Entrepreneurship and Innovation - Assignment Example

ENTREPRENEURSHIP AND INNOVATION Student’s name Course Institutional Affiliation Date Chapter 1: The new Entrepreneurial Imperative The Innovator’s Notebook Case Microsoft: Trailing in the innovation race? Discussion Questions: 1. Describe how the ‘new entrepreneurial imperative’ has affected Microsoft. The ‘new entrepreneurial imperative’, refers to the ways through which companies have been forced to re think their strategies where old methods no longer work (Romero-Martinez et al., 2010). In the case of Microsoft, the monopoly and advantage it enjoyed in the market is long gone with new companies coming up and challenging changes in the economic, legal, competitive, customer, labour and global environment among others. For instance, the company’s move into the world of home gaming consoles, cable TV and mobile phone market led to resistance from the world market, with the players in this industries making moves to lock out Microsoft from being a competitor in their area of business; mobile phone operators formed a software consortium; cable TV operators hesitated to install Microsoft software in their set boxes and gaming development companies grew sceptical of Microsoft’s intention when it insisted on maintaining control of the online market (The Economist, 2005). Another case in point are the various legal tussles Microsoft has faced over the years, varying from software tampering issues(Lawrence.,1999) to anti competition behaviour, the biggest ones being cases filed against it by the US department of Justice (DOJ) as well as Europe’s Anti-trust law regulators that resulted in Microsoft being fined lump sum amounts(Jovanovic,2013). 2. How would you apply the organisational life cycle to Microsoft today? The organizational life cycle refers to the way companies change over time, patterns that emerge that shows its growth, stability, and sustainability or death. Taking the organizational life cycle as described by Greiner (1972), Microsoft’s life cycle can be described as the Initial stage or the Beginning, which according to Greiner (1972) is the discovery stage of an organisation where everything is pretty much undefined. When Microsoft began, a lot of its structures were mostly informal, with everyone doing everything. The show was run by Paul Allen and Bill Gates as co- founders. It was a significantly successful time for Microsoft when they introduced the personal computer, for the first time, one could have a computer at home! Workers at Microsoft experienced exciting and fun times and the work environment was inspiring and challenging. Over time this had to change with the expansion of the markets and need for proper structures and so formality had to step in and specific and skilled people found who could handle emerging departments and market needs. Second stage or definition of roles is described by Greiner (1972) as the direction stage, where formal settings have to be put in place. As the market expanded, Microsoft began to have clear cut departments though its essential operations were still managed by the co-founders. Third stage or specialization stage, as Greiner (1972) explains, is the stage where departments become more labour specific, where roles are not done twice. The roles are delegated with the younger staff being entrusted to particular roles in departments. Over the years Microsoft has succeeded in doing this to form a hierarchy of leadership as well as autonomous departments globalised in nature, run by a board of directors (Microsoft, 2009). It also has five committees charged with various responsibilities This is shown in the tables 1.1-1.3 below. Table 1.1.Key Executives - Microsoft Corp (MSFT) Name Title Age Steven A. Ballmer Chief Executive Officer and Executive Director 56 Amy Hood Chief Financial Officer and Corporate Vice President 40 Brian Kevin Turner Chief Operating Officer 46 Per Adolfsson Chief Executive of Sweden Operations -- Akther Ahmed Chief Executive Officer of Emerging Markets for Asia-Pacific -- Table 1.2.Board Members - Microsoft Corp (MSFT) Name Primary Company Age William Henry Gates III Bill & Melinda Gates Foundation 55 Steven A. Ballmer Microsoft Corporation 56 David F. Marquardt August Capital 62 Charles H. Noski Microsoft Corporation 59 Helmut Gunter Wihelm Panke Ph.D. BMW US Capital, LLC 66 Table 1.3.Executive Committees* - Microsoft Corp (MSFT) Committee Name Chairperson Members Audit Committee Charles H. Noski 4 Executives Compensation Committee John W. Thompson 3 Executives Nominating Committee David F. Marquardt 3 Executives Corporate Governance Committee David F. Marquardt 3 Executives *Data is at least as current as the most recent Definitive Pro Source: Microsoft July 1 2009 Fourth stage or the centralization stage is where the company seeks to consolidate its operations and establish control through hierarchy of leadership as shown above, by division of labour. Microsoft has succeeded in doing this by the establishment of various divisions under reporting to various heads of departments who report to the board of directors. Fifth stage or consolidation is implicated by the fourth stage which normally produces a form of bureaucracy that can cripple growth in a company. According to Greiner (1972), this is the most difficult stage for companies and organisations, and they never get to overcome it. Microsoft has sought to Re-invent itself in this area. The co-founder Bill Gates fostered an environment where anybody could give ideas on the best way forward. A lot of resources are devoted to research and development in its global set up through its teams of scientists, mathematicians, sociologists and psychologists. For instance in 2009, Microsoft spent $9 billion in research and development (The Economist, 2005). 