 2016, Rolf Schromgens, as hotel-related online marketing and distribution. The trivago's CEO and managing director, gazed over the New firm provided a two-sided, online meta-search platform York City skyline. Only a few hours previously, he and that connected travelers seeking hotel accommodations his co-founders had rung the stock market opening bell with more than 200 booking sites and 1.3 million hotels. at NASDAQ and, thereby, realized the largest IPO of a With 1.4 billion visits and 487 million qualified referrals' German company in NASDAQ history. in 2016, trivago was the largest hotel meta-search plat- A feeling of disbelief washed over him as he consid form in the world. What differentiated trivago's business ered the incredible journey the team had taken. What had model from that of online travel agents (OTAs) was its started only a decade earlier as a small, online-travel com- value proposition as an independent information pro- munity had become the world's leading hotel meta-search vider. trivago did not sell hotel rooms. Instead, it orga- engine. Each month, it linked 120 million travelers with nized large amounts of hotel-related information from 1.3 million hotels in 190 countries. In 2013, trivago had multiple sources to offer the optimal basis for making signed a USD 632 million deal in which travel giant a booking decision. Thus, trivago helped users convert Expedia acquired 61.6% of trivago's shares. Since then, their initial interest into a clear, specific booking inten- the firm had continued to grow rapidly. Only two weeks tion, thereby fulfilling their personal needs. prior to the IPO, trivago had released its figures for yet Given the large number of hotels, even in smaller another record year. From 2015 to 2016, its revenue had cities, finding the right place to stay could be time con- again increased by more than 50% to EUR 754 million. suming and frustrating for travelers, who generally faced Moreover, in 2016, the firm hired employee number 1,200 an overload of information. trivago supported accom- and the fast-paced recruitment continued. modation seekers in this regard by providing real-time Now, in the silence of his hotel room, Rolf's mind transparency regarding a large set of hotels, room avail- turned to the question that had often preoccupied him in ability, and prices (Exhibit 1). Moreover, it reduced the recent months: Would trivago be able to remain the entre- number of booking sites a user had to visit before book- preneurial, driven company he had built and loved? ing. All of trivago's services were free for the traveler. He thought back to the days prior to trivago's emer- OTAs faced the challenge of winning customers. A gence. He and his co-founders had worked for large duopoly of industry giants-Expedia, Inc. (e.g., Expedia corporations that were focused on high efficiency but .com, TripAdvisor, eLong, Hotels.com) and The PricelineExhibit 1 Traveler Value Added Mobile Desktop Transparent Pricing ... Search details . .....*. Best deal .some Price comparison Rich content Ratings and reviews Travelers entered their desired location, room choice, date of stay, and individual preferences, such as hotel rating, family friendliness, and customer ranking. They then received a filtered and synthesized list of hotels from multiple sources ranked by price, popularity, or distance to city center. trivago further enriched this information through, for example, a distilled, easy-to-use rating review. After a hotel was selected, the accommodation seeker received an overview of all available booking providers and their corresponding prices. As such, trivago offered a one-stop method for researching hotels and initiating bookings. Source: trivago earnings call, Q1 2017. Group (e.g., Priceline.com, Booking.com, Agoda, Kayak) Priceline Group. The OTAs competed for direct bookings with their various sub-sites-dominated online distri- with each other, offline booking providers, and the hotel bution. For example, 75% of US online hotel bookings brands themselves (Exhibit 2). OTAs typically worked went through Expedia, Inc. in 2014, while 60% of online with hotels using a commission-based model and they bookings of European hotels in 2015 went through The received commissions of 15-30% of the room price. Exhibit 2 Hotel Booking Channels-Market Shares (2015) Offline channels | Online channels Online travel agencies 20.0% 47.0% 25.0% Other (hotel phone Hotel brand websites reservations, walk-ups, and traditional travel agencies) 8.0% and mobile Local properties' websites Source: Authors' illustration based on Skift (2016).Exhibit 3 Online Advertisement Spending-The Priceline Group Versus Expedia, Inc. (USDbn) 3.48 3.56 2.74 2.76 2.33 2.29 1.80 1.79 1 1.27 7 1.40 1.01 0.92 0.55 2010 2011 2012 2013 2014 2015 2016 Priceline group Expedia, Inc. Note: Expedia, Inc. online advertisement spending estimated based on The Priceline Group's average online advertisement share multiplied by Expedia's total marketing expenditure. Source: Online advertisement data for The Priceline Group as displayed by Statista (2017). As the same hotel could be booked through various business using a cost-per-click (CPC) bidding-platform travel agents and platforms, OTAs invested heavily in (Exhibit 5) and a flat fee for managing premium features marketing in order to be the premier access point for on hotel profiles. room distribution (Exhibit 3). trivago added value to OTAs by offering them direct customer access, as well Meta-Search Competition as a performance-based measurable marketing and trivago faced head-on competition in its own com- distribution channel (Exhibit 4). trivago monetized its petitive environment. By 2016, hotel meta-search had Exhibit 4 ROAS Comparison, trivago versus Online Travel Agent (OTA) (example) A hotel in Berlin launched a marketing campaign on trivago that referred customers directly to the hotel's own booking engine. The following results were achieved, which can be compared to those of a traditional OTA-based business. trivago Online Travel Agent (OTA) Marketing budget EUR 1,000/month Average OTA commission 25% on net room price Clicks 1,891 Average net room price EUR 120ight Bookings 71 OTA commission EUR 30ight Room nights 133 Room nights 133 Channel revenue EUR 15,960 Channel revenue EUR 15,960 ROAS (EUR 15,960/EUR 1,000) = 1596% ROAS 960/(EUR 30*133) = 400% Source: Case authors based on hebsdigital (2013).Exhibit 5 Overview of Monetization-CPC Bidding Advertisers Room Price CPC Bid! Global OTAS $163 $1.20 Regional OTAS $163 $1.10 Do.za $0.90 $174 Hotel Chains $0.90 800 800 $177 Vertical exposure Horizontal exposure Advertisers bid on our CPC-based' bidding marketplace for a specific hotel offer 10 advertisers per hotel across platforms on averages CPC bidding relies on a real-time auction mechanism that allows hotels or online travel agents (OTAs) to define a maximum pay-per-view visitor referral to their site. While the best price for a room will always be listed at the top, the highest bid receives a higher page ranking for a selected hotel and, therefore, better visibility. Actual CPCs are determined by the competitive forces reflected in the willingness of OTAs or hotels to match a given bid based on a pre-defined budget and maximum bidding price. OTAs and hotels can choose to let trivago automatically manage their bids to increase convenience and usability. This is particularly useful for smaller hotels. For trivago, the bidding model generates highly stable cash flows- if a bidder drops out, sales are still guaranteed through another auction participant. Source: trivago earnings call, Q1 2017. become the starting point for 30% to 50% of hotel-related the market will dominate the top of the funnel. We want online searches and the area was still growing rapidly. to be that player." Therefore, firms invested heavily in building brand rec- ognition to capture market share. trivago and its major meta-search competitors, Kayak and TripAdvisor, Starting Up: 2004-2009 engaged in a constant and fierce fight to serve as the "front gate" for the customer. One key driver of compe- The Initial Idea tition in these two-sided platform markets was found In early 2004, Rolf provided the initial spark to what in cross-site network effects. In other words, the value would become one of Germany's biggest start-up success generated for travelers increased with the number of stories of the early twenty-first century. He called Peter hotels listed on a platform, as they therefore had more Vinnemeier and Stephan Stubner. These close friends freedom of choice. On the other hand, an active pres- had studied together and worked together as co-founders ence on trivago became more attractive for hotels and of ciao.com, a review-based evaluation platform for OTAs, as more travelers could be reached. This influ- products and services from mobile phones to hotels. enced the share of marketing budgets committed to The three met for breakfast at Tresznjewski, a restaurant trivago. Consequently, for trivago and its competitors, in the cultural heart of Munich. At that breakfast, Rolf the number of users was highly significant, as higher pitched his business idea to his friends: creating a "dig- numbers resulted in increasing returns to scale and ital Wikipedia for travel" in the form of a web-based, enhanced profitability given the sites' highly scalable focused community for sharing travel experiences. The infrastructure. website would be monetized through a CPM payment Thus, trivago developed in a fast-pace, competitive model for affiliate marketing banners, which could be environment where it wanted to play the leading role. placed next to the focal content ranging from personal Rolf stated: "In two, three, or four years, one company in travel guides and tips to travelogues, evaluations, andpictures. The idea was met with immediate approval, approach them whenever they needed support or assis- as Peter and Stephan were both strong believers in the tance. The founders favored informal and constructive power of user-generated content, a belief based on their direct peer-to-peer-communication not only among experiences at ciao.com. themselves but also with and among their employees. As Rolf's proposal came during the golden era of online one of the first employees stated: marketing. Advertisers were willing to pay a three-digit price per thousand advertising impressions (CPM) and What made trivago special from the first day was the feel- many young firms were entering the online-marketing ing of family. The founders wanted us to reach our object field in order to take advantage of the high returns. tives, but they also wanted us to enjoy working for trivago Driven by their entrepreneurial spirit, Rolf, Peter, and and being part of the team. Stephan soon started working on the initial idea in a single-room office under a garage in Dusseldorf. Given Finding Product-Market Fit their limited resources, they focused on bootstrapping Success did not come easily. By the end of 2006, advertis- their endeavor to build a great product that would ers' satisfaction with their advertisements' performance enable them to at least pay the bills. on trivago's site was decreasing, as the advertisements gen- In June 2005, trivago GmbH was founded and the erated too few direct bookings. The devil was in the details. first beta version of trivago went live in Germany. For example, advertised hotels were often unrelated to the content on trivago's site. As advertisers were unable to Team and Working Mode in the Early Years find a solution, trivago developed a software algorithm to In early 2006, Stephan left trivago and Malte Siewert, also match hotel advertisements with site content. Moreover, a former fellow student, joined the firm as a co-founder. as the different advertisements often featured the same Moreover, a first business-angel funding round was com- hotels at different prices, trivago created a database that pleted, which also provided trivago with valuable contacts bundled the advertisements together, which allowed it and expertise. Later that year, Rolf as CMO, Peter as CTO, to display different prices for the same product without and Malte as CFO started looking for employees to support showing double entries. This marked the birth of trivago's them in their respective functions. Employees were usually price-comparison feature. In addition to hotel advertise- hired as interns and were offered a permanent position after ments, trivago experimented with a variety of other prod- successfully completing an internship. By early 2007, the ucts (e.g., flights, holiday packages) and tried to license first interns had been permanently hired. At this early stage, its software algorithm to generate additional revenue. everyone was still doing a bit of everything and