MGT162

FUNDAMENTALS OF MANAGEMENT

INDIVIDUAL ASSIGNMENT:

By:

MICROSOFT COMPANY

Prepared by:

NUR ZULAIKHA BINTI RAMLI

Student id:

2022546653

Group:

BA111B,CS1102A

Prepared for:

MOHD FAISAL BIN ABDUL RAHIM

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 TABLE OF CONTENT

CONTENT PAGES

1. INTRODUCTION 3-4

2. PLANNING 4-6
a. Vision,Mission statement
b. Types of plans-practiced by the chosen company.

3. ORGANIZING 7-9
a. Organizational structure.
b. Types of departmentalization.

4. LEADING 9-10
a. Leadership approach available in the company.

5. CONTROLLING 11-13
a. Controlling method used by the company.

6. CONCLUSION 13

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1. INTRODUCTION

Microsoft(MSFT),one of the world’s largest technology companies and An American

multinational computer technology corporation. Microsoft was founded on April 4, 1975, by
Bill Gates and Paul Allen in Albuquerque, New Mexico.Its current best-selling products are
the Microsoft Windows operating system; Microsoft Office, a suite of productivity software;
Xbox, a line of entertainment of games, music, and video; Bing, a line of search engines; and
Microsoft Azure, a cloud services platform. Five years later, Gates and Allen were hired to
provide the operating system for IBM’s first personal computer (PC), followed in 1985 by
Microsoft’s launch of its now-ubiquitous Windows software product.In 1986, the company
raised $61 million in an initial public offering (IPO) that some analysts referred to as “the deal
of the year. By the late 1980s, Microsoft became the world’s largest PC software company.As
of June 30, 2015, Microsoft has a global annual revenue of US$86.83 Billion and 128,076
employees worldwide.It develops, manufactures, licenses, and supports a wide range of
software products for computing devices.The Microsoft campus is the corporate headquarters
of Microsoft, located in Redmond, Washington, United States, a part of the Seattle metropolitan
area. Microsoft initially moved onto the grounds of the campus on February 26, 1986, shortly

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before going public on March 13. The headquarters has undergone multiple expansions since
its establishment and is presently estimated to encompass over 8 million square feet (740,000
m2) of office space and have over 50,000 employees.Microsoft sells computing devices, cloud
systems and services, software, and other products to consumers and businesses.The company's
intelligent cloud segment is the largest source of profit, as well as the fastest-growing.Microsoft
divides its business into three reportable segments, breaking out results by both revenue and
operating income: productivity and business processes, intelligent cloud, and more personal
computing. These segments are categorized according to both product type and customer
demographic. Productivity and business processes, for instance, includes products across
multiple platforms and devices relating to productivity and communication. And more personal
computing focuses on products designed with end-users, developers, and IT professionals in
mind.The top shareholders of Microsoft are Satya Nadella, Bradford L. Smith, Jean-Philippe
Courtois, Vanguard Group Inc., BlackRock Inc. (BLK), and State Street Corp.Satya Narayana
Nadella was born on 19 August 1967 is an Indian American business executive. He is the
executive chairman and CEO of Microsoft, succeeding Steve Ballmer in 2014 as CEO and John
W. Thompson in 2021 as chairman.Before becoming CEO, he was the executive vice president
of Microsoft's cloud and enterprise group, responsible for building and running the company's
computing platforms.As of 2020,Microsoft has the third-highest global brand valuation.

2. PLANNING

a.Vision,Mision statement

Microsoft Corporation’s success as a global computer technology company is founded

on the fulfillment of its corporate mission and vision statements.Microsoft’s corporate vision
and mission statements emphasize empowerment as a value or benefit that the company’s
products can provide to customers.

Microsoft’s Corporate Vision Statement

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:

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1.People and businesses throughout the world.

2.Help to realize.

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.

Microsoft’s vision statement shows the company’s target market and product value.
However, the corporate vision lacks details to effectively guide the organization’s
development. Ideally, vision statements must include details on a desired future situation of the
organization. In Microsoft’s case, the corporate vision does not contain such information. Thus,
it is recommended that the company revise its vision statement to include information about
where the business is heading. For example, Microsoft’s vision statement can present
information about its target market leadership for a specific set of computer technology and
software products in the decades to come.

Microsoft’s Corporate Mission Statement

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

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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.

