Organizations have external and internal factors that impact management. The four functions of management are: planning, organizing, leading, and controlling. This paper will explain the impact that external and internal factors play in these functions by looking at Microsoft Corporation, a large global high-tech company.
Internal and External Factors
There are various internal and external factors that impact the way in which the four functions of management, planning, organizing, leading, and controlling are affected. In the external environment organizations exist in a competitive and macroenvironment. Company leaders must stay abreast of the financial community, economic trends, technological developments and existing legal constraints
The competitive environment includes an organization's business competition, its clients and customers, and its suppliers. The macroenvironment are the social and natural elements that affect organizations, including legal, technological, political, and demographic. An organization's leaders must take the external elements into account when formulating their strategic plans or face serious consequences. In May 1998, Microsoft Corporation faced an unprecedented antitrust lawsuit when the U.S. Department of Justice filed suit against them claiming that Microsoft had violated sections one and two of the Sherman Act. The government argued that Microsoft had taken actions that were anticompetitive to prevent competitive innovations. Microsoft countered that the organization's success was a result of their innovations and competitive insight, (Fisher & Rubinfeld, 2001).
Organizations must also assess their internal strengths and weaknesses. Internal factors include financial strength, human resources activities, the strength or weakness of a company's manufacturing, production, or service delivery activities, research, and development. An internal analysis can provide an organization with an understanding of how they can compete through their internal resources. A company's resources can be advantageous if they are rare and not readily available to all competitors (Bateman &Snell, 2009). In recent years Microsoft has faced challenges with their workforce not being motivated because of their frustration with the company's bureaucracy. Employees believe that the innovation that Microsoft is renowned for, has been stifled because they are too busy focusing on the monopoly products, rather than coming up with the next generation technology. This has led to discontent among the employees and is impacting the organization's ability to lead and plan effectively for the future (Green, 2005).
Microsoft has offices on each continent in the world as well as offices in a majority of the countries within each continent. This helps the company by possessing an office close to each customer. The customer can contact the office locally and speak with a person who is within his or her own culture that has the answers to the questions about any product that the customer may be using. This allows the company to stay in line with its mission of helping all the businesses and people around the world realize their full potential. It also allows Microsoft the opportunity to use the knowledge of skilled technical workers in the different regions of the world that may not be available in the United States alone.
Microsoft has many products available for both business use and personal use. These products range from Microsoft Office and Windows Seven to personal use technology like the Xbox video gaming system, and the Zune MP3 players. They also have online search tools like Bing and servers and tools to help either businesses or individuals protect their computers or visual studios to help a company hold meetings from different places online. Microsoft has proven that they will use any new technology to help serve their customers. All of these different programs or products make it easier for Microsoft to show the ability they have as a company to produce quality technology for many types of users.
New technology is publicly released at least once a year. The newest innovations come from the scientists and technical abilities of each employee or customer. Microsoft uses the new technologies that are available to improve the current technology that was in place. When Sony came out with the new PS3, Microsoft worked to build a better Xbox 360 unit that would be comparable. A customer can purchase an Xbox 360 Live that has more storage abilities because of a larger hard drive, and the price is still lower than that of the PS3.
Another example of innovation is to know when there are improvements necessary and building on a past mistake to make sure that the new product will not have the same faults as the previous product. This can be seen in the Microsoft Windows XP version that did not have all the issues worked out of the system before the launch of the product. This lead to people returning to an earlier version that was more user friendly. Based on the customer feedback from Windows XP users, Microsoft released Windows 7 that has as many issues worked out as possible as well as user friendliness. It is not always how rapidly a company is able to get a product to the customer, but rather, how well the product works for the customer.
Delegation for Managing Major Factors Of Change
The top-level manager of the Microsoft Corporation is the Chief Executive Officer (CEO), Steve Ballmer. Ballmer believes that providing a framework conducive to harmonious working relationships is the best and most important thing a manager can do for his or her employees (Gillmor, 2002). Prior to becoming CEO in January 2000, Ballmer's style of management was keeping total control of company activities. In 2001, he was still searching for a more effective way to manage in his new position. Even though Ballmer was not comfortable with delegating business activities, he understood the need for change in the infrastructure addressing product development and sales with a weak financial management system (Guth, 2003). Ballmer researched how similar corporations structured their business units and decided to break-down Microsoft's business into seven business units, each with its own manager. Microsoft's CEO, Steve Ballmer understands the internal and external environment and acts accordingly by delegating the management of activities necessary in dealing with major forces of change.