the employ- Moreover, the company began to expand internationally. ees supported one another wherever possible. It was present in the United Kingdom, Spain, France, Within a short period of time, the small trivago team Sweden, Poland, and Italy by the end of 2007. managed to develop a passionate and dedicated work- 2008 was a groundbreaking year for trivago. An addi- ing mode, which was highly result oriented and perfor- tional funding round, which aimed at supporting trivago's mance driven. All work pursued at trivago had to directly growth and internationalization, was completed. The funds and measurably affect the business. The founders made backing trivago contributed additional industry expertise important decisions together and although they did not and network contacts. Nevertheless, trivago's revenue was always agree, each of them was committed to accepting declining, and the founders felt a need to reconsider their the majority vote. In addition, decisions were based on ambitions and search for ways of securing the company's analytics rather than on emotions. In order to pursue liquidity. Despite the availability of funding, the founders a project and allocate resources accordingly, the found- insisted that the business needed to quickly pay for itself. ers had to be convinced of sufficient "short-term" return In other words, subsisting on venture capital was not an potential. At the same time, early employees welcomed option. Therefore, during a "legendary management off- the positive relationships among each other and with site" meeting in 2008, Malte, Peter, and Rolf pondered the the founders, who were always accessible and open to company's future. Rolf described the situation: new ideas. The founders' unrestricted accessibility was We had not yet understood that people were visiting our underpinned by the fact that the door to their office site for the price comparison, not because we were the was almost always open. Even though the founders "travel wiki" we aimed to be. That was when we realized expected their employees to work independently on we were doing too many things at the same time . . . software their tasks and to equip themselves with the knowledge licensing, flights . . . We realized that if we continued like they needed, employees were encouraged to directly that, trivago would never amount to anything.On the basis of the firm's strengths, the founders frequently change office locations, as capacity limits decided to limit their business operations to meta-search were quickly reached. Hence, in December 2011, after and price comparisons for hotels only. To manifest this having changed office locations twice since its founda- focus, they formulated trivago's mission statement: "to tion, trivago moved for the third time. Its new office was be the traveler's first and independent source of infor- located at "Bennigsen-Platz" in Dusseldorf. In terms of mation for finding the ideal hotel at the lowest rate." interior design, trivago favored open-space offices. The This mission statement was to guide all future business meeting rooms were individually designed and fur- decisions. Three months later, trivago relaunched the nished, and often named after employees' hometowns. entire website. Notably, by the end of 2008, the company Relaxation areas, table-soccer games, and a climbing wall had extended its market presence to Russia, Greece, and were introduced for recreation purposes, while compli- the Netherlands, and it had 19 employees. At the time, mentary drinks and healthy snacks were made avail- more than 2.5 million visitors per month were searching able in trivago's shared office kitchens. In addition, gym 225,000 hotels around the globe. classes were provided free of charge. In conjunction with the mission statement's introduc- In 2012, 315 employees already called trivago their tion, the founders intensively discussed brand-building working home. External growth also remained strong opportunities. One important reason for doing so was and, by the end of 2012, trivago was present in 33 markets, to become more independent of Google and its domi- 13 more than at the beginning of 2010. At that time, nant search-market position by increasing the ratio of the period of significant organizational growth was branded traffic. The founders knew that trivago could topped off with Expedia, Inc. announcing that it would only be travelers' primary and independent source of buy a 61.6% strategic stake in trivago, making the com- information if travelers considered trivago before any pany the first German start-up worth more than one other source. For this purpose, trivago needed to be a rec- billion dollars. The Expedia deal did not affect triva- ognized brand. At the time, TV spots were the medium go's appetite for growth. In the ensuing years, trivago of choice for reaching a broad audience. Convinced of expanded into 22 new countries across Europe, South the value of TV advertisement, trivago invested half America, Africa and Asia, adding 150 new partner of the capital it had previously collected from investors. websites and hotel chains to its price-comparison net- The plan worked and trivago's advertising spots struck work. The increase in the number of hotels listed in its a chord with the German TV audience. The TV spots database from 700,000 in 2013 to more than 1 million were a key driver of trivago's success, as reflected in the in 2016 led to an increase in brokered hotel rooms to year-on-year revenue growth rate of nearly 400% from 1.4 billion. Even though trivago strongly insisted on 2009 to 2010. a one-office policy, it opened up two innovation cen- ters, one in Leipzig, Germany, and the other in Palma de Mallorca, Spain, in 2013. However, management Growing Without Growing Up?: insisted that new offices should only be opened if 2010-2016 regulatory or entrepreneurial (e.g., innovations apart from the core product) interests justified it. Moreover, Growth Numbers and Office Locations the new offices were kept as small as possible, as In 2010, trivago took its TV presence international and the Dusseldorf office was to always be "home" to at aired TV campaigns in five European countries. That least 90% of trivago's employees. By 2014, trivago had year, the meta-search engine could compare hotel prices become the world's leading hotel meta-search com- from more than 100 websites. Every second person in pany. The trivago growth engine was further fueled by Germany and Spain recognized the trivago brand. In the skyrocketing employee numbers, which rose from fact, Spain became trivago's strongest market in 2011. 