Evaluating Strategies Used By The Microsoft Corporation
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Microsoft Corporation is a software development company, they develop operating systems and much other software but now with the change in technology they are also entering in the mobile industry. They are one who always develop a revolution in the field of computing and they make concept of personal computers and make it very friendly with human begins. Microsoft corporation established in the April 4, 1975 and their head office in the Redmond, Washington, USA and on the same date they sell BASIC interpreter and Altair 8800, and then they make history in the computing field in the mid of 1980s when they launch their first operating system DOS and then continuously windows 95, windows 98 and till now windows 7 with the graphics and user friendly. And the founder of the Microsoft is Bill Gates and Paul Allen, and these names are now in the worlds richest persons. Now the CEO of the company is Steve Ballmer and COO is Brain Kevin Turner.
Organizational Direction is more about taking organization towards the height of success. With the help of environmental analysis managers gathered information and decide the way which directs the organization to move on. And their and two main ingredients of organizational direction which are:
Organizational Vision and Mission
Organization Aims and Objectives
In the modern age many organizations are developing their vision statement in actual it is an answer of many questions asked by the people or other organizations that what do you want to become or where you want to see yourself in the future? So, now a day's organizations set vision with the help of vision statement and then they represent to the world that our organizational main aim is this. Developing a vision statement is the first step towards strategic planning, preceding even first step for developing the mission statement. And this vision statement is made by the people of organization who are responsible for the success and failure of the organization mean experienced strategists, who plan every thing from initial to end step by step to make organization future and they give the original direction to the organization towards success from starting developing vision. Mostly it is just describe in a single line.
The Vision of the Institute of management Accountants is "Global Leadership in education, certification, and practice of management accounting and financial management."
A mission statement is a statement of purpose of any organization in which the organizations indentifies their scope of business's operations in product and market terms, actually it addresses the answer of a basic question faces by all strategists that what is our business? In a clear mission statement organizations clearly distinguish the values and priorities of business. In developing of mission statement the strategists keep in their mind the nature and scope of the present ongoing business and how to approach of potential attractiveness of future market and activities. In the beginning when the companies just started developing mission statements, it's all due to attracting investments from shareholders and investors to tell them what is our business and what we want to do. A clear mission statement must contain the information for attraction about: who are current customers, what are the products or services offered by the organization, where it is located and what technology they are using, and philosophy & self-concept.
Mission statement of Microsoft is:
"Microsoft's Mission is to create software for the personal computer that empowers and enriches people in the workplace, at school and at home. Microsoft early vision of a computer on every desk and in every home is coupled today with a strong commitment to internet-related technologies that expand the power and reach of the PC and its users. As a world's leading software provider, Microsoft strives to produce innovative products that meet our customers evolving needs."
Values, Strategic Values & Prevailing Values:
"Clarifying the value system and breathing life into it are the greatest contribution a leader can make. Moreover, that's what the top people in the excellent companies seem to worry about most" ( Peter & Wateman, 1985)
As shown in the above statement the values are very important for the organization and these are the qualities which have worth in the organization. Values represent the individual's highest priority and how they want to behave with each other in the organization and it depends on their experience and the cooperate culture. And it also represents that how the organization will value the customers, suppliers and other people which are related with the organization. The values of the top management are especially important in the development of culture because they have power to set the values and environment in the workplace.
Strategic values are related with the long term strategies and it defines that how the organization wishes to be perceived by its customers and clients. Because of it is a shred belief it depends on the guide on going activities and decisions.
Analyze of Organizational Vision with Hamel & Prahalad observations:
The Vision of Institute of management accountants is strong, not difficult, logical and consistent.
It fully covered with the market changes.
It is unique and can compete in the market place.
As it is clear in the statement they are just focusing the education and this only one vision they have
As they are doing good and getting their goals
Vision statement development according to Lynch's (2006):
Five elements for developing Vision Statement:
That it is very important for the organization to make vision statement because what we will do in the organization to become a successful organization in future time and investigate the purpose of need to deliver it.
We should have to identify the organizational objectives with the mission statement and should have to analyze in a very positive way for identifying future strategies and vision also should have to be identify and cleared.
The vision of the organization should have to be beyond the current opportunities and boundaries and organizational recourses.
We should have to keep in our mind the future innovations which can be done so we have to think beyond few years without the current situation with the organization is now dealing.
A vision is always a big challenge for the top management especially for managers.
