The rapidly growing world of industrialization and globalization has witnessed a sharp growth of industries, which are substantial in economic and social growth. Technological advancement is probably one of the major characteristics of the industrial revolution in the postmodern world with virtually every important aspect of a technical profession, largely relying on technological support to operate efficiently.
Notwithstanding their aptitude to integrate business ideas that support them through the rapid diffusion globalized economy, corporate organizations are facing unrelenting challenges in their operations. Since its advent into the corporate world, Microsoft Corporation has been arguably one of the prevalent corporate names in the technology industry, with its performance positioning it among the fortune 500 organizations.
Analogous to other organizations, Microsoft has also been facing challenges that have marred its corporate growth. Fundamental to this notion, the purpose of this study is to analyze problems that Microsoft faces and provide possible alternatives and recommendation.
Symptoms of the problems
Notwithstanding its long outstanding performance within the technological business paradigm with unbroken performance track record, Microsoft is experiencing something different in the contemporary days. Several critical symptoms to its downfall in the technological consumer market are becoming more eminent in the current days.
Dropping in Microsoft’s market value is one of the first symptoms that significantly demonstrate possible problems confronting Microsoft Corporation; hence, its fall in market prominence and dominance in the last two years before the advent of Apple, which has proved to be one of the world’s most honored technological companies.
Another significant symptom to the problems marring corporate growth is the gradual loss of human capital that has been forming potential strengths to the initial success of Microsoft Corporation.
As postulated from the case study, Microsoft is gradually losing a majority of its innovative human resources to the prevailing competition with many of its top executives withdrawing from the organization either through formal work retirement process or attracted by competitors.
Microsoft third most possible symptoms to its current problems is technological eschew or stagnancy with the case study report indicating that Microsoft is steadily losing value and lagging behind its competitors as the company has failed to continue producing modern technologies including gaming devices, tablets, mobile phones, and other media.
From its initial growth in productivity that made almost all its employees virtually millionaires, one of Microsoft’s significant symptoms of downfall is its low revenue generation as compared to its operating income. This performance trend started stagnating and fluctuating from the beginning of 2008 towards 2010.
From the case report, employee rapport with Microsoft Corporation started dwindling following the company’s inability to handle integral employees concerns including low pays of wages and reduction of benefits despite the company’s ability to record high profits. Indicative of these symptoms, Microsoft is now struggling to deal with numerous problems within its operations.
Microsoft Corporation is facing a continuum of challenges in the recent days. One of the major problems that form a great challenge in the progress of Microsoft within the technology realm is low productivity, underproduction, or simply poor organizational performance. Microsoft is gradually falling short of market performance, which is characterized by low performance as opposed to its initial phenomenal success.
Also, as a software giant, flagship products are becoming rare. From the case report produced by the Wall Street, Microsoft was lagging behind its competitors in almost all aspects of business including technological advancement, marketing techniques, and relatively low financial capacity following the invasion of other technical companies.
Management is one of the critical success factors that determine the initiation and resilience of the organizations in its operations. Organizational management is normally responsible for administering leadership techniques that determine organizational performance as it controls both human and financial capital.
According to the case, as provided by Wall Street, poor management is one of the potential problems affecting Microsoft in the contemporary days within evidence of bureaucratic management that has significantly affected creativity and stock performance.
The case study indicated that innovative workforce is withdrawing with members claiming that Microsoft was responding too slowly to technological changes and other employees cited that Microsoft failed to address their concerns.
Any modern company aims at organizational success that is currently achievable by addressing significant production factors including actively focusing on quality of products that meet customers’ demands and preference. Research on this case study unveiled that Microsoft is currently facing stiff market competition from potential competitors in the technology industry, including the rapidly growing Apple, Mac, and Linux.
With demand for advanced technologies cutting across different devices and services, Microsoft is facing technological competition from the PC market to its services, including the Windows division that provides computer-enabled operating systems. This competition is stiffening from software production to hardware systems, which were Microsoft’s main tools for competitive advantage.
Low and deprived productivity
Organizational productivity is determined by numerous factors that entail financial comportment and market performance. From the case study provided about Microsoft, market performance and financial status clearly indicate that Microsoft is currently surviving under deprived productivity.