571 in 2013 to more than 1,200 in 2016. Moreover, in 2011, trivago launched TV advertisements The increasing number of employees soon started in the United States and Brazil to challenge the "Benningsen-Platz" office's capacity. The company's internationalization, marketing activ- New office space was continuously added by spread- ities, and increasing product complexity fueled the need ing employees across multiple floors and, later, to for more manpower. With 46 employees in 2010, trivago surrounding buildings. During this time, however, the had already more than doubled its workforce from 2008 top management team was alarmed by the increase and, in 2011, the company welcomed employee number 100. ing physical distance among employees. The founders The growing number of employees forced trivago to feared that it could lead to communication challenges,social detachment, and empire building, which could negatively affect day-to-day cooperation, trust build- ing, and information exchange. Slower working and learning processes were the dreaded, potential conse- quences. Therefore, in early 2016, trivago announced that it had commissioned the construction of a trivago campus in Diisseldorf, where all employees would be reunited in 2018. Workforce Characteristics Members of trivago's workforce shared many charac- teristics from the beginning. For example, most of the employees were young, and they came from diverse cul- tural and educational backgrounds. The hiring of inter- national talents was seen as particularly advantageous. As one employee outlined: We always looked to recruit talented people from around the world who are still in the early stages of their careers and reective. We need pragmatic people with an agile mindset and a willingness to continue learning. The fact that these employees were willing to leave their home countries and move to Diisseldorf implied that they were adventurous, willing to take risks, and able to adapt to a new environment. Moreover, as many new employees were new to Dusseldorf without social contacts outside the rm, employees often quickly developed friendships, which contributed to trivago's team spirit. These features were all greatly appreciated in the entrepreneurial environment of trivago. In contrast, more experienced employees who had been socialized in corporations were often seen as difcult to integrate, as they were frequently already shaped by rm cultures that promoted rigidity, less openness to new ideas, and strong career aspirations. Despite trivago's established practice of hiring young professionals who did not have extensive experience with other companies and the fact that the company generally wanted to promote internally, hiring some experienced personnel was unavoidable from a skills perspective. Certain external hires were seen as vital, as trivago's size required increasingly advanced man- agement and leadership capabilities. Moreover, these professionals were expected to be able to bring in new managerial impulses for professionalizing the organiza- tion without making trivago \"corporate\" in its working style. In 2015, the top management team was expanded beyond the group of founders. Andrej Lehnert and Iohannes Thomas were promoted from within trivago to become managing directors. Both had been with trivago since 2011. Moreover, Axel Hefer left the German online furniture retailer Home 24 AG, where he had served as COO and CFO, to join trivago in 2016. Like the three founders, Axel had studied at HHL Leipzig Graduate School of Management. Initially, Axel led the Country Development department, but he was soon promoted to the top management team. By the end of 2016, the top management team's com- petencies were distributed as follows: Axel was CFO and the managing director for nance, legal and interna- tional; Andrej was the managing director for marketing and business intelligence; Iohannes was the managing director for advertiser relations, business operations, and strategy; Malte was the managing director for trivago's marketplace-related business; Peter was the managing director for technology; and Rolf was CEO, and respon- sible for products, people, and culture. Organizational Structure In 2010, departments and teams began to evolve on an as-needed basis. While departments were expected to function with a high degree of freedom, an increasingly specialized range of tasks required more cross-team coordination. Compared to the early years in which each employee covered a broad range of issues, job proles became particularized and, therefore, changed signifi- cantly. Hierarchies and clearer responsibilities began to emerge within each department and team. In terms of leadership structure, the chain at trivago was basically as follows: managing directors were responsible for department leads, department leads were responsible for their team leads, and team leads were responsible for their team members. Moreover, a basic matrix structure evolved in which country-development teams were sup- ported by functional teams active in, for example, mar- keting, technology, nance, and HR. However, the founders were wary of formal manage- ment and control structures, which they felt could limit subsidiarity and compromise decision speed across the organization. They feared that increasingly specialized tasks could lead to silo-based thinking, and that evolv- ing hierarchical structures could give rise to status asym- metries in which individuals perceived discrimination in the supply of information and the degree of decision autonomy depending on their hierarchical status. To counter the emergence of such asymmetries, the found- ers tried to nurture an \"absence of ego\" mentality. They believed that such a mentality was vital for the success of a knowledge-driven business in which the accessibility and ow of information and data formed the basis of competitiveness. One step towards an \"absence of ego\" mentality was the founders' ofcial announcement that trivago would remain a company without job titles. As one employee explained: At trivago, it is important to respect others' knowledge and inspiration, not their titles. Decision processes should not be slowed down because an individual feels a need to get approval from various levels. Instead, the individual should be empowered to make his or her own decisions and work independently. The ofcial statement from top management seemed necessary, as employees had started to create titles on their own. One employee described this period: \"It was a bit weird . . . We had interns calling themselves 'Senior Vice-President: while their team leads did not have titles themselves.