Microsoft’s mission statement presents the global market scope of the business and a
general idea about the benefit of the business to its customers. However, the corporate mission
does not clearly define the business in terms of its nature or what it does. Ideally, mission
statements must provide a general idea about the nature of the business and about what the
organization wants to achieve. In this case, Microsoft’s corporate mission needs improvement.
A recommendation is to improve the company’s mission statement by including how the
organization achieves its corporate vision. For example, in terms of growing its computer
technology and software business, the corporation can specify rapid innovation in computing
networks and related products. Also, to improve the corporate mission statement, information
about Microsoft’s strategies may be included.

b. Types of plans-practiced by chosen company

1. Strategic plan

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.

2. Tactical plan

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.

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3. ORGANIZING

a. Organizational structure

Microsoft’s organizational structure has been described as a divisional, product-type

organizational structure based on functional business groups and engineering groups. As of the
company’s latest restructuring in June 2015, several changes were announced that would help
to align the company to its strategic direction as a productivity and platform company. While
Microsoft has become more hierarchical as the company has grown, it has managed to maintain
its hybrid approach between senior management, functional business groups, and engineering
groups.

Microsoft’s current business groups are divided into nine areas:

1. Business Development Group

2. Corporate, External, and Legal Affairs
3. Corporate Strategy and Planning
4. Finance Group
5. Global Sales, Marketing, and Operations
6. HR Group
7. LinkedIn
8. Marketing Group
9. Worldwide Commercial Business

Whereas its engineering groups are divided into three areas:

1.Cloud and AI Group

2.Experiences and Devices

3.Artificial Intelligence and Research

Microsoft also has two geographical divisions:

1.United States

2.International

Under the company’s 2015 structure, heads of engineering groups report directly to
CEO Satya Nadella. This helps new product development and innovation because it helps new
products and services to get to market faster. A clear distinction between engineering and

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business groups also illustrates Microsoft’s focus on its engineering groups which are
responsible for building core products and services.

The way Microsoft’s organizational structure has been designed also means that there’s
a wider span of control than what is typically seen at comparable tech giants such as Apple or
Facebook (Meta). This means that the company is more centralized, and more subordinates
fall under the supervision of individual managers,those with the most authority ,as a result.

The decision to centralize Microsoft’s decision-making was initially introduced by Bill

Gates in a bid to keep output standardized, remove the potential for personal biases, and create
a unified company with diversified standards ,Nadella’s decision to keep this set up is a clear
sign that it works well for Microsoft.

b. Types of departmentalization

Since Microsoft’s founding in 1975 and until 2000, Bill Gates served as the CEO before
stepping down to be replaced by Steve Ballmer who served for 14 years between 2000 and
2014. Since 2014, the position of CEO has been held by Satya Nadella.

Despite being such a huge organization, Microsoft has a relatively small executive
leadership team. This is made up of CEO Satya Nadella and: the President and Vice Chair, the
Chief Marketing Officer, the Chief Human Resources Officer, the Chief Financial Officer, and
the Executive Vice President for Business Development, Strategy, and Ventures.

Microsoft’s board of directors is mostly made up of company outsiders, which is

customary for publicly traded companies. Board members are elected every year at the annual
shareholders’ meeting using a majority vote system. After stepping down as CEO, Bill Gates
continued to serve on the board until March 2020, when he left to focus more on his
philanthropic efforts.

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4. LEADING

a. Leadership approach available in the company

Co-founder of the company, Bill Gates was at the helm of Microsoft leadership since
its inception in 1972 until 2000, when Steve Ballmer succeeded him as CEO. While Steve Job’s
leadership was rightly regarded as successful, Steve Ballmer was pointed to as the worst CEO
of a large publicly traded American company in 2012 by Forbes. This viewpoint is shared by
many business analysts and practitioners. It has been noted that Microsoft peaked at USD
60/share in 2000, just as Mr. Ballmer took the reins. By 2002 it had fallen into the USD 20s,
and has only rarely made it back to USD30s value, until Ballmer’s replacement by Satya
Nadella as CEO in 2014.

Currently, Microsoft leadership team comprises 21 members led by CEO Satya

Nadella. Specifically, there are 12 executive vice presidents responsible for various critical

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directions and aspects of the business, along with chief technology officer, chief legal officer
and CEO of LinkedIn. Microsoft Board of Directors comprises 14 members, who are
experienced senior leaders across a range of industries.

Microsoft leadership practices are based on the following principles:

1. Focus on organizational culture. Leadership style exercised by Satya Nadella places a great
emphasis on developing and maintaining the right type of organizational culture. Specifically,
the leader of the tech giant cultivates the integration “learn-it-all”rather than “know-it-all”
mentality into Microsoft organizational culture.

