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Corporate communication is crucial to organisations that operate locally and globally. Microsoft has used corporate communication to create their distinctive existence in customers' mind to differentiate themselves among their competitors. Corporate communication department of Microsoft administer various communication functions to develop and flourish its capability at its best (see Appendix 1).
Background of the organisation:
Microsoft Corporation was founded in 1975 by Bill Gates and Paul Allen in USA. It is a multinational company with headquarter in Redmond, WA, United States, and its subsidiaries in 110 countries. With 89,000 employees in USA and worldwide and annual revenue of USD 62.48 billion, it is one of the world's largest and dominant software companies. It provides software, services and solutions to people and businesses world-wide. The company focuses on research and developing, manufacturing, licensing, and supporting wide range of software products and services for various types of computing devices.
According to the Microsoft Corporation, "The Microsoft mission is to help people and businesses around the world realize their full potential. We work to accomplish this mission through the development of innovative products and services that help people harness the power, opportunities, and benefits of technology."
The communication strategy and its framework in the organisation
An effective corporate communication strategy is very important for any organisation to overpower today's highly competitive and information driven business environment. It protects an organisation from negative publicities and limits misleading steps of the corporate.
Strategy requires choices - deciding what particular kind of value an organisation wants to deliver and to whom (Porter, in Gibson, 1997). Implementation of proper and practical strategies can bring equal opportunity to people; resulting in distribution of innovative information, resolution of conflict and coordination in organisation.
X-Border communication strategy adapted by Microsoft:
Degree of adaptation and standardisation:
Microsoft provides standard customer satisfaction through innovative quality products and services, adapts different markets by abiding local government laws and regulations, and providing software in local languages where possible.
Since their existence till date, Microsoft have continuously provided and grown innovative products and services gaining stakeholders' loyalty.
External Vs Internal:
Microsoft provides effective means of communication in different ways to their internal and external stakeholders through Annual Reports, Analysts Relation, information and many more.
Corporate Identity and Reputation:
Microsoft have strong brand name. It aims to build and maintain a good image and high reputation to stand out against it's competitors.
Microsoft understands the value of money. They run programs cost-effectively by keeping all development and lab works in-house; and minimise marketing, selling and distribution cost through vendors and agents.
Role of technology:
Microsoft uses various ways of effective communication to their stakeholders, such as, e-mails, webcasts, podcasts, websites, and many more. They believe these technologies help them to connect and maintain transparent flow of information.
Microsoft implements the communication model shown in figure 1. Keeping in mind of their identity and image, they deliver messages to their shareholders, employees, stakeholders, and society by the use of Management communication, Organisational communication, and Marketing communication (see Appendix 2).
Figure 1: Communication model, Strategy of the organisation (M. Welch and P. Jackson, 2007)
In all organisations, communication flows vertically and horizontally, internally and externally, formally and informally linking employees internally to each other and to various layers of management, and to the many external resource holder of the organisation (Fombrun and Riel, 2007).
There are three main types of structures of the company and they are as follows;
Microsoft follows a matrix structure to perform its communication (see Appendix 3). It has horizontal divisions for international operations and vertical divisions for product groups. It is a complex structure where internal and external communicators focus on geographical, functional and product-area responsibilities (see Figure 2, below).
Figure 2: Areas of responsibility at Microsoft
Microsoft adapts a centralised and well-designed area accompanied by a network of decentralised area so that special needs of the independent business units can be fulfilled. Microsoft's Governing Body is the Annual Meeting of Shareholders and the Executive Body is the Board of Directors (see Appendix 4).
Board of Directors
President, Microsoft Entertainment and Devices and Chief Xbox Officer
SVP, Finance and Administration and CFO
President, Microsoft International
President, Server & Tools
Chief Software Architect
SVP, General Counsel, Corp Secretary, Legal & Corp Affairs
Chief Operating Officer
SVP Microsoft Services & IT
VP, People and Organizational Capability
General Manager of Services
Figure 3: Organisational Structure of Microsoft
The main issues relating to corporate communication
External and Internal communication:
External communication refers to communicating with external parties of an organisation which includes customers, shareholders, government, media, and competitors.
