ABOUT

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 lineup 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’s business model

Microsoft is a technology company that provides software products and

services to its consumers. It reports three business segments:

1. Productivity and Business Processes

This segment comprised 33% of Microsoft’s revenue in 2019. It consists of

products and services in Microsoft’s portfolio of productivity and information

services which include:

● Office Commercial/Consumer — Revenue is derived from users

subscribing to Microsoft’s Office software suite. Services in this
segment are intended to enhance personal and organisational
productivities. This segment is a key driver of revenue in this
business segment of Microsoft.
● LinkedIn — The professional social network makes money by
offering three categories of monetised solutions: Talent solutions,
marketing solutions, and premium subscriptions.
● Dynamics — This business provides cloud-based and on-premises
business solutions for business applications like enterprise resource
planning (ERP) and customer relationship management (CRM).
Dynamics revenue is driven by the number of users licensed,
expansion of average revenue per user. and the shift to Dynamics 365
— the cloud component of Dynamics.
2. Intelligent Cloud

This segment comprised 31% of Microsoft’s revenue in 2019. It consists of

Microsoft’s public, private, and hybrid server products and cloud services that

power modern businesses:

● Server Products and Cloud Services — Microsoft’s server software

provides integrated server infrastructure and middleware designed
to support software apps built on Windows. Server products include
Microsoft’s SQL Server and Windows Server. Server products revenue
is driven through volume licensing programs, licenses sold to original
equipment manufacturers, and retail packaged products. Microsoft
also provides a comprehensive set of cloud services through
Microsoft Azure. This is in line with the secular growth of cloud
computing as opposed to managing on-premises hardware and
software. Azure makes money through users subscribing to its
service.
● Enterprise Services like Microsoft Consulting Services are project-
based engagements to help customers plan and implement Microsoft
products so they can reap as much value from Microsoft’s products as
possible.

3. More Personal Computing

This segment comprised 36% of Microsoft’s revenue in 2019. It consists of

products and services mainly catered to improving the user experience:

● Windows – the operating system is still the most used desktop

operating system in the world. Windows original equipment
manufacturers’ (OEMs) revenue is derived from the purchase of
 Windows licenses by OEMs, which they pre-install on the devices
they sell.
● Devices — including Surface, PC, and other Microsoft intelligent
devices. Revenue is derived from this segment from the sale of these
devices.
● Gaming — Microsoft generates gaming revenue from the sale of Xbox
consoles and games.
● Search – Microsoft’s search engine, Bing, generates advertising
revenue.

How Microsoft is using the web

Microsoft’s official website is very user friendly. It gives very accurate

information on all of its products and softwares (like Microsoft 365) in a very
systematic way. The same web page can be used to purchase the products and
services as well. Another feature ‘Office for the web’ makes it easier for you to
work in the cloud because Word, Excel, PowerPoint, OneNote, and PDF
documents open in your web browser. Microsoft has done a great job of
finding ways to integrate different products to give users solutions that are
ready to be used right away. For example within Office 365 we are instantly
able to easily create sites, without even needing IT. Office 365 provides
powerful services that you can access easily from anywhere. It brings teams
and resources together with many solutions, and it makes working together
more productive and enjoyable, regardless of where participants are located.
SharePoint is such a service that is provided and it uses Office 365 technology,
making it simple to use and popular among users.

Business Information System Used at Microsoft

Information is necessary for many businesses whether small, medium, or

large, and the necessity of the information depends on a variety of uses. For
example, in the case of proper planning in the business, senior managers will
require information to facilitate this planning. However, middle-level
management relies on detailed systems of information in order to properly
control and monitor various activities in the business. At the same time,
various employees who have operational roles also tend to rely on
information systems in order to efficiently carry out their duties in the
business. Due to all these necessities, many businesses tend to develop
information systems that operate at the same time. The Microsoft Company
applies Management Information Systems (MIS) in dealing with internal
affairs of the company. An Office Automation System (OAS) improves the
productivity of employees who need to process data and information (Bill
2006). The Microsoft Company deals with several software systems and the
use of OAS becomes handy since it enhances employees’ productivity.
Employees have the ability to work from their own homes, as well as other
areas at their convenience. Apart from these two systems of information, the
other systems of information applicable by the Microsoft Company is the use
of Decision Support Systems (DSS). A decision support system enables the
management to make decisions in situations surrounded by uncertainty (Bill
2006). A lot of uncertainty occasionally arises from these big companies such
as Microsoft and in such times, the use of DSS becomes handy. This method
consists of techniques and tools capable of collecting relevant information and
providing analysis of all the relevant information gathered. In the process of
analysis provisions, the method also provides alternatives used in case of
absence of relevant information. Apart from the provisions of alternatives,
this method also involves the use of complex spreadsheets and various
databases used to develop several “what-if” models.

