Analysing The Business Culture of Microsoft

“Culture impacts most aspects of organisational life, such as how decisions are made, who makes them, how rewards are distributed, who is promoted, how people are treated, how the organisation responds to its environment, and so on”

Microsoft Windows and Microsoft Office are at present installed on over ninety percent of every computer globally. In estimation this is just under a billion computers. Recently Microsoft had to pay an antitrust fine of four hundred and ninety seven million Euro due to having a “monopoly” on the market.

Microsoft has been trading stocks since 1986. Microsoft is currently the third highest stock market capitalization in the USA with $270,000,000,000. This means they are easily valued over their competitors Google, IBM and Apple.

This analysis will explore the cultural aspects of Microsoft; the motivation on employees, the organizational structure, market that Microsoft is currently in, the managerial behaviour and effectiveness of Microsoft and the cultural environment of Microsoft.

The industry sector which Microsoft is in is a very competitive, unstable, fast moving industry that requires constant regeneration of new and innovative products in order for a company to maintain success.

Microsoft profited $12.6 billion (£7.5 billion) last year on 71,000 employees in 85 countries. Of these, only 32% are female, this is an earning of $177,450 (£106,378) per employee.

In terms of management theories, there are a lot of similarities to be seen with each of the four main categories and the culture of how Microsoft is operated, for example, the classical approach. In this approach there are a number of key concepts that would be very important in the day to day runnings of Microsoft.

The classical approach puts emphasis on:

the formal structure of the business,

a hierarchal structure in relation to management

Common principles of organization.

Classical writers such as Fayol were apprehensive with improving the organisation with a means of growing efficiency. His main key theories were on planning, organizing, command, co-ordination and control. These theories are still very relevant to Microsoft today because the way that the company operates is in a controlled, hierarchical structure. Although with such classical writers as Fayol there is an issue that they have not taken into account personality factors and for illustrating an organizational structure, in which people can exercise only limited control due to a strict regime, however this is not the case with Microsoft, they also pay attention to social factors at work. Peter Drucker was a writer that wrote about making work industrious and employees attain, managing social impacts and responsibilities and fulfilling the detailed purpose and duty of the organization. Drucker was very focused on people; one of his most famous quotes is “Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you’ve got.” This gives people a very good idea of the kind of person Drucker was and how he felt about management of a business. Drucker’s key concepts match that of Microsoft’s because both are designed to get people involved with each other in order to produce the best possible outcome for the company.

Motivation is a big part of every business, especially such a professional business as Microsoft, they use certain motivational techniques as groups and teams and extrinsic (tangible rewards) and intrinsic (psychological rewards.) There are various writers that talk about Motivation; some are FW Taylor, Maslow and Herzberg.

Taylor stated that money was the most important thing used in motivating people. He studied different workers carrying out tasks, known now as his “time and motion studies.” He concentrated on the production process to make it more efficient by using “specialist equipment and breaking jobs down into very simple tasks.”

He came up with a set procedure for employees which they had to follow, to maximise efficiency. He designed “piece rate” (paid people per item made) to encourage people to produce more. Microsoft do not work under certain principles that Taylor studied because although the main aspect of every business is to make money, Microsoft are more directed at sustaining market leadership and also making sure that the employees are motivated through other things rather than money. Another motivational writer was Maslow; Maslow created a Hierarchy of needs. He assumed it showed what people wanted from their job. He presumed all employees would work upwards from the bottom to the top.

Self actualisation

=== Esteem needs ===

===== Social needs =====

====== Safety needs ======

======= Physical needs =======

– Self actualisation – Fulfillment – learning new skills, challenges etc.

– Esteem – recognition of achievements.

– Social – Friendship, contact – communication.

– Safety – Job security and safety.

– Physical – Ability to pay for food and shelter with pay.

The central problem with Maslow’s theory is that various people have various needs and not everyone will fit into the same pattern. Microsoft concentrate on the top two elements of Maslow’s hierarchy of needs triangle, they are continually trying to get workers to learn new skills through job rotation and also they believe that recognition of achievements is important, for example at the Microsoft Worldwide Partner Conference 2009, Microsoft Corp honoured an elite group of Microsoft Dynamics partners for their commitment to customers and success in extending the Microsoft Dynamics platform to drive business advantages in companies worldwide.

Herzberg research was based on a survey to investigate what people liked and disliked about their jobs. The results were put into categories; shown below:

Motivators

Hygiene factors

Achievement

Company policy

Recognition of achievement

Supervision

Meaningful and interesting work

Pay

Responsibility

Interpersonal relations

Advancement

Working conditions

Surveys regularly happens in Microsoft offices according to internet sources, at least once a year the staff fill out a form about how they feel about the company, if they have any issues they would like to raise.

The Final culture element that will be discussed in this analysis is the cultural environment, since Microsoft has 71,000 employees in 85 countries; this shows that because they are still majorly successful that they have overcome the adoption of a cross-cultural approach to the organizational behaviour of a business.

In conclusion, throughout its history, Microsoft has earned a reputation for tenacity when entering markets created, and initially dominated, by innovative start-ups. Competitors and observers ridiculed when Microsoft put out a first basic product that didn’t come close to matching the market leaders. Microsoft has a history of stubbornly staying the course, refining its wares, investing in development, until gradually the products become strong enough to push out the competition. With this, it’s clear to see that Microsoft has an effective culture and working environment when they can continually overcome the competition.

Text Book References:

Mullins, L. j. (2008). Management and organisational behaviour 8th edition. (1)

Harrison, R. a. (1992). Diagnosing Organisational Culture. (2)

Website References:

http://www.computer-juice.com/forums/f48/10-facts-you-didnt-know-about-microsoft-19984/

http://www.thestandard.com/news/2009/11/06/search-market-created-microsofts-worst-enemy

http://www.microsoft.com/presspass/press/2009/jul09/07-14DynamicsPartnerAwardsPR.mspx

http://www.projectalevel.co.uk/as_a2_business_studies/motivation_in_theory

http://microsoft.blognewschannel.com/archives/2007/07/17/microsoft-earns-177000-per-employee/

http://www.corporatewatch.org.uk/?lid=363#share