Managing Change and Creativity in Organizations - Assignment Example

Managing Change and Creativity in Organizations Microsoft is one of the leading corporations of the world, with a brand value of US$ 56,647 million. The company thrives upon the concepts of creativity, innovation and change. An employee base of 90,000 means diversified employees leading to more ideas and assorted thinking, which is all that Microsoft needs to sustain that competitive edge that it has gained over the years since its inception. The founders, Bill Gates and Paul Allen, because of their creativity only, were able to lay the foundation of the giant company Microsoft. The organization structure of Microsoft was such that all the employees were brought into the decision making process, that is their opinions were very valued. Such a structure is a great stimulator of creativity within the organization. This is because employees are satisfied about their position in the company. Whenever they do some work, they can see it fit in the whole organization’s progress. Microsoft fosters creativity and innovation within the workplace by valuing diversity and by respecting each person’s individuality. As far as Microsoft is concerned, the demographic factors as well as the technological advancements count as external triggers of change. . Microsoft, as a company, has been in existence for more than three decades, and therefore, like any other organization, it is bound to lead towards stages of decline at some point in time. The challenge for Microsoft would be to prolong the stage of maturity. The market for computer software is maturing rapidly, and thus the market share is being eaten up by rivals who are faster and quicker to respond to the market changes. And this extension of the maturity stage can only be gained if regular innovations are brought about by Microsoft in the market. INTRODUCTION TO THE COMPANY – MICROSOFT Microsoft is one of the world’s largest companies, well renowned globally in sector of computer software. It not just develops software, but also manufactures it and provides its licenses. It also supports a wide array of software products that can be used for better computing on devices. Interbrand, the world’s largest brand consultancy, has ranked Microsoft at number 3 position in the top 100 brands of the world in 2009. Microsoft’s country of origin is United States of America, and its brand value in millions of dollars is 56,647. Microsoft was founded by Bill Gates and Paul Allen on 4th April, 1975 in New Mexico. The most popular products of Microsoft are the Microsoft Office suite, a combination of various software tools, designed to help the layman in doing work like making a report or designing a presentation, among the many other facilities and the Microsoft Windows operating system, the interface between the hardware and the user. In 1990’s, Microsoft had totally captured the market, with a vast majority of the market share, that is 90%, under them. (Micheal, 1995) In 1980, Microsoft shook hands with IBM (International Business Machines), which is one of the giants of the corporate world, nicknamed the Big Blue. This partnership entailed that now Microsoft computer software would be sold with IBM computers. Thus, this allowed Microsoft to gain royalty on every sale that was made of IBM computers. As of now, the company is very successful, earning revenues of around US$ 60.42 billion in just the year 2008. CREATIVITY AND INNOVATION The concepts of creativity and innovation are very relevant to Microsoft. In fact, these concepts provide Microsoft the edge it needs to sustain the market share, maintain it and further build it. This is because the sector in which Microsoft thrives is maturing, and thus innovation is needed to engage the customer. In a company like Microsoft where innovation has to be stirred, it is important to focus on all aspects of management, just so that the process of innovation gets its due share of acceptance within the company and that its implementation is well managed from all aspects. Therefore, some areas always need to be focused on when innovation and creativity is discussed. The first pertains to the management of the innovation itself, the second is about the training requirements that would be needed to make the process smooth, the third is about the managerial planning that goes in any innovation process and the fourth and very important is the strategic leadership that is needed to support the change. (Micheal, 1995) A company always tries to build a long and lasting relationship with the customer so as to ensure loyal customers who spread positive word about the company through word of mouth. But in these changing times, it is not easy to capture the attention of the consumer whose mind is always in a war of brands, where they cannot decide which one to go for. Therefore, it is vital for today's corporate world to innovate. Innovation is to produce something new, whether it is an idea, a method or a device. Innovation opens the horizon for new dimensions to be explored and also fulfill some market niche which was unexplored and touched upon before the innovation. Moreover, the definition of innovation does not end there. Its scope is pretty vast. Innovation is not just about introducing a new thing; it is also about improving something old by adding an element of freshness and newness to it. Innovation is all about creativity. A person needs to be creative to be informative. Furthermore, he needs to have the knowledge and information necessary for creativity in a field. If a scientist is expected to innovate, we expect that he will be fully equipped and aware of all the scientific terms, chemical formulae and the terminologies that can be used to being an innovation and produce a product with the help of science which will somehow help mankind. (Akdere, 2007) Their Relevance to Microsoft Microsoft is a multinational and thus has spread its operations in around 105 countries. With human resources strength of 90,000 from such varied cultures and nations, Microsoft has always encouraged creativity and innovation among its employees. Such diversified employees means more ideas and assorted thinking, which is all that Microsoft needs to sustain that competitive edge that it has gained over the years since its inception. And like we discussed above, the pre-requisite for creativity is the possession of all sorts of knowledge, information and tools. And Microsoft is a company which equips its employees with all the things they need for creativity. Examples Microsoft is always on a ‘war of innovation’ with rivals like Google. Most recently, the two giants have started this clash on who would come up with a better search engine. These two companies are bent upon bringing such innovations which would make a