Organizations operate as open systems. They try to maintain effective relations with the environment and use the information they obtain in the course of their performance to strengthen their market and organizational position. “Open systems theory is a modern systems-based change management theory designed to create healthy, innovative and resilient organizations and communities in today’s fast changing and unpredictable environments” (Open Systems Theory, n.d.).
For many organizations in the software development industry, being an open system has become a matter of competitiveness and effectiveness. Microsoft is one of the many software companies that maintain an image of an open system for the purpose of achieving greater strategic results. Unfortunately, Microsoft is often torn between multiple open system priorities, and it is time for the company to find a new balance of customer involvement and employee engagement in the development of innovative software products.
Microsoft as an Open System
It is extremely important for modern organizations to be flexible and adaptable to environmental change. The systems theory represents a valuable perspective on organizational change and competitive evolution of companies (Amagoh, 2008). Yet, analyzing the way organizations operate and adopt open systems consciousness is impossible without understanding what constitutes an open systems approach. Basically, an organization operates as an open system, when it can easily maintain permeable boundaries with the environment, consider and use the feedback obtained from the environment, develop a culture of shared values, foster interdependency of its crucial organizational elements, and rest on the assumption that customers must be the company’s strategic partners (Amagoh, 2008).
The open systems approach at Microsoft grows from its vision, mission, and key growth strategies. Leadership plays one of the fundamental roles in promoting the company’s openness in its relationships with the environment. Microsoft monitors the environment for the most talented workers and makes everything possible to hire the most prospective talents from all society groups (Microsoft, 2014a). Employee engagement represents an essential component of the open systems philosophy at Microsoft.
According to this philosophy, employees function as a link between the company and the environment and bring their knowledge, talent and skills from the outside to contribute to organizational improvement (Microsoft, 2014a). Interdependence further operates on the basis of the existing employee networks and employee resource groups, which are closely linked to the company’s strategic goals and are based on the principles of social networking (Microsoft, 2014a). Microsoft is particularly successful in its striving to bring together the diverse talents of its varied workforce and build innovative products to satisfy customers’ most advanced needs.
The fact that customers act as partners in the development of new creative products reinforces Microsoft’s commitment to open systems theories and frameworks. According to Microsoft (2014b), being customer-oriented is the focus of its business and organizational activities. The company is profoundly influenced by the feedback obtained from its Customer and Partner Experience Program, which represents one of the strongest links between Microsoft and its strategic environment (Microsoft, 2014b).
The Customer Experience Improvement Program is used by customers to provide their feedback about the use of Microsoft products and services (Microsoft, 2014b). Unfortunately, despite the continued business success of Microsoft, it cannot always manage and resolve the emerging conflicts between the various elements of its organizational system.
Problems with the Open Systems Approach
As Amagoh (2008) writes, the systems theory does not offer any guidance as to the way companies should prioritize the organizational constituents that are in conflict. For Microsoft, these are the customer involvement and employee engagement components. On the one hand, Microsoft claims to be a customer-oriented organization, and customers can use a variety of mechanisms to share their product and service experiences with Microsoft. On the other hand, Microsoft fosters employee engagement as a means to utilize workers’ creative and talent potentials.
Yet, it is still unclear how these two aspects of open systems performance can be balanced and reconciled. It seems that Microsoft can develop a more effective organizational system by re-channeling employee creativity and talent in ways that satisfy customers’ needs and meet their expectations. Therefore, Microsoft should develop new policies and systems to ensure that customers and employees constantly interact. Being an open system is not simply about being open to the environment. The organization must be ready to keep in touch with the environment, in which it operates. Consequently, Microsoft should develop new standards of communication between employees and customers, turning them into a cohesive force and a source of the company’s sustained competitive advantage.
Conclusion
Microsoft remains one of the brightest examples of systems approach to organizational development and growth. It is open to the environment and uses the feedback provided by stakeholders, including customers. The latter act as full partners in the development of innovative products at Microsoft. Unfortunately, the open systems theory does not always provide opportunities to resolve the emerging conflicts among various elements of the system. Today, Microsoft should develop new policies and solutions to ensure that customers and employees become a cohesive innovative force.
References
Amagoh, F. (2008). Perspectives on organizational change: Systems and complexity theories. The Innovation Journal: The Public Sector Innovation Journal, 13(3), 1-14.
Microsoft. (2014a). Key growth strategies. Web.
Microsoft. (2014b). Microsoft customer and partner experience. Web.
Open Systems Theory. (n.d.). Open systems theory. Web.
The contemporary business world is characterized by a high level of competition. Various individuals and groups have engaged in conducting business. This builds up the level of competition as businesses engage in the production of relatively the same goods and services.
This therefore calls for application of strategic measures to keep pace with the competitive market situation. For the sake of this assignment, I will give a critical analysis of Microsoft Company. Much emphasis will be given to aspects such as the company’s overview and the industry of its operation, the company’s major business lines and the company’s competitive strategy and market position. Finally, the company’s use of Information Technology for competitive advantage will be highlighted.
Description of the Company and the Industry in Which It Competes
Microsoft is a well known company. It was founded in 1975 by Bill Gates. The company came into being following combined ideas from Bill Gates and Paul Allen, individuals who had interest in computers and programming in particular. The company started as a small organization whose operations were only local. It was later that Bill Gates developed the idea of programming languages and tried some applications that became successful although initially faced with some challenges (Kumar, 2010).
It was in 1976 that the Microsoft Company was registered in Mexico City. The company picked so well and this enhanced its growth and development. It was not after long that the company was in a position to extend its operations, selling its products locally as well as internationally. The company grew day by day and developed more advanced and desirable programming languages such as FORTRAIN and COBOL (Kumar, 2010).
The growth of the company was accelerated by an increase of Personal Computers’ manufacturers in the market. This increased the demand for Microsoft products and hence the need for Microsoft Company to enhance its production strategies to meet the demand. It for instance started an office in Japan in 1978.
From this time there was emergence of new developments that put the company at a better position in the market. A major development was that of MS DOS, which paved way to other advanced programs like the windows. It was in the year 1982 that Microsoft Corporation changed its name to Microsoft Inc (Kumar, 2010).
Microsoft operates in the software industry. It provides a lot of products and services that are aimed at satisfying the needs of customers in the software industry. In addition to this, the company has diversified its operations in other fields in an effort to enhance its competitive advantage.
This includes Microsoft games which have gained considerable application among people. The industry in which Microsoft operates is highly competitive mainly because of the effects of technological developments making it a necessity to be extremely alert to capture and implement everything new in order to satisfy the ever changing demand of the market. The industry is also characterized by new entries as people and groups wish to be as successful as Microsoft Company (Kumar, 2010).
To deal with the competition, Microsoft has engaged in production of products that are of high quality. The company also engages in strategies that are geared towards improving the quality of its products every now and then to satisfy the changing demands of the market. This has been made possible through research and development programs. This is an effort that has bore positive fruits for example attraction of a lot of customers and maintaining their loyalty.
Description of the Company’s Major Business Lines
Microsoft is involved in provision of a wide range of products and services to its customers. The major line of business is however in the provision of software related products and services. The company is involved in the provision of servers, office, hardware, windows live, software, Microsoft store and mobile devices among others. Apart from being involved in provision of products, Microsoft has also invested a lot in services provision.
Some of the services include, Skype, Microsoft advertising and Microsoft Online services among others (Microsoft, 2011). The provision of these products and services has been the main source of profit to the company. This in turn helps in placing the company in a good position in the market as it is an indication of good performance, an aspect that is desired by all organizations as well as customers.
Generally, Microsoft have performed relatively well over the past years. This has led other companies to desire to utilize the company’s production strategies in an effort to excel in their business operations. This has greatly increased the level of competition in the industry thus necessitating that Microsoft engage in even more strategic measures.
A major threat is for example the Linux program which has gained a lot of favour from the customers. However, plans are underway to upgrade Microsoft’s products and enhance it services in order to maintain its competitiveness compared to other companies in the industry. This will be made possible through extensive research.
Description of the Company’s Competitive Strategy and Market Position
Different companies have different competitive strategies and thus they secure different market positions in the market. Microsoft is competitive enough in its industry of operation and it has secured a good position in the market. Various aspects have been attributed to it competitiveness. For instance, its management is a source of its competitive advantage.
There is quality leadership at Microsoft. Bill Gates is the company’s chairman while Steve Ballmer is the CEO. Election is usually fair. The share holders have the duty of electing the board of directors. The board of directors is then supposed to hire the presidents, vice-presidents, top executives, treasurer and the secretary. The workforce in Microsoft is very rich in terms of skills and knowledge, making the company to do well in its business operations both locally as well as internationally (Johnson, 2008).
Microsoft has a number of strengths, which have significantly contributed to the company’s success. To begin with, the company has a broad global brand. The company has the largest software developer which has a good reputation all over the world. It has a big customer base which is located all over the world. All the products in the Windows line are successful. This has significantly contributed to the company’s success.
The company’s strongly developed brand has put it in a position where it is able to cultivate customer loyalty all over the world. Its customers are enthusiastic and act as advocates who always use the company’s products. Therefore, the company has managed to retain its existing customers as well as attracting more. This has contributed to the tremendous growth of the company.
Microsoft’s competitive strategy also involves the location of its premises or offices. Microsoft has offices located in different parts around the world. These offices are strategically situated in strategic positions. This has ensured that the company’s products are trendily available to all the customers across the world. For instance, the company has offices in Korea, Europe, China and Germany. This has promoted the availability of its products throughout the world avoiding unnecessary shortages.
Diversification of the company’s operations has also enhanced its competitiveness. For instance, the company has recently ventured in other areas like game design and developing. This provides a wide range of opportunities to the company.
The company has managed to provide free emails and news to its customers. In addition, it has managed to develop software that is very useful in organizing business spreadsheets and data. This comes at a time when the demand for such software has risen with increased need for efficiency in the contemporary business world.
The company’s market position can be understood by looking at its financial status. As already noted, Microsoft has been in the market for a long time. Since its development, the company has recorded good performance. Earlier this year, the company closed its fiscal year in optimistic results.
For the fourth quarter which ended in June 2011, the company’s revenue rose to $ 17.37 billion (Betanews, 2011). This was an eight percent increase over the last one year. Meanwhile, the operating income hit a level of $ 6.17 billion. During this quarter, the company recorded a profit of $ 5.87 billion (Betanews, 2011).
The success has not been attributed to a single aspect but rather a combination of factors. The strengths and opportunities are a source of the company’s competitive advantage and good position in the market. For example a strong brand that is well known all over the world. This has enhanced the level of sales and hence increased productivity and profitability.
Despite the fact that Microsoft Company has got considerable strengths and opportunities, it is not without some weaknesses and threats. Some of the weaknesses and threats that face Microsoft include; compatibility issues involved in the company’s products. For instance, most of its products are not effectively compatible with many hardware and software produced by other companies.
This may discourage customers from buying the company’s products due to the inefficiencies involved. Another weakness of the company is that it has not managed to develop an effective client and service support in the internet. This denies its customers important services in case problems and bugs occur. This threatens the integrity that the company’s products are perceived by its customers.