Communication with customers:
Customers are the most influential part for any organisation to exist in business environment. Microsoft claims that the success of their company is based on their ability to listen and respond to customer feedback about their products, programs and services, and to increase customer satisfaction with all the possible ways. They continually engage with their customers and partners through third-party surveys and feedback mechanisms within their products, and community-based websites.
Communication with media:
The media are both a constituency and a conduit through which investors, employees, and consumers receive information about and form images of a company Argenti (2009).
Microsoft has a separate section in their company site called "Microsoft News Center" which provides latest updates and information on company with "Press Tools". It contains Press Releases, Analyst Reports, PressPass and many more. It has also established number of air-traffic control tools to avoid misleading and misinterpreting messages to media (see Appendix 5).
Communication with competitors:
The main competitors of Microsoft are Google, Apple, VMware, Oracle, and Open source (Linux and Firefox). Microsoft keeps up-to-date information about its competitors. It obtains information about their competitors through honest, ethical, and legal methods for healthy competition.
Communication with Government:
Government is involved in all stages of business development. As Microsoft operates in various regions and areas globally, it makes sure to follow the national, regional, and local bylaws and legislation of the country (see Appendix 6).
Communication with shareholders:
Microsoft has 8,555,523,242Â shares of common stock outstanding on October 22, 2010. Microsoft communicates with its shareholders through Annual shareholder meetings, Annual Reports, it also has a section of "Investors Relations" that provides each and every information of the company.
Strong internal communications- fostering increased workforce loyalty and productivity - will thus continue to play a pivotal role in a company's employee relation and overall success (Argenti, 2009).
Microsoft fully realise the role of employees and vendors for its overall success.
Communication with employees:
Microsoft believes in "one company" approach. They believe in integration and optimistic relationship with all employees. One of their most important developments has been the establishment of an Internal Communicator Community. They have also developed a new approach to the annual planning process. They have established a regular quarterly meeting and monthly Live Meeting1/conference call for all Public Relations leads in Europe, the Middle East and Africa (EMEA) - regardless of their areas of responsibility (see Appendix 7).
Communication with vendors:
The communication between Microsoft and its vendors are done via reports and information technology and system provided by Microsoft such as e-mails (see Appendix 8).
Identity, Image, and Reputation:
The concept of corporate identity is traced by organisation's marks or logos, name, motto, products, services, and any other possessions of the organisation that is visible and tangible to differentiate themselves from their competitors and print their image in the minds of consumers (Argenti, 2009).
Image is shaped by the identity of an organisation, it is the way internal and external constituents perceive the organisation's identity get fulfilled. Finally, strong reputation of an organisation is achieved when identity and image align with each other.
Names, Brands, Symbols, Self-presentation
is perceived by â€¦.
The sum of their
Corporate Reputation perceptions equals â€¦
Figure 4: Reputation Framework (Argenti, 2009)
Its identity is majorly reflected by it's name, logo, innovative products and services, market capitalisation with over USD 238 billion, and Bill Gates, former CEO of Microsoft Corporation (see Appendix 9).
Microsoft is huge, highly innovative and has become daily necessity of life.
Microsoft holds highly valued reputation for its citizenship strategies and contributions it has made in social responsibilities (see Appendix 10). However, Microsoft's reputation has been problematic since its establishment. It was accused for copying the ideas of its competitors and its monopolistic nature of business (see Appendix 9).
Culture and its influence in corporate communication
Any organisation's culture is reflected by the behaviours, attitudes, beliefs, norms and values of its employee working with each other towards attaining a common goal. It has become a serious issue with prevalence of globalisation.
Hofstede (1980, 1982, 1987) has outlined five dimensions of cultural impact in an organisation. They are;
Individualism Vs Collectivism,
Masculinity or Feminism, and
Long term or Short term.