3. What specific actions indicate that Microsoft is trying to exhibit corporate entrepreneurship? Microsoft has realised the importance of innovation if it needs to stay relevant and profitable in the market today, especially in its products, windows and office. As outlined by the CEO, Steven Ballmer in 2010, Microsoft has taken various steps to ensure it does this by focusing most of its long term research and development in the following given areas (The Economist, 2005). 1.Cloud computing and software plus services: Microsoft is focused on delivering end –to-end that connect users to information, communication, and entertainment wherever they will be, at work, at home and as widely as possible by combining the power of desktop and software server with the internet. 2.Natural user interface; calculated at enhancing the way people interact with technology, through touch ,gestures, speech recognition and the like, calculated at delivering new experiences and creating un reached markets 3. Natural language processing: Microsoft envisions a scenario where through research and development, there will be a creation of software that has the knowledge and intelligence sufficient to interpret consumer needs in the simplest language and accurately reflect them into what the consumer requires. 4. New scenario innovation: By focussing on global issues like healthcare, environmental sustainability and education among others. Microsoft, through research and development looks at the opportunities that such issues can create for software development where lack of skill will no longer be an impediment for necessary software development that will increase output in industries. As a result, Microsoft aims to tap into potential markets through software development and has concentrated its team of researchers, mathematicians, sociologists and psychologists into research and development aimed at creating new avenues. For example, skin operated data system where someone’s details and needs can be kept under the skin. As a result, one will not need to carry a computer around to access personal data. Through its current program Bizspark, Microsoft has extended its research and development to companies that are just starting up with a base limit span of three years or a base capital of $1 million which therefore enables them to freely access Microsoft tools, technologies and services. Microsoft may consider buying this start-ups eventually. Part 2: Compare the entrepreneur and innovative strategies/decisions of the company analyzed in Innovator’s Notebook with its close global competitor (or a similar organization in the UAE). Microsoft is a company that for a long time enjoyed global monopoly. Such was its monopoly so much that it was declared an unfair competitor.This though is no longer the case because there are a lot of companies that are now doing the same thing that for a long time Microsoft alone did for example, Linux, Apple, Google,Oracle, to name but a few. One of the toughest rivalries today in the corporate world today is that between Apple and Microsoft(Gadchick,2012). It has been the subject of a lot of writing, betting and advantageous for the consumer with each company trying to outdo the other in that which they bring out into the market. Both companies are global in nature, very well established in the arena of software development and mobile production. Both companies are also involved in online gaming systems. Apart from that, both companies have established operating systems, where Microsoft has Windows and DOS operating systems, Apple has the IOS and OS X lion operating systems. In the area of personal computers, apple is responsible for the fierce competition that Microsoft currently experiences in the area of smart phones. The competition between these companies can be categorised thus; a. The personal computer i.e Windows vs. Macintosh Microsoft was here first and enjoyed the monopoly for a long time, but with the advent of the Mackintosh by Apple, this monopoly slowly drew to a close,especially among the techno-savvy market. This served to push Apple close to the top in the personal computer market though it still cannot be compared to the Microsoft dominance. b. Mobile technology i.e Windows mobile Vs, Iphone With the venture of Apple into the mobile phones Scene with the Iphone, Microsoft joined this foray with the launch of the windows mobile. In this area though, the Iphone has enjoyed relative monopoly in the market. Its only competitor in this area is Google with its android . c. Entertainment i.e Zune Vs. ipod In the entertainment scene, Microsoft for a long time enjoyed monopoly in terms of the online gaming console but the Ipod became the game changer that took the market by storm and changed the game forever. Currently apple has dominance in this field too. Microsoft tried to swing back with the Zune which was essentially supposed to do what the Ipod did, but it could not take back that market. d. Operating systems MS-Windows and MS-Dos Vs.IOS and OS X Lion. In the Area of operating systems, Microsoft which enjoyed relative monopoly and still does to a good level has experienced its fiercest competition yet. It is one of the areas where Microsoft has had to re-invent itself. The launch of the Windows Vista, for example, was a disaster for Microsoft and it served as the proverbial last nail on the Microsoft’s market dominance coffin. Currently the preferred operating system seems to be the OS X lion that seems to be having up to a million downloads per day. e. The founders i.e Gates Vs, Jobs. These two companies share a link in that the