Competitors are a threat to the Microsoft Company. Many companies have engaged in the business of provision of software and other computer related services. This therefore necessitates that Microsoft Company establish and implement strategic measures aimed at maintaining its competitiveness to avoid losing its customers to the competitors. All in all, it is evident that the company has tried to overcome the threats and weaknesses through the reinforcement of their strengths and opportunities.
Use of Information Technology for Competitive Advantage
Information technology is a resourceful tool in an organization. It has been used by various organizations to secure a large share in the competitive market.
Effective utilization and implementation of information technology enables an organization and the workforce to be reliable in provision of services to the consumers. This is because it enhances efficiency, effectiveness and economy, an aspect that is extremely crucial in the achievement of high levels of productivity and profitability.
Microsoft Company has recognized information technology as a strategic asset and thus, it incorporates it in almost all its practices and processes. One area in which information technology has found application in the company is the accounting section.
The company has recognized that information technology can help in solving the problems that were associated with the traditional method of accounting. Information technology has also been used as a strategic communication tool. This involves communication services such as IP telephony, Microsoft Live Communication Server (LCS) and other Microsoft’s telecommunications infrastructure.
Some of the information technology related issues in Microsoft include; Business Application Support, clients services, messaging services, enterprise services, global technology services, corporate security among others (Rasmus, 2008). Microsoft is one of the leading companies that have achieved success through utilization of information technology including advertisement and reaching out clients and suppliers.
Conclusion
From the above discussion, it is evident that Microsoft Company has performed well over the past and has managed to secure a competitive market position. Its success is attributed to a variety of factors for instance a strong management body, an established brand name, strong and experienced workforce and utilization of information technology among others. Although it has some weaknesses and it faces some threats, it has been able to overcome this and its financial performance has been excellent over the past.
In the scope of its definition, a monopolist firm is a unit that solely supplies a product or a service in the market. With regards this definition, a firm that is dominant in a properly developed market may exhibit monopolistic tendencies depending on its authority in such market. In contrast with the fallacious arguments by different groups consisting of software market critics and lawyers from South Korea, Europe and the US Justice Department, it is not palpable that a firm which is a market leader is undoubtedly a monopolist establishment. In the ideal, a monopolist firm has the potential and capital base to fully exploit the market through lowering quality, cost of inputs, and increasing the prices for its products in order to attract higher profits than other firms that operate in a perfectly competitive market.
Discussion
Reflectively, several firms in the software industry have same monopolistic power as is the case of Microsoft Corporation. However, Microsoft Corporation has unique operational strategies which cannot be equated to the ideals of monopolistic strategies that other firms in the same industry use. For instance, the company has consistently increased its production and diversification of products in the market instead of reducing output with intent of increasing prices. A critical review of the software market indicates that Microsoft’s products are readily and easily available as compared to those of its numerous competitors.
Notwithstanding, Microsoft Corporation has consistently improved the quality, operation and usability of its operating systems over the last three decades. The Windows OS has been developed from the simple Windows 1998 to the current powerful Windows 2008. From this strategy, it is apparent that the company’s commitment to quality assurance is above its competitors. Besides, the company has been in the forefront in technological innovation to constantly improve the value of its products at the same prices of the previous versions. Unlike a monopolistic firm that would manipulate the quality and prices for its products with intent of increasing its returns, Microsoft Corporation did not adopt this strategy. Instead, the company has maintained the prices for its products despite series of improvements and quality addition over the years.
The findings of analysis of the software industry indicate that Microsoft Corporation’s products are the most affordable. Despite having the opportunity to use its monopoly power to manipulate prices and quality of its products to increase the profits, Microsoft Corporation concentrated on product improvement through innovations.
Over the years, Microsoft Corporation has managed to dominate the software market despite competition. The dominance can be attributed to quality and affordability of its products rather than the monopolistic power. As a result, the company has heavily benefited from the lack of competition and economies of scale since the company is able to sell many units of its products within a short period of time. The main challenger of the Microsoft Corporation’s products is the Apple Company which controls less than 20% of the software market.
Conclusion
Since Microsoft Corporation operates in a dynamic industry that experiences constant technological innovations, it has channeled heavy capital investment in the product research and development. The economies of scale earned as a result of sales of many units of its products have made the capital intensive innovation and product improvement strategies possible for the Microsoft Corporation. Basically, it is apparent that the strategies and scope of operations at the Microsoft Corporation are not monopolistic. The company has the interest of the society and is ethical in its operational strategies.
Organizational structure and design is important to every organization. This is because it defines the reporting structure and the job description and this way every employee becomes aware of their roles. Additionally, compensation for work done is necessary in order to motivate the employees since an organization cannot exist without them. However, compensation varies with the ranks whereby the executives receive higher remuneration packages than the employees.
This can be demotivating to the employees because they do majority of the work. A company’s management is also expected to represent the interest of its stockholders (creditors and shareholders). Therefore, if the management (agent) uses its position to pursue its personal interests to the disadvantage of the stockholders (principal) it leads to agency problem. The aim of this paper is to analyze Microsoft Corporation, the agency problems facing the company, its job design and compensation packages to its executives and the employees.
Essay Body
Microsoft Corporation is one of America’s most profitable companies. It was started in 1975 by Paul Allen and Bill Gates. It is the global leader in providing software, services and solutions which assist people and enterprises in achieving their goals. Microsoft’s headquarters are located in RedMond, Washington in the United States. According to Fortune 500 Microsoft is among America’s top 50 largest companies in profits, revenue and shareholders’ equity returns.
Currently, the company’s net earnings are at $23,150m and its revenues are $69,943m. Some Microsoft’s products are Microsoft Office, Xbox, Xbox 360 video gaming tools and Microsoft Windows. The company also runs Windows Operating Systems (Microsoft Investor Relations, 2011). Its mission is to assist people and businesses in the entire globe in achieving their potential. Additionally, its values are honesty, integrity, mutual respect and personal excellence among others. In addition, Microsoft takes passion in technological innovation and it is concerned about the welfare of its stakeholders by striving for the best quality (About Microsoft, 2012).
Microsoft has over 92,000 employees in over 25 countries. In order to manage its operations the company has divisional/group organizational structure whereby every division or product group specializes in particular products. Additionally, every division has research and development, customer relations, Microsoft business, entertainment and sales staff. Every division is represented by one executive who is responsible to the company’s president (Wills, 2010, p. 1). The diagram below is an example of Microsoft’s organizational chart.
Agency problem within the company, its causesand how it might be better controlled:
Agency problem is also known as principal-agent problem. It refers to conflict of interest that arises between a company’s management and its stockholders. It can occur if the management and the stockholders have differing ideas. The stockholders are the principals of the company. They include the creditors and the shareholders while the management is the agent. The principals own the company but they employ the management to run and manage the company on their behalf. Therefore, the agent is expected to represent their interests.
An example of agency problem is adverse selection. This conflict arises when the principal is not sure if the agent is capable of doing the work for which he is expected to do. Conflict of interest exists in almost every organization (Agency Problem: Definition, 2011). More specifically, Microsoft Corporation has been accused of more than one agency problems. For example, the company was involved in an agency conflict with Sun Microsystems. Microsoft had negotiated with Sun in order to be allowed to use the company’s Java technology. Java’s success was mainly attributable to its flexible programs which could run on any operating system.
Therefore, Microsoft signed an agreement promising to develop and sell its own Java version but it would keep it portable. However, some days after signing the agreement Microsoft introduced a Java version which was incomparable with Sun’s. Microsoft’s Java version was only running on computers that used Windows operating system. Conflict arose between the two companies because Sun Microsystems (Principal) felt that Microsoft Corporation (agent) did not carry out the business they were expected to. Therefore, Microsoft’s management preferred to take care of its own interests to the disadvantage of Sun (Stephens, 2002).
This agency problem could have been caused by Microsoft’s strategy to dominate the software development market by copying the original non- Microsoft programs. Additionally, Microsoft is well known for deliberate use infringement and litigation of its competitor’s patent and ownership rights as an expansion strategy. This is because it has been involved in similar other cases which make it clear that litigation and betrayal have been the company’s way of beating competition. Unfortunately, it might be impossible to entirely eliminate agency problem. This is because the costs for doing so overshadowthe benefits.
However some control measures can be adopted. For example, Microsoft’s managers can be motivated through incentives so that they can act in accordance to the stockholders’ interests. Some incentives may include performance- based compensation and threats of either takeovers or firing. Additionally, a company can employ watchdog bodies or tough screening procedures. Law suits are also optional especially against Microsoft because they are legal. Additionally, through a strong court case it is possible for the affected stockholders to receive compensation for damages or loss of business incurred from infringement or litigation (Stephens, 2002).
Job dimensions of the company;if the current design is appropriate for the company; suggestions for improving the job design and if the organization is effective:
A job refers to specific tasks carried out as the routine of a person’s occupation at a certain price or compensation. Job can be part-time or full-time in nature. On the other hand job design or dimension is the way in which a group of tasks are organized. It also refers to the job specification, methodology and relationship between various jobs which are aimed at achieving an organization’s and an employee’s goals.Some of organizational goals of job design are efficiency, quality and productivity while the employee’s goals are contentment, motivation and personal growth (Griffin & McMahan, 1993, p. 2).
Microsoft’s job design is grouped by profession, geography and business division/ segments. The company uses job attributes approach, motivational approach and the perceptual-motor approach in its job design. The job attributes approach elaborates the required qualifications for a given job. The motivational approach requires that the job applicants possess certain skills and requirements while the perceptual-motor approach requires an employee to have technical skills in order to be able to interact with the company’s machinery (Griffin & McMahan, 1993, p. 4-9).
The current job design is not appropriate for the company. This is because it does not take in to account the human factor such as physical incapacity and gender balance. In order to improve this issue Microsoft should add more groupings in its job design. As a result gender discrimination can be reduced as well as discrimination against the physically challenged applicants. This type of integrated design has been very successful in NGOs and it is also possible that it can work for Microsoft.Therefore, the job design that the company is currently using is not effective because it concentrates mostly on organizational goals while the goals of the employee are merely represented. The table below is an example of a 3 by 7 job design matrix that Microsoft can incorporate.
Employee status Position
Gender Male/Female
Physical challenge Yes/No
Title
Date
Location
Job ID
Business division/segment
Job description, skills and requirements
Compensation package for executives and employees within Microsoft; if it is effective and any suggestions for improving the compensation package:
Compensation packages are essential in business organization. Landlords expect rent returns and entrepreneurs expect profit from their investments. Similarly, the labor force expectsa fair compensation package in form of salaries or wages from the business process. However, the executives have higher basic pay than the other employees. This is because they have more skills, experience and the title of their position also deserves high pay. Effective and fair compensation packages for both executives and the employees should be “internally equitable, externally competitive, affordable/cost effective, understandable, legal and appropriate for both the organization and the workforce” (Greene, 2010, p. 1).
Effective compensation package should also be based on merit (the employee’s role and how good their job is), personality (value that the employee adds to the organization) and results (Greene, 2010, p. 1). As from 2009 Microsoft’s executives have incentive plans which enable the Compensation Committee to put in place award programs for a given performance period. Therefore, the maximum compensation for an executive officer is a percentage of a pool of incentives for a specific performance period such as a fiscal year. The compensation package to one executive officer per fiscal year should be a maximum of $20m and it can be in form of stock awards or cash (Punk, 2008, p. 1).