place in the minds of the consumer. Specialists observing the industry claim that such announcements made by the companies will actually change the way searching is being done on the Internet. There will be an overwhelming amount of innovations by these companies in the upcoming years 2010 and 2011. This news piece well supports the fact that innovation is what is driving Microsoft ahead, and is the tool through which competitors can be given a run for their money. THE FOUNDERS’ MOTIVATIONS IN STARTING THIS INNOVATIVE VENTURE The founders of Microsoft, Bill Gates and Paul Allen, are the entrepreneurs behind the company. The motivations that drive an entrepreneur generally are the opportunity to gain control of one’s own destiny, to make a difference, the ability to reach one’s full potential, the chance to reap unlimited profits, the prospect to contribute to society ad to be recognized for one’s efforts and the opportunity to do what one enjoys doing. Both of the founders of Microsoft, Gates and Allen had a passion for computers and they were fascinated by the way those machines worked. Gates always used to exclaim that the computer machines were ‘neat’. From as early as 8th grade, Gates had an interest in programming, and both Gates and Allen dropped out of their studies to work as full time programmers for Microsoft. (Bass, 1990) The founders, because of their creativity only, were able to lay the foundation of the giant company Microsoft. They had called MITS (Micro Instrumentation and Telemetry Systems) and told them that they had to ability to provide them with a programming language for the Altair 8800 system that they had introduced. All they needed was a chance to demonstrate that. MITS gave them the chance. And in the few weeks till they met with MITS executive, together Gates and Allen had produced an interpreter for the system. The demonstration was a success, and the interpreter was adopted by MITS, and given the name of Microsoft. In reality, before they had called upon MITS, they did not have an interpreter, nor did they own an Altair 8800. Still, through determination coupled with the creativity and innovation that fostered within them, the two founders were successfully able to produce an interpreter worth not just demonstrating, but worth a billion dollars. Therefore, their motivation was furthered by their childhood interest, and since they had worked on their interest since childhood, they had developed the capability and skill to bring alive such innovations. Gates father is also reported to having said that Gates always wanted to start a business. And thus, he always had the entrepreneurial personality. So, the creativity of Gates and Allen in the then fresh sector of computer software led them to become founders of the giant Microsoft – a venture of innovation and creativity. ORGANIZATIONAL STRUCTURE OF MICROSOFT The structure of any particular organization can be defined in the way in which the organization is designed and managed. When it comes to the management of the organization, the focus mainly comes on how the authority is distributed and how the hierarchy is set. Therefore, the components that mainly affect the organization structure are work specialization that exists within the labor force, the chain of command that is being followed, authority and responsibility, the span of management, and whether the organization works on centralization or decentralization. Keeping these points in minds, we would now define the organizational structure of Microsoft. The organization structure of Microsoft required that all the employees be brought into the decision making process, that is their opinions were very valued. Employees were given the authority and responsibility to take decisions on their own, as far as the interests of the company were kept intact. The chain of command is small, that is, not many layers are present in the organization with respect to authority etc. (Fleming, 2006) The work specialization is very high, that is, each Microsoft employee has a unique skill or capability, which contributes to the organization and can not be replaced easily by any other employee. Since employees do not have to report to a long chain of command, their creative idea reaches quickly to the top management, thus allowing for its evaluation and its implementation (if approved by the senior executives). The fact that Microsoft is a multinational also helps because then it has diverse employees, coming from diverse background, with varying thinking patters, ultimately leading to the generation of a bigger pool of creative ideas. It’s Effects on Creativity The kind of organization structure that exists at Microsoft is a great stimulator of creativity within the organization. This is because employees are satisfied about their position in the company. Whenever they do some work, they can see it fit in the whole organization’s progress. The quote ‘the sum of parts is larger than each part acting alone’ can be aptly seen been applied in Microsoft. Creative ideas are welcomed because employees are invited in the decision making process. Employees are given the confidence that their ideas will always be looked upon, and if good enough, they can be the pioneers of Microsoft’s next innovation. CULTURE AND CREATIVITY Creativity is a process whereby the organizational problems can be solved through giving novel solutions. This is an art of creative people and they should be nurtured as much as possible within the organizations. It is not just about a single individual. Departments or whole organizations can be made creative. A creative individual is one who has open mindedness, is original in his ideas, less authoritative, is independent, very playful, wants to explore more, is curious, has persistence within himself, is committed to his goals and has a focused approach to life. The creative organization and department are those where there are open channels of communication, teams are used to get work done, the norms of risk taking prevail, people accept mistakes and learn from them, and there is a playful corporate culture. (Darwin, 2003). Microsoft fosters creativity and innovation within the workplace by valuing diversity and by respecting each person’s individuality. They encourage liberal and open-minded thinking at the workplace, thus not restricting the thinking limits of an individual. Microsoft believes in taking care of the work/life balance that is needed to be maintained by employees, of the duties that a parent has to perform, of the women who want to work in IT, of the community that they are in. Thus, when Microsoft takes care of other issues in the life of an employee, the individual is left with a fresh and calm mind to come up with innovative ideas and a creative outlook. CHANGE AT MICROSOFT Organizational