Discussing on financial performance that signifies performance or productivity in organization, Exhibit 3 provided in the study can significantly demonstrate this concern. A closer analysis of annual financial statements of revenue and operating income of Microsoft from 2008-2010, the company’s financial stability is dwindling.
The financial statement indicates that Microsoft has been recording profits, but in quite unstable performance characterized by hikes and drops between the years. In 2008, the company recorded $ 60, 420 million values of revenue and $22,217 operating income (loss).
In 2009, the company recorded annual revenues worth $58,437 and reported annual operating income worth $20, 363. This financial performance trend proves that the company is recording unsteady performances.
Management forms an integral part in organizational performance as policies and objectives articulated by management and their competence normally influence organizational success. One of the useful indicators that point to management failure in Microsoft is the continued employee-management wrangles that have posed serious issues in the company.
As indicated by the report, despite its uninterrupted track record in attracting and retaining significant human capital, the company has in the recent past witnessed a substantial loss in its key creative human resource. Top executives attached to business long term endeavors have resigned and others sought employment from other potential employers.
The current management has failed considerably in handling essential employees’ concerns including complaints regarding wages and benefits reductions, characterized by a widening compensation gap between executives and employees.
The management’s laxity in adopting new technologies that are integral for intensifying competition in the technology industry is keeping the company at stake, thus forcing it to struggle in the market performance.
Technological market competition
The response to the market demands and customers’ preference for certain products is currently one of the paramount business factors that entrepreneurs have recognized to have a potential impact on a firm’s stability. A key problem facing management in Microsoft is the constantly rising technological market competition that in most occasions has found the company unwary.
The fast pace at which other technologies are rising and their capability to respond to the rapid technological changes has created enormous problems to Microsoft. The company has lagged behind in realizing innovations involved in new technologies, including supporting the development of gaming services, tablets, mobile technologies, and other sources of media.
Microsoft has failed to recognize the rising demand for Smartphone technologies and continued to perform in dwarf of PCs. The company is performing dismally in server and tools and in providing online services while at the same time, the entertainment and devices section are dwindling in its performance in the technology market.
Alternatives for the problems and their Evaluation
Problems normally occur in businesses, but they only become detrimental when alternatives and approaches to handle them never emerge. The main problem in the case of Microsoft that has a significant influence in the existence and continuation of others is the issue of management itself. The management is arguably part of barrier to implementation of important strategies in Microsoft.
In a bid to reclaim its aptitude and performance in the rapidly changing technological industry, reshuffling and changing the management style is paramount for positive results in Microsoft Corp. Bureaucratic management stifles performance and each significant change will begin by streamlining the management.
As stated from the case, the current management is autocratic and tyrannical, with little expertise as top executives, including the current C.E.O Steve Ballmer have not received any credible welcome from directors and employees.
Attracting and retaining innovative workforce to help in innovating new technologies would help in reshaping Microsoft Corp. as talented human resource is imperative in analyzing problems, making critical decisions, and supporting management with progressive ideas.
One of the essential factors to consider in the technology industry is the trendiness in the products as integrating services and products with significantly advanced technologies would greatly aid in improving the market demand for its products.
After identifying innovative workforce that would produce competitive products and brands, it would be significant for Microsoft Corp. to consider expanding its market through strategic marketing techniques and enhancing the prevailing partner relationships. The restructured managed is capable of building more powerful partners.
Course of action (Recommendations)
Step 1: The entire action plan would require one year for effective implementation. Each step would require three months. The first would be a three-month strategic action plan development, which denotes the beginning of changes. The first step would involve revamping the management to allow integration of significant changes in Microsoft Corp. Designing implementation committee is integral in this phase.
Step 2: The second phase of change that would create significant change to Microsoft is attracting new and innovative workforce that would help in generating ideas on developing new technologies. The new management can practice this aspect throughout the company’s operations, though for the start, three months are adequate to identify the desired workforce competent enough for improving Microsoft.
Step 3: In three months, the new talented workforce will work with the management team in critical decision making to improve the company’s operations including changing and designing new and advanced products that follow the market trend. This move would help restore the company’s reputation on the quality of products and subsequently improve its market rapport with clients.
Step 4: The last step that would significantly place Microsoft Corp. in the best market position would involve developing a global marketing team and designing strategic marketing plans that will aid in expanding the market share for products of Microsoft. For instance, a huge marketing team to market the new windows 7 and Windows 8 is paramount.