BUSINESS ENVIRONMENT

In 2011, Greenpeace released a report rating the top ten big brands in cloud
computing on their sources of electricity for their data centers. At the time,
data centers consume up to 2% of all global electricity and this amount was
projected to increase. Phil Radford of Greenpeace said "we are concerned that
this new explosion in electricity use could lock us into old, polluting energy
sources instead of the clean energy available today," and called on "Amazon,
Microsoft and other leaders of the information-technology industry must
embrace clean energy to power their cloud-based data centers." In 2013,
Microsoft agreed to buy power generated by a Texas wind project to power
one of its data centers. Microsoft is ranked on the 17th place in Greenpeace's
Guide to Greener Electronics (16th Edition) that ranks 18 electronics
manufacturers according to their policies on toxic chemicals, recycling and
climate change. Microsoft's timeline for phasing out brominated flame
retardant (BFRs) and phthalates in all products is 2012 but its commitment to
phasing out PVC is not clear. As of January 2011, it has no products that are
completely free from PVC and BFRs.

Microsoft's main U.S. campus received a silver certification from the

Leadership in Energy and Environmental Design (LEED) program in 2008,
and it installed over 2,000 solar panels on top of its buildings at its Silicon
Valley campus, generating approximately 15 percent of the total energy
needed by the facilities in April 2005. Microsoft makes use of alternative
forms of transit. It created one of the world's largest private bus systems, the
"Connector", to transport people from outside the company; for on-campus
transportation, the "Shuttle Connect" uses a large fleet of hybrid cars to save
fuel. The company also subsidizes regional public transport, provided by
Sound Transit and King County Metro, as an incentive. In February 2010,
however, Microsoft took a stance against adding additional public transport
and high-occupancy vehicle (HOV) lanes to the State Route 520 and its floating
bridge connecting Redmond to Seattle; the company did not want to delay the
construction any further. Microsoft was ranked number 1 in the list of the
World's Best Multinational Workplaces by the Great Place to Work Institute in
2011. In January 2020, the company promised to remove from the
environment all of the carbon that it has emitted since its foundation in 1975.
On October, 9, 2020, Microsoft made their work from home policy permanent.
In January 2021, the company announced on Twitter to join the Climate
Neutral Data Centre Pact, which engages the cloud infrastructure and data
centers industries to reach climate neutrality in Europe by 2030.
Microsoft’s Generic Business Strategy (Porter’s Model)

Microsoft Corporation uses broad differentiation as its generic strategy for

competitive advantage. Broad differentiation involves unique products sold to
a wide variety of customers. In this case, Microsoft’s products are unique in
terms of features, such as software products specifically designed for business
organizations. Also, this generic competitive strategy is broad in the sense that
the company sells its products to various market segments. For example,
individuals, households and organizations buy Microsoft’s software and
hardware products. Through the broad differentiation generic strategy, the
company builds its competitive advantage to attract a large population of
customers globally. This generic strategy also aligns with Microsoft’s mission
and vision statements, which emphasize capturing a global market.

A strategic objective applicable under Microsoft’s broad differentiation

generic strategy is to develop business competitive advantage through
continuous product innovation. This strategic objective is crucial to long-term
success, considering that Microsoft operates in a rapidly changing and highly
dynamic industry. Uniqueness of product design is another strategic objective
linked to the broad differentiation generic strategy. This strategic objective
highlights the importance of tangible and intangible attributes of products to
ensure Microsoft’s competitive advantage. For example, the company can
develop new computer hardware and software products that are difficult to
copy because of its specificity to the Windows operating system.

