Ballmer’s work changed the company’s culture to focus on strategies of raising revenue instead of concentrating on factors such as innovation and making the life of its customers better. He failed to realize changes in consumer preferences from desktop to internet revolution and smartphones. Lack of new products, while competitors maintained consistent introduction of new systems, applications, and smartphones, affected the company growth. Moreover, he over-focused on the fight against major competitors, including Apple, Amazon, Google, IBM, Sony, and Oracle hindering the attention paid to such key areas as research and development. Workers lost interest in teamwork and concentrated on how they can climb their career ladder while disregarding the company’s values.
Ballmer did not recognize the negative norms in the company, particularly, poor collaboration, teamwork, and determination. Ineffective sharing of information and lack of trust hindered the smooth flow of activities and the ability to achieve organizational goals. No one was willing to accept the responsibility for problems, making it difficult to establish the necessary corrective measures and address arising issues appropriately. Talented employees were frustrated since the management did not recognize their efforts and their recommendations were ignored.
Dominant logic resulted in the creation of many levels of middle management hindering decision making process. Ballmer’s strategies focused on Windows and related items and ignored other important factors for organizational growth. Moreover, the CEO disregarded ideas for continuous process improvement and avoided employing young workers. This made him lose the focus on the technology trend and in the process, failed to understand updated strategies for meeting the market expectations.
Changes that Nadella Made to Microsoft’s Values, Norms, and Dominant Logic
Nadella understood Microsoft’s values, norms, and dominant logic, and realized that they needed to be changed to improve the working conditions and enhance continuous development of products. He made every effort to develop new values that would support success strategy and facilitate organizational growth. He emphasized customer commitment and influenced the establishment of growth policies instead of focusing only on Windows. He transformed the company by reorganizing and rebuilding the marketing and sales apparatus. The company started selling its products in diverse industries, including financial services, health, and retail, as well as education. Investing more in industrial marketing helped satisfy special customer needs and reach out to a greater market.
Norms that Nadella presented suggested that workers should be motivated to provide quality work instead of forcing or intimidating them. As a persuasive and inspiring leader, he promoted teamwork and cooperation between the employees and their managers. This influenced workers to develop a positive attitude towards the workplace environment and the work itself, to remain focused on the achievement of the organizational goals. Since he was concerned about issues affecting every employee, he facilitated the development of friendly policies that helped address such stressors as workload and working hours.
Nadella made changes to the dominant logic where he encouraged the establishment of a positive and respectful attitude towards the company activities and stakeholders, including developers and customers. He changed the fight against the company competitors and considered ways that he can work with them to attain better growth. For instance, he ended the war with Apple and started putting its software in iPhones and iPads where the two companies became partners.
Factors that Made Microsoft’s Culture under Ballmer Result in Poor Financial Performance and Good Performance under Nadella Management
Poor financial performance under Ballmer was realized because the company’s culture lacked innovation and interest in the development of new products. Decisions made were not focused on the new technology trends but rather the company engaged in unhealthy fights with its competitors. Poor technical direction and vision hindered the company from investing in key areas, such as cloud storage, smartphones, search engines, and social networks. Moreover, the company was unable to motivate its workers to offer quality work and utilize their talents and skills to support organizational growth. These issues resulted in a failure, which translated to a loss of customers, reduced sales, and, eventually, poor financial performance.
Microsoft Inc. realized massive growth and good financial performance under the Nadella culture to attain the third-largest market value. He changed the approach of focusing only on smartphones or personal computers to supporting every individual and organization to achieve its dream. The CEO paid attention to the satisfaction of customers’ needs, including identifying emerging trends to remain ahead of its customers. He invested more in cloud computing instead of personal computing since it was likely to help the company realized better performance. The acquisition of GitHub and Linkedln opened a great source of revenue for the company.
On the other hand, the application of the company’s software on the competitors’ products, such as iPad and iPhone, enabled it to earn greatly from its investments. The new culture increased the share price nearly three times under the leadership of Nadella, implying that his work influenced great financial performance. Developers felt motivated, resulting in the development of Windows Phone and Windows 8 and offering them as developing tools and applications.