Information Technology in the Current Competitive Business Environment - Essay Example

A report on hurdles facing Microsoft in retaining its Leadership in Technology Table of Contents Table of Contents 2 Appendix: 1 8 8.1 Statement of the problem 8 8.2 Research strategy 8 8.3 A Brief overview of Microsoft financial records from 2007-2014 9 Terms of reference Written by: To: Investors Purpose: To establish how Microsoft can turn around Date required: Procedure The report was collected using information published online because it was easily accessible. Topic: INFORMATION TECHNOLOGY The use of computers has been in existence for more than half a century especially in commerce. Nearly every business uses computers applications in the current competitive business environment. Computer technology has an impact on performance yet this amazing fact is yet to be revealed in business. The use of computers has revolutionalized how business offer their product and services. Companies that have successfully implemented Information Technology as their strategic tools have reaped the benefits that come with innovation in the sector whereas those which have been hesitant to adopt have lost their competitive edge. Organizations have been able to achieve the objective of reducing their cost expenditure by the use of technology. The organization has been able to achieve operational excellence in workstation and customers delivery service (Carr, 2012).Information Technology is a field that is responsible in gathering information then processing it into a meaningful form using computer systems (Apel,2003). Findings 4.1 Overview of Microsoft Corporation Microsoft Corporation was once a leading organization in technology controlling a large percentage of the market share. The company lost its competitive edge in early 2000 to its competitors. Apple incorporation, Google, and Face book were vying for the market share. Employees who had previously served the company attribute the loss of track to the then chief executive director Steve Baller. The company has undergone deeply rooted over the previous years. Although they have tried to come with new products some of the products have failed terribly, and many questionings have been raised to them. The company launched the much-anticipated Windows Phone 7 but unfortunately; the sales were dismal. A modification for the phone was later developed and for the second time the company did not sale as it was expected. Criticism came from different quotes because customers were disappointed by the company’s trend of producing products that did not meet their expectations. The beginning of the Microsoft dwindling performance was caused by failure by the company to reduce mistakes that were committed, capitalizing n the existing opportunities and lack of support to promote innovation within the company. Whereas companies such as Face book, Google, and Apple concentrated in innovation new products; Microsoft remained adamant and conservative. The company only relied on the products it had innovated initially to contribute to its revenue streams. Cut –throat competition started being witnessed in the technology industry, but Microsoft failed to strategize on how to counter the competition. The company lost its strengths to other players in the sector because consumer needs were changing, but the corporation failed to respond to the new demands. The organization was struggling to impress the demanding customers, and most of the innovation became a proven failure even after trying new products. The value of shares for the company traded in the year 2000 was about $ 510 billion. Microsoft was the wealthiest company in the world. However, down the lane Microsoft failed to retain the position and lost a position to Apple whose sales were growing fast (Eichenwald, 2012). 4.2 Microsoft challenges Microsoft future was very promising having managed to outclass IBM, and that was once a leader in the technology industry. However, the dreams and hopes of the company to defend its position were quickly dashed along the way. Researchers propose that focus should be directed to the plight of the company so as to ascertain what factors could have resulted to the company’s performance to go haywire. Management problems were witnessed in the boardroom, and it led to poor decision making which interfered with the smooth operation of the company. The company management had started a habit of blood hounding its employees something that did not go well with the employees. Internal wrangles became the order of the day and escalated tension that hampered daily operation of the business. The leaders specialized in the acts of brutally murdering employee’s innovation spirit and efforts to launch new products were derailed. The e-book and Smartphone technology was dragged by the conflicts that had been created (Eichenwald, 2012). 4.3 Decisions taken Steve Baller was fired with controversy surrounding the decision. According to Paul Carroll, who is an acquaintance to the founders of the company Bill gate and Paul Allen, shareholders of the company demanded Bill Gates to resign from the chair position. Part of the reason that they would wish him to step aside is to bring in fresh talent to the company that might change the operations of the company. They see Gates as an impediment to the appointment process whereby he imposes chief executives at his pleasure without considering his credential and consulting with others. In an interview with Forbes magazine, Carroll thinks that Gates should maintain the position because his age does not interfere with his performance. In fact, he contends that Gates has the energy to serve Microsoft, and he brought a substantial amount of knowledge to the organization (Forbes, 2013). Despite the fact that Gates is a geriatric, he still has a strong sense of innovation and supports innovative ideas. Carroll points out to the fact that Gates was among the first people to develop the e-book even before Amazon took a shot at it. Gates also supported initiatives to launch tablet computers even before the invention of I pad. However, despite the fact that Gates encouraged the innovative ideas, Microsoft’s has little to show in terms of performance. The company failed to cease new opportunities that were arising in technological innovation a thing that Carroll believes will lead to the company’s downfall. Carroll also believes that the