\" The employees' reaction to the abolishment of titles took the form of a series of questions: \"If we do not have titles, how do I emphasize the expectations linked to my position?\Exhibit 6 trivago's Core Values OUR CORE VALUES FANATIC LEARNING UNWAVERING POWER O ENTREPRENEURIAL OF PASSION S PROOF AUTHENTICITY TRUST trivago Trust: We want to build an environment in which mutual trust can develop that gives employees the confidence to discuss matters openly and act freely. Authenticity: We aim to be authentic and appreciate constructive and straight feedback. Entrepreneurial passion: We believe that entrepreneurial passion drives us forward to continuously try out new and Improved ways of thinking and doing. Power of proof: We believe that data, used correctly, can lead to empirical, proof-based decisionmaking across the organi- zation. Focus: We focus our energy on our mission of being the traveler's first and independent source of information for finding the ideal hotel at the lowest rate. This mission drives where we spend our time and focus. We believe that multiple small, incremental improvements toward this goal add up to long-term success. Learning: We never stand still and choose to remain open minded and inquisitive. We try new ideas and continue to chal- lenge received wisdom. Source: Image-trivago (2017), text-trivago IPO prospectus (2016).to a hands-off approach, which was an important require- ment for the founders. Therefore, trivago continued to operate independently and its founders remained in place. trivago continued to finance its expansion solely through its own prots, such that it operated on a break- even basis. As in the early trivago days, decisions regarding investments in new initiatives and growth were based on an analytical trial-and-error principle: initiatives needed to be analytically sound and the potential for short-term revenue had to be visible. Initiatives were then run through a test phase to obtain proof-of-concept data. Therefore, decisions were data-driven whenever possible. If initia- tives did not work out as planned, their initiators could either make justiable improvements or stop the projects. Employees, regardless of their position, were expected to constantly challenge whether a task or activity made sense. Whenever certain tasks or activities were proven to add no value, employees were expected to either adapt or terminate them. In this context, failure was always seen as an opportunity to learn. As one developer stated: \"You need to be willing to pay for knowledge.\" In 2015, to emphasize trivago's \"absence of ego\" men- tality and to decrease the perceived distance between employees and the managing team, the managing direc- tors moved out of their shared ofce and spread their work stations across the open-space ofce areas, where they could mingle with their respective teams. The for- mer management ofce room, named \"Leipzig\" in honor of the place where the founders rst met, was then used for weekly management meetings. In 2015, trivago also introduced a yearly Management Workshop and a Strategy Summit. During the Management Workshop, managing directors developed the compa- ny's overall strategic priorities for the upcoming year. Those priorities were then presented and discussed in a subsequent Strategy Summit attended by the develop- ers. Generally, these strategic priorities were expected to support trivago's mission as formulated in 2008 and to be compatible with trivago's core values. Moreover, based on a critical review of the previous year, they included ideas for adjustments necessary to achieve the mission. Finally, strategic priorities were to be viewed as guiding lights rather than xed goals. Eventually, the tasks related to these strategic priorities were not delegated from top- down. Instead, the teams developed their own missions and strategic priorities based on the overall strategic guiding lights, trivago's mission statement, and triva- go's values. As Rolf stated: \"At trivago, we emphasize the need to convince, not command, people. Therefore, we do not enforce strategic initiatives from the top down.\" This need to convince instead of command was also reected in how meetings were conducted. Employees were granted freedom to only attend meetings if they individually perceived them as value-adding. Systems and Processes Recruiting. The need to increase the number of employees amplified the recruitment efforts required from each department. In order to let each department concentrate on its core tasks, a Human Resources (HR) department was established in early 2010. HR began to introduce a centralized recruiting process that same year. Ideas for systematizing job advertisements and the appli- cation process were developed by HR in 2011, and a sys- tem was introduced in the following year. In 2014, a joint \"Talents and Organization\" (TO) team, the result of the consolidation of HR and the \"Strategy 8c Organization\" department, was established to focus recruiting, devel- oping, and retaining talent, as well as the best ways of sharing the trivago identity in a rapid-growth environ- ment. The department was also charged with anticipat- ing needed changes in trivago's organizational design and introducing value-conforming measures. The aim was to ensure that the growing organization would still function and that it would not \"become corporate.