MGT162

FUNDAMENTALS OF MANAGEMENT

TOPIC: INDIVIDUAL ASSIGNMENT (MICROSOFT COMPANY)

PREPARED BY: MUHAMMAD NAWWAR ALAUDDIN BIN MOHD AFFANDI

MATRIC’S NUMBER: 2021110037

GROUP: THM1101AB

PREPARED FOR: MADAM NIK FAZLIN HIRYATI BINTI NIK JAAFAR

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 TABLE OF CONTENTS

PAGE CONTENT
1 COVER PAGE
2 TABLE OF CONTENTS
3-4 INTRODUCTION
4-6 PLANNING
6-7 ORGANIZATIONAL STRUCTURE
7-10 TYPES OF DEPARTMENTALIZATION

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INTRODUCTION

Microsoft Corporation is an American multinational technology company with headquarters

in Redmond, Washington. It develops, manufactures, licenses, supports, and sells computer
software, consumer electronics, personal computers, and related services. Its best known
software products are the Microsoft Windows line of operating systems, the Microsoft Office
suite, and the Internet Explorer and Edge web browsers. Its flagship hardware products are
the Xbox video game consoles and the Microsoft Surface line up of touchscreen personal
computers. Microsoft ranked No. 21 in the 2020 Fortune 500 rankings of the largest United
States corporations by total revenue. It was the world's largest software maker by revenue as
of 2016. It is considered one of the Big Five companies in the U.S. information technology
industry, along with Google, Apple, Amazon, and Facebook. Microsoft, the word being a
portmanteau of "microcomputer software" was founded by Bill Gates and Paul Allen on
April 4, 1975, to develop and sell BASIC interpreters for the Altair 8800. It rose to dominate
the personal computer operating system market with MS-DOS in the mid-1980s, followed by

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Microsoft Windows. The company's 1986 initial public offering (IPO), and subsequent rise in
its share price, created three billionaires and an estimated 12,000 millionaires among
Microsoft employees. Since the 1990s, it has increasingly diversified from the operating
system market and has made a number of corporate acquisitions, their largest being the
acquisition of LinkedIn for $26.2 billion in December 2016, followed by their acquisition of
Skype Technologies for $8.5 billion in May 2011. As of 2015, Microsoft is market-dominant
in the IBM PC compatible operating system market and the office software suite market,
although it has lost the majority of the overall operating system market to Android. The
company also produces a wide range of other consumer and enterprise software for desktops,
laptops, tabs, gadgets, and servers, including Internet search (with Bing), the digital services
market (through MSN), mixed reality (HoloLens), cloud computing (Azure), and software
development (Visual Studio). Steve Ballmer replaced Gates as CEO in 2000, and later
envisioned a "devices and services" strategy. This unfolded with Microsoft acquiring Danger
Inc. in 2008, entering the personal computer production market for the first time in June 2012
with the launch of the Microsoft Surface line of tablet computers, and later forming Microsoft
Mobile through the acquisition of Nokia's devices and services division. Since Satya Nadella
took over as CEO in 2014, the company has scaled back on hardware and has instead focused
on cloud computing, a move that helped the company's shares reach its highest value since
December 1999. Earlier dethroned by Apple in 2010, in 2018 Microsoft reclaimed its
position as the most valuable publicly traded company in the world. In April 2019, Microsoft
reached the trillion-dollar market cap, becoming the third U.S. public company to be valued
at over $1 trillion after Apple and Amazon respectively. As of 2020, Microsoft has the third-
highest global brand valuation.

PLANNING

VISION

Microsoft’s corporate vision is “to help people and businesses throughout the world realize
their full potential.” This vision statement shows that the company presents its business and
computing products as tools that people and business organizations can use for their
development. Microsoft’s corporate vision statement has the following components:

1.People and businesses throughout the world

2.Help to realize

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3.Full potential

The first component of the vision statement partly defines Microsoft’s target market, which is
the global market. Instead of selling software products to individual customers only, the
company also sells its products to organizations. The second component of Microsoft’s
corporate vision statement shows what the business intends to do. For example, the company
aims to provide products that assist customers toward the achievement of their full potential,
which is specified in the third component of the corporate vision. Thus, Microsoft’s corporate
vision presents the target market, what the company’s technology products do, and what
customers can achieve through such products.