Microsoft operates in an international environment, acknowledging and respecting the diverse cultures, customs, and business practices it encounters in the international marketplace (see appendix 11). According to the articles and Microsoft Standards of Business Conducts, I feel, they do not practice power distance. They believe in collectivism idea with equal employment opportunities, and are always ready to embrace any changes that would lead the company to success.
The role of technology
The role of technology in carrying on communication effectively and gaining success has been immense in any organisations.
Microsoft Corporation itself is a leader in developing and distributing innovative technologies world-wide. There are numerous software products and services produced by Microsoft for communication use. However, technologies that they use for internal and external communication are; e-mails, video conferencing, conferencing calls, telephones, webcasts, podcasts, blogs, internal intranet site, air-traffic control tools, and integrated communication planning software.
The role of Human Resource in corporate communication
HRM is a strategic and coherent approach to the managers of the organisation. The most valued assets, the people working there who individually and collectively contribute to the achievements of its objectives. (Armstrong, 2003).
According to Ulrich (1997), there are four roles of Human Resource Management in an organisation. They are as follows;
Change agent, and
Figure 5: The HR Business Partner (based on an idea by Dave Ulrich, 1997)
The HR department of Microsoft is responsible for maximising the value of their employee for business success. Core HR functions, processes and practices are divided among vertical tower structures for easier and more transparent flow of information (see Appendix 12).
Microsoft collaborates among the internationally recognised groups. Its Citizenship and reporting strategies are guided by those laid out in the Global Reporting Initiative, the Global Network Initiative the United Nations Global Compact, the United Nations Millennium Development Goals, and the Carbon Disclosure Project.
Microsoft HR section is held responsible for managing cost-effectiveness of the company.Â For instance, 10% of job cuts during recession. They analyse the best way to minimise unnecessary expenses and overheads.
Microsoft is very flexible in managing change. They perform various pre-surveys within and outside the organisation to forecast and ensure to manage these changes.
Microsoft is constantly recruiting and acquiring talent; they aim for extremely intelligent staff. They are known to be fierce recruiter and often the first company to offer jobs to fresh and best graduates at campus fairs across the world.
Microsoft has gold-plated health-care benefits and other great perks. They rank their employees and have rewarding system to maintain the employees' motivation.
Conclusion and Recommendation
Microsoft practices high-quality and practical corporate communication strategy. Microsoft is clear about its aim of delivering innovative technologies targeting various types of customers and markets and not just only few particular ones.
It implements matrix structure to communicate with its stakeholders and perform its international and product groups operations which I think is best for a huge organisation with vast geographical area coverage and diverse products and services. This type of structure allows them to carry on effective communication for its business development. In my opinion, this is a brilliant approach that Microsoft is adapting. Microsoft's combination of centralised and decentralised framework is great. It allows top executives to manage and control the overall work of the company and also help it to be flexible and minimise security threats and economic downturns. Academically, ideal structure for corporate communication function includes a separate department for corporate communication (see Appendix 2). However, I did not find Microsoft following such structure, it does not have a separate corporate communication unit and still they seem to be very efficient.
Microsoft is excellent in communicating with it's external and internal stakeholders using various means of communicating tools and technologies discussed in 2.4 and 2.1. They hold strong point in dealing with customers and collecting and responding their feedback. They are very careful on passing messages to media to avoid any negative impacts on the company.
Microsoft had bad reputation since their establishment and was accused by many companies for various reasons. From 2007, after the failure of Windows Vista and uprising of Google, they seriously started realising this matter and started building up and maintaining it's high reputation through various Social and Corporate responsibilities (see Appendix 8).
Microsoft practices an open culture. It believes in "one company" approach and has set their beliefs and values which each employee needs to follow within the organisation. It understands the value of employees and their role in its success. HRM department of Microsoft follows and maintains all the four roles of HR by Ulrich with Pluralist approach. Microsoft's HR strategy is known to be one of the best and employees feel it's one of the best workplaces.