Assessing Mission Statement against Lynch's four effectiveness criteria:
The mission statement of Microsoft Inc. is well enough for effecting on the people in or outside of the organization
Microsoft's mission statement is showing everything positive and affecting the advantages of it on the people and also based upon on the strengths and weakness of the organization.
It is totally realistic and attainable as what they have achieved and what they are trying to achieve from the market place.
It is flexible they have enough space to cover the environmental changes if changing but currently they are changing the environment by providing their best services and software to the world.
Lynch's five elements of formulating a mission statement:
First of all organization should have to know about their own business in which they are or what business they want to start with.
Your mission statement should have target oriented that is it effecting customer or your target audience, is it have enough space and information in it.
It is very important that your mission statement should have to reflect your organizational core values and believe.
You should have to tell your customer that what is your thinking about your chosen business and how you are professional in your field and what unique ideas you have to get advantage.
It is important that you tell your target audience that the main reasons for your strategic approach.
It is a kind of broad statement in which organizations describe that what they want to achieve and some time we called organizational aims as organizational goals. It includes all things in details that what are the main purposes of the organization, what they want to achieve and also organizations identifies what will for success of them in future time. The aims if the organizations are usually unquantifiable.
These are the tasks list what organization will do to achieve their sated goals and it's broken down in some elements which are called SMART, and we can compare these against organizational objectives. These are usually for short time and quantifiable and measurable.
S - Specific
M - Measurable
A - Achievable
R - Realistic
T - Time bound
Types of objectives:
Qualitative and Quantitative:
Short and long term
These are persons, individuals or groups which are directly or indirectly affected by the organizational decisions or policies. There are huge numbers of persons or groups who are directly related with the organization e.g. employees, debtor, creditors, customers etc. all stakeholder of the organization have their own rights or duties and power in the organization and these powers are usually equal to others.
These are persons, individuals or groups but form inside of the organizations that are affected by the organizational decisions. Some if the list if internal stakeholders are:
These are the persons, individuals or groups but outside from the organization e.g.
Primary stakeholders are the persons, individuals or groups who are affected by the organizational decision and policies on the certain matter. And these are mostly related with the finance matters and may be these are investors.
Secondary stakeholders are the persons, individuals or groups who are not directly related with the finance or investments. But they may experience or being affected by the organizational decisions.
Trade unions etc.
Conflict between Stakeholders:
As stakeholder are affected by the organizational decisions and might they are in or outside of the organization they can discuss on the decision of the organization and sometimes it happens that some people get happy on the decision but on the same time some people het angry or show that they are not agree with the decision made by the organization. And this stage of disagreement called conflict. There are many reasons because of conflicts can arises. All the organizational people have their own rights, duties and responsibilities and apart of that they also have power to compete with others and can show wither they are agree or disagree with the decision. There are some serious matters due to most of conflicts arises e.g. conflict between employees and top management for pay rising or bonuses, between the organization and local community due to noise, parking, wasting dirty things etc., conflict between government and organization due to tax, conflict between union and organization due to different matters against management etc.
Some organizational on going day to day matters affect whole organizational strategies and to solve this purpose and for getting desired results in the future organization take some important decision routine wise outside of the strategy. And in these decisions some decisions are to solve these conflicts and employee and supplier demands etc. And organizations have some performance measures to view and evaluate their performance and to indicate it. They view their performances day to day and measure it as they want or when the performance like to decreasing or increasing. It is very effective tool to get organization towards success. But sometimes it happens that due to price rises organizations cut their costs of products by cutting down labor cost or supplier cost etc.
It is a tool used by the organizations for identifying the powers and expectations of the different organizational members or stakeholders. This tool is also used by the organizations to assist top management to understand the social, economical and political environment and for searching, identifying and making new potential strategies for the organization or to make changes in the exciting strategies to make them potential and workable and less time consuming. This tool also identifies the power of different stakeholders of the organization and orientation of them and to make a good relationship which organization needs between various groups and organization.
Stakeholder mapping - The Matrix:
A (Minimal Effort)
B (Keep Informed)
C (Keep Satisfied)
D (Key Players)
"The extents to which individuals or groups are able to persuade, induce or coerce others into following certain courses of action" (Johnson & Scholes 1999)
Every stakeholder have their own power and also limits of it and can use their power when they think that something can happen if they suggest something to the company and the time when they are not happy with some decisions of the organization and want to comment and to change some decisions. And with power there are some things belong with interest if the stakeholder that in which they interest most and it is also very important to identify the stakeholder's interest with power in the organization.