founders also served as the main players with bills gates being the face for Microsoft and Steve Jobs being the face for Apple. The two have been responsible for the creativity that both companies have exhibited over the years. As a result, there has been serious competition between the two to outdo each other or take up dominance of the market. Both are geniuses in their own rights having given the world some of the greatest inventions of the century. The strategies these two companies have employed are pretty interesting to observe and compare. Whereas for a long time Microsoft was more geared towards strengthening its market base by maintaining its products albeit with variants, Apple has been actively involved in the creation of new products or improved variants of its products. As a result, Apple finally overtook Microsoft in the market. Off late though, Microsoft has started leaning towards innovation and taking risks, what it was known for before and this portends a very exciting time for this market in the very near future. A brief comparison of these two competitors, their products, market base and strategies can be can be summarized in table 1.4 below; Summary Table1.4 Company Microsoft Apple Founder Bill Gates Steve Jobs Operating systems Ms-Windows and Ms-Dos Ios and OS X Lion as well as Mackintosh and Lisa Market bases Mobiles, e mailing, cable tv, personal computers, online games Mobiles, personal computers, online games Mobile technology Windows mobile The IPhone Market strength Enjoys huge market share in office Web Application and the Windows operating system as well as E-mail use and corporate Enjoys huge market share in the Mobile technology and is popular with the 18-35 age group. Market strategy Till recently, was based on strengthening existing products with calculated foray into other market products but now they are leaning into innovation As always been innovative, calculated at improving its products or coming up with new ones. The result is outright dominance in the mobile market Product Affordability and availability Has a huge advantage, products easily accessible and affordable Some of its products are relatively un known by non techno-savvy individuals Global presence Strong markets globally Making a strong move towards global markets Make a judgment on the efficacy and success of the global competitor’s entrepreneur and innovative strategies/decisions. Based on the above discussion, it can be said that Apple discovered what worked best for it and maximised on it. The innovativeness that has characterised its products as well as their superiority in over similar products in the market has reaped unto it huge benefits. It has also maximised on its target market, that is, the age group between 18 and 35 to very good results. Consequently, it currently enjoys a greater share of the shared market between it and Microsoft. Unfortunately, it is leaning towards monopoly the same way Microsoft did. That, unless checked may end up being a Microsoft repeat story. Analyze the impact of these two companies in the UAE. Currently the markets in Information and Technology as well as the Mobile computing markets are a big thing in the UAE (Oxford Business Group, 2008). Microsoft which has been a player in this market for sometime has been joined by its global competitors, Apple being one of them. Microsoft along with the Government has been involved in IT security solutions (Oxford business group, 2008) while Apple just opened up a store for Its iphones in the UAE recently possibly to capitalize on that market (Oliver Haslam, 2011), a market which Microsoft would still hope to have a share of with its launch of the windows 8 currently used by the Nokia Lumia, a product that has proven it can effectively hold its ground against the Iphone. In the Area of online Games, Microsoft enjoys a relatively good share of the Market with its Xbox 720 as well as the Xbox 360, though the Sony Play station has a larger market share. Microsoft also enjoys greater market share in the provision of internet service solutions in comparison to its competitor, Apple (MEED, 2009). By virtue of longevity, Microsoft still has an advantage in the UAE as compared to the others as well as in terms of the variety of products it can offer the market even though in the mobile computing technology, Apple still has a stronghold. References Greiner. L.E, (1972). “Evolution and Revolution as organizations grow,” Harvard Business Review (July- August):37-46. Kuratko, D, F(,2009). “Entrepreneurship: Theory , process and practice” (Mason, OH Cengage /South Western Publishing). Kurt Macki December 14th,2011,. Analysts: “Microsoft Facing 'Disruptive' Competition From Apple and Google,” viewed on 9th May 2013. Lawrence D. G. (1999). “Legal Battles That Shaped the Computer Industry,” (Greenwood Publishing Group). Miroslav N. J. (2013). “The Economics of European Integration”, (Edward Elgar Publishing) Romero-Martinez, A..,Fernandez-Rodriguez,Z., and Vasquez-Inchausti. E. (2010). “Exploring corporate entrepreneurship in private firms” Journal of World Business, 45(1), 2-19 MEED. (1998) University of Virginia Economic East Economic Digest, Limited, Volume 42, Issues 14-26. Microsoft. (2009, July 9). "Microsoft Corporation Corporate Governance Guidelines". Viewed on 9tth May 2013. Odies C. Ferrell, John. Fraedrich, Linda Ferrell, Ferrell,.2012 “Business Ethics: Ethical Decision Making and Cases”, Edition9 (Cengage Learning). Oliver, H. ( 2011, March 10th) “Apple to open store in UAE” viewed on 9th may 2013. Oxford Business Group, 2008,. “The Report: Dubai 2008,”Oxford Business Group The Economist, (2005, November 30). “Microsoft: Way beyond the PC”, pp 83-85. Read More