This incentive is effective because it is merit based. However, on the other hand it is not cost effective. A $20m salary package per executive head means a lot of money outflow from the company.For example, in the fiscal year ended 2010, Microsoft’s CEO Steve Ballmer received $1.34m in compensation while Kevin Turner, a top executive received $10.45m (Eaton, 2010, p. 1). On the other hand Microsoft’s employees are compensated less than half of what the executives receive. For example, the annual salaries for managers range from $720,000 to $2.34m.
This shows that there is a very wide gap between the compensation packages for the executives and the employees. This is not effective considering that it is the employees who do most of the work as compared to the executives (Microsoft Salaries, 2012). Therefore, in Microsoft merit and results may not apply in compensation criteria.As a result this can demotivate the employees leading to poor performance for the company. Additionally, some employees can resign in pursuit of better remuneration making the company to lose talented and skilled staff.
In order to improve the compensation package, the Compensation Committee should compensate all the employees according to merit, results, skills and experience. Therefore, the employees should also receive bonuses and incentives such as stock options for good performance. This can motivate them and improve performance. On the other hand, the executive incentives such as stock options should be reduced because they are currently too high and they are affecting the company’s performance. The table below shows the compensation packages for the various executives in Microsoft for the fiscal year 2008 to 2010.
The table below shows compensation packages for some employees in Microsoft as at June 15, 2012.
Conclusion
Microsoft Corporation is an international company with high revenues and profits. It is also ranked among the top 50 largest companies in the Fortune 500. It specializes in software applications and services. Although it has a good reputation, it also faces various challenges. One of the major challenges is litigation or illegal use of its competitors’ ideas and products for its personal gain. This refers to agency problem which arises when a company misrepresents its stockholders’ interests.
Additionally, the company has an ineffective job design which can encourage gender discrimination and discrimination against physically challenged people. Microsoft’s compensation structure is discouraging in nature since there is a very wide gap between the executives and the employees. However, there are possible ways of solving these problems including law suits for agency problems, a 3 by 7 job design matrix, reduced stock option incentive for executives and increased remuneration for the employees. If these issues are solved as recommended, then Microsoft Corporation, its employees and its stockholders can achieve their desired goals.
Founded by Gates, Microsoft Corporation is renowned as a global company specialized in the manufacture and improvement of software and computer appliances (Business day). It not only produces various software packages but also offer a wide range of computer services. Video games, operating system, personal computers and other computer applications are some of Microsoft’s products. As part of its services, the corporation educates and endorses software developer and also offers consultancy services.
1. Based in Washington, Microsoft is divided into different subdivision i.e. customer, Microsoft commerce, server and tools, online, entertainment and devices (Microsoft Corporation). Matters pertaining to consumers such as complain or comments are handled by the consumer division. Client division ensures that consumers are well handled by carefully addressing their concerns thus maintaining satisfaction.
It is responsible for making deliveries of Microsoft products to customers all over the globe. Online division plays a significant role in advertising and providing basic information about the company’s goods and processes. In addition, it links the corporation to its customers, partners and the outside world i.e. by email and web messages.
The construction and marketing of hardware and entertainment devices such as video games and zune digital music is produced under entertainment and devices division (Microsoft Corporation).
Server and tools sector is specifically responsible for manufacture and endorsement of products and processes. The handling of the overall business problems i.e. by providing overall business elucidation, whether financial or company’s productivity are handled by the business division.
2. In as much as the company is divided in different organizational segments, it also has different parts with their own structures. The parts include manufacture, marketing, finance/accounting and HR. Marketing as part of the company, has different offices to begin with marketing manager followed by three underlying offices i.e. Sales manager, marketing research manager and product manager.
The above three offices work alongside committed teams that ensure effectiveness and efficiency of these offices. Finance/accounting as a component of Microsoft, is headed by a finance manager followed by two offices i.e. management accountant and finance accountant in conjunction with a strong workforce.
HR and production elements of Microsoft are headed by a HR manger and production manager respectively. The overall company’s structure takes a tree shape thus making it a hierarchical configuration. This is indicated by many level of administration with different offices working under each level.
3. The ultimate decision makers of the company are the directors. The board is made of ten members, approved by shareholders in the company’s yearly common assembly. The team is responsible for making every final approval on actions that impact on the general company. Approvals are divided among different board committees in relation to the kind of activity i.e. auditing committee handles matters pertaining accounting, finance committee handles matters pertaining finances of the company and so on.
For the management of global activities a team of sixteen bureaucrats that include persons who are responsible for sales, marketing and HR in the global perspective. Additionally, there is a staff council that handles all affairs of the company at corporate level. Management of Microsoft also includes heads of each department who are responsible for different activities at departmental level (production department, marketing department and so on).
Production departments are specialized in the production of software and other hard ware computer products while marketing in charge of advertising Microsoft products. Finance/ accounting offices maintain records of transactions performed by the business and ensure that they are updated and safely kept.
Conscription and vetting of employees are managed by the HR department which ensure that the company’s workforce meet the required standard. Microsoft uses both centralized and decentralized methods of production. This is because production of some products requires technical skills and advanced technology that can only be available in certain specific regions. On the other hand, products which do not demand technical skills and technology are produced in different locations.
4. The organization has a structure in the form of a tree commonly known as a hierarchical structure (John Dunning and Sarianna, Lundan, 238).
This is because of its different management levels that spread through from a global level to corporate level. It adopts a hierarchical structure due to the various factors surrounding the business i.e. size, complexity, diverse products and geographical coverage. The company has many levels of management ranging from board level to corporate level i.e. management runs from the global level to continental and finally corporate level.
5. Vital decisions that affect the whole company, are decided by the board of directors in Washington based headquarter. The company has centralized staffs that perform different types of functions that affect the overall functioning of the company.
Centralized staffs decide on strategy to be used in future expansion of the company i.e. introductions of new branches, new products and services. Centralized staffs dictate on the company’s income expenditure i.e. they decide on the amount of dividend for shareholders and the amount ploughed back to the company.
Additionally, they decide on the overall budget of the company; they influence the amount to be distributed in the running of their branches and the amount used in running different activities of the company. Centralized staffs manipulate and also draft rules that govern the company and also have the capacity to impose penalties on indiscipline employees. In as much as running the branches is left to branch managers, centralized staffs do approve crucial activities that directly affect the company of which I consider a fair deal.
6. Some of the decisions made by the entity are centralized while some decentralized. Decisions that affect the overall company such as budget expenditure are centrally made while the ones with fewer effects are decentralized. Decisions regarding management of the company’s branches are mostly decentralized i.e. decisions are made by branch managers.
Managers and their teams can set a meeting and discuss matters concerning their branches with final decisions made. Less important decisions such as recruitment of new subordinate staffs are decentralized at corporate level. On the other hand, important decisions such as how to spend revenues, expansion of the corporation, decisions on how to raise finances and decisions on rules that govern the company is centrally made.
Centrally made decisions are always carefully made since they directly influence the company’s performance either in the short run or long run. Even though, most of decentralized decisions may not be made carefully, some decisions prove to be important and should be carefully handled such as recruitment of new staff whether unskilled or skilled. Whether in the line of work or at field (companies activities), the same rules in applies in decision making.
7. Various factors including technology, strategy, environment, life cycle and company size have profoundly influenced the company’s organizational structure (Cliffsnotes). Microsoft is an exceptionally large organization, in fact, among the world greatest companies thus making it a complex organization that can only perform under a hierarchical structure. This is because hierarchical structure subdivides a complex company to a manageable level.
Considering life cycle, Microsoft just like people, evolves and undergoes various life cycle before maturity i.e. birth, youth, middle-life and adulthood (Cliffsnotes). Microsoft like any other company was also given birth i.e. the time it was founded (1975). The second stage of growth is the youth stage, a stage where a company (Microsoft) begins to grow by expanding its operations. At this point, a company operates in a flat structure since the company’s simplicity.
Youth stage is followed by middle-life, a stage where company experiences changes in its operations i.e. from a small company to a larger and more complex company. Additionally, the company experiences a change in its organizational structure by switching from a flat structure to hierarchical structure. The company also realizes a significant increase in revenue which is as a result of increased sales from an expanded business. At maturity, the final stage of growth, a company becomes less innovative with minimal expansion.
This is because of the company’s exhaustion of its industry and the only remaining activity is to maintain the status in the market. At this point, a company is expected to operate in a hierarchical structure due to its complexity and. Environment, as a contingency factor, is the surroundings in which a company/organization operates (Cliffsnotes).
It can either be stable or unstable/dynamic. A stable environment is considered free from environmental factors such as politics, natural calamities, socio-cultural concepts and technology. A company or organization operating in a stable environment will experience be very much productive which will influence its organizational structure from flat to hierarchical. However in an unstable environment, the business surrounding is occupied by natural calamities and politics thus rendering it unfavorable to organization.
Microsoft operated in a stable environment that made it experience rapid growth in its productions and operations making forcing it to change its organizational structure from flat to hierarchical (Snellen, Wim and Donk, 264). Another contingency factor that affects an organization’s structure is technology. A company operating in an advanced technological environment will experience efficiency and effectiveness in its operations thus increasing its production and sales.
On the contrary, an organization in a poor technological environment will be ineffective thus experience minimal production and sales. By the fact that Microsoft began its operation in United States, a country with advance technology, provided a suitable technological environment. This made Microsoft grow rapidly creating a shift of its organizational structure from flat to hierarchical.
8. For smooth running of an organization, there must be rules that govern the institution. Microsoft is a large organization, operates under legislations that should be obeyed by employees and management. The lengthiness of Procedures in Microsoft organization depends on the nature of activities in place. Activities such as investments, expansion may undergo many procedures as opposed to ones which are less vital that undergo less procedure before approval.
For example, for a merger or acquisition to be approved, it must undergo many procedures to check the viability project. Programmed robots are some of the devices that are use in the coordination of different activities of the company especially in production of computer devices. Telephones also provide a better means of communication in the company, thus maintaining the smooth running of the business.
9. Microsoft organization carries out different activities either within or without their area of operation. Although, most of its activities are specialized, it also performs other different activities such as conserving the environment. This came in handy after being rated poor in environmental conservation.
Some of its environmental driven activities are to pioneer for tree planting and also minimize the use of plastic package. Whether the use of teams or an individual in the running of any activity will all depend on the nature of the work involved. This is for the reason that some activities are involving and demands a team for their effective running as opposed to the less involving activities.
10. Most organizations or companies under software industry operate internationally with their branches and outlets in different countries. This is because of increase in the use of computers thus leading to an increase in enterprises operating under this industry. In developed countries, enterprises operating under this industry are nationally distributed because of equal development in all regions of the country.
In such countries electricity, infrastructure, technology and skill that are required in the use of computers are evenly distributed thus creating ready market for software; however, in underdeveloped countries enterprises are regionally located since most the software markets are restricted to only developed areas. This goes by the fact that development in such countries are unequally distributed rendering some areas incapable of using computers i.e. by lack of electricity, infrastructure and skill that limits software markets.
Conclusion
Credit must be attributed to Bill Gates as the founder of this incredible company that developed the world technologically. It is fortunate that Microsoft was formed in a suitable environment that facilitated its growth.
