This paper will discuss the different challenges that are being faced by a corporation today. It will try to identify and critically analyze and evaluate the Management and Leadership Framework and Performance Infrastructure in that organization. This paper will also critically assess the effectiveness and efficacy of these measures. The paper will also highlight the barriers to effective management in the chosen organization. This paper will also try to study the different performance differentiators and how it is used by the given organization in responding to the challenges and other problems.
The company that will be the focus of this paper is the company called Microsoft Corporation or simply Microsoft that is based in the United States but has offices and business centers around the globe including an office in the United Kingdom. First of all Microsoft had a strategically sound product design. The products and services that Microsoft offered were not only based on the requirements set by its competitors but also based on the conditions and necessity faced by its consumers. It offered products that can be classified as disruptive as stated by Shafer (2003, p. 51) since goods and products of the company are innovative and do not conform to the normal standards of the industry. It did not concentrate on a specific field of the market but expanded to other computer related industry to maximize its consumer base and profits (Manes, 1994, p. 111). Microsoft developed, manufactured, licensed and supported a wide range of software products for computing devices (Manes, 1994, p. 112). The most popular of these are the Windows operating system and the Microsoft Office Suit. It has also published Microsoft Encarta, an encyclopedia designed to run on a computer and books such as Exploring the IBM PC Home Computer by Peter Norton and the Apple Macintosh book by Cary Lu (Lowe, 1998, p. 32) . Microsoft also issued the Microsoft Sidewinder 3D Pro in an attempt to further expand its profile in the computer hardware market (Lowe, 1998, p. 55). Microsoft entered the palm computing market with Windows CE 1.0, a new, built from scratch version of their flagship operating system designed to run on low memory and low performance machines such as handhelds and other palm sized computers (Manes, 1994, p. 67).
Microsoft Windows 98 as well as Internet Explorer 4.0 SPI was released marking the beginning of the takeover of the browser market from its competitor, Netscape. It included features such as FAT32 file system and a support for multiple displays. Windows XP was also issued and it was specifically designed for multimedia capabilities and entry level consumers. Microsoft did not only dominated the software business but it diversified, moving into messaging by introducing MSN Messenger to instant messaging clients to compete with the popular AOL Instant Messaging (Wallace, 1992, p. 211). It also acquired the major online service MSN and the cable news station MSNBC. Microsoft has also tapped the global market of home entertainment by introducing WebTV which enabled consumers to access the Internet from their television and the highly regarded Xbox and Microsoft Flight Simulator which dominated the market with their superb graphics and splendid game interface (Wallace, 1992, p. 222).
Microsoft was not only concerned with the expansion of its market, it has also an insight on how to develop and design its products based on the specifications and needs of its specific end user. Microsoft introduces Russian MS-DOS 4.01. MS-DOS is the first Microsoft product localized for the Soviet market. The Russian version brings the total number of foreign-language versions to 13, including versions in Arabic, Chinese, Hebrew, Japanese (Kanji), and Korean (Hangeul) (Wallace, 1992, p. 213). Because of international acceptance, the company simultaneously introduced Windows version 3.1 of Windows in English, Dutch, French, German, Italian, Spanish, and Swedish (Slater, 2004, p. 55). The Chinese State Bureau of Technology Supervision (CSBTS) and the Chinese Ministry of Electronics Industry (MEI) also announce that they have signed an agreement with Microsoft to standardize the Chinese version of Microsoft Windows 95 as the software development standard for The People’s Republic of China (PRC) (Stross, 1997, p. 167). The agreement was aimed at speeding the development of Chinese Windows 95 by expanding the scope of cooperation and strengthening the foundation of software development in the PRC (Stross, 1997, p. 166).
With regards to process and manufacturing, Microsoft excelled in this area. Microsoft Corporation develops product with outmost care and consideration for the equipments and features that its product would possess. Inside Microsoft the “eat your own dog food” expression is used to describe the policy of using the latest Microsoft products inside the company in an effort to test them in “real-world” situations and to perceive potential errors and mistakes before a software is released in the market (Lesinski, 2000, p. 55). Prerelease and beta versions of products are considered dog food. Microsoft also expects its employees to be comfortable with uncertainty. Employees do not know with a degree of certainty when a product will ship, what it will be called, or what features will be included. The company expects responsive employees to rapidly adjust to dramatic changes and advances (Lesinski, 2000, p. 67).