I think Microsoft has great communication system that has allowed it to be on top of the market for so many years. However, I would recommend the company to create a separate corporate communication function department which may contribute Microsoft to have better and efficient communication structure.
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According to surveys, over half of the heads of corporate communication departments in many organisations including Microsoft administer communication functions. They are as follows;
External and internal communications
Managing corporate reputation and brand
Recruiting and retaining
Developing company strategy
Corporate social responsibility
Boosting investor or analyst perception
Neil Holloway, President of Microsoft Europe, Middle East and Africa (EMEA), focused on the balanced objectives of driving customer satisfaction, improving integration across Microsoft business units, addressing the unique technology needs of diverse markets, and growing the software business in the region.
Neil Holloway states "improving integration across Microsoft business units" that shows they are concern about Management Communication and Organisational Communication. These are the internal communication system between various departments of an organisation. Figure below, shows different departments that fall under the corporate communication. In terms of Marketing Communication, Holloway states he will focus on addressing technology needs of diverse markets, and growing the software business in the region i.e., Europe, Middle East and Africa to capture and grow the market of Microsoft software.
Figure: Communication framework for managing communication (Cornelissen J, 2008)
The matrix structure is taken as the most responsive ones among the three organisational structure which includes; Functional (Division), Matrix, and Project based structures. It groups employees by both function and product. A matrix organization frequently uses teams of employees to accomplish work, in order to take advantage of the strengths, as well as make up for the weaknesses. The matrix structure is perceived as the compatible structure for huge organisations. Some successful organisations, such as, Microsoft, Dell and many more implement this structure.
International operations carried on horizontally means communicating with employees having similar capabilities and understanding which maintains the quality of the message delivered. On the other hand, product groups need to have vertical communication, communicating with entities from top to bottom and bottom to up so as to get feedbacks from consumers and enhancing the products and services.
Similar to other corporations, Microsoft's governing body is the Annual Meeting of Shareholders. It is where shareholders meet to elect Directors, vote on shareholder proposals, or amend the Articles of Incorporation. Microsoft's executive body is the Board of Directors, which has nine members of which six are independent. Microsoft separates the function of Chief Executive Officer and Chairman of the Board. The Board oversees management and assists them in determining the company's long-term strategy. It also evaluates the CEO annually, oversees CEO succession, and assesses company risks and strategies. The Board established five committees to support its work. These include an Antitrust Compliance Committee, an Audit Committee, a Compensation Committee, a Governance and Nominating Committee, and a Finance Committee. Each committee is composed of led by only independent directors. - 2006 Global Accountability Report
The air-traffic control tool is a service used in airports to avoid collisions on the way. In Microsoft, they practice this means by filtering the messages before it goes to any media. Any communicator planning to pitch a story to the media must clear their proposal through an integration group responsible for ensuring that they prioritize the best stories, target the right journalists and avoid mid-air collisions on the way.
They have also established a regular quarterly meeting and monthly Live Meeting1/conference call for all PR leads in Europe, the Middle East and Africa (EMEA) - regardless of their areas of responsibility. This has become a clearing house for communication plans and has helped establish the discipline of air-traffic control.
The same sort of planning approach is also applied to product launch campaigns, corporate communication and internal communication. Part of the solution has been to build a sense of professional community across the divisions.
Regulatory Compliance section in Microsoft Standards of Business Code shows that Microsoft is aware of the laws and regulations that govern the global management of our business. Microsoft is cautious and abides all the necessary requirements of effective business operation.
Microsoft is aware that with change in culture and business environment, employees and their attitudes, beliefs are changing and they need to be treated in different ways to gain their loyalty and productivity. Thus, effective communication among and with internal stakeholders is very crucial.
Microsoft has brought together all those with an internal communication responsibility from across the organization to share their planning and exchange best practice. In fact, one of our most important developments during the past year has been the establishment of an Internal Communicator Community. This team has met regularly, set up work groups to develop new cross-functional projects and solutions, and held training workshops.
