ORGANIZATIONAL DEVELOPMENT IN MICROSOFT
Organizational Development in Microsoft
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Institution Affiliation
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Issues that Led Toward Need for Change
Microsoft's primary force for change is the need to survive and sustain its operations in
the rapidly changing economic environment. Strategic organizational development is critical for
the company in response to the new economic landscape. The most critical forces include change
in stakeholders' (customers and investors) demands, globalization, an increase in competition,
and deregulation of the market. According to Faruki et al. (2015), the launch of Android and iOS
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has created a unique competition for Microsoft and other competitors. As smartphones become,
ubiquitous Microsoft has a new challenge to respond to increased competition. More than 65%
of customers left the PC market to use smartphone technology and threatened replacement
(Singh & Samah, 2018). In 2011 smartphones outsold the sale of PCs, becoming less important.
Microsoft's acquisition of Nokia for the US $ 7.2 billion to increase Windows Phone revenue
was important to capture the home segment and the workplace (Singh, 2014). Microsoft has had
experiences with failed acquisitions, and the successful integration of Nokia is critical to market
relevance. The change in the technological landscape within different areas has also increased
the need for the company to adjust to accommodate technology's future.
Serious internal problems, including the structure and culture of the organization,
promote the need for change. While Satya Nadella has initiated a restructuring process for the
company, some issues are not fully addressed. Conflicts between major departments in the
company are a major challenge (Katzenbach, Steffen, & Kronley, 2012). Competition other than
a partnership between the departments created toxic environments. The company seeks to
continually improve its structure and culture by enhancing collaboration. Elimination of
destructive internal competition requires establishing common goals. Encouraging employees to
work flexibly and collaboratively is desired to eliminate the existing boundaries. Microsoft is
structured based on hardware and software subdivided across the borders. A key driver for
change is the need to shift from focusing on individual applications. Instead of dividing
employees into product groups, it is important to categorize them into consumer tasks to enhance
skill sharing. Presentations and content creation are better organization strategies than
categorizing employee groups into individual products like PowerPoint and Excel.
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Multiple long-term adjustments on the company's strategic course led to the need for
change. As the market demand for cloud technologies increases, the company was proactive in
initiating change. Disruptive technological change influences the need for cultural change in the
company. Microsoft is not exempted from the forces of a changing HR climate, and hence
leaders are pulled to promote transformation. Microsoft has made some critical milestones. The
company needs to adopt a new culture that makes the customers and employees perceive its care
to their unique needs. Adopting a culture centered on making a difference, being open, making a
bold decision is critical in the company's survival in a competitive market. During the Steve
Ballmer era as CEO, there was a lack of proactive efforts to develop a growth mindset (Singh &
Samah, 2018). Leadership challenges in the Ballmer era as CEO is a major cause of internal
problems in the company. Leadership styles that emphasize promoting continuous improvement
organizational culture have been achieved in the Nadella era as CEO.
The main cultural issues in the company are failing to respond to the customers changing
needs. Customers being unhappy with the company products with alternative products such as
iPhone and Android are a disaster (Singh, & Samah, 2018). Customers did not consider Bing as
an alternative to Google based on product failure to create unique customer values. Improving
the company product's quality and partnership with other tech companies is a commitment to
customer's needs. Inclusivity and diversity concerns are a threat to the attraction and retention of
top talents. The culture was inherited from previous leadership and, despite current
improvements, remains a major challenge. A growth mindset is critical for responding to
customers' unmet and anticipated needs. Microsoft has suffered a reputation for being a follower
of the technology landscape. Establishing the company as an innovator is important for the
company to emerge as a leader. The company has a complex product portfolio threatening
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capacity to respond to key customer concerns in each segment. Organizational development is
established in defining an area of focus that establishes the highest value to the customers.
The restructuring process is critical to adopt the evolving business models within the
industry. The exclusive reliance on technical and administrative software operations skills is not
competitive for the current business framework. The company has adopted many organizational
changes to respond to increased complexities in the operations. Microsoft lacks another suitable
company to emulate in defining its changes, and hence there is a need for constant modification
over time (Dhillon, & Gupta, 2015). Shifting to multi-product solutions and digital
transformations require both infrastructural and skill changes. Connecting the company product
lines to improve on the innovativeness increases the need for comprehensive research operations.
The company needs to restructure its organization and leadership to establish Microsoft Research
as a major element in its structure. Shifting from the divisional to a functional organizational
structure is an important factor in achieving innovation and cross dependence. Increased
competition from Google and Apple increases the need to change the organizational design and
establishing a culture of creativity to outperform them (Dhillon, & Gupta, 2015). While there are
no major concerns on current financial outcomes, sustainability depends on constant innovations.
Maintaining high profitability to create value for shareholders depend on constant organizational
development efforts.
References
Dhillon, I., & Gupta, S. (2015). Organizational Restructuring and Collaborative Creativity: The
Case of Microsoft and Sony. IUP Journal of Business Strategy, 12(1).
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Faruki, P., Bharmal, A., Laxmi, V., Ganmoor, V., Gaur, M. S., Conti, M., & Rajarajan, M.
(2015). Android security: A survey of issues, malware penetration, and defenses. IEEE
Communications Surveys & Tutorials, 17(2), 9981022. https://doi.org/10.1109/comst.2014.2386139
Katzenbach, J. R., Steffen, I., & Kronley, C. (2012). Cultural change that sticks. Harvard
Business Review, 90(7), 110-117
Singh, M. K., & Samah, N. A. (2018). Impact of smartphone: A review con positive and negative
effects on students. Asian Social Science, 14(11),
83. https://doi.org/10.5539/ass.v14n11p83
Singh, N. P. (2014). Microsoft acquired Nokia in the unipolar operating system
market. Independent Journal of Management &
Production, 5(3). https://doi.org/10.14807/ijmp.v5i3.166
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