Microsoft Corporation Organization


Part A: Microsoft

The rationale behind the organization of business is ensuring thatthere is a steady increase in the volume of goods of certain quality(Hill 2008). The organization of production also requires that anorganization improve its production designs, growth of labourproductivity and improvement of the working conditions for itsemployees (Daft 2012). On the other hand, business organizationreflects the organizational culture where shared values within anorganization have been designed to influence every employee,communication and overall business operations. Therefore, selectingthe right business organization is the first step towards ensuringthat every business operation goes on smoothly. This paper reviewsMicrosoft Corporation’s organization. Microsoft is an Americancomputer technology corporation, which is publicly owned. In the wakeof the new millennium, the company employed approximately 60000people worldwide. As of 2014, due to its growing business, thecompany had employed about 130,000 employees. It is one of theleading multinational corporations in the world.

Organization of Production

Zsidisin, Melnyk and Ragatz (2005) say that one of the chiefrequirements of organization of production is that it must satisfycontinuity of the production process. Microsoft serves hundreds ofmillions of customers globally, and as such, it has to ensure thatthe customers are supplied with goods and services in a consistentmanner. Given this, the company has to balance the work of all units,both local and international, to guarantee there does not exist anyunevenness in the flow of production. At the Microsoft productionplants, continuity efforts involve use of instruments of labour withminimal time losses (Lim 2008). This is to ensure that there isuninterrupted movement of objects through the production lines.Microsoft has a sheer number of product lines which have helped itbring in billions of dollars in revenue. The most important productlines for the companies are windows, Microsoft office, windowsserver, X-box, Microsoft dynamics and Bing. Microsoft also has amajor production line, known as System Centre (Morimoto 2012). TheMicrosoft System Centre product line brings in more than $1 billionin revenue annually. According to the company’ executives, theSystem Centre is set to be expanded to accommodate new capabilitiesand operations.

As a strategy to serve its millions of global customers, the companyhad diversified the locations for its production plants. It isworthwhile to note that Microsoft’s’ production headquarters isnot in Seattle, rather in Washington (Richardson, 2003). However,Microsoft bases most of its manufacturing facilities in China. Thecompany also has a number of production facilities located in India.Their second largest facility after the headquarters in Redmond,Washington, was opened in Hyderabad, India, almost a decade ago(Bose, Jha and Joshi 2014). The headquarters office in Washingtonserves as the centre for production logistics however,sub-contractors from Asia develop most of the company’s software.This raw software is then imported into the Washington offices to becompiled and sold as full packages. According to Feiock (2007), oneof the conditions for rational organization of production is thatthere has to be a reduction in the diversity of tasks to be performedin various sections. This is the reason why the company bases itsproduction lines away from a centralized location, to give space forsmooth production and operation. Additionally, Microsoft uses itshighly specialized technology to ensure that there is continuity inproduction. Cerra and Saxena (2007) assert that slowed productioncauses a considerable amount of loss to the company, and has to beavoided at all costs.

Organization of Business

Ross, Westerfield and Jordan (2008) say that there are three majorcategories of business organizations. These are sole proprietorship,Limited liability Company and Corporations. Microsoft falls under theCorporations group. The corporate structure of business organizationdistinguishes business entity from its owners, meaning it can havereduced liability (Luchs et al. 2010). The steps ofestablishing a corporation kind of business are similar to those ofestablishing a Limited Liability Company. Schneeman (2012) andCassidy (2006) say that there are two types of corporations. Thefirst one, C Corporations, are considered to be separate tax-payingentities, while the other, S corporation, are pass-through entities.Their income, losses and other deductions have to go through thecompany and are directly connected to the company’s shareholders. Microsoft is a C Corporation.

Microsoft’s business is organized into sections that servecustomers in a wide scope. Its customers include consumers,corporations, gamers, governments, and individuals (Microsoft 2015).According to the company, each business is responsible for its ownprofit and losses. However, they all contribute to the success of thecorporation at large. As such, Microsoft Corporation’s business isorganized into a number of business groups. They are as follows:-

  1. Advanced strategy and research

  2. Advertising and strategy

  3. Applications and services

  4. Business development and evangelism

  5. Cloud and enterprise

  6. Devices

  7. Finance

  8. Legal and corporate affairs

  9. Marketing

  10. Operations systems

  11. Sales, marketing and service groups

The advanced strategy and research business group’s focus is onresearch, intersection of technology and review of new technologicaltrends. It has sub-teams such as Trustworthy Computer Team andStrategic Software team. The Advertising and Strategy business groupcollaborates with the marketing group to oversee a number of projectsthat invoice the media, analytics and other advertising platforms.The Application and Services group spearheads the application andservices technology, and is behind some of Microsoft’s leadingproducts such as Microsoft Office and Skype (Microsoft 2015). TheBusiness Development and Evangelism business sector is responsiblefor innovative partnership with other stakeholders in the technologyindustry, and is responsible for coming up with Microsoft’snext-generation platforms. The Cloud and Enterprise group isresponsible for building the company’s computing platforms anddeveloper tools. It is the team that is behind Visual Studio, SQLserver and physical data centres.