In a short space of time, this team has given internal communication a higher profile with senior management, increased the skills and experience of the community and started to address internal air-traffic control challenges.
They are now developing a new approach to the annual planning process, by creating a forum for sharing internal and external communication plans across all business disciplines to build a "one company" approach. This process preserves the integrity of individual plans where they are relevant to discrete audiences, but enables us to identify the opportunities to exploit the connection points between plans. Our objective is to use a campaign approach to integrate internal and external communication across the company. - Love (2006). Cutting through the clutter at Microsoft
By Microsoft's count, more than 500 companies have emerged just to
create software for Windows, resulting in more than 17,000 jobs. In total,
more than 16,000 software companies nationwide have been involved in
developing software for Windows (Sugawara, 1993). Most of these companies are dependent on Microsoft and so are careful to maintain good working relations with the company. The success of many smaller software companies can be traced to their ability to learn from and deploy Microsoft's own marketing techniques (Andrews, 1993b). - Sill (2009), Running Head: MICROSOFT CORPORATION
Bill Gates plays major role in maintaining identity of Microsoft Corporation. He's seen as a bright and innovative person who started Microsoft in a small scale and grew the company into one of the world's software giant making him one of the richest people in the world.
Microsoft has been facing damaged reputation since its establishment. It has been accused for copying the ideas of its competitors and naming it as Microsoft's innovation. Microsoft has also been accused by small companies for its monopolistic nature of business, and it also has not been able to achieve all of its commitments that it promises to.
"Since June 1990, Microsoft has been under investigation three times by the Federal Trade Commission (FCC). The company was also investigated by the Justice Department for antitrust law violations. It was accused by its competitors of using the market power of MS-DOS to compete unfairly in the software market, and allegedly of building features into its software that made competitors' products incompatible with Microsoft software. Microsoft also offered large discounts to computer manufacturers that agreed to pay royalties on every computer shipped rather than sold (Lewyn & Rubello, 1993). Other allegations include predatory pricing: undercutting the competition by selling products at a loss." - Sill (2009)
In 2007, the delay on launch of Windows Vista Operating System was a disaster. Customers were dissatisfied as Vista could not fulfil the commitment that it promised to. Opera software also accused Microsoft for bundling Internet Explorer with Windows and also not following web specifications in its browser rather using its own "de facto" standards that made the browser competition very difficult.
Corporate citizenship is a term used to describe a company's role in, or responsibilities towards society. Microsoft along with many companies including IBM and Novartis has undertaken various social activities in a way to describe their social initiatives regarding themselves as citizens within a territory.
Citizenship strategies of Microsoft is extending technology and operating responsibly. They are involved in Education, Jobs and Innovation, Nonprofits, Humanitarian Response, People, Environmental Sustainability, Responsible Sourcing, Online Privacy and Safety, Governance and Compliance, and Public Policy and Advocacy.
For Microsoft activities visit: http://www.microsoft.com/about/corporatecitizenship/en-us/our-actions/in-the-community/disaster-and-humanitarian-response/community-involvement.aspx
Microsoft believes that the following listed values guide their behaviours and it is reflected in their employees in their interaction with each other and their stakeholders.
Integrity and honesty
Passion for customers, partners, and technology
Open and respectful with others and dedicated to making them better
Willingness to take on big challenges and see them through
Self-critical, questioning, and committed to personal excellence and self-improvement
Accountable for commitments, results, and quality to customers, shareholders, partners, and employees
"Microsoft promotes and supports a cooperative and productive work environment by supporting the cultural and ethnic diversity of its workforce and is committed to providing equal employment opportunity to all qualified employees and applicants. We do not unlawfully discriminate on the basis of race, color, sex, sexual orientation, gender identity or expression, religion, national origin, marital status, age, disability, veteran status, or genetic informationÂ in any personnel practice, including recruitment, hiring, training, promotion, and discipline. We take allegations of harassment and unlawful discrimination seriously and address such concerns that are raised regarding this policy." - Equal Employment Opportunity, Microsoft Standards of Business Conduct.