\" In the year of its formation, TO introduced a structured, week-long, onboarding process. On their rst day, new hires ran through an extensive process aimed at ensur- ing that everyone understood the trivago values and why they were vital for the organization. The new hires also familiarized themselves with the challenges of different departments through practical case studies designed to help them understand the various roles and responsi- bilities. One of the managing directors took the time to welcome each new group of employees and to personally explain what trivago represented. TO also introduced a structured offboarding process aiming at understanding why employees left the company and where improve- ments could be made. In 2014, more than 260 people were hired, while the number of applications exceeded 45,000. While trivago had no rigid recruitment criteria, cultural fit with the company was key, especially as the need for experienced hires with specialized functional expertise increased with continuing professionalization. As one developer stated: Ifyon are someone who needs clear directionfor this prob- lem I go to '21\" and for another problem I go to \"B,\" you will not be happy here. Here at trivago, you always need to nd new approaches and gure out who can help you your- self Also, we do not have a hierarchy of communication you can approach anyone who might be of help. Therefore, the right traits, which were labelled as core. In 2012, HR introduced a customized 360-degree "trivago skills" (e.g., intrinsic motivation, positivity, trust feedback tool. Initially an Excel document, the tool in others) and "universal skills" (e.g., taking ownership, developed over the years into a professional in-house welcoming of change, determination) were viewed as peer-evaluation software that was constantly adapted. crucial for trivago employees. As of 2014, the "trivago 360" reflected the six trivago values and the universal skills, which served as the Performance Evaluations, Rewards, and basis for evaluations of employees' individual job per- Employee Development. Given the continued formance (Exhibit 7). Twice each year, every employee growth in employee numbers and departments, trivago had to be provided with feedback by the person to introduced additional measures to reduce the risk of whom he or she reported. The content of that feedback status asymmetries and strengthen the entrepreneurial was based on input from the employee's direct peers. Exhibit 7 360-degree Feedback Criteria trivago-value contribution and trivago skills 0 360 O VALUE CONTRIBUTION IMPACT . Your work has an bry YOU CREATE VALUE. TEAM CONTR BUTION . You as cost Being postively to the QUANTITY . The amount of TRIVAGO SKILLS TRUST PON TIVITY - Your INTEGRITY - You rebwally, hereshape YOU CREATE AN ATMOSPHERE OF TRUST TEAM PLAYER . You a jay berg under TRUST IN OTHERS . World you codalyons shitsp once in thee knowledge, which and obits AUTHENTICITY OWNING UP TO YOURSELF - YOU ARE YOUR TRUE SELF AT TRIVAGO Pont when it comes to your decision SPEAKING FROM THE HEART . ADDRESSING ISSUES . YOU FOR yev GOING INTO IMPORTANT DISCUSSIONS - You Fend off adirty your pam of view. ENTREPRENEURIAL INTRINSIC MOTIVATION -Solos what youdo andrew COURAGEOUS [TRIAL & ERROR) - ON PASSION AVE A MINDSET O CHALLENGING STATUS QUO . Dreamsto Be need POWER OF PROOF DATA DRIVEN APPROACH . Never mating dumps DETAIL ORIENTED . You are Better Parts FOUR ACTIONS AND DECISIONS HAVE A SOUP FOUNDATION. EFFECTIVE CONCLUSIONS . Yet moreBey STRUCTURED THINKING - You are capable of tracking down long UNWAVERING FOCUS DOING THE RIGHT Thereas - You consciously spend your tans or dong LISTANCY - you wat, and way of working OPTIMIZATION - You need to optimize your work by min ANAGING EXPECTATIONS - You manage the expectations PRODUCTIVITY . You get into a rhythm that alows you to better locus be products RESPONSIVENESS - You respond to inputinstinct runner FANATIC LEARNING CURIOSITY - You thing EXCHANGING FEEDBACK - You provide conmust YOU SEEX TO GAIN AND SHARE KNOWLEDGE WELCOMING CHANGE - You me able to plights DEVELOPING YOURSELF - Youthe SHARING KNOWLEDGE-Y. continuedExhibit 7 360-degree Feedback Criteria (continued) trivago-universal skills UNIVERSAL SKILLS COMMUNICATION CLARITY . You can com and check that you were undermood ACTIVE LISTENING - You listen attentively to others and show interest in SKILLS that's bring curvearicured, then you give your input. CONVEY INFORMATION EFFECTIVELY MIGHT TIMING & AMOUNT . You know when to com NIGHT CHANNEL - you select the appropriate for and channel for poor d can judge the level of details needed. INGLISH SKILLS . You feel comfortable spying or company logonge wanton Apoo English both verbaly and in writing LEADERSHIP TAKING OWNERSHIP - You seek whip for responsibilities, take EMOTIONAL INTELLIGENCE . Yes have a good taste ofothers Bemoor ubiley for there and cool dusty wain feditions QUALITIES STEPPING IN - Yes are good at judging wihustiora MPOWERMENT - You provide the knowledge, structure and a when needed at is nodded to achieve the ideal autcorsa INSPIRING - You are an bropardon to tear through you RECOGNITION . You provide the knowledge, mucture and nowledge andior unperience. that is handed In achieve the ideal outcorse CAPABILITY TOO% PROFICIENCY . You are proficient in using the tich mo tored for YOU HAVE DEVELOPED THE NEEDED Independently both your work and internal communication, APPLYING EXPERIENCE . Wor experience enables you to pick TRIVAGO KNOW HOW - You been the press EFFORT HARD WORKING - You take your tasks MINATION - You give well you have reached your goal energy in your work, YOU ALWAYS DO YOUR VERY BEST. EAGERNESS TO EXCEED - Yes have high quality standards and try to go PRO-ACTIVITY - Now we highly ung brave and beyond Source: trivago (2017); the original trivago 360-degree feedback poster has been graphically adapted for the sake of readability. The aim in this regard was to enable a fair, unbiased Prior to the introduction of the "trivago 360" tool, no feedback process and to reduce employees' depen- mandatory, standardized feedback mode existed. If an dence on the people to whom they reported. Instead employee received feedback, it usually solely reflected of appearing as superiors, employees with leadership the evaluation of the person responsible for him responsibility were encouraged to function as mentors. or her. Exhibit 8 Online Hotel Market-KPIs, Size, and Potential Market potential 6% CAGR EUR 51,9 bn based on 15% global $415 bn Large global hotel bookings market take-rate of hote industry bookings 33% Low online penetration 10.8% High online hotel bookings growth EUR 17,6 bn take-rate on 56% Highly fragmented market online hotel bookings EUR 0,75 bn trivago revenue Source: trivago earnings call, Q1 2017.Trivago established and openly communicated its philosophy of trust-based working hours and vacation days. The company's employees had neither a xed num- ber of working