Organization are gathering of some people where they work together to achieve some specific goals and in the working they create an environment which called organizational environment. It is just like a small home in some small private organization and some time a big organization. And this environment effect on all organizational strategies especially on current strategies. And we have two types of organizational environment first is internal and second is external. In internal environment we include all elements within the organization e.g. current employees, management, trade unions and shareholders and when they gathered in the organization they create a organizational environment and a culture. Second are external ones they are related with the organization bur outside of the organization and these are the forces who impact on the organization on achieving the goals e.g. competitive, technological, Political and Legal.
Microsoft's Current Strategy:
In the modern age where technology is very advance and lifestyle and habits of buying and selling of people is changing rapidly, Microsoft is also changing with the environment and currently they are working on a revolution e.g. they are working on a project of Microsoft windows 7 mobile phone in which they are adding new software and high speed access point of internet with latest touch screen and they are trying to make it most fastest, convenient and suitable to all customers needs and apart form that they are trying to introduce new strategies within their old product hotmail.
Porter's Five Forces:
It is a most powerful and easy tool for an organization in which organizations can found their understanding with power and help organization to find out where they aye in the current situation and it also helps to find out organizational strength current competitive situation and strength of a position the organization moving into. And we have five mail tools to discuss porter's five forces which are:
Bargaining power of supplier: Here we will discuss upon the power of a supplier that it is very easy for the supplier in increasing up the prices of commodities or services. But it is very difficult for the organization to move on to another supplier because it will cost organization very much so what organizations do they change some patterns or do as the supplier said because sometime organizations do not have choices between suppliers. And the more you need the suppliers and more they are powerful.
Bargaining Power of Buyer: In this factor of porter's five forces we discuss upon buyer and what powers them have and how they use it because it is not difficult for buyer to bargain upon products or services and to decrease product prices. And it also cost the organization to move on another market to survive and same as supplier bargaining power the most powerful buyers you have the most you should have to agree with certain terms and conditions.
Competitive Rivalry: This factor effect when you have some competitors in the market are the same they are offering, you are offering in the market and it is very important to compete with them and to make a step beyond them otherwise they will capture the market because in this situation every one is looking upon you that when you will offer best deals for customers and competitors.
Threat from Substitution: Now a day this substitution power is effecting organization very much because due to expensive products in the market people try to find out some other ways to satisfy their demand and these ways are called substitution. And it is threat upon the organization so to avoid from that organization should have to keep in their mind that what substitutes are available which a customer can use for example if you launch a software in the market but people can do the same task manually or by using some other different tool then it will give a hard time to organization.
Threat from new entrants: It is a great threat upon the organization when a new competitor comes into the market with the same products. And it cost very low to come into the market by using old strategies and with same products but to compete effectively against the organization.
When we study of macro environment of any organization then we find out that every organization have some key factors which can effect or challenge on the decisions of managers and top management of organization. And for dealing with these kinds of situations managers use PESTEL analysis. PESTEL is an abbreviation of:
P - Political:
These refer to the government policies which may change any time and effect on the organizational current strategies e.g. suddenly change in the education of the workforce, transportation or heavy duties upon products or services, elections etc.
E - Economic:
These factors include the change in the rate of taxation, interest rates, exchange rates, inflation and economic growth. High rates of interest can effect on the organizational borrowing and the change rate in currency also effect on the organizational current strategies.
S - Social:
This factor includes some social areas which are related with the person's income distribution like in some pension schemes due ageing population in the country. Workers attitude at work etc.
T - Technological:
Technology change is also take effect to the organizational current strategies because now a day's technology is changing rapidly and it includes, innovations, new development of the products and the rate of technological obsolesces.
E - Environmental:
These factors are including the global warming and some environmental issues.
L - Legal:
In this factor of PESTEL analysis organizations discuss upon some legal and lawful facts which may includes competition law, health and safety law, and some employment laws which are given by the government.
It is a tool which used by the organizations to find out in which factors they are powerful or they are not to worry about them or in which factors they need more attention to improve them who are applying a brake in the way of success. and with the help of environmental scan we can find out some internal and some external factor which get influence to the organization:
Internal factors are:
External Factors are:
After discussion of all these tools and analysis it is very important for all organizations that they should have to make value statements e.g. mission and vision statements. That if the organizational mission and vision is clear then organization can go towards to success. We have some tools to measure our organizational performance that whether we are now and where we want to go. And it is in the responsibilities of top management and managers that what decision they are taking and how they are developing strategies and how they are dealing with threats and weakness of the organization and how effectively they are converting it to strengths and opportunities and these all things are in the hand of managers whether they give right direction to organization.
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