Microsoft’s Intensive Strategies (Intensive Growth Strategies)

Market Penetration (Primary Strategy). Market penetration is the primary

intensive strategy that Microsoft uses to grow its business. This intensive
growth strategy involves selling more products to the markets where the
company currently has operations. For example, the company grows by
intensifying its marketing and sales in its current markets in Asia. This
intensive growth strategy is responsible for Microsoft’s global dominance in
the IBM PC-compatible operating system market. The company effectively
applies market penetration through the broad differentiation generic strategy,
which uses product uniqueness to attract more customers from various
market segments. A strategic objective based on this intensive strategy is to
ensure Microsoft’s growth through aggressive sales and marketing.

Product Development (Secondary Strategy). Microsoft Corporation uses

product development as a secondary intensive growth strategy. This intensive
strategy facilitates growth based on the development and sale of new
products. For example, Microsoft continually develops new software products
to generate higher revenues. Through new products that address market
needs, the company supports its generic strategy, which requires product
uniqueness as a competitive advantage. This intensive strategy points to the
strategic objective of enabling Microsoft’s growth through product innovation.

Market Development (Supporting Strategy). Market development is a

supporting intensive growth strategy that has considerable but minimal
impact on Microsoft’s current business performance. Market development
supports business growth through the firm’s entry into new markets. For
example, in its early years, Microsoft applied this intensive strategy to sell its
computer software products outside the United States. However, considering
that these products are already globally popular, market development is no
longer as significant in the company’s growth. The generic strategy of broad
differentiation empowers Microsoft in applying market development as an
intensive growth strategy. For instance, through unique business-specific
computer products, the company initially entered overseas markets. A
strategic objective linked to this intensive strategy is to grow Microsoft by
entering new markets, likely in developing countries or regions.
Diversification (Supporting Strategy). Microsoft Corporation considers
diversification as a supporting intensive growth strategy. In this intensive
strategy, the company grows by developing new businesses. For example,
Microsoft diversified its business when it acquired Nokia’s devices and
services division to re-enter the smartphone hardware market. The company
can effectively apply this intensive growth strategy through new product
development in new business ventures, based on the broad differentiation
generic strategy. A strategic objective based on this intensive strategy is to
facilitate Microsoft’s growth through mergers and acquisitions.

Microsoft’s organizational structure

Microsoft has a product-type divisional organizational structure, with each

division focusing on a specific line of goods and services. Furthermore, each
has a separate research and development arm and dedicated sales and
customer support staff.

Since current CEO Satya Nadella was appointed in 2015, the company has
undergone several structural changes. Presently, Microsoft has two core
engineering (product development) divisions:

1. Cloud and Artificial Intelligence Platforms.

2. Experiences and Devices.

 Functional structure

Microsoft has a further seven functional divisions:

1. Business Development and Evangelism.

2. Finance.
3. Human Resources.
 4. Legal and Corporate Affairs.
5. Engineering (operating systems, devices, studios, applications,
services, and cloud and enterprise units).
6. Dynamics.
7. Advanced Strategy and Research.

Despite each division having some autonomy, divisional heads must still
report directly to Nadella.

 Geographic divisions

Microsoft also contains two geographic divisions: United States and

International.

Other characteristics of Microsoft organizational structure

 Span of control

Microsoft has a wide span of control (SOC). This means the company has a
comparatively higher number of subordinates under a single manager.

 Centralization

Unlike Apple – where decision-making is made by all levels of management –

Microsoft remains predominantly centralized with decisions made by those
with authority.

Instituted by Bill Gates, centralized decision-making standardizes work

output and removes the potential for personal biases. This creates a unified
company with universal standards of performance and progression.
Advantages and disadvantages of Microsoft’s corporate
structure

Advantages

● Streamlined innovation. With a product-based divisional structure,

employees work on projects that suit their skills and expertise.
Supportive leadership with access to the CEO gives product
specialists the freedom and resources to innovate. This ties in nicely
with Microsoft’s core strategy of creating a family of integrated
devices and services.
● Minimization of internal conflict. With little overlap in the scope of
each division’s activities, there is little chance for conflict over
resources or skills.
● Flexibility and responsiveness. Each division operates as a pseudo-
entity, equipped with the functions and resources necessary to
accomplish its mission. As a whole, this makes the divisional
structure of Microsoft more adaptative. Divisions can be added,
removed, or merged as required and do not impact other units.

Disadvantages

● Incompatibility. The divisional structure has led to a scenario where

Microsoft’s own products were incompatible with each other. This
occurred when the business software division was unable to
integrate Microsoft SharePoint with Windows Live.
 ● Minimal consideration for international markets. Microsoft has a sole
geographic division for the rest of the world sans the United States. It
could be argued that a single geographic division fails to capture the
nuanced differences of regional markets.