Microsoft also promotes a general attitude of long-term strategic wariness in its managers, who are expected to be ready for any challenge from the competition or the market (Lesinski, 2000, p. 67). In this reasoning, being the largest software company in the world does not entail assurance, guarantee and security that the company will remain successful. For instance, future competitors could rise from other industries, or computer hardware companies could try to become less dependent on Microsoft, or consumers could decide not to upgrade their software as often. Microsoft requires its managers to maintain vigilance and sustain a dynamic expansion in new markets. Because of the size and massive time it takes to produce software that will be appreciated by the market, Microsoft has to engineer processes that would rapidly produce the products needed by the market while reducing “bugs” and other irregularities (Rich, 2003, p. 89).
Microsoft, like other companies breaks the development of its software by means of checkpoints called milestones. Each milestone has a definition document that describes which features will and will not be implemented by that milestone and what the acceptable quality level for those features are (Kramer, 2004). Product would also pass the alpha and beta stages of development. Alpha developments refer to releasing previews an pre released versions of a developed software so that it can be scrutinized not just by the company’s developers and programmers but also a selected few consumers to solicit feedbacks and other improvements (Rich, 2003, p. 90). After the product has passed the Alpha test, the product will undergo the Beta stage where it is examined for hidden bugs and defects. Beta stage would also include all features of the software. The last step of a product would be the Release Candidates (RC). As the name implies RC is a software good enough to be shipped out to the market and are tested by tem of developers and a set of costumers for quality assurance and other overlooked bugs (Rich, 2003, p. 100).
Moreover, management of logistics is also stressed inside the company since softwares and products had to be produce rapidly to satisfy consumer demands. Microsoft implemented this concrete and successful supply chain management negotiating with suppliers with regards to developed and fresh concepts that it can market (Bramel, 1997) Microsoft also develops a long term partnership with other firms to have a stable supply and source. A stable supply will dramatically increase the capacity of a company since raw materials and information can be passed on one department to another department without any hindrances (Bramel, 1997). An example of this would be the partnership between Microsoft and Apple Corporation in an effort to develop a joint computer program with regards to software development and hardware improvement. Microsoft wrote the computer program that enabled Apple Macintosh machines to run. In the browser competition with Netscape, Microsoft gained a lead versus Netscape when it vertically integrated the internet industry by buying the email provider Hotmail and when it sold Windows 98 bundled together with its Internet Explorer.
Furthermore, to improve its softwares, Microsoft implemented quality measures to protect its product. Unlike cars and other products that can be measured, softwares and computer programs have a special system to check for consistency and quality. During the development of a specific software, the product undergoes alpha and beta testing as mentioned above to check for errors and other hidden bugs in the program. To totally eliminate bugs and glitches, most products are tested by Microsoft’s in house programmers and developers. Imaginary checkpoints are also set to be able to check the progress of a product and to solve problems before projects are completed (Lowe, 1999, p. 100). This strict quality control is due to the fact that substandard products and softwares released in the market would cost the company millions of dollars in lost sales, not to mention the negative publicity and bad image it would shed on Microsoft (Shafer, 2003, p. 43).
Aside from the ones mentioned above, Microsoft also made products that patterned and molded to the quality expectations of its costumers. In a survey hired by Microsoft before releasing their popular game console Xbox, it was found out that the gamers wanted a stable and secured gaming platform with superb graphics, higher frames per seconds, compatible softwares and additional features such as network plays (Curran, 2005, p. 100). Microsoft answered the demands of the gamers and gaming enthusiasts by releasing Xbox which fully complied and satisfied the gaming demand of the public. It was an error free and a bug free platform, it plays games with stunning graphics and its softwares are also exclusively made by Microsoft, thus eliminating the hardware and software conflicts suffered by other gaming platforms like Sony and Nintendo (Curran, 2005, p. 101).