MISSION

Microsoft’s corporate mission is “to empower every person and every organization on the
planet to achieve more.” This mission statement shows that the business is all about
empowerment of people and organizations. Such empowerment is achieved through the
utility of the company’s computing products. The following components are significant in
Microsoft’s corporate mission statement:

1.Empowerment

2.Every person and every organization on the planet

3.To achieve more

The first component of the corporate mission shows what Microsoft’s products can do for
customers. For example, such empowerment can take the form of speedy data processing in
offices and enhanced information access in homes. The second component of the company’s
mission statement specifies the target market, which in this case involves all individuals and
organizations worldwide. The company’s corporate mission also specifies that its computer
technology and software products benefit customers in terms of achieving more. Microsoft’s
corporate mission statement is similar to the company’s vision statement, considering that
both statements pertain to empowerment. However, the corporate mission statement puts
more emphasis on the practical benefit of achieving more. This benefit or value is reflected in
strategies and tactics included in Microsoft’s marketing mix or 4P.

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TYPES OF PLAN

Strategic

A strategic plan is the company’s big picture. It defines the company’s goals for a set period
of time, whether that’s one year or ten, and ensures that those goals align with the company’s
mission, vision, and values. Strategic planning usually involves top managers, although some
smaller companies choose to bring all of their employees along when defining their mission,
vision, and values.

Tactical

The tactical strategy describes how a company will implement its strategic plan. A tactical
plan is composed of several short-term goals, typically carried out within one year, that
support the strategic plan. Generally, it’s the responsibility of middle managers to set and
oversee tactical strategies, like planning and executing a marketing campaign.

2.ORGANIZING

ORGANIZATIONAL STRUCTURE

Microsoft Corporation’s organizational structure reflects the needs of the computer

hardware and software business in response to market dynamics. A responsive
organizational structure ensures the company’s long-term success.

Microsoft Corporation has a product type divisional organizational structure. This structure

involves divisions that are based on certain computer hardware and software products, or
organizational outputs. The following characteristics are significant in Microsoft’s
organizational structure:

1.Product type divisions (most dominant structural feature)

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Product type divisions are the primary characteristic of Microsoft’s organizational structure.
In this characteristic, the company uses product or output as the main criterion for grouping
personnel and related resources. For example, the organization has a self-contained division
for Intelligent Cloud products and separate divisions for other products. This structural
feature contributes to the company’s organizational capacity for product innovation.

2.Global corporate groups

Global corporate groups are a secondary characteristic that defines Microsoft’s organizational
structure. These groups are based on the functions essential in the computer technology
business. For example, the Human Resources group addresses the company’s workforce
needs and related concerns. This structural characteristic ensures that the organization
functions as a whole.

3.Geographic segments

Microsoft Corporation’s corporate structure also involves geographic segments as the least
significant characteristic. These segments are used to group operations in the company’s
financial reports.

TYPES OF DEPARTMENTALIZATION

Functional departmentalization

Most companies practice functional departmentalization. An example is the Production

department, HR department, Accounts department, Marketing department and IT department.

Product departmentalization

When a company has a wide range of products, product departmentalization is a logical

choice. For example, Kimberly Clark manufactures children’s products, toiletry and
industrial hygiene products. Each product cluster has its own manufacturing plant, research
and development, and marketing team.

Customer departmentalization

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When a company has different customer bases, customer departmentalization allows better
customer servicing. A travel agency can have one team taking care of corporate customers,
and the other team taking care of walk-in retail customers.

Geographical departmentalization

Geographical departmentalization is good for a multi-national company. The company can

hire local employees to serve different customers from different geographical locations.

3.LEADING

Leadership is critical for a successful business operation because of its direct impact on
organizational health, employee performance, and shareholder value. Abundant literature
exists with stories of leaders who succeeded or failed to achieve intended objectives because
of a particular leadership style. This is an attempt to define leadership, briefly analyse
different leadership styles, and identify an approach that best describes a leadership style
practiced by Satya Nadella, Chief Executive Officer Microsoft, Inc.