change is the adoption of a new idea or behavior by the organization. The environment, whether it is internal or external, keeps on changing and it is the task of the organization to be structured in such a way so as to respond to the changes by changing itself in the right manner. Or else it will be left somewhere behind in the race of this cut throat competition. There are many forces, within and outside the organization, which trigger the need for change. Within all these elements, any factor can make an organization realize that there is change that can make things better. (Patron 2000) Firstly there are external forces, which can be demographic, related to technological advancements, concerned with market changes or simply social and political pressures. In demographics, basically the age, education, skill level, gender and immigration of the people concerned with the organization are studied from time to time so as to gauge any differences that take place with time in the general statistics. It can be the company's customers or employees. Secondly, in technological advancements, new innovations in information technology have to be seen and a feasibility study has to be conducted to find out whether its implementation can make things better within the organization. Manufacturing automations would be a technological advancement which can be incorporated within an organization which has a factory. Thirdly, market changes like mergers and acquisitions, domestic and international competitors and recession at any stage in the economy can set the stage for a change process at an organization. Lastly, among social and political pressures come war, values and leadership which can trigger change as much as any other factor. (Richard 2000) As far as internal forces are concerned, there are two broad factors, human resource problems / prospects and managerial behavior / decisions. When it comes to human resource problems / prospects, the employees of the organizations can have certain needs which are unmet, they can be dissatisfied with their job somehow, absenteeism and turnover is increasing due to some reason, productivity has lowered and due to the participation and suggestion of the employees, a certain need for change has been felt. The managerial behaviour / decisions concentrates on conflict between two managers, the difference between the current leadership style and the kind of leadership that the organization needs to do better, reward systems need to be examined thoroughly for loopholes and lastly, there is a structural reorganization that needs to be done. (Fleming 2006) These internal and external forces, if even one of them is active, can translate into a perceived need for change within the organization. There is a dire need for change when there is a performance gap – the difference between the desired and the existing levels of performance. To bridge the gap, organizations respond to changes that are needed by initiating and implementing it. (Fleming 2006). As far as Microsoft is concerned, the demographic factors as well as the technological advancements count as external triggers of change. The number of people worldwide which are using the Internet and the computer are increasing with each passing day. Dependability on the computer is accelerating. This is the information technology age. Now, parents are learning how to use the computer from their children. Offices are becoming paperless. These trends show that the demographics of Microsoft’s customers are constantly changing. New customers are adding to the list day by day. And Microsoft needs to innovate in ways which would help customers, but not confuse them. Moreover, the technological advancements made by any company are not sustainable at all in the long run. Constant change needs to be adapted if the interest of the customers has to be kept, and the edge maintained in the market. An example of this change is the way Microsoft has extended its brand by innovating in an altogether new sector. (Mike, 2004) Microsoft pioneered as a company for computer software, but right now, it is giving a run for their money to Google, which is in the Internet Services sector. Such changes need to be brought within the thinking pattern of the organization and the vision needs to be enlarged so that accommodation of change can be made for the benefit of the company. BIGGEST CHALLENGE FOR MICROSOFT Microsoft, for the first time ever in its history, saw a decline in its brand value in 2009. There was a 4% decline, to be precise. And this decline is expected to continue in the next year. The biggest challenge for Microsoft is to maintain that competitive edge that they have always possessed. Microsoft, as a company, has been in existence for more than three decades, and therefore, like any other organization, it is bound to lead towards stages of decline at some point in time. The challenge for Microsoft would be to prolong the stage of maturity. The market for computer software is maturing rapidly, and thus the market share is being eaten up by rivals who are faster and quicker to respond to the market changes. When it comes to software for browsing the Internet, Microsoft’s Internet Explorer was one of the most popular among all, but since the last some years, it has dropped ten percentage points as far as its market share is concerned, every two years. And this is more alarming, since its biggest competitor Mozilla Firefox is actually gaining ten percentage points in the same given time frame. Moreover, the marketing efforts of Microsoft are not doing that well as much as they could have, considering that they are big money on the pockets of the company. For instance, the $300 million ad campaign, which was endorsed by Gates himself as well as Jerry Seinfeld, did not do as well as expected. Therefore, right now, the biggest challenge that faces Microsoft is to maintain a competitive edge over their rivals in the various product categories that it has. This competitive edge can be maintained by a constant stream of innovations, and trying to come up with new ideas, thereby, never losing the interest of the customer. For instance, Microsoft came up with a great brand extension, that is, it came up with a search engine. Google was the winner in the category of search engines, but Microsoft introduced Bing in the June of 2009, and it is expected that it will give Google very tough competition. Like mentioned above, the maturity stage, at which Microsoft is now, has to be prolonged, if the company wants to be market leaders. And this extension of the maturity stage can only be gained if regular innovations are brought about by Microsoft in the market. BIBLIOGRAPHY 1. C., Micheal (1995) Microsoft secrets. Edition 1. Free Press 2. C. 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