The Success and Growth of Microsoft Corporation - Case Study Example

Method of Leadership or Organizational Behavior A Case Study of Microsoft Corporation Date Introduction Microsoft Corporation became a company in 1981 despite being founded in 1975 by Bill Gates in collaboration with his childhood pal, Paul Allen. The two friends were guided by the belief and foresight that the personal computer would be a tool of value on almost every office desktop and home computer. The company’s main business is building up, licensing and supporting a wide variety of software services and products. In addition, the company designs and sells hardware. It also conveys online advertising services to customers (Heller, 2007). The company’s main business is categorized into five sections: Windows Division, Online Service Division (OSD), Server and Tools, Microsoft Business Division (MBD), as well as Entertainment and Devices Division (EDD). Microsoft Corporation provides operating systems for personal computers (PCs), phones, servers, and other intelligent gadgets; distributed computing environments server applications, business solution applications, productivity applications, server management and desktop tools, tools for software development, online advertising, and video games (Heller, 2007). Body Apart from vending individual products and services, Microsoft Corporation offers groups of services and products. In addition, it provides support services for product solution as well as consulting services (Heller, 2007). Microsoft Corporation has its operations distributed worldwide and its offices distributed in over 100 countries. Recently the company has acquired companies such as Skype Global in October 2011, and Vide Surf Inc. in November 2011. In addition, Microsoft windows are the most used and successful operating system in the world. The success and growth of Microsoft Corporation was mainly because of the vision and foresight of the key founder Bill Gates. Gates is the central factor in the company’s vital strategic and management decisions in Microsoft (Driskill, & Brenton, 2011). He also plays a pivotal role in the technical advancement of new products. Gates utilizes a large proportion of his time associating with customers and contacting Microsoft employees universally through e- mail. The strongest and most successful factor that contributed to Bill Gates being one of the most successful entrepreneurs universally is his entrepreneurial skills. His skills helped him to operate a profitable and successful company for many years, and even recently, Microsoft Corporation cannot survive in the competitive industry and business environment without Bill’s entrepreneurial skills (Miner, 2005). The vital factors for being a successful entrepreneur are dedication and vision. Bill Gates has both these factors, in addition, to identifying the most qualified and talented employees for recruitment (Rogelberg, 2007). The success story of Bill Gates offers a motivational factor for all imminent and enthusiastic entrepreneurs. Bill Gates is a dedicated, hard working, and self- confident individual who, despite being conservative with money, has immersed a lot of wealth. Microsoft Corporation’s leader Bill Gates possesses position power. Legitimate power possessed by Bill Gates is based on power warranted to him by the organization (Driskill, & Brenton, 2011). This may also be called legitimization-influencing approach. In this power mode, employees voluntarily agree to abide by the management authority in return for members benefits. Legitimate power is appropriately utilized when requesting an employee to perform a task that is within their job description. In the strategic level, Bill Gates has implemented the rational persuasion method legitimately (Rogelberg, 2007). He employs this method in convincing higher-level managers to take up his stand in the decision making process. Rational persuasion entails a round- table logical and factual argument with n aim of persuading other managers to put into practice your recommended actions. Through this leadership tactic, Bill explained the purpose of meeting company objectives as well as being motivational on the likelihood of meeting the objectives by producing slight evidences that the objectives are achievable (Rogelberg, 2007). In this regard, he was also extremely precise on the benefits that the employees would achieve on taking a certain standpoint regarding an issue. Bill Gates was extremely quick, precise, and detailed on explaining the problem handling techniques. In addition, he at all times innovated newer technologies and clearly highlighted their strength over others. Reward power is another form of leadership power employed by Bill Gates in Microsoft Corporation (Miner, 2005). This concept is pegged on the leader’s ability to influence employees and other stakeholders by offering something of value to them. Microsoft is well- known for giving massive remuneration packages to its employees. Reward power is well complemented by the control of resources, for instance budget funds and allocating expense. Bill Gates is the overall controlling body in employee performance appraisal and determining their promotions, raises, and other rewards. An additional significant factor in management is coercive power. This form of power entails punitive measures and withholding of rewards to enhance obedience and compliance to company policies and mission (Rogelberg, 2007). This form of power