Microsoft also has a fine practice of managing human resources. A great deal of time and money is spent each year on recruiting young university-trained software developers who meet very exacting criteria, and on keeping them in the company (Slater, 2004, p. 111). For example, while many software companies often place an entry-level software developer in a cubicle desk within a large office space filled with other cubicles, Microsoft assigns a private or semiprivate closed office to every developer or pair of developers (Kramer, 2004). In addition, key decision-makers at every level are either developers or former developers. In a sense, the software developers at Microsoft are considered the “stars” of the company. For fun, Microsoft hosts the Microsoft Puzzle Hunt, an annual puzzle hunt. The company also funded a corporate campus for its developers and other students to further advance the knowledge and learning experience of its employees (Gates, 1996, p. 50).
Microsoft also strictly implements scheduling. Scheduling in Microsoft’s definition refers to subcontracting other parts and system of the program to smaller software firms and computer programmers. The Microsoft program MS-DOS was created by Tim Paterson of Seattle with its original name, QDOS (Lesinski, 2001p. 66). Windows which was Microsoft’s main product, was a copy of the program used by Apple Macintosh. Subcontracting does not only lessen the expenses of Microsoft in hiring new programmers and developers, it also picks up outside ideas, insights and innovations that it can use in its products (Shafer, 2003, p. 176).
Microsoft also performs regular maintenance in its products and softwares. It can be seen on the costumer support hotline in the company’s website. In the costumer service hotlines which can be reached by email, Microsoft provides technical support to costumers who have encountered problems with regards to their computer software (Rich, 2003, p. 44). To protect itself and its end consumers it has initiated a program in all its legal softwares to carry a product activation codes as safeguards against computer pirates. Not only does it offers consumer support and technical assistance, Microsoft and its website also supports forums, blogs, newsgroups, user groups to elicit feedbacks and response (Gates, 1996, p. 76).
Since Microsoft incorporated these improvements and reforms in the organization of the company, it has remained a major leader in the software development industry. This is evident because of several accounts. Data from several websites largely argued that Microsoft is a big leader in the said industry. It has the largest market shares and sales. Microsoft has the largest market capital with an amount of 296.45 billion dollars and it has possesses the biggest quarterly growth of 6% when compared to its closest rival International Business Machines (IBM) which can only post a -7.80% (Microsoft Corp., 2005). Microsoft has also amassed a net income of 12.86 billion dollars, a big sum when compared to the net income of Oracle Corp. and IBM which is 4.96 billion dollars and 18.48 billion dollars respectively (Microsoft Corp., 2005).
While Microsoft is growing financially today, the company is also faced with numerous problems and challenges nowadays. Alongside this apparent success is a different aspect of the company. Microsoft has been frequently sued by numerous competitors, U.S. Department of Justice and 50 states in the U.S. with regards to antitrust violations (McKenzie, 2000, p. 87). The plaintiffs argued that Microsoft abused its monopoly power in selling operating system and web browsers when it bundled its Internet Explorer with the Microsoft Windows operating system (McKenzie, 2000, p. 93). This move enabled Microsoft to dominate the web browser wars and elbowed its competitors since consumers now have a free version of Internet Explorer. The U.S. Department of Justice also alleged that Internet Explorer will only work with Windows and not with other software made by Microsoft’s competitors (McKenzie, 2000, p. 95).
Aside from the antitrust suit that Microsoft eventually lost, a formidable challenge faced by the company is the problem of computer and software piracy. Microsoft software and products are being pirated and copied illegally then sold to the consumers at half the price with no revenue going to the firm (Conrad, 1999, p. 61). This is appalling since even products and software not yet ready for release to the global market are copied and sold. Aside from software piracy there are also notions, reports and allegations that Microsoft and its programs are very vulnerable to hackers and computer viruses proliferating in the cyber world (Conrad, 1999, p. 53). These viruses cause the computer to act sluggishly losing important data and files. Viruses and other problems inherent in the programs made by Microsoft creates costumer dissatisfaction, negative publicity and loss of sales (Conrad, 1999, p. 65).