As a result, it experienced rapid changes in its production, organization structures and operations. Though faced some criticism of not being competitive and also by being insensitive to environment, Microsoft established itself to become the greatest software producer around the globe by outshining its competitors such as apple.
Talent management and succession planning have become core functions of human resource management as organisations struggle to maintain a pool of skilled workforce. It is important to understand that these are two vital human resource functions which involve having the right people to undertake various duties whenever this may be necessary.
According to Berger and Berger (2004, p. 48), “Effective talent-pool management concerns itself with building a series of feeder groups up and down the entire leadership pipeline or progression.” It means having the right workforce who can take up any position within the firm I case it falls vacant. As these scholars note, it involves identifying the skills and talents of the employees within a firm that may make them fit for various positions whenever they fall vacant.
On the other hand, Oakes and Galagan (2011) say that “Succession planning is focused narrowly on identifying specific back-up candidates for given senior management positions” (p.57). Many organisations always struggle to find replacements for their chief executive whenever the current holder of the office leaves the office unexpectedly. In most of the cases, such an organisation would consider looking for the replacement from outside the organisation because there were no plans laid down to groom the internal employees for the top post.
According to the research by Shukla (2009), it is a fact that getting the top management employees internally from the current employees is more beneficial than getting the replacements from external sources. Not only do these employees understand the organisational culture of the organisation, but they also get motivated by such promotions. They develop a feeling that the organisation respects them and holds them in high regard. Such individuals would make an extra effort to ensure that they are successful in order to maintain the trust that the organisation has towards them.
This is very different when the top replacements are taken by employees from other organisations. These newly hired top executive may be too proud to deliver good results, always feeling that the current employees of the organisation are inferior to them and that is why they had to be hired from other organisations. In this study, the researcher will focus on the importance of talent management and succession planning strategy, and how Microsoft Corporation has used this strategy to achieve success in the market.
Importance of Talent and Succession Planning
According to Elegbe (2010), many organisations have experienced problems because of poor or lack of talent management and succession planning strategy. These are very important human resource functions that an organisation should not ignore if it is to achieve meaningful success in its operations. Talent management is a task that involves identifying desirable qualities among the current employees.
It involves identifying what they can do better, and areas where they may need little changes in order to ensure that they can be assigned specific duties. In an organisation, it is a fact that many positions are always left vacant regularly because of issues such as transfers, promotions, resignations, lay-offs, deaths, or any other reason that may make an employee quit his or her current position. A successful firm will not just make haphazard replacements simply because there is a need to fill in the post.
According to Effron and Ort (2010), Microsoft Corporation is one of the largest and most successful computer software and hardware firms. One of the reasons why this firm has been successful is because of its talent management strategy. This firm is always very keen when it comes to managing its pool of talents. Since the days of Bill Gates as the chief executive, Microsoft Corporation has developed a culture of pooling the talents in order to know how to assign its employee’s various tasks.
The human resource unit developed a unit that identifies the special skills and capabilities of the employees from junior positions to senior managerial posts. This strategy helps the human resource to match task needs and employee capabilities. This makes it easy to identify individuals who can be assigned to various posts in case they fall vacant. This eliminates cases where people are promoted based on the time they have spent at the firm without considering their ability to deliver results in these posts.
Succession planning is a very important task that many organisations are yet to take seriously.
According to Israelite (2010), when firms succeed in getting highly talented and capable chief executive officer, many of them tend to forget the fact that this officer may one day leave the organisation, sometimes sooner than expected. For this reason, they spend a lot of time trying to offer the best working environment for such an officer without giving focus to the need to groom replacements. These organisations fail to realise that there are various uncontrollable forces that may make such a good director leave the firm sooner than the agreed date.
When such unavoidable circumstances occur, such organisations would start scrambling for anyone they believe has the right qualification to fill the post. In such cases, ending up with a wrong candidate is a very likely event. Pham-Gia (2009) says that such unfortunate incidents can be easily avoided by having the right succession plan within an organisation. Promoting internal employees to the topmost managerial position has always been considered to be a better alternative than hiring someone who was previously working for a different firm.
This should be a rigorous and continuous process that involves identifying special skills among the existing executives. The relevant officers should be able to single out characteristics, skills, knowledge, and special talents among the executives that may make one better qualified than others to fill the post of chief executive in case the position become vacant. This is the strategy that Microsoft Corporation has been using in order to remain successful. The approach that has been taken in appointing the chief executives of this firm is probably one of the best among the leading multinational corporations.
When Bill Gates left the position of chief executive on January 13, 2000, he identified Steve Ballmer as the best replacement for the position. Steve Ballmer had been working for the company for about twenty years as at that time and had held important managerial positions at the firm. The current chief executive officer, Mr Satya Nadella, joined the firm in 1992 when the company was under the leadership of Bill Gates. He had held various top positions in the firm by the time he became the top executive of the firm.
The link between Learning, Development, Performance Management, Talent Identification, Talent Assessment and Career Development
As Schweyer (2013) says, talent and succession management planning is a complex process that involves a series of activities. These activities are interrelated in one way or the other. They work together in grooming employees to take various sensitive positions within the firm in order to ensure that there are continuity and success even in cases where other employees leave the firm for various reasons. The following are some of the activities that are involved in talent and succession management planning.
Learning
According to Tony (2007), learning is one of the core values in employee development. The world is experiencing various changes brought about by technology and other environmental forces. The only way of mastering these changes is through the learning process. Many organisations have developed programmes that allow their employees to undertake advanced classes in order to enhance their understanding of their fields. However, learning is not only limited to a classroom context of the teacher-student relationship.
The experience offers the best learning process. In most cases, organisations would organise on-job training for their employees in order to offer them a practical training session on how they can handle their tasks in better ways. Continuous learning process results in development. At Microsoft Corporation, there is a program that not only makes it possible for the individual employees to advance their educational qualifications but also compensates them for the costs they meet undertaking such programs. The management has always been flexible when it comes to assigning of duties, especially to those who are undertaking further education.
Development
Employee development is a process of adding desirable values to the workers in order to make them more suitable for their current or future positions. Development involves learning through experience, classwork, teamwork and other such related activities. It also involves gaining skills that will enable one to coordinate with other employees, and to understand how external environmental forces can be managed using internal capacities in order to achieve success.
Through development, an employee is groomed to be in a senior managerial position. He or she is able to develop an understanding of what it takes to lead others and the expectation of all the stakeholders within the firm. During the development process, one is able to understand how the internal and external environmental forces interact, and the best way through which an organisation is expected to behave in order to avoid negative impacts that external changes have on a firm.
Performance management, talent identification, and talent assessment are aspects of employee development. The successive leaderships of Microsoft Corporation have been sensitive to the issue of employee development. The organisation has been keen on taking a holistic employee development approach to ensure that their employees expand their knowledge in their respective areas of work and that they learn interpersonal skills that would facilitate teamwork within the organisation.
Performance Management
According to Armstrong (2007), the overall performance of an organisation largely depends on the performance of the individual employees. This explains why many organisations are currently considering performance contract as the best measure of determining the compensation of their employees. This simply means that the employees would be compensated as per their output. Performance management entails identifying specific objectives that a given office holder should achieve within a specific period.
As Waldrop (2008) says, the objectives set for the employees should be specific, manageable, achievable, and realistic. The evaluation team would then determine how well an employee was able to achieve the set objectives. In case it is determined that the employee was way off from achieving the objectives, a team should be set up to explain why the employee was not able to achieve the set objectives. The obstacles identified on the employee’s path towards achieving success should be addressed adequately before he or she can be assigned new objectives within the firm. At Microsoft, this programme exists.
Employees are assigned duties based on their positions within the firm and their capabilities. After the end of every year, the performance of every employee is always evaluated in order to determine how well they were able to meet the set objectives. Those who surpass their set targets are always rewarded as a way of boosting their morale. Those who fail to achieve the target would be subjected to some form of investigation in order to determine why they were not able to achieve the set targets. The firm has a policy that recommends layoff to those who are consistently unable to meet its objectives.
Talent Identification
According to Sims (2007), talent identification is one of the most important tasks of human resource management. Employees have different skills and talents that make the unique and best suited for different tasks. Many organisations struggle to achieve success because they have not been able to match their employees’ talents with the tasks. However, this can only be done if these talents can be identified. Sometimes the employees themselves may not realise that they have a special talent that can be useful to their employer.
This means that it is necessary for organisations to develop programmes that would help identify these talents. According to Mathis and Jackson (2009), Microsoft has perfected the art of talent identification as it seeks to maintain innovation in the firm. The firm uses regular contest in order to identify special talent among its employees. Such competition would involve developing new software, advancing the current software, or addressing various issues within the organisation in a way that is unique and superior to the approaches that are in use. Through this, the organisation is able to identify special talents that may help it in various areas.
According to Price (2011), talent identification can also be done by the non-management stakeholders. This may be through the feedback received from the clients based on these services they receive from the firm. This information can be used to identify some of the desirable capabilities of some of the employees. Some organisations consider using services of other institutions that have specialised in this area. They would be expected to work closely with the employees as an independent authority to identify their skills and special talents. This information would then be delivered to the management so that a decision can be taken. However, this approach is not being applied at this firm. Microsoft Corporation uses its own management to identify these talents.
Talent Assessment
According to Shukla (2009), once the talent has been identified, the next important phase is to assess it in order to determine its usefulness to the organisation. Talent assessment is a review process that involves identifying the relevance of a given talent to a given organisation. Sometimes it may occur that the talents of a given employee are not relevant to a given organisation. Waldrop (2008) says that a talented chef may be more beneficial to Hilton chain of hotels than to Apple Inc. similarly, a talented software developer may not have a place at the Sheraton Hotels, but may be an invaluable individual to Microsoft Corporation or Apple Inc. when assessing the talent, the focus would be on determining how relevant the special feature on the employee is to the organisation.
Before dismissing a given talent as being irrelevant, it is necessary to evaluate various areas within an organisation that needs different skills. A skilled security officer may not have the knowledge in software development needed at Microsoft, but his skills are very important to this organisation in ensuring the safety and security of people and properties of the firm. Making a rush decision of declaring a given talent irrelevant may be a costly process. It may make an organisation to lose a skill that may be used to advance its operations.
At Microsoft, human resource management has rolled out various programmes that are meant to identify and assess talents of the employees in various fields. The mid managers and supervisors are always given opportunity to identify employees will skills that they feel are needed within their department. They would then be expected to write a letter to the human resource explaining why they feel that these employees have the skills they need in their departments.
The human resource will review such letters and determine the necessity to reassign employees from their current tasks to other tasks in the same department or other departments within the organisation. The aim is to ensure that in the long run, every employee is assigned duties that best meet their capacities as employees of the firm. This strategy not only boosts the results, but also enhances employee morale.
Career Development
Career development is a broad term which involves all the activities that focuses on the advancement of one’s career. According to Price (2011), many people always face serious challenges when developing their careers because of the mistakes they make at the very beginning of their careers. For instance, it is common to find someone with passion in music focusing on the field of medicine because of peer pressure or the pressure from the parents.
At the beginning of their career, they would always struggle to be successful in the wrong careers because they want to please other people. However, as they grow more independent and as the external pressures get eliminated, they are left without the drive to advance their career. They become disillusioned when they realise that they took wrong path that does not offer them the satisfaction they need. This disillusionment may have serious negative impact on one’s career development. This is especially the case when the age factor cannot allow one to make a turnaround to take the career they would love to have.