current chair cannot escape the blame on the company’s performance. The chair has the role of ensuring that the internal flights do not exist in the organization because it destructs the attention of employees and reduces productivity. He should also ensure that the chief executive officer is competent enough to lead the company into prosperity. The main issue of concern about the leadership of the company has been a lack of goodwill to attain the laid down plans and objectives. Retaining Gates as the chair is likely to be beneficial because he has the zeal, knowledge and expertise required turning around the fortunes of the company (Forbes, 2013). Microsoft founder and chairman find himself found himself in a difficult situation same to the circumstances that surrounded Steve Jobs in the 1980’s.Analyst believes that Gates is about to undergo the same fate which Jobs experienced after being forced to quit the same position at Apple incorporation. They, however contend that Microsoft cannot afford to fire Gates and instead should retain him during this difficult time the company is going through. They should instead work together and in consultation appoint a talented chief executive officer who will spur the growth of his company.IBM is a clear case study of a company that underwent similar path to Microsoft. The organization was unable to respond to the market needs. Their core business was manufacturing calculating devices for corporations. The company however failed to tap into the opportunity of manufacturing computers which had become a trend in the in the 1950’s.The organization was on the risk of going under until it decided to change its game plans to rescue its survival (Forbes,2013). Conclusion The board of Microsoft needs to adopt new ways in the running of the once most profitable company in the world. Financial issues seem to be hurting innovative activities in the corporation as it can be by the case of e-book and tablet launch. Emphasizes seem to be laid on financial costs before a project can be an issue that slows down or gets rid of innovative projects. The company should be ready to encourage innovative courses however costly they may be to the company. Hence, if they company wishes to produce innovative products it should be prepared to meet the cost however costly they may be (Forbes, 2013). Recommendations When companies experienced the global financial crisis, they could have used a number of turnaround strategies that could have rescued their performance. Companies such as Microsoft might have encountered a number of problems relating to improper decision making. Decreased revenues due to changes in the economic environment, low sales, product failure, lack of resources and stiff rivalry from competitors. Microsoft has a number of options that if implemented could help the company regain its lost glory. The board of managers needs to be reconstituted to bring new people who are well equipped to deal with technological changes. The management also needs to evaluate the environment and strategize on how to deal with competitors who pose a threat to the company’s business and device how to counter their product. The company could also choose to restructure its management structure to get rid of departments that do not add value to the organization. The company further composes new ones that will contribute towards bringing effective changes on performance (Net MBA, 2010). Bibliography Apel, M. A. (2003). Careers in information technology. New York, Rosen Pub. Group Carr N. (2013).Does it Matter? Information Technology and the Corrosion of Competitive Advantage. Harvard University Press EichenwalD K. (2012).Business: Microsoft’s Lost Decade. [Retrieved 7.11.2014]. < http://www.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-ballmer> Forbes. (2013).Is the Microsoft Board headed for a Steve Jobs Moment? [Retrieved 7.11.2014]. < http://www.forbes.com/sites/chunkamui/2013/10/11/is-the microsoft-board-headed-for-a-steve-jobs-moment/2/> Net MBA (2010).Strategic Management: Turnaround Management. [Retrieved 7.11.2014]. < http://www.netmba.com/strategy/turnaround/> Microsoft. (2014).Investor Relations: Trended Historical Financials. [Retrieved 7.11.2014]. . Appendix: 1 8.1 Statement of the problem The report seeks to establish the impact of challenges faced by the once global leader in the technology industry which currently struggling to retain its competitive edge. 8.2 Research strategy Sources that were used to compile the report were mainly retrieved online and the company’s website. Source 1 Apel, M. A. (2003). Careers in information technology. New York, Rosen Pub. Group The source was chosen because it describes information technology precisely. Source 2 Carr N. (2013).Does it Matter? Information Technology and the Corrosion of Competitive Advantage. Harvard University Press The source was chosen because gives clear information on the role of Information Technology. Source 3 Eichenwald K. (2012).Business: Microsoft’s Lost Decade. [Retrieved 7.11.2014]. < http://www.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-ballmer> The source was chosen because it gives an analytical approach to Microsoft’s position in business. Source 4 Forbes. (2013).Is the Microsoft Board headed for a Steve Jobs Moment? [Retrieved 7.11.2014]. < http://www.forbes.com/sites/chunkamui/2013/10/11/is-the Microsoft-board-headed-for-a-Steve-jobs-moment/2/> The source was chosen because it gives a comparison between Microsoft and Apple which had similar problems. Source 5 Net MBA (2010).Strategic Management: Turnaround Management. [Retrieved 7.11.2014]. < http://www.netmba.com/strategy/turnaround/> The source gives ideas that can be used to solve Microsoft problems. Source 6 Microsoft. (2014).Investor Relations: Trended Historical Financials. [Retrieved 7.11.2014]. . The source gives fast hand records of the company financial performance. 8.3 A Brief overview of Microsoft financial records from 2007-2014 Year 2007 2008 2009 2010 2011 2012 2013 2014 Net income in million dollars 14,065 17,681 14,569 18,760 23,150 16,978 21,863 22,074 Basic Earnings per share $ 1.44 $ 1.90 $ 1.63 $ 2.13 $ 2.73 $ 2.02 $ 2.61 $ 2.66 Revenue in million dollars 51,122 60,420 58,437 62,484 69,943 73,723 77,849 86,833 Net income available for common shareholders in million dollars 14,065 17,661 14,569 18,760 23,150 16,978 21,863 22,074 Source: Microsoft Incorporation, 2014 Read More