hours nor any limitations on the number of vacation days. This philosophy was mainly attribut- able to the founders' conviction that how much someone worked was not an appropriate measure of performance. As long as results were achieved on time and with the expected level of quality, the amount of time invested in a certain task did not matter. To keep employees motivated and aligned, trivago further professionalized its incentives in 2015. One step was the introduction of a structured \"Salary Review Process,\" which was intended to align compensation levels and remove differences among departments. The process itself was linked to the trivago values via the 360-degree feedback tool. The aim was to incentivize value-conforming behavior in order to foster the living of the trivago spirit and to move authority over compensa- tion into the hands of the group. Furthermore, two types of ad-hoc bonuses were introduced in 2016. Executives with direct leadership responsibility could grant an instant bonus to reward exceptional efforts that went well beyond expectations. Such rewards were designed to support employees' intrinsic motivations and replace variable salary components, which were seen as extrin- sic motivators. Extrinsic motivators, in turn, were not viewed as appropriate tools for motivating people in the long term. Moreover, each employee received a monthly bonus allowance with which to reward co-workers. As Rolf explained: I believe that the era of managing systems based on extrin- sically motivating people is over. The idea that people do not want to work is outdated. In a knowledge-worker environment, you cannot really control people anyway. Therefore, the only viable option is to make sure people are intrinsically motivated to achieve something. In 2015, TO introduced a management-development training program in response to trivago's preference for internal promotion. With an average employee age of around 28 and the company rapidly growing, many executives with leadership responsibility had to quickly adapt to their new responsibilities. Although trivago viewed personal development as a \"pull responsibil- ity\" (e.g., it would pay for self-selected seminars ifthe Exhibit 9 Hotel Market FragmentationHotel Chains versus Single Hotel Room Supply. 2014 (in '000} 6,600 North Am erica Europe Asia Pacic Latin America Middle East and Africa l I Room supply, single hotels I Room supply, hotel chains | Source: Adapted from ESSEC, Graf {2016} based on STR Global {2014}. Exhibit 10 Price Premium, Branded Hotels, 2015 Price premium in EUR per hotel category Economy Midscale Upper full service 19 27 Luxury Brand price premium per room vs. unknown or not preferred alternative 15.6% 14.3% 14.1% 13.4% 13.3% 12.7% 8.9% Hilton Le Sheraton Sofitel Radisson Mariott Crowne Meridian Plaza Source: Hotel News Now based on BDRC Continental (2015).need was reasonably justied}, the company offered its own \"trivago Academy,\" which covered a variety of topics chosen to inspire employees and broaden their thinking. As one developer accentuated: \"You can find the knowledge you need somewhere in the com- pany, but we expect you to equip yourself with what you need!\". Communication. The increasing specialization and rising headcount affected decision speed. One devel- oper responsible for multiple country teams discussed this issue: One of the greatest issues I am ghting against is the fact that we are getting slow in all departments. That seems to come naturally with size . . . We can decide to do some- thing; but when I ask about it later, nothing has happened because people are waiting for a meeting or someone is on vacation. Now there are too many people involved, which was never an issue in the past. Similarly, communication ows started to slow. One department lead described this problem: In the old days, I knew who was doing what and could just walk over there if I needed something . . . Today I sometimes do not even know where to go!r This is why we need to continuously strive to also professionalize the way we keep our culture alive. Exhibit 12 Planned PostIPO Shareholder Structure. 2016trivago NM Ownership interests, trivago Expedia lodging partner services S.a.r.l Exhibit 1 1 Hotel Room DistributionBackground Information Demand for hotel rooms is often seasonal and price elastic In most regions, guests stay an average of two nights. As a result, hoteliers face short sales cycles and intense pressure to distribute rooms. Effective room distribution is crucial, as stable occupancy rates have a signicant leverage effect on protability due to a high share of xed costs for personnel and maintenance. In addition, distribution channels for hotel rooms consist of several disintegrated legacy technology platforms, such as pre-Intemet central reservations systems (CBS), global distribution systems (GDSL telephone booking systems, and other offline sales platforms. Online channels consist of online travel agents (OTAs), the hotels'own booking engines, and meta-search sites. In general, channels differ in terms of technical complexity, margins, and average booking terms (e.g., last-minute versus well in advance), but can all contribute signif- icant revenue? Therefore, hotels face pressure to simultaneoust manage multiple channels using distinct IT systems. Source: Case authors. To keep direct communication owing and avoid information silos, trivago implemented a set of com- munication and coordination tools. One was known as \"trivago talk,\" a kind of an internal social-media applica- tion. It was introduced to allow for the sharing of com- pany information and easier identification of peers. The tool was centered around work-related topics, such as announcements of new team members, discussions of technical issues, and invitations to joint leisure activities, such as soccer training. \"trivago knowledge,\" a company Founders 8.6% {A-sh a res) 59.7% (B-shares) Share classes A-shares = Economic interests B-shares = Voting interests Source: trivago IPO prospectus [2016]. 