Globalization, technology, innovation, diversity, and ethics are many major waves of change in today's business marketplace. Delegating management that directly addresses these changes will help an organization meet its mission and goals (Bateman & Snell, 2009). Consequently, Microsoft's CEO, Steve Ballmer, uses delegation to manage innovative ideas in areas that competition is surpassing like in Internet applications, which is an area of struggle for Microsoft (Bateman & Snell, 2009). Managing knowledge of techies like Ray Ozzie, appointed as top technical executive of Microsoft, is a strategic plan to harness innovative ideas of employees and stay ahead of competition.
Microsoft Corporation assigned management of its Worldwide Services division to Courtenay Yates. Yates has senior-level responsibilities in the oversight of international business strategy and realizes the need for business management courses. Operating on such a large global scale constitutes global accountability. Microsoft recently invested in research and development projects in China and hired a chief financial officer to take charge of their business helps generate more presence in the greater China region.
The fast-changing market of mobile technology is creating new challenges for Microsoft and delegation of duties in the field of technology is an important part in keeping up with the competition. The launching of the Windows Phone Seven (WP7) is a good example of how delegating duties to a department that focuses on the implementation of products will slow competition.
Diversity is a rapidly changing force in the corporate marketplace. To address disability laws and enhance diversity in its workplace, top-level management delegated duties such as identifying, recruiting, and retaining qualified individuals with disabilities (Sandler & Blanck, 2005).
The Global Network Initiative is a program initiated by Microsoft, Yahoo, and Google. This program provides a set of guidelines, which addresses ethical issues of consumer online privacy and the freedom of expression (A Global Internet Policy, 2008). Ethics is an important issue especially for global organizations because operating in foreign countries can be ethically challenging for managers abroad.
Diversity plays a major role in a company's success. Understanding that this is the case, one can see how diversity plays a role in the four functions of management within Microsoft. Microsoft believed that leveraging diversity would be critical to the success of their business (Fagerburg, 2003). They wanted to organize "a workforce that would reflect the diversity of their customers, partners, stockholders, and the communities around the world in which they do business (Fagerburg, 2003). This organization of the workforce shows how the first of the four functions of management came into play. Microsoft believed that they "needed the insight, creativity, and diverse perspectives that a range of employees can bring to the table in order to become a better, stronger, and smarter company (Fagerburg, 2003)." The two other functions of management that diversity played a major role in was that of planning and leading. Microsoft put a great deal of planning into their diversity movement in the hopes to recruit and retain a more diverse workforce at all levels of their corporation. They believed this planning would lead to establishing the leadership team that would ultimately allow them to reach the success they were looking for as a company. Finally, Microsoft believed that by establishing such a workforce they would be able to control the greater part of the market share that would lead to their success.
Within the Microsoft Corporation, ethics are a vital part of what has made them successful. Steven Ballmer, CEO of Microsoft stated, "how we think about and work with customers, partners, governments, vendors, and communities, impacts our productivity and success (Ballmer, 2009)." He goes on to mention that "it's not enough to just do the right thing, but that we do them in the right way (Ballmer, 2009)." This takes a great deal of planning, organizing, leading, and controlling at all levels of the corporation, and at all times to be successful.
The management of Microsoft is committed to handling their customers, consumers, partners, and shareholders in such a way that they can retain their confidence, respect, and trust (Microsoft Standards of Business Conduct, 2009). By following the ethics they have established, and through implementing them into all aspects of the four functions of management, Microsoft continues to be a very successful corporation.
This paper examined how external and internal factors impact planning, organizing, leading and controlling, the four functions of management, in Microsoft Corporation. It also looked at how globalization, technology, innovation and workplace diversity and ethics impacts the functions. Microsoft has demonstrated its commitment to managing the different factors and functions of management by providing a framework conducive to harmonious working relationships. Although Microsoft is the most profitable company in the technology industry, it must continue to address the external competitive challenges as well as the internal human resources challenges, to remain competitive and innovative.
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