is also known as the pressure influencing tactics. Though Bill’s leadership style is autocratic, he never made harsh threats and instead utilized coercion to manipulate others or achieve individual benefits. Personal powers are a category of power that is obtained from the follower as influenced by the behavior of the leader. It includes friendship, expertise, or charisma and loyalty. Expert power originates from the user’s knowledge and skill. With the leader being an expert, he automatically influences other employees to be dependent on him or her (Miner, 2005). Human beings naturally respect an expert and, the fewer the individuals who possess proficiency, the more power the party with expertise enjoys. Bill Gates is a guru in his field of expertise and his skills, knowledge, and expertise are unquestionable and comparable to none, thus tagging him as possessing expert power. Referent Power revolves around the leader’s individual relationship with others. This is also called the personal control method based on friendship and loyalty (Rogelberg, 2007). The autocratic behavior of Bill Gates towards his employees is the main root of referent power. This is the reason why most employees stay at Microsoft Corporation for longer duration of time as compared to most other companies. An added factor affecting the influencing factor of an exceptional leader is pressure. According to Fiedler’s model, the trait of dominance as a personality factor causes the leader to assume either a task- oriented or relationship- oriented stance. Relation- oriented leadership involves leaders who portray their fellow workers in favorable words, with an inflated LPC. These leaders are alleged to achieve utmost satisfaction from developing close relationships with their co-workers (Driskill, & Brenton, 2011). These leaders are of the notion that healthy interpersonal relations are necessary requirements for work performance. This leadership attitude is extremely necessary for growth and development of a company because of teamwork. Highly successful companies such as Microsoft attribute their success to this leadership attitude. Task- oriented leadership involves leaders who portray their least favorite co-worker in unfavorable words, with a small LPC, achieve substantial satisfaction by completing a task triumphantly (Driskill, & Brenton, 2011). These leaders are more worried about accomplishment of tasks successfully and less concerned about interpersonal relations. An extra factor in Fielder’s theory is the effectiveness of leadership as the product of style employed by the leader and the environment in which the leader performs his tasks (Miner, 2005). This is also known as environmental variable or situational favorableness. This theory r a leader to exercise influence over a team of individuals. Fielder focuses his study on three vital situational factors: The first is the leader- member relations that refer to a situation where employees accept a leader. The second situational factor is the task structure (Miner, 2005). This is the process of making clarifications to subordinates by using a job description. The third factor is position power, which is described as the level of formal authority the leader enjoys by possessing a certain position in the organization. Hence, in this context, Bill Gates found the most favorable context where positional power is augmented since he possesses most authorities in the firm; the employees also have a clear job description since he directs his employees to fulfill his vision, and he has maintained principled leader- member relation (Rogelberg, 2007). This means that Bill Gates is more probably a task- oriented leader that values high employee performance. He believes that work has to be done satisfactorily to achieve the company goals. A basic feature of Bill Gates leadership and management practices control. Gates is obsessed with attention to detail and counter checking. Microsoft’s predictability, as well as, the egocentric system of management has vanished. Under the previous system, small groups were continually structured and reformed to undertake tasks (Miner, 2005). There was the application of stringent financial controls, though the proper organizational reinforcement was Gates himself, backed by Ballmer. Therefore, decisions were channeled to the top, and thus the duo became a blockage. This led to the confidence of other managers in the lower levels of Microsoft’s leadership hierarchy being undermined. Under the new Microsoft organization system, the company is divided into eight new divisions that are customer- oriented (Driskill, & Brenton, 2011). Each division is placed under the control of a senior manager whose role is to practice autonomous, delegated power over his team. This system is adopted from the traditional “military” or “divide and rule system”. Gates role is to concentrate on broad organizational strategy and avoid the daily management of the groupings. This strategy was implemented with the hope of freeing the company from the bureaucratic procedures, which slow down product and service delivery. It is wrong to judge managers by just what they individually control. This can only be true in a situation whereby divisions are dependent and related to each other (Rogelberg, 2007). A case scenario where managers are deemed answerable only for their personal results, this triggers the natural tendency to overlook other groupings, losing the likely essential advantages of