Organizational Change in Microsoft Corporation

Free Research Paper on Microsoft Corporation


Microsoft is a global corporation, which specializes on creating, producing, testing, supporting and selling computer software and devices all around the world. It is one of the biggest corporations, operating on the computer market and contributing to the advanced scientific and technological research. It is best known for such products as Windows operating systems, Microsoft Office set, Internet Explorer, Skype and Xbox. Microsoft Corporation remains a leader on the global market in terms of total revenue, which was equal to US$ 86.83 in 2014. Microsoft conducts its business activities worldwide, hiring approximately one hundred thousand employees and setting filial departments all around the globe (Oreskovic & Rigby, 2013).

Microsoft Corporation was founded by Bill Gates and Paul Allen in 1972. Virtually, Microsoft has inaugurated the era of home computers, encouraging their development and improvement across the whole country. The second most important achievement of Microsoft lies in launching of Windows, which helps to operate approximately 90% of all computers in the world. Additionally, Microsoft Corporation deals with the production and improvement of such services as Skype, Azure, Surface, Windows Phone, Visual Studio, and others.

As a multinational corporation, Microsoft needs to pay much attention to the organization and management of the working process. Until 2013, its man activities were divided into three major categories, known as Windows, Online Services and Server and Tools (Carlson, 2013). Those thee departments were responsible for conducting all business operations and procedures within their divisions. However, such a structure of working process appeared to be unsuccessful, when it came to satisfying the demands of a multi-million corporation. As a result, Microsoft has implemented significant changes in its organization. This research aims at investigating the organizational changes implemented by Microsoft Corporation and analyzing their main features, characteristics, stages and consequences.

Necessity to Change

It is possible to say that Microsoft Corporation followed the vertical product specific focus of the company’s development. In other words, it did not act as a single united organization. On the contrary, the responsibilities for the corporations’ success were divided between several divisions and departments. Each of them was concerned with the solutions of separate tasks, which did not follow any united strategy of development. In 2002, Microsoft accepted a law, which provided top managers with great independence and autonomy of decisions and solutions (O’Toole, 2013). This step resulted in the division of the company’s activities between various groups of interest (Carlson, 2013).

In 2005, the independence of separate managers was limited, according to the creation of three main platforms. They included the platform of Products and Services, Business, and Entertainment and Devices (O’Toole, 2013). It is easy to guess that each platform focused on the completely different aspects of working and had little connection with the others. Moreover, to a certain extent, the three main platforms perceived each other as rivals, competing with one another, instead of following a common business plan and the same objectives. This inaccuracy was the first sign, indicating the necessity to introduce organizational changes.

Additionally, the debacle of Windows Vista drove the corporation into the financial crisis. This defeat together with other financial difficulties made Microsoft implement the policies of redundancy. On the account of this step, the company has lost thousands of qualified workers and bright professionals. This was another reason calling for the immediate management and organization change (Rash, 2013).

Finally, the imperfection of Microsoft’s working structure resulted in the reduction of the target audience and impossibility to meet the demands of clients. Thus, Microsoft Corporation had to think over the implementation of changes in order to satisfy the requirements of the market audience and keep up with the times of technical and scientific advancements.

Inauguration of Changes in Management

In July 2013, Microsoft’s CEO Steve Ballmer announced the reorganization of the corporation’s management structure. First, the reorganization dealt with the unification of the working process and creation of the “One Microsoft” (Rash, 2013). The reform aimed at amplifying the internal cooperation and forming the united environment. According to S. Ballmer, it is important to act as a single team, which shares the same values and plans. Such a strategy presupposed to increase the corporate awareness and develop a unified approach to the working process (O’Toole, 2013).

The change did not concern any lay off or redundancy of the personnel. It merely aimed at reorganizing working places and providing the employees with new objectives and plans for working. It also redistributed the duties and obligations among the top managers and executives. Particularly, the reform tried to focus on the market audience and make their services and products more convenient to use. The reorganization of such a big corporation as Microsoft consists not only in the management style. It also influences the way of producing and selling products and services to the customers. A part of the change concentrated on the improvement of Microsoft’s product line so that it meets the contemporary standards and demands of stakeholders (Carlson, 2013).

In addition, the reform changed the main strategy of the entire corporation. Thus, it put an emphasis on the development of mobile software and apps since the latter had an increased popularity on the contemporary market (Oreskovic & Rigby, 2013). From this standpoint, S. Ballmer identified the change n Microsoft as the necessity to follow the popular tendencies and orient on the topical innovations. In order to meet this objective, Microsoft has introduced the program “Devices and Services”, which is intended for the extension of production of gadgets and appliances with the end-user services.

Steps of Reorganization

The reform starts with the formation of four engineering groups, which work over the same issues and problems, dwelling on different aspects. Those four groups include operating systems, applications and services, cloud and datacenter and devices and studios. These groups are aimed at organizing the entire working process and improving the current products/services with the orientation on end users (Carlson, 2013). Moreover, they observe the marketing focus of the company and define the major directions of Microsoft’s further activities.

Secondly, the reorganization has also changed the focus of production. Thus, it has inaugurated the stress on development of new factors of mobile devices, including the operations with gestures, touch and speech. Microsoft also aims at improving current mobile Windows operating systems to make them more convenient to use. Generally, the shift to the mobile technologies is another part of corporations’ reorganization (Oreskovic & Rigby, 2013).

Thirdly, Microsoft tends to install the improved connection between the developers and users by unifying the cross-device user experience and improving the system of feedback. Furthermore, it works over the introduction of new advancements to the market of mobile technologies.

Finally, Microsoft claims that its initial purpose consists in the intention to reveal their stakeholders’ (customers, partners and employees) potential and capacities to full extent. It means that the corporation is going to build new apps for the electronic devices and improve the system of virtual interaction for the sake of improved learning, working, playing and communicating.

Outcomes of Microsoft’s Change

The reorganization of Microsoft has encountered plenty of criticism. Many regarded it skeptically and unfavorably since the corporation had made many attempts to introduce organizational changes throughout its history. Thus, the new reorganization was viewed as another attempt to reconstruct the management and redistribute power within the company. Nevertheless, this change brought many positive consequences to Microsoft’s stakeholders, as well.

Firstly, big businesses and commercial organizations received an opportunity to move to the cloud to host and store their services. A new strategy of Microsoft is oriented on the improvement of cloud computing and focuses on its extending and facilitating. Moreover, the accent on mobile technologies and development of Web applications for tablets and phones provides enormous opportunities for the target market audience (Carlson, 2013).

Furthermore, the introduced changes do not contain any threats to the employees and executives since they do not concern the policies of redundancy or layoffs. Steve Ballmer has introduced a new system of working obligations and duties, distributing them among the existing personnel. From this point of view, the reorganization in Microsoft was an essential event, caused by the social and technological advancements. Those changes were necessary for staying in business and providing high quality products and services to the customers (Carlson, 2013).


To sum up, the Microsoft’s reorganization of 2013 was an essential step towards the effective management of the working process. Influenced by market changes and social requirements, the reorganization made a shift in the priorities of development and sales of Microsoft’s products and services. Thus, it established focus on the creation and improvement of mobile technologies and cloud computing.

The reorganization was also significant for the entire working process. Now, Microsoft acts as a unified corporation, which follows same values and accomplishes the same tasks despite its multinational and multi-cultural environment. In fact, one of the main aims of the change consisted in the creation of the unified working surrounding and elimination of the autonomy of individual departments. Microsoft’s CEO is convinced that success and prosperity of the corporation lies in the collective efforts and common thinking.

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