The research by Waldrop (2008) reveals that passion is one of the key forces in career development. When one has passion in what he or she is doing, then one will always make an effort to ensure that he or she does what it takes to be successful. At Microsoft Corporation, there is a program that seeks to help in career development from very early stages of life. The organisation has developed programme that seeks to identify talented individuals with passion in software engineering.
Through this programme, the selected individuals would be given guidance on the right courses to take at the college level. Once they graduate from colleges, the firm would determine their ability to fill in various posts within the firm. This approach was taken to eliminate cases where some employees quite their important positions in the firm to pursue careers that are very irrelevant to software or hardware engineering. Having employees who are passionate in their assignment is an assurance that they will be retained within the organisation as long as the environment remains favourable to them.
Learning and development are part of career development. As one experiences developments in various areas of his or her work, he or she will be developing his or her career. This will be seen through promotions earned at various stages. The ultimate aim in one’s career development is to become the chief executive officer of a blue chip organisation. This will be the ultimate indication that one has been successful in his career path, and the top most position is not only an indication of this, but also a reward for the relentless effort and skills at work.
Reflective Analysis and Suggested Changes
It is clear from the analysis of the current status above that talent and succession management planning strategy is very important human resource task that may define the future success of a firm. The above analysis has clearly shown how Microsoft Corporation has been struggling to ensure that it lays clear programs that would define its talent and succession management planning strategy.
This firm has been a number of strategies to identify talents and determine their relevance to this firm in order to enhance its success. The firm has also been keen on grooming executives to take top managerial positions in order to ensure continuity at the firm. Of the three chief executives that this firm has had since it was founded, none of them was sourced outside the organisation. The top management would groom a number of candidates for the top position, and when the time comes, one of them would be chosen to head the organisation.
That is how the current top executive, Mr. Satya Nadella, and his predecessor, Mr. Steve Ballmer, were chosen to head this organisation. Although the firm has been successful in this area, it is clear from the analysis that there is a gap in the current system that may inhibit the ability of the firm to be successful. The management of this firm should work on these gaps in order to make the strategy more effective. The following are some of the suggested changes that may need to be observed in order to enhance levels of success.
High Potential Development Program
According to Mathis and Jackson (2009, p. 38), “Developing the current and future leaders requires a deep understanding of how development happens on the job.” These scholars say that many organisations have failed to develop future leaders because of their minimal understanding of how development takes place on the job. The human resource management should have the knowledge of how its workforce can be developed while working in their respective areas of assignments.
On-job development involves developing programs that will help expand the knowledge of the employees not only through experience, but also teamwork and introduction of new concepts. This is an area that Microsoft has not given enough consideration. The best approach of doing this is to outsource the services of external specialists or get the relevant tutors among the current employees. These tutors will work together with the employees whose skills need to be developed. This way, the tutors will introduce the new concepts to the employees in a practical approach.
The employees can ask any relevant question in order to enhance his or her understanding of the new concept. However, Shukla (2009) warns that when using this strategy, the student-learner approach should be avoided as much as possible. Teamwork approach is always the best so that the employees may have the freedom of asking any relevant question on the new concepts that they are learning. This eliminates unnecessary formalities that may affect the ability of the employees to grasp the concepts easily. This is why it is always recommended to use consultancy services other than using senior employees to train junior employees.
Competency Development
Sometimes an organisation may suffer from the problem of employee incompetence. Having an incompetent employee may not necessarily mean that the employee lack the relevant skills to make him or her deliver good results. The problem could be with the competency model that is in use within a given organisation. Armstrong (2007) says, “A thoughtfully developed competency model is one of the best ways to make sure all parts of your people management process are aligned and pulling in the same direction” (p. 49).
The competency model must be able to identify skills and special talents of an employee within an organisation. The model should then identify specific tasks that should be completed using the competencies of the employee. This model must also define how different skills and talents will be brought together when undertaking various tasks within a given department. The focus should be to ensure that in areas of weakness of a given employee, there will be another employee who will be able to support him or her in order to achieve an overall success within a given firm.
At Microsoft Corporation, the human resource has been keen on developing effective competency models in order to ensure that employees in a given team complement each other. Using some of the new models may help this firm to achieve good results. However, care should be taken to ensure that only practical models are used. Some of the models may not achieve the desired results because of practical challenges.
Talent Pipeline Assessment
As a business unit experiences growth, it may be difficult to precisely determine the number of top executives that would be needed in the future. Some firms experience rapid growth that may force them to identify employee to fill in senior managerial positions for effective management of the firm. The problem that many firms face is that they do not realise this until when the roles become too many to be handled by the few top executives.
Pham-Gia (2009) says that talent pipeline assessment “Makes sure that a given business unit has quality people and key talent in the right roles right now, and creates a People Plan for a successful future” (p. 48). This model helps in focusing on both the current and future needs. A successful future depends on what an organisation does today. It means that the current operational activities should be done by a team of highly talented workforce with the right knowledge of what is expected of them. Talent pipeline assessment helps in identifying the right workforce at every stage of a firm’s development.
As the form experiences growth, the nature of employees needed for every task also changes. This program plays an important role in making the employees of the organisation to change with these changes in order to make them relevant for various posts. This approach helps in eliminating the need to hire new employees from other organisation to take over top management positions. The current employees will be groomed at every stage to undertake these duties at higher levels. This strategy can be very beneficial to Microsoft Corporation.
Action Learning
Action learning is increasingly gaining relevance in many organisations across the world. The current competitive environment has forced many organisations to look for ways of increasing the knowledge of their employees while they are working. This gives employees the practical knowledge on how to address different tasks. According to Dessler (2005, p. 28), “Action Learning is a highly effective way for senior management to provide mentoring and visibility as part of a structured development program that drives the company’s goals forward.”
Action leaning, also known as project based development, offers employees an opportunity to develop new knowledge and skills working on critical projects with high potential employees. In this strategy, the high-potential employees will guide the junior employees on what they are expected to do at various stages. This approach is beneficial to both the management unit and the junior employees of an organisation. While the junior employees will be learning about new skills that can be used to undertake various tasks, the management will be offered an opportunity to understand the potential of the employees. This makes the process of assigning them various tasks very easy. Microsoft Corporation can use the approach to expand the performance of its employees.
Strategic Talent Review
As the company expands, it may be necessary to conduct regular reviews to determine if the employees have been rightfully assigned various tasks. Price (2011) defines strategic talent review “As an efficient and systematic way to check the quality and alignment of talents to determine whether a company has the right people in the right roles” (p. 57). There are cases where growth of firm is inhibited by the fact that employees are assigned positions that do not correspond with their skills and experience.
When this happens, even the most effective employees will underperform because they will be forced to work in areas that they have minimal knowledge. Strategic talent review allows the management to conduct a regular appraisal on the employees to determine how well they are able to use their knowledge and skills to achieve success in their tasks. The assessment team should be keen on identifying the mismatch between the talents and task requirements. When such incidents are identified, corrective measures should be taken immediately. Microsoft Corporation can use this strategy to enhance alignment of its employees’ skills and talents, and the assignments that is given to them in order to achieve the desired success.
References
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Berger, L. A., & Berger, D. R. (2004). The talent management handbook: Creating organisational excellence by identifying, developing, and promoting your best people. New York: McGraw-Hill.
Dessler, G. (2005). Human resource management: Gary Dessler. Upper Saddle River, N.J: Pearson/Prentice Hall.
Effron, M., & Ort, M. (2010). One page talent management: Eliminating complexity, adding value.
Elegbe, J. A. (2010). Talent management in the developing world: Adopting a global perspective. Farnham [England: Gower.
Israelite, L. (2010). Talent management: Strategies for success from six leading companies. Alexandria, Va: ASTD Press.
Mathis, R. L., & Jackson, J. H. (2009). Human resource management essential perspectives. Australia: South-Western Cengage Learning.
Oakes, K., & Galagan, P. (2011). The executive guide to integrated talent management. Alexandria, Va.: ASTD Press.
Pham-Gia, K. (2009). Talent Management: Recruitment Methodologies – an Overview. München: GRIN Verlag GmbH.
Price, A. (2011). Human resource management. Andover: Cengage Learning EMEA.
Schweyer, A. (2013). Talent management systems: Best practices in technology solutions for recruitment, retention and workforce planning. Hoboken, N.J: Wiley.
Shukla, R. (2009). Talent management: Process of developing and integrating skilled workers. New Delhi: Global India Publications.
Sims, R. R. (2007). Human resource management: Contemporary issues, challenges and opportunities. Greenwich, Conn: Information Age Publ.
Tony, D. (2007). Talent assessment: A new strategy for talent management. Aldershot: Gower.
Waldrop, S. A. (2008). The everything human resource management book: Attract and keep the people who will drive your company’s success. Avon, Mass: Adams Media.
Penrose (1959) pioneered the resource-based view. However, Chamberlain (1939) was the first to explain explicitly the concept of unique resources and capabilities. He explained that exploiting unique skills is the best strategy of achieving competitive advantage.
Wernerfelt (1984) did the first publication of Resource based theory, whereby he explained it as a compliment of the market based theory. He observed that competition for resources among firms would affect their ability to implement product market strategies.
Rumelt, Schendel and Teece (1984) also made significant contribution to this theory whereby they defined firms as bundles of productive resources. They therefore suggested that the economic value of these resources would be different depending on context within which they are used.
Mahoney and Pandian (1992) asserted that the main idea behind the Resource based view is that internal resources act as the source of a firm’s strengths and weaknesses. Therefore, for a company to have strength over its competitors it has to have resources that are different and superior to other firms.
Therefore, a firm’s unique resource endowment will influence its strategic choice or its conduct, which will in turn determine its economic success or performance (Collis & Montgomery, 1995).
Characteristics of Resources
There is no generally accepted typology of the resources. However, the resources of a firm can be divided in to two broad categories – tangible and intangible resources. Tangible resources describe the physical and financial resources which include production facilities, Information technology hardware and equity base.
On the other hand, intangible resources are further divided in two parts – personal and impersonal resources. Personal resources refer to skills and capabilities, Impersonal resources refer to intangible assets such as patents and rights as well as organizational processes and routines (Von Pock, 2007).
The main characteristics of the resources are based on two assumptions: firms in the same industry are different with respect to the resources they control. These resources controlled by these firms may not be perfectly mobile (Barney, 1991).
Barney (1991) identifies key parameters that can be used to determine the resources of a firm that leads to competitive advantage. First, the resources must be valuable, which refers to the ability to facilitate the exploitation of opportunities as well as reduce the threats that are in its competitive environment.
Secondly, the resources must be rare which means that they should not be easily available to current or potential competitors. Thirdly, imperfectly imitable, this means that they cannot be copied or obtained by competitors. Lastly, they should be non-substitutable.
This means that there are no other equivalent resources which can be used to develop the same strategies. All characteristics affirm the first assumption of heterogeneity. The second assumption of imperfect mobility is affirmed by the fact that some resources cannot be obtained from the factor markets.
These include strategic resources such as reputation, staff motivation and organizational knowledge. Therefore, the RBV theory is all about exploiting differences in the resources that firms control (Kirsch, 2007).