cooperation. This scenario was mainly one of the reasons for Microsoft’s inability to get employees to collaborate across borders. Thus, a considerable part of the rewards should be pegged on the overall performance of the company and not divisions. A climate of freedom and confidence can result in better performance as compared to that of suspicion and control (Miner, 2005). Despite this fact, control and suspicion have governed Microsoft, albeit with surprisingly successful results. This paradox can be attributed to the financial incentives issued to the top managers by the founder of Microsoft, Bill Gates. Numerous Microsoft influential leaders have temporarily opted out of the company because of their dissatisfaction with the grueling deadlines, and frustration caused by the bureaucracy resulting from Microsoft’s volatile growth or the bang in startup that are highly technical in nature. Microsoft has reacted to this tragedy by focusing on reducing Gates’ controlling power in the company and transferring some of the powers and autonomy to managers of the new business units (Driskill, & Brenton, 2011). This was a move triggered by results of 100 interviews carried out on Microsoft’s team leaders and programmed managers. However, ceasing the brain drain phenomena occurring on the company’s top managers will mainly depend on the reality of Microsoft’s rich and influential people acquiring autonomy, which they seriously yearn for. In addition, leadership style employed in Microsoft Corporation is delegate style. In this style, Gates gave first priority and exceptional attention to the best talent in terms of mental capabilities and creativity (Heller, 2007). Gates deemed that recruiting talented and well- learned software engineers were a vital success factor in the software industry. Gates searched for a set of attributes in potential recruits. Attributes he considered included the ability to capture new knowledge fast, the ability to raise vital questions, and proper understanding of programming structures (2007). Gates did not believe in the normal method of public advertising and recruitment of employees, but rather sent Microsoft’s HR managers to head- hunt the best talented candidate and offer them a job. Gates believed that the best candidate could not apply for a job directly. The Microsoft leader gave autonomy to his managers by delegating to them authority to run their departments independently. Despite the success story of Microsoft Corporation, there are various criticisms that have been leveled against the company and its founder. First, critics argue that the company does not play an innovative role (Heller, 2007). They argue that Gates modified existing products to satisfy customer needs rather than innovating and inventing new ones. Another criticism was that Microsoft’s mammoth market share was a key barrier to innovation in the software technology industry. Not only was the Microsoft the market leader, but also the bench- marker for the industry. A further critique is that Microsoft has acted as an impediment to the growth of smaller firms. According to critics, winning was the centre of satisfaction for Gates such that he would go to any degree to beat his component, and stop at nothing until he thoroughly killed his competition (Heller, 2007). The critics insist that occasionally Gates took things so much personally that his emotions surpassed his rational thinking capabilities. Gates’ severe rivalry with some of his competitors led him into personalizing every battle and this aspect blurred his judgment. Gates’ aggressive and ambitious business philosophy has led to constant fighting of legal suites filed by various competing companies against Microsoft. Conclusion In order, for Microsoft Corporation to achieve higher levels of success as compared to the one they enjoy currently, Bill Gates should be able to guide the top management into implementing a well- balanced mix of leadership styles. It should contain directing leaders who will direct subordinates in how, what, where, and when tasks ought to be done (Miner, 2005). These leaders will maintain a high standard of performance that is high- directive in nature. Participative leadership should also be used. This entails the managers consulting with employees and is high- supportive in addition, to being highly directive. Supporting leadership style entails leaders who are friendly and concerned with the affairs of the junior employees and are usually supportive than directive in nature. Delegating leadership style should also be entrenched in the company’s management (Miner, 2005). This style supports high accomplishment and sets daring goals with an emphasis on excellence. Leaders in this category clearly portray confidence in the abilities of subordinate employees. Junior employees operate in a low- directive and low- supportive environment thus, ability to stretch their abilities fully. References Driskill, G. W., & Brenton, A. L. (2011). Organizational culture in action: A cultural analysis workbook. Thousand Oaks, Calif: SAGE. Heller, R. (2007). Management styles & leadership styles of Warren Buffett & Bill Gates. Retrieved on 18.02.2012 from: http://www.thinkingmanagers.com/management/management-styles.php Miner, J. B. (2005). Organizational Behavior 1: Essential Theories of Motivation and Leadership. Armonk, NY: M.E. Sharpe. Rogelberg, S. G. (2007). Encyclopedia of industrial and organizational psychology. Thousand Oaks, Calif: SAGE. Read More