Microsoft Corporation’s Organizational Culture

Microsoft Corporation’s organizational culture ensures workforce resilience

and capability to address business needs in the dynamic market for computer
hardware and software products. A company’s corporate culture refers to the
values, traditions and behavioral expectations among employees. Microsoft
uses its organizational culture to facilitate innovation and customer
satisfaction. As one of the leading firms in the IBM PC-compatible operating
system market, the company must maintain cultural characteristics that
suitably promote innovation and high quality output. Microsoft’s long-term
success partly depends on this organizational culture and the corresponding
competence of the company’s human resources.

Features of Microsoft’s Organizational Culture

Companies have distinct cultural characteristics based on the nature of their

businesses, industry situation, labor market conditions, and internal business
processes. Microsoft Corporation’s organizational culture has the following
main characteristics:

1. Accountability
2. Quality and Innovation
3. Responsiveness to Customers
4. Growth Mindset
5. Diversity and Inclusion
 Accountability. Microsoft describes its corporate culture as a culture of
accountability. This cultural feature ensures that every employee
understands that his actions have consequences in the company’s context.
To ensure accountability, this characteristic of Microsoft’s organizational
culture is applied in the form of all-employee surveys and reward and
recognition programs. For example, an employee is evaluated for
accountability based on Customer Partner Experience (CPE) criteria and
related feedback. Such institutionalized accountability contributes to the
ability of the organizational culture to motivate workers to adhere to
Microsoft’s rules and objectives for its computer hardware and software
business.

 Quality and Innovation. As a technology business, Microsoft needs to

innovate to maintain its competitiveness against other computer hardware
and software firms. Innovation and quality are features integrated in the
company’s organizational culture. For example, Microsoft heavily invests in
research and development efforts for product improvement and new
product development. Such efforts are linked to the company’s
organizational culture through emphasis on quality standards and
innovativeness among employees. In addition, Microsoft rewards workers
for their innovative contributions, based on feedback from customers and
business partners. This characteristic of the corporate culture supports the
company’s needs for innovation-based competitive advantage. This
cultural characteristic facilitates Microsoft’s generic strategy for
competitive advantage.

 Responsiveness to Customers. To ensure customer satisfaction,

Microsoft Corporation includes responsiveness as a feature in its
 organizational culture. Responsiveness is achieved through training, so
that employees effectively consider feedback from customers and partners.
For example, Microsoft maintains feedback systems to allow employees to
know what customers think and experience in using the firm’s computer
hardware and software products. In addition, the company trains
employees to listen to such feedback, instead of just reading or delegating
them. To ensure that this cultural feature is integrated in its human
resources, Microsoft uses a variety of tools, such as product support
services and social media. The resulting information is applied in
innovating product areas, such as the Windows operating system and Bing.
This feature connects the organizational culture to Microsoft’s mission and
vision statements, which focus on empowering customers and business
partners.

 Growth Mindset. Growth is a necessary part of every business. Microsoft

uses its corporate culture to grow its computer hardware and software
business. For example, the company trains employees to identify potential
avenues for new business growth, such as new ideas and solutions.
Workers are rewarded based on their contributions in this regard. This
characteristic of its organizational culture affects Microsoft in terms of
continued growth and resilience despite competitive rivalry in the global
market.

 Diversity and Inclusion. Diversity and inclusion is now seen as an

essential factor in business development. Microsoft applies these factors in
its organizational culture through appropriate training programs. Also, the
company’s human resource policies for recruitment and hiring ensure a
high level of diversity and inclusion in the organization. This organizational
cultural characteristic provides a means for Microsoft to maximize human
resource competence based on diverse ideas and unity among employees.
Suggestions:
 Leverage the power of big data and analytics
 Co-opting new technology such as artificial intelligence powered
Chabot’s
 Increase spending on R&D and innovation
 Build and extend strategic alliances/partnerships

In a nutshell, information technology (IT) is important to all organization

in order to attain competitive advantages and success in the competitive
world. Nokia understands the importance of utilizing IT and hence Nokia
involves the use of IT in the company. Information system helps Nokia to
make decisions in strategic, tactical and operational levels of Nokia. That’s
why information system is so important nowadays and why is it there is a
growing trend of people or organization using IT.