Resource creation and decay
Firms can have unique resources through two ways – accumulation and acquisition. Therefore, firms become heterogeneous, because throughout their history they accumulated different assets and acquired different intangible assets of dynamic routines and tacit learning (Peteraf, 1993).
Accumulation is a relatively clear process, because it entails development of internal resources to achieve competency. However, acquisition is a bit problematic. The benefit of acquiring the resources might be equal to or more than the cost of acquisition.
In addition, there are limits to acquisition of resources in the factor markets. Some resources cannot be transferred as physical assets. For instance employee motivation cannot be acquired, it has to be developed (Enders, 2004).
However, resources owned by a firm can decay, whereby they are no longer beneficial to achieving a competitive advantage. Decay is causes by various reasons which include a given technology becoming outdated. For instance, a firm can attain a competitive advantage over its rivals by developing a technology that is superior and unique t its rivals’ technology.
However, another firm that rivals that rivals that company can come up with a technology that is superior to the one that the company owns.
Therefore, the company’s resource will have decayed. Another way through which resources can decay is when rivals develop resources that are the same as those of the superior firm. Therefore, its superiority will have diminished (Shi, 2007).
Resource recombination
A firm will have to identify its critical resources or acquire them after which it will transform them in to core competencies of the company. These core competencies are then used to build competitive advantage (Dierrickx & Cool, 1989). Enders (2004) argues that capability is formed by institutionalization of resource combination.
Therefore, developing core competencies will depend on the management’s ability to combine its skills and knowledge base as well as its values, norms, technical systems and managerial systems to develop a competitive advantage.
As a result, organizational competencies find their roots in organizational processes if the firm has the ability to create and acquire knowledge and efficiently and effectively transfer that knowledge to achieve competitive advantage (Collis, 1991).
Resources and the Role of Managers
Resources alone do not lead to competitive, because they need to be transformed. Managers play an important role of converting the resources in to value for customers. Therefore, they need to be able to identify, develop or create, deploy and protect the firm’s resource to attain competitive advantage.
The manager should be able to identify the characteristics of resource that create competitive advantage. After identifying the resources, the manager should develop them to create core competencies. For instance, some resources cannot be acquired from outside the organization.
Therefore, it is upon the manager to put in measures that will ensures that such resources are accumulated to create a competitive advantage in the future. The next role after developing the resources is protecting them from rivals.
For instance, trade secrets and technology innovations need protection from copying. Lastly, the managers are charged with the task of deploying those resources effectively in the market place (Lei, Hitt & Bettis, 1996).
Resource Functionality
Resource functionality refers to how the resources are used to achieve competitive advantage. This involves determining an organizations strategy and deploying resources through the selected strategy to achieve a competitive advantage over competitors.
To determine a strategy a firm needs to identify its strength and weaknesses. The strengths of a firm are based in the resources that are unique to the firm, have value, and cannot be easily copied and non-substitutable. After this assessment firm can build on these strengths to attain a competitive advantage over its rivals.
Therefore, the management will deploy its resources to build on these competencies. In the end they will have attain some superiority over its competitors. To achieve sustainability, the management needs to put up measure to protect the attained advantage (Barney & Clark, 2007).
Firm Analysis
Microsoft Overall analysis
Every management would like to see its firm attain a competitive advantage. Microsoft has been able to achieve competitive advantage over its competitors through the VRIO approach.
The firm has resources that are immobile whose creation are path-dependent and have complex conditions, which has enabled it to develop and sustain its competitive advantage over its rivals. Some of these capabilities have been developed over along period, which makes it costly for its rivals to acquire.
For instance, the company has an operating system called windows a software that runs the computer hardware. The company started working on the windows software in 1982; this has enabled it to gain vast experience and expertise that competitors cannot acquire overnight (Shi, 2007).
The company has human resources as well as human resource practices that have enabled it to have creative employees who are able to come up with innovative ideas on how to better their products. The company achieves this through job satisfaction whereby it seeks to present Microsoft as the best company to work for.
It provides its staff with attractive salary packages as well as financial incentives for creativity. As a result, the company has been able to check on its competitors who are working hard to outdo the firm.
The company has also made strategic acquisition as a way of accessing critical resources that it cannot develop within cost-effectively. For instance, it recently acquired Skype as a way of venturing in to the video and more interactive technologies.
This year Microsoft acquired Skype at a value of $8 billion and in 2007 it acquired aQuantive at a value of 6 billion dollars. These two acquisitions demonstrate the financial might of the company which is a critical resource in attaining competitive advantage (Microsoft, n.d).
The company has also entered in to strategic alliances in order to have core competencies that will enable it to stay ahead of its competitors. For instance, the company has partnered with mobile phone giant, Nokia to develop windows phone which is projected to become the second in market leadership by 2015.
This type of relationship cannot be copied. This shows Microsoft’s ability to configure the market as well as develop and implement appropriate strategies. Lastly, the company has windows and office products, which are leading in their product categories.
It has achieved this through its core competency of research and development. For instance, Windows has undergone a series of innovations for the past 25 years, which has enabled it to maintain market leadership (Barney & Clark, 2007).
Analysis on a VRIO perspective
VRIO is an acronym that stands for the following elements of capability, Value, Rarity, Imitability and Organization. Rarity seeks to explain whether relatively few firms possess the resource or capability.
Imitability determines whether the resource or capability is difficult to copy and whether any firm that tries to copy, obtain or develop the capability or resource will find it disadvantageous in terms of cost. Organization checks whether the firm is organized, ready and able to exploit the capability or resource (Von Pock, 2007).
Microsoft has financial resource capability as shown by its ability to make large and costly acquisitions. However, this financial might is not enough if it cannot be coordinated to the advantage of the firm.
Therefore, organization in VRIO is important in determining how the finances are spent to ensure that the company obtains a competitive advantage. Although most of its competitors cannot afford such large amounts of money, this will only be helpful if the acquisition made with it is strategic and enables the company to secure a competitive advantage.
Therefore, the value of the resource is shown by its ability to acquire resources that the firm lacks such as technologies. It is rare because few firms can afford such amount of money and it is organizationally used to acquire a strategic venture (Kolakowski, n.d).
Innovation is another resource or capability that continues to give Microsoft an edge over its rivals, because it builds its reputation. This resource has been patented, which makes it a rare resource at least in the company’s product categories.
The company’s dominance in the windows and office products shows Imitability of the resource, because competitors are unable to match the company’s innovation capability. This resource has value, because the company has been able to exploit the software demand market through its innovative capability.
The company protects its human resource by providing for incentives for creativity and attractive remuneration packages, which enables it to protect its human resource from competitors (Microsoft, n.d).
Discussion
Resources at Microsoft’s disposal
The firm has tangible resources, such as the financial resources and intangible resources such as the employees’ innovative ability. Both of these have enabled the company to have a great reputation over its rivals. In addition, the company is able to coordinate and protect these resources through its organizational resource (Enders, 2004).
Level and characteristics of these resources
The tangible resources such as financial are so important to the company. Furthermore, its intangible resources and organizational resources are core and priority, because they determine the company’s performance. They are therefore, protected from competitors. As observed above these resources are valuable, imitable, and rare and cannot be substituted (Grant, 1991).
Creation of capabilities
The resources owned by Microsoft have the characteristics that enable them to create a sustainable competitive advantage. For instance, their innovative capability, which is an intangible resource, cannot be imitated, yet it has helped them to maintain market leadership for not less than two decades (Grant, 1991).
Sustainability Success
Microsoft’s success can last for a relatively long period before its competitors catch up with its competencies. Their continued improvement is an indication of continued dominance in the two product categories that they are leading in. Furthermore, its strategic alliances and acquisition will enable it to move to higher heights in the future (Coyne, 1986).
Conclusion
Resource based view is a widely held theory that managers can use to manage a company to success against its rivals. Microsoft has demonstrated that it has some core competencies, which it has built to attain a competitive advantage over its rivals.
The firm has the ability to identify and organize its critical resources in way that ensures that it maintains a higher performance compared to its rivals. These resources have the characteristics that make them competencies such as imitablity, rarity, value and non-substitutable.
In addition, the firm has put up measures, which ensure that these advantages are sustainable. This will ensure that its performance continues to increase and that it maintains its advantage.
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Microsoft is a multinational technology corporation that has, for many years, been dedicated to delivering cutting-edge goods and services to its clientele. The company’s annual report provides evidence that it has a deliberate strategy to become a leader in its customers’ digital transformation, with a primary emphasis on accelerating innovation and driving growth. The strategy was developed to achieve the company’s goal of becoming a market innovator. Its approach is always in the form of innovative cloud computing services, cutting-edge educational solutions that help students remain connected and involved, and unwavering dedication to providing excellent customer support and satisfaction. This essay will discuss the aspects of Microsoft’s planned and realized strategy, as detailed in the company’s annual report and as experienced by customers.
Characteristics of Microsoft’s Intended Deliberate Strategy
Cloud Computing Services
Microsoft is focused on delivering cloud computing services to its customers, allowing them to access data, applications, and services from any device at any time. This is done through the Azure platform, which is a comprehensive cloud services platform that is designed to meet the needs of businesses of all sizes. Microsoft also offers cloud-based artificial intelligence (AI) and machine learning (ML) services to help customers unlock insights from their data.
Advanced Educational Solutions
Microsoft has developed products that help students stay connected and engaged in their education. Microsoft Teams, which allows students to collaborate on projects, is one example of how the company is utilizing technology to boost student success. Additionally, Microsoft offers an array of resources in the form of free training and certification programs, allowing students to become certified in technologies such as Azure and Microsoft Office.
Accelerating Innovation
Microsoft is focused on accelerating innovation, with a goal of providing customers with products and services that are ahead of the curve. To do this, Microsoft invests heavily in research and development, ensuring that new products and services are developed quickly and efficiently. Microsoft also invests in partnerships with other companies, allowing them to leverage the expertise of other industry leaders in order to create innovative solutions.
Driving Growth
Microsoft works to ensure that its products and services are constantly evolving and improving in order to meet the needs of customers. The company has a strategy of leveraging its platform and ecosystem to drive growth and create new opportunities. This is done through strategic investments, partnerships, and acquisitions to ensure that the company is able to provide customers with the best possible products and services.
Customer Support and Satisfaction
Microsoft places a high priority on ensuring the complete happiness and contentment of its clientele by offering superior customer service. The organization has made it a priority to provide prompt and effective responses to questions and comments raised by customers. In addition, Microsoft has made significant investments in a variety of customer support technologies, such as chatbots and virtual agents, to make it simpler and more expedient for consumers to get the information they want.
Characteristics of Microsoft’s Realized Strategy as Experienced by Customers
Open Source Contributions
Microsoft has been committed to providing open-source contributions to the development community. This includes the open source projects hosted on GitHub, which allow developers to access and use Microsoft’s code. Additionally, the company has invested in open-source education initiatives and has sponsored open-source conferences and events. This commitment to open source has allowed customers to benefit from Microsoft’s expertise and has helped to create a more vibrant and innovative development community.
Cyber security Solutions
Microsoft provides its clients with a variety of solutions for cyber security, with the goal of assisting them in protecting their data and systems. This entails not just an array of security-related products and services, such as Windows Defender and the Azure Security Center, but also an extensive array of consulting services and educational programs. These products are intended to assist clients in guarding their data and systems against intrusions and other forms of harm caused by hostile actors.