31.7% (B-shares) Trivago N.V. wiki, was developed to consolidate information on all departments, teams, and current and past projects and initiatives. \"Slack,\" an instant messaging tool for teams, was introduced in 2015 to ensure day-to-day communi- cation and increase communication efciency. Finally, \"trivago task\" was introduced to allow for jobs to be assigned to service functions, such as requests for new mail accounts. Given its awareness of the potential for silo thinking, inertia, and stereotyping in daily work routines, and its desire to strengthen the sense of community and trans- parent communication, trivago organized four events for the entire company on a yearly basis: a Christmas party (introduced in 2007), a trivago Update Meeting in the spring (introduced in 2008), a company trip (introduced in 2010), and a summer party (introduced in 2015). The Update Meeting began with the managing directors pre- senting the rm's strategic priorities for the year and ended with a party. The trivago trip was a four-day trip designed as a cross-departmental bonding tool. The trip focused on fun activities that were oriented toward con- necting people across departments. Each team was also encouraged to regularly organize its own events, such as bowling or team dinners. For this purpose, an event bud- get of EUR 30 per team member was available monthly. Twice each year, this monthly budget was used for events at which participating members of all teams were mixed randomly. Exhibit 13 Su pervisory Board Members The following people were members oftrivago's Supervisory Board as ofJanuary 201?. Name Ag. Supervisory Board members Mleke S. De Schepper I 41 Peter M. Kern I 49 Dara Khosrowshahi I 47 Frdric Mazzella | 40 Mark D. Okerstrom I 43 Niklas ostberg | 36 David Schneider I 34 Pursuant to the Amended and Restated Shareholders'Agreement, Mrs. De Schepper. Mr. Kern, Mr. Khosrowsha hi. and Mr. Okerstrom were selected to serve as Supervisory Board members by Expedia. Mr. Mazzella, Mr. Ostberg, and Mr. Schneider were selected to serve as Supervisory Board members by the founders. Source: Tabletrivago company website {201?}, textbased on trivago IPO prospectu s (2016). In 2014, TO introduced a yearly company-wide sur- vey that asked each staff member to identify company strengths and areas in need of improvement. The T0 team was in continuous dialog with all departments in order to be close to the needs of employees and anticipate changing company needs. As one HR consul- tant outlined: \"It is part of my job to have my ears on the ground, as our employees know what needs to be done.\" Many TO projects resulted from trivago's bottom-up approach to employee involvement and communication. As one TO team member stated: We constantly need to ask ourselves and others whether a standardized tool or process is really the best way to solve a certain issue. When implementingprojects, we must con- vince people, which requires continuous communication and explanations. Whenever possible, new tools and suggestions for processes were tested in one or two departments. This was seen as important, as T0 would only proceed with a company-wide rollout if the testing department fully backed the project and was willing to publicly support it based on the perceived benets. Even then, TO typically produced tools that could still he declined by individual departments and teams. One developer said: \"If I do not see the value in something that has been proposed, I just do not do it. Nobody has ever tried to argue with me about it.\" Another opportunity for feedback and discussion initiated in 2015 and coordinated by T0 were \"trivago Fridays.\" These events were regular Q&A panels that were dedicated to particular company topics. Prior to each panel, all employees could hand in and vote for questions to be discussed at the panel. At least one man- aging director took part in each trivago Friday and was available for questions. The focus on establishing outlets for information exchange not only aimed to strengthen informal and socially grounded relationships, but also to allow for direct communication and feedback across the entire organization, independent of responsibilities and role expectations. trivago's IPO: Not the End but the Beginning Toward the end of 2016, trivago announced its plan to go public and to do so quickly. When addressing potential investors, Rolf stated: \"You will be investing in a company with an amazing culture with so much focus on learning that, regardless of what happens in the future, we will always be able to adapt.\" In this vein, trivago's CFO clarified the company's growth ambitions: In our business, there is a trade-ojjf between growth and protability However, from our perspective, it would not be a good idea to aggressively improve prcy'itability while sacrificing growth. This is because our growth, as such, is more than a revenue gure. On December 16, 2016, Rolf, Peter, Malte, and Axel rang the NASDAQ stock market opening bell. The room was filled with trivago employees, all of whom repre- sented the group effort that had made trivago's success possible. At trivago, the IPO was seen not as the end but as the beginning of a new chapter in trivago's path to continued growth. For additional information see Exhibits 814. When Rolfs mind again turned to the many people who made trivago the firm it had become, he felt a sense of renewed energy. He stopped pondering and focused on the challenge aheadthe need to \"stay entrepreneurial\" and avoid \"becoming corporate\" in order to secure gture growth and success. Exhibit 1 4 Shareholder's AgreementBackground Information \"The Amended and Restated Shareholders'Agreement contains certain provisions that could result in the departure of certain of our senior management. li' the Founders, collectively, hold less than l596 of our outstanding ClassA shares and Class B shares (calculated as if all securities convertible, exercisable or exch an ge- able for Class A shares or Class B shares had been converted, exercised or exchanged), they lose certain contractual rights to nominate members of our management board. in such case, our supervisory board may also request from the Founders, the resignation of members of the supervisory board who have been nominated by the Founders. in addition, the general meeting of shareholders, which is controlled by Expedia, has broad discretion to remove members of our management board with and without cause, irrespective of the Founders' holdings. if the general meeting of shareholders h as reasonable cause, as dened in the Amended and Restated Shareholders'Agneemen t, forsuch removal, Expedia has the unilateral right, subject to certain exceptions, to purchase all of su ch members sh ares.\" Source: trivago IPO prospectus (2016}