Another huge challenge against Microsoft today is the shift of the world market to an open source program. Open Source programs like Linux are softwares much like the one’s made by Microsoft but with a fundamental difference. The difference lies in that Linux is a stable program, its source code are open and can be modified, it has the best technical support, it runs on a wide range of hardware and most of all it is free (Siever, 2005, p. 51). Since the main advantage of the Linux is that it is free and can be modified freely, Microsoft and its subsidiary companies and softwares are put in an unpleasant position. The market would now gradually shift to Linux and other open source program gobbling up the huge market share and monopoly enjoyed by the company. Linux and other open source program will also force Microsoft to open up the source codes and basic programming codes of its softwares to the public since the current trend now in software programming is open sourcing (Siever, 2005, p. 53).
A proper operations management could overcome these said challenges and problems. An appropriate operations management could turn the tide for Microsoft. A suitable operations management could also have an immense impact on the over all performance of the firm. Microsoft should adapt stringent maintenance and reliability on its products. It must implement measures that would help curb the effects of computer viruses and the company must employ stiff computer firewalls against hackers and identity thieves. Assuming viruses do get into the system, Microsoft must have an immediate manpower and technical resources to remedy the situation and in addressing the issues, and helping the costumers with regards to their computer problems. This is very vital since the absence of frequent maintenance and a costumer service hotline could adversely affect the company’s reputation, profits and costumers.
With regards to product design, Microsoft must be extra watchful when it is going to release a product. It must consider all legal and political changes occurring in the society to avoid being sued and fined with a heavy sum. This incident is not only counterproductive to the goals of the company but also damaging to a company’s reputation. Microsoft can also win against piracy by making its products pirate proof, making all softwares and products unable to function when they are recopies of the original.
In relation to the challenge posed by Linux and the advent of open source system, Microsoft can use and improve its quality management and maintenance with regards to a proper operations management. First, Microsoft in order to survive, must step up its quality management in relative to its products and softwares. Stepping up the level of quality management is not only improving the excellence and superiority of its products but also listening to the desires and wishes of the costumers since they are ones that must be satisfied by the company. Microsoft must replicate the steps and actions that they took that enabled their Xbox to be a success. It must listen to feedbacks from the publics regarding its products and implementing these feedbacks as a solid answer to the expansion of Linux.
Greater competition and struggle in the software business is also a challenge to the growth of the company. The organization is being threatened by other competitors and other business enterprises that aim to get a big market share that is solely dominated by Microsoft. Aside from competition from other companies, there has also been a trend towards liberalization of the market and the software industry.
Liberalization means the gradual decrease of control on the part of Microsoft with regards to source codes and other computer programs because of the recent anti trust rulings made by the U.S. Supreme court. Source codes and computer programs that is unique and the vital in building computers softwares will be gradually distributed to open source programmers and other independent software companies making these source codes available to the public and breaking Microsoft’s monopoly on software designing. This “liberalization” would in turn strengthen other software companies in challenging Microsoft and providing alternative products to the consumers. This move would also decrease the dependency of the market to the products offered by the company since the consumers will have a clear and distinct choice when buying.
To combat these negatives external factors, a clear cut policy must be implemented by the company. First, the company must diversify its products. Because of recent government actions and other factors such as new competitors, Microsoft must diversify the products that it offers to the market. Product diversification would mean the modification of products that would have an edge over other competitors in terms of performance, ease of use and compatibility. Diversification would also mean the production of new and unique products that would be bought by the market following the example made by Apple Corporation and their portable music players. Microsoft must also venture producing products and not concentrating all its resources and manpower on a specific area which is software development and design. It must increase its focus on game design, software publishing and home entertainment system to to ease the pressure of competition. Diversification would also mean entering new markets such as China to relieve competition from market rich regions of the world. Microsoft would benefit greatly if it totally enters the Chinese market because of the huge consumer base and the cheap labor cost being offered by China.
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