Automation Solutions
The company has developed a range of automation solutions to help customers increase productivity and reduce costs. This comprises of Microsoft Automation Platform, which is a cloud-based platform that enables customers to automate their processes and workflows. It also offers a range of artificial intelligence (AI) and machine learning (ML) solutions to help customers streamline their operations and increase efficiency.
Digital Transformation
The company has a goal of helping customers achieve digital transformation. It offers consulting services to help customers develop their digital strategies and leverage the company’s platform and ecosystem to create innovative solutions. The company has also invested in digital transformation initiatives, such as the Microsoft AI for Good program, to help customers make the most of their data and technology.
Business Solutions
Microsoft provides a range of business solutions to help customers succeed in their respective industries. It offers products such as Dynamics 365, which is a suite of enterprise applications designed to help businesses of all sizes manage their operations. The company also provides a range of business intelligence and analytics solutions to help customers gain insights and make informed decisions.
Sustainability
Microsoft is committed to sustainability and has invested in efforts to reduce its environmental impact. This comprises investing in renewable energy sources and carbon offset projects, as well as developing products and services that are designed to be more sustainable. The company is likewise committed to responsible and ethical business practices, such as providing safe and secure products for customers and ethical sourcing of materials.
How Microsoft Has Achieved Its Strategic Goals
Microsoft Company has been successful in accomplishing its strategic objectives because of the investments it has made in research and development, as well as the dedication it has made to developing cutting-edge goods and services tailored to individual customers’ requirements. It has also been possible for the firm to form strategic collaborations with other businesses, such as the one that was just recently announced with Adobe. These agreements have allowed the company to broaden its range of goods and services and attract new clients. Additionally, Microsoft has successfully grown its client base by selling its goods and services to new areas, such as the education sector (Chen et al., 2020). This strategy has allowed the company to extend its customer base. These investments have enabled the firm to maintain its position as a leader in the digital transformation of its clients and to maintain a position of advantage over its rivals.
Microsoft has made it one of its primary goals to foster an environment inside the firm that fosters creative expression and fosters group efforts to find solutions to problems in order to increase the likelihood that the company will continue to be successful. This choice has resulted in a significant amount of favorable outcomes. Because of the company’s commitment to its workers, it has been able to effectively build a robust and diverse staff that is motivated, creative, and eager to deliver innovative goods and services. All of this is a direct result of the company’s commitment in its employees (Aula & Mantere, 2020). The firm has been able to maintain its position as the market leader in digitally changing its consumers because of its dedication to both innovation and cooperation. This has allowed the company to remain one step ahead of its rivals and sustain its position as the industry leader. In addition to this, it has managed to keep its position as the industry leader.
As a direct result of this, Microsoft Company has conceived of a strategic plan to become a market leader in the digital transformation of their clients. The speed of invention is going to be sped up as part of this strategy, and the creation of new firms is going to be encouraged as well. Customers always have the opportunity to observe this strategy firsthand in the form of the cutting-edge educational solutions that are offered to help students stay connected and involved, as well as the unwavering commitment that the company has to provide excellent customer support and satisfaction (“Annual Report, 2021”). Because of the firm’s dedication to investing resources in research and development, building strategic alliances, and establishing a culture that supports creative expression and collaboration among workers, the business was able to effectively realize its long-term objectives.
Summary Results of Operation
The Impact of Microsoft’s Strategy on Customers
The fact that Microsoft is still growing and having success demonstrates that the company’s strategy has been effective in meeting the requirements of the company’s clientele. As a result of the company’s commitment to delivering outstanding customer service and ensuring that each and every one of its patrons is completely satisfied with their purchases, it has been successful in developing a clientele that is dedicated to making ongoing use of its various products and services (Mckeown, 2019). In addition, the firm’s drive to produce new products and services, as well as its investments in research and development, have helped the business retain its competitive advantage in the rapidly shifting digital industry. As a direct result of this, customers have been able to stay connected, engaged, and competitive in the digital world. Furthermore, customers have been able to experience the most current technical developments.
Microsoft’s intentional approach has also enabled the corporation to establish a solid foothold in the international market. The firm has successfully developed a devoted client base eager to use its goods and services and make financial investments in the company due to its emphasis on customer service and happiness (Mckeown, 2019). In addition, the company’s dedication to innovation has allowed it to continue to develop and extend its footprint in global markets despite the quickly shifting digital scene. This has been made possible by the rapid pace at which the digital landscape is evolving. As a direct consequence of this, Microsoft has established itself as a frontrunner in the digital transformation of its customers. As a result, the company offers its clients the most recent technology advances and services that enable them to remain connected, engaged, and competitive.
Evaluation of Strategic Options
Microsoft’s strategic plan is a comprehensive approach that covers multiple facets of the company’s operations. By focusing on cloud computing services, advanced educational solutions, accelerating innovation, driving growth, customer support and satisfaction, open source contributions, cybersecurity solutions, automation solutions, digital transformation, business solutions, and sustainability, Microsoft is well-positioned to meet the needs of its customers and achieve its long-term goals (“Annual Report, 2021”). In order to evaluate the suitability, acceptability, and feasibility of these strategic options, it is important to consider each option in the context of the company’s overall strategy and objectives.
Cloud Computing Services
The cloud computing services offered by Microsoft are highly suitable for the company’s strategy and objectives. By leveraging the Azure platform, customers are able to access data, applications, and services from any device at any time (Aula & Mantere, 2020). Additionally, the cloud services platform is designed to meet the needs of businesses of all sizes. Cloud computing services are also highly acceptable to customers, as they offer them the ability to access data and applications from any device. In terms of feasibility, cloud computing services are relatively easy to implement, as Microsoft has already invested in the development of the Azure platform.
Advanced Educational Solutions
The advanced educational solutions offered by Microsoft are also highly suitable for the company’s strategy and objectives. By providing students with collaborative tools, such as Microsoft Teams, and resources, such as free training and certification programs, Microsoft is helping to boost student success. Additionally, these solutions are highly acceptable to customers, as they help them to stay connected and engaged in their education. In terms of feasibility, the advanced educational solutions are relatively easy to implement, as Microsoft already has the resources and infrastructure in place to provide these solutions.
Accelerating Innovation
The goal of accelerating innovation is also highly suitable for Microsoft’s strategy and objectives. By investing heavily in research and development and leveraging partnerships with other industry leaders, Microsoft is able to develop innovative products and services quickly and efficiently. The goal of accelerating innovation is also highly acceptable to customers, as they are able to benefit from the company’s cutting-edge products and services. In terms of feasibility, the goal of accelerating innovation is relatively easy to implement, as Microsoft already has the resources and infrastructure in place to achieve this goal.
Driving Growth
The strategy of driving growth is also highly suitable for Microsoft’s strategy and objectives. By leveraging its platform and ecosystem to create new opportunities, Microsoft is able to provide customers with the best possible products and services. The goal of driving growth is also highly acceptable to customers, as they are able to benefit from the company’s continued investment in products and services. In terms of feasibility, the goal of driving growth is relatively easy to implement, as Microsoft already has the resources and infrastructure in place to achieve this goal.
Customer Support and Satisfaction
The goal of providing excellent customer support and satisfaction is also highly suitable for Microsoft’s strategy and objectives. By responding quickly and efficiently to customer inquiries and feedback, as well as investing in customer service tools, such as chatbots and virtual agents, Microsoft is able to provide customers with the best possible customer experience. The goal of providing excellent customer support and satisfaction is also highly acceptable to customers, as they are able to benefit from the company’s commitment to providing the best possible customer experience. In terms of feasibility, the goal of providing excellent customer support and satisfaction is relatively easy to implement, as Microsoft already has the resources and infrastructure in place to achieve this goal.
Open Source Contributions
The commitment to open-source contributions is also highly suitable for Microsoft’s strategy and objectives. By providing open-source projects on GitHub and sponsoring open-source conferences and events, Microsoft is able to build relationships with the development community and provide customers with access to cutting-edge technology. The commitment to open-source contributions is also highly acceptable to customers, as they are able to benefit from Microsoft’s expertise and access to innovative solutions. In terms of feasibility, the commitment to open-source contributions is relatively easy to implement, as Microsoft already has the resources and infrastructure in place to achieve this goal.
Cyber security Solutions
The cybersecurity solutions offered by Microsoft are also highly suitable for the company’s strategy and objectives. By providing a range of security products and services, as well as comprehensive consulting services and training programs, Microsoft is able to help customers protect their data and systems from threats and malicious attacks. The cybersecurity solutions are also highly acceptable to customers, as they are able to benefit from the company’s expertise and solutions. In terms of feasibility, the cybersecurity solutions are relatively easy to implement, as Microsoft already has the resources and infrastructure in place to provide these solutions.
Automation Solutions
The automation solutions offered by Microsoft are also highly suitable for the company’s strategy and objectives. By providing customers with the Microsoft Automation Platform, as well as artificial intelligence (AI) and machine learning (ML) solutions, Microsoft is able to help customers increase productivity and reduce costs. The automation solutions are also highly acceptable to customers, as they are able to benefit from the company’s expertise and solutions. In terms of feasibility, the automation solutions are relatively easy to implement, as Microsoft already has the resources and infrastructure in place to provide these solutions.
Digital Transformation
The goal of helping customers achieve digital transformation is also highly suitable for Microsoft’s strategy and objectives. By providing consulting services to help customers develop their digital strategies, as well as investing in digital transformation initiatives, such as the Microsoft AI for Good program, Microsoft is able to help customers make the most of their data and technology. The goal of helping customers achieve digital transformation is also highly acceptable to customers, as they are able to benefit from the company’s expertise and solutions. In terms of feasibility, the goal of helping customers achieve digital transformation is relatively easy to implement, as Microsoft already has the resources and infrastructure in place to achieve this goal.
Business Solutions
The business solutions offered by Microsoft are also highly suitable for the company’s strategy and objectives. By providing customers with products, such as Dynamics 365, and business intelligence and analytics solutions, Microsoft is able to help customers succeed in their respective industries. The business solutions are also highly acceptable to customers, as they are able to benefit from the company’s expertise and solutions. In terms of feasibility, the business solutions are relatively easy to implement, as Microsoft already has the resources and infrastructure in place to provide these solutions.
Sustainability
The commitment to sustainability is also highly suitable for Microsoft’s strategy and objectives. By investing in renewable energy sources and carbon offset projects, as well as developing products and services that are designed to be more sustainable, Microsoft is able to reduce its environmental impact and provide customers with ethical and responsible products and services. The commitment to sustainability is also highly acceptable to customers, as they are able to benefit from the company’s commitment to responsible business practices. In terms of feasibility, the commitment to sustainability is relatively easy to implement, as Microsoft already has the resources and infrastructure in place to achieve this goal.
Conclusion
Microsoft’s strategic plan is a comprehensive approach that covers multiple facets of the company’s operations. By focusing on cloud computing services, advanced educational solutions, accelerating innovation, driving growth, customer support and satisfaction, open source contributions, cybersecurity solutions, automation solutions, digital transformation, business solutions, and sustainability, Microsoft is well-positioned to meet the needs of its customers and achieve its long-term goals. By evaluating each strategic option in terms of its suitability, acceptability, and feasibility, Microsoft is able to ensure that its strategic plan is effective and able to meet the needs of its customers.