2. Efficiency and practicality. Microsoft leadership at the most senior level has been praised
for being practical and CEO Satya Nadella told employees “to stop wasting their times at
pointless meetings”.

3. Regular coordination of efforts across the departments and groups. CEO Satya Nadella has
8-hour meeting with his leadership team every month and he runs 4-hour meetings other three
weeks.These meetings involve performance review of top executives on the basis of
dashboards and integration of activities according to the overall business strategy.

4. Unrestricted path to leadership within the company. It is not unusual at Microsoft for team
members to step into leadership roles even if they weren’t already on that path. For example,
“employees from the hack team that created Learning Tools for OneNote are now overseeing
the product’s market expansion”.

Moreover, Nadella is an acknowledged and effective business leader, who can attain
focus to solve complex problems, knows how to give his team confidence and he announced
his mission to transform Microsoft organizational culture to infuse the values of innovation.

Microsoft Corporation Report contains a full analysis of Microsoft leadership. The

report illustrates the application of the major analytical strategic frameworks in business studies
such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and
McKinsey 7S Model on Microsoft. Moreover, the report contains analyses of Microsoft
business strategy, organizational structure and organizational culture. The report also
comprises discussions of Microsoft marketing strategy, ecosystem and addresses issues of
corporate social responsibility.

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5. CONTROLLING

a. Controlling method used by the company

Cybernatic control process

Microsoft Corporation, well-known for computer soft wares, is one of the top
technological companies which had earned billions of dollars annually. Microsoft Corporation
can easily achieve such high revenue by following their aims. These aims could not easily be
achieved without a certain standard of management skills and controlling skills in the
organization. Therefore, Microsoft Corporation has a unique yet strong Cybernetic Control
Process to manage their employees and products.

First of all, Microsoft Corporation’s management style is referred as “Microsoft’s

management style is its core strength,” and “Microsoft’s management strength is why it will
continue to dominate.” by the employees of the corporation. The reason for such believes is
because employees at Microsoft focus in the aim of “Total World Domination” which is
winning 100% of all Microsoft Corporation employees market rather than focusing on the
bottom of their target line which results in strategic planning to capture the market. Besides
achieving 100% of their target, Microsoft manages their control system by hiring smarts people
instead of knowledgeable people. They seek for people who can think and quick in detecting

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errors. With this kind of system, people tend to work harder in order to survive and ensure
highly productive workforce to achieve 100% of their market revenue.

By sticking to their goal of total world domination, Microsoft Corporation measures

their employees’ performance by having surveys with measuring Customers Satisfaction Index
(CSAT). The Customers Satisfaction Index helps to identify areas of strength that could lead
to opportunities to improve in business and maximize the value of the time Microsoft spends
on customers’ insight. After receiving the rating from customers through surveys, the higher
up of Microsoft Corporation will plan for better strategies to fulfill customer’s satisfaction.

All companies will face failure even if it is a top company in the business world.
Sometimes failure is required to make better changes for the organization. In Microsoft, failure
is expected, and even required because risking failure is the only way to push the
employees.For instance,Microsoft did not achieve “Total World Dominance” after the release
of Window 8.This is because the price of Window 8 is much higher compare to the price of the
previous product, Window 7 which has a similar function as Window 8. As a result, Microsoft
relentlessly pursues success without fear of failure. Therefore, Microsoft always overcomes
failure as quickly as possible to avoid the waste of time. This can clearly be shown when
Microsoft has cuts the price of Windows 8 and Office 2013 to overcome the lack of demand in
the market in order to increase the sales of product.

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 After all of the control process, the most important reason to keep on motivating the
employees is Bill Gates and other senior executive are watching over the corporation. They
truly understand the internal and external of the corporation. Every month, the lead manager
on every project e-mails a status report to Bill and the other key managers, providing an update
on the project’s status and any major problems. There will be time when all important key
officers have meeting discussing issues in each department. Although Bill Gates is the
chairman of the corporation, he has practices Horizontal Communication in his corporation.
He is willing to communicate down through the ranks and even help the software developers
who actually perform the work.

6.CONCLUSION

Microsoft Corporation is a technology company that deals with the selling ofcomputer
software and services. It’s publicly traded and has been growing significantly since its
inception. The company has grown its income base over the past few years.Comparing the
income statements and the balance sheets for the past three years, thecompany current assets
have risen significantly. The company’s Accounts Receivables that ended for the quarter as at
December 2015, the figure was at $12,247 million. The company gross margin has however,
been on the decline for the past thirteen years(Microsoft, 2015)

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