Leadership is a complicated interactive process between a leader and followers. A leadership

definition that has garnered consensus among scholars describes leadership as a “process
where by an individual influences a group of individuals to achieve a common goal.”
Achieving a common goal in an increasingly dynamic, global, and diverse business operating
environment intensifies leadership complexity and heightens the need for an effective
leadership. Research and debate on effective leadership style continues, and several studies
have proposed a skill-based, trait-based, and behaviour based leadership approaches to
influence followers successfully.

Identifying and practicing an effective leadership style is critical for defining a clear vision
and strategy, responding timely to changing market and customer needs, and returning
financial value to shareholders. Leadership style also influences commitment and
performance of individuals who play a critical role. The three most common leadership styles
include skill based, trait based, and behavior based approaches.

Skill based approach emphasizes the leader’s technical, human, and conceptual capabilities.
A trait-based approach stresses innate characteristics of the leader such as integrity,
determination, and self-confidence. Unlike the first two, the behavior approach considers a

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leadership style focusing on task accomplishment or nurturing a relationship, or a
combination of both. Behavioral based relationship-oriented leadership style involves
developing, supporting, empowering, and recognizing followers. This approach increases
individual performance and motivation, positively affects organizational health, and foster
open and trusting relationship at all organization levels. An authentic and transformational
leaderships are a form of behavioral based leadership styles.

Authentic and transformational leaders practice a behavioral style and relationship oriented
leadership approach. Authentic leaders are transparent, morally grounded, and responsive to
followers needs. Transformational leaders are change agents, are in-tune with the needs and
motives of followers, and inspire and empowers followers to achieve higher goals. Satya
Nadella, Chief Executive Officer (CEO) of Microsoft, Inc., embodies both authentic and
transformational leadership style.

When Nadella became a CEO a little over four years ago, he sent a genuine and emotional
email to employees that gained him trust and aroused commitment from employees. Then
Nadella started holding a monthly "ask me anything" session (recently few other EVPs at
Microsoft have started to do likewise) with employees where he transparently discusses
issues, answers their questions, and eases their concerns. During these session, attendants feel
his authenticity and honesty when he talks about his own shortcoming, his dedication to a
lifelong learning, and his priority to maximize authenticity in others. He also demonstrates a
drive to transform Microsoft through clarity of purpose, alignment of resources, innovation,
and appropriate intervention to build confidence and to improve capabilities.

Nadella implemented changes and transformed the company starting immediately after taking
the helm of the enterprise. He created a new mission, defined a new strategy, and shifted the
company’s primary focus towards building a cloud platform. Under Satya, the Microsoft
Azure cloud computing platform has changed to support Linux operating system, a Microsoft
Office version that works on Apple iPad has been released, and Microsoft Outlook now
works on iPhone and Android platforms.

As the result, Nadella has won the love and admiration of employees and investors alike. A
survey of close to 13,000 employees showed a 3.9 out of five overall employee satisfaction
rate, 92% CEO approval, and 83% willingness to recommend Microsoft to a friend. Financial
markets have also recognized Nadella’s laser focus on the cloud platform. Microsoft stock

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share price has appreciated and has reached an all time high primarily as the result of
Nadella’s quick and decisive leadership in embracing and shifting to the cloud service
offering.

4.CONTROLLING

Therapeutic controls are those that not only detect a deviation but attempt to correct it at the
same time. An automatic transmission in a vehicle senses when the engine is working too
hard and uses oil pressure to switch gears so that the engine runs more efficiently. A coach
notices when an athlete's form is incorrect and uses instructions to help correct the deviation.

Concurrent controls are commonly referred to as steering controls because they allow an
action to be taken while a deviation is occurring; a business representative can quite literally
steer the course of an interaction.

Concurrent controls are more common than you might realize. A restaurant waiter must learn
what is on the menu and what comes with the meal. A car salesman must know the features
of the vehicle he is trying to sell. Workers in factories employ machines that measure
products to make sure they meet standards of weight, size and other criteria.

Managers may use feedback controls, or post-action controls, to identify a salesperson whose
quotas are consistently not being met and who needs supplemental training or dismissal from
his job. If several customers complain about a loose part in a child's toy, the appropriate post-
action control may be a recall to prevent a choking hazard. If sales information shows that
product inventory is depleting quickly, it may be a sign that production needs to increase.

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