Microsoft has been a leader in the operating systems market for many years. From the company’s foundation, the presentation of Microsoft Office programs, and their first operating system named, Windows 95, Microsoft was the trendsetter in its field, and even today, they continue to grow. However, it is impossible to achieve something without mistakes and failed periods. In 2005 Microsoft acquired strong competitors, such as Play Station in terms of entertainment, Apple for phones, and Google for web services. That is the reason why they needed to restructure to stay competitive hereafter. Even though the 2005 restructuring did not achieve its goals, the 2013 Microsoft reorganization was crucial for the company’s future perspectives and a vital step toward its growth.
Overall, 2013 was a year of ups and downs for Microsoft. Last year’s Windows 8 failed, and the company continued to recover from its crisis. People started to prefer tablets over computers, and that directly affected the sales of their new operating system. However, in 2013 Microsoft strongly developed its cloud services and began to compete in the market. Satya Nadella was the head of the Cloud and Enterprise Engineering Group at the moment and became new Microsoft’s CEO after Ballmer because of his success.
The company was in a bad state primarily because of Ballmer. He was contradictory in his impact on Microsoft, which is why investors raised the company’s shares when he announced his retirement next year. Many people blamed the company during Ballmer’s management for a belated movement to the mobile market and untimely decisions in general. Microsoft needed a fresh impulse and a new leader that shareholders would trust, understand how to use the strengths of the company, and make the weaknesses stronger.
The main reason for the 2005 failure was that Microsoft’s divisions were competing with each other for resources and did not cooperate enough. The company did not take the lead in the search engine or mobile phone markets. The company’s then-CEO Steven Ballmer created a plan called “One Microsoft” that was meant to help the company develop and get out of the crisis. It can be seen today that this reorganization was a significant and needed decision. Nadella replaced Ballmer as CEO in 2014 and made the system more collaborative, as well as made an accent on cloud services. That way, Microsoft became one of the leaders in cloud computing with Azure, which challenged Amazon in this field. In 2019’s April, Microsoft became one of the three US public companies worth over a trillion dollars, along with Amazon and Apple (Danh, 2020, para. 11).
Microsoft’s shares’ constant growth is only one of the reasons why this company is moving correctly and competently. Even though the 2013 reorganization needed many changes to work right, it can be seen that “One Microsoft” was the impulse that the company needed to rehabilitate.
To conclude, “One Microsoft” was a good idea that saved the company and helped Microsoft to stay competitive. The company founded decades ago needed a change to grow, develop and remain relevant for modern people. The 2013 reorganization was significant for the company’s future and its outlook. This restructuring caused many challenges but was the beginning of something promising. As a result, Microsoft became one of the leaders in the global market of cloud computing and came to unprecedented heights.
The rapidly growing world of industrialization and globalization has witnessed a sharp growth of industries, which are substantial in economic and social growth. Technological advancement is probably one of the major characteristics of the industrial revolution in the postmodern world with virtually every important aspect of a technical profession, largely relying on technological support to operate efficiently.
Notwithstanding their aptitude to integrate business ideas that support them through the rapid diffusion globalized economy, corporate organizations are facing unrelenting challenges in their operations. Since its advent into the corporate world, Microsoft Corporation has been arguably one of the prevalent corporate names in the technology industry, with its performance positioning it among the fortune 500 organizations.
Analogous to other organizations, Microsoft has also been facing challenges that have marred its corporate growth. Fundamental to this notion, the purpose of this study is to analyze problems that Microsoft faces and provide possible alternatives and recommendation.
Symptoms of the problems
Notwithstanding its long outstanding performance within the technological business paradigm with unbroken performance track record, Microsoft is experiencing something different in the contemporary days. Several critical symptoms to its downfall in the technological consumer market are becoming more eminent in the current days.
Dropping in Microsoft’s market value is one of the first symptoms that significantly demonstrate possible problems confronting Microsoft Corporation; hence, its fall in market prominence and dominance in the last two years before the advent of Apple, which has proved to be one of the world’s most honored technological companies.
Another significant symptom to the problems marring corporate growth is the gradual loss of human capital that has been forming potential strengths to the initial success of Microsoft Corporation.
As postulated from the case study, Microsoft is gradually losing a majority of its innovative human resources to the prevailing competition with many of its top executives withdrawing from the organization either through formal work retirement process or attracted by competitors.
Microsoft third most possible symptoms to its current problems is technological eschew or stagnancy with the case study report indicating that Microsoft is steadily losing value and lagging behind its competitors as the company has failed to continue producing modern technologies including gaming devices, tablets, mobile phones, and other media.
From its initial growth in productivity that made almost all its employees virtually millionaires, one of Microsoft’s significant symptoms of downfall is its low revenue generation as compared to its operating income. This performance trend started stagnating and fluctuating from the beginning of 2008 towards 2010.
From the case report, employee rapport with Microsoft Corporation started dwindling following the company’s inability to handle integral employees concerns including low pays of wages and reduction of benefits despite the company’s ability to record high profits. Indicative of these symptoms, Microsoft is now struggling to deal with numerous problems within its operations.
Problem statements
Microsoft Corporation is facing a continuum of challenges in the recent days. One of the major problems that form a great challenge in the progress of Microsoft within the technology realm is low productivity, underproduction, or simply poor organizational performance. Microsoft is gradually falling short of market performance, which is characterized by low performance as opposed to its initial phenomenal success.
Also, as a software giant, flagship products are becoming rare. From the case report produced by the Wall Street, Microsoft was lagging behind its competitors in almost all aspects of business including technological advancement, marketing techniques, and relatively low financial capacity following the invasion of other technical companies.
Management is one of the critical success factors that determine the initiation and resilience of the organizations in its operations. Organizational management is normally responsible for administering leadership techniques that determine organizational performance as it controls both human and financial capital.
According to the case, as provided by Wall Street, poor management is one of the potential problems affecting Microsoft in the contemporary days within evidence of bureaucratic management that has significantly affected creativity and stock performance.
The case study indicated that innovative workforce is withdrawing with members claiming that Microsoft was responding too slowly to technological changes and other employees cited that Microsoft failed to address their concerns.
Any modern company aims at organizational success that is currently achievable by addressing significant production factors including actively focusing on quality of products that meet customers’ demands and preference. Research on this case study unveiled that Microsoft is currently facing stiff market competition from potential competitors in the technology industry, including the rapidly growing Apple, Mac, and Linux.
With demand for advanced technologies cutting across different devices and services, Microsoft is facing technological competition from the PC market to its services, including the Windows division that provides computer-enabled operating systems. This competition is stiffening from software production to hardware systems, which were Microsoft’s main tools for competitive advantage.
Problem Analysis
Low and deprived productivity
Organizational productivity is determined by numerous factors that entail financial comportment and market performance. From the case study provided about Microsoft, market performance and financial status clearly indicate that Microsoft is currently surviving under deprived productivity.
Discussing on financial performance that signifies performance or productivity in organization, Exhibit 3 provided in the study can significantly demonstrate this concern. A closer analysis of annual financial statements of revenue and operating income of Microsoft from 2008-2010, the company’s financial stability is dwindling.
The financial statement indicates that Microsoft has been recording profits, but in quite unstable performance characterized by hikes and drops between the years. In 2008, the company recorded $ 60, 420 million values of revenue and $22,217 operating income (loss).
In 2009, the company recorded annual revenues worth $58,437 and reported annual operating income worth $20, 363. This financial performance trend proves that the company is recording unsteady performances.
Management
Management forms an integral part in organizational performance as policies and objectives articulated by management and their competence normally influence organizational success. One of the useful indicators that point to management failure in Microsoft is the continued employee-management wrangles that have posed serious issues in the company.
As indicated by the report, despite its uninterrupted track record in attracting and retaining significant human capital, the company has in the recent past witnessed a substantial loss in its key creative human resource. Top executives attached to business long term endeavors have resigned and others sought employment from other potential employers.
The current management has failed considerably in handling essential employees’ concerns including complaints regarding wages and benefits reductions, characterized by a widening compensation gap between executives and employees.
The management’s laxity in adopting new technologies that are integral for intensifying competition in the technology industry is keeping the company at stake, thus forcing it to struggle in the market performance.
Technological market competition
The response to the market demands and customers’ preference for certain products is currently one of the paramount business factors that entrepreneurs have recognized to have a potential impact on a firm’s stability. A key problem facing management in Microsoft is the constantly rising technological market competition that in most occasions has found the company unwary.
The fast pace at which other technologies are rising and their capability to respond to the rapid technological changes has created enormous problems to Microsoft. The company has lagged behind in realizing innovations involved in new technologies, including supporting the development of gaming services, tablets, mobile technologies, and other sources of media.
Microsoft has failed to recognize the rising demand for Smartphone technologies and continued to perform in dwarf of PCs. The company is performing dismally in server and tools and in providing online services while at the same time, the entertainment and devices section are dwindling in its performance in the technology market.
Alternatives for the problems and their Evaluation
Problems normally occur in businesses, but they only become detrimental when alternatives and approaches to handle them never emerge. The main problem in the case of Microsoft that has a significant influence in the existence and continuation of others is the issue of management itself. The management is arguably part of barrier to implementation of important strategies in Microsoft.
In a bid to reclaim its aptitude and performance in the rapidly changing technological industry, reshuffling and changing the management style is paramount for positive results in Microsoft Corp. Bureaucratic management stifles performance and each significant change will begin by streamlining the management.
As stated from the case, the current management is autocratic and tyrannical, with little expertise as top executives, including the current C.E.O Steve Ballmer have not received any credible welcome from directors and employees.
Attracting and retaining innovative workforce to help in innovating new technologies would help in reshaping Microsoft Corp. as talented human resource is imperative in analyzing problems, making critical decisions, and supporting management with progressive ideas.
One of the essential factors to consider in the technology industry is the trendiness in the products as integrating services and products with significantly advanced technologies would greatly aid in improving the market demand for its products.
After identifying innovative workforce that would produce competitive products and brands, it would be significant for Microsoft Corp. to consider expanding its market through strategic marketing techniques and enhancing the prevailing partner relationships. The restructured managed is capable of building more powerful partners.
Course of action (Recommendations)
Step 1: The entire action plan would require one year for effective implementation. Each step would require three months. The first would be a three-month strategic action plan development, which denotes the beginning of changes. The first step would involve revamping the management to allow integration of significant changes in Microsoft Corp. Designing implementation committee is integral in this phase.
Step 2: The second phase of change that would create significant change to Microsoft is attracting new and innovative workforce that would help in generating ideas on developing new technologies. The new management can practice this aspect throughout the company’s operations, though for the start, three months are adequate to identify the desired workforce competent enough for improving Microsoft.
Step 3: In three months, the new talented workforce will work with the management team in critical decision making to improve the company’s operations including changing and designing new and advanced products that follow the market trend. This move would help restore the company’s reputation on the quality of products and subsequently improve its market rapport with clients.
Step 4: The last step that would significantly place Microsoft Corp. in the best market position would involve developing a global marketing team and designing strategic marketing plans that will aid in expanding the market share for products of Microsoft. For instance, a huge marketing team to market the new windows 7 and Windows 8 is paramount.