Microsoft’s Devices Business group is the one that is responsiblefor the company’s design, production and distribution of smartdevices. These range from smart phones, gaming consoles, tablets tofeature phones. With some of the technology market’s leadingbrands, the devices business group partners with the rest of thecompany to bring high value products to the market. The FinanceBusiness section is responsible for the company’s financialrecords, such as taxing and accounting, while the Microsoft BusinessSolutions focuses on developing sales and operations dynamics. TheOperating Systems business group heads the company’s strategy anddevelopment, and builds the platform for their major devices. It isone of the technological industry’s leading innovative gaminginterfaces and content development. Lastly, the sales and marketingbusiness group is responsible for the delivery of devices andservices to the global market.

Organization of Labour: Treatment of Labour Wages

Microsoft has been applauded as one of the companies with the highestwages for its employees. Its perks include free paid leaves likematernity and paternity leaves, paid offs for new parents, offeringfood and goods as well as providing family recreation spaces for theemployees (Schwarz and Yenmex 2011). Microsoft’s annual salariesrange from $265,000 to $165,000 for heads of departments. The companyalso pays the junior staff members attractively. As a motivationalstrategy, the company offers cash prizes to the best performingemployees (Arvidsson 2008). The company’s wage policy supports wageincrement for employees as they continue working for the company, aswell. For instance, a software engineer’s salary is increased asthey stay with the company, to retain them and bring the best out ofthem. As a skilled labour strategy, Microsoft does outsource some ofits labour. A report was given that the company outsourced fromIndian companies for high-level skilled jobs in software architectureand development (Bishop 2004).

The organization is dedicated to the fair treatment and safety of allits workers. Nonetheless, some people have asserted that the Companymistreats some of its workers, especially from the Asian Continent(Gu 2005 Duhigg and Barboza 2012). Some reports have emerged thatthe workers work for long hours and are poorly remunerated, and theircomplaints are not heard whenever they raise them. It is reportedthat some of the company’s employees in China would work up to 15hours a day in bad conditions, yet be paid minimum wages (Hull andSorrell 2010). The company has therefore dedicated considerable fundsfor the establishment of a third party auditing program to ensurethat all its operations are carried within the Microsoft Vendor Codeof Conduct. As such, the company maintains that there are strictrepercussions for actions of non-compliance with their labourrequirements, which includes revocation of vendor permits andoperating licenses.

Part B: Reflection Essay

In this research assignment, our group embarked on researching aboutthe organization of business, organization of production andorganization of labour (treatment of labour wages) for Microsoft. Theaim of the paper was to do research about these specificorganizational structures for Microsoft Corporation, a multinationalComputer Technology company. We set upon the task of completing theresearch paper first by identifying the areas of study that needed tobe addressed. As such, three main areas were identified these wereMicrosoft’s organization of production, organization of businessand organization of labour (treatment of labour wage). After this, weembarked on searching for material to be used in the research. In theprocess, we identified book, peer reviewed and online articles thatwere most relevant to the topics identified. It was after this that Iwas tasked with addressing the first part of the research paper,organization of production.

Contribution made

My main contribution to the research paper was in the organization ofproduction part. I went through selected literature that we hadearlier collected with the rest of the group members, and noted themost relevant information that would be used to write the content.While doing this, I noted that there is plethora of data andinformation that can be used altogether to structure and write thepaper. As such, there was need to refer to the latest trends inorganization production so that I could not go out of scope.According to Khan (2011), a researcher has to clearly define thescope of the research to not go beyond the boundaries of operation.This is because research work is all about investigating and workingsystematically, with the aim of finding out the desired outcomes ofthe methodology of study.

I used secondary methodology to conduct my research. This type oftechnique is restricted by the fact that the information that isobtained is subject to change with dynamics and time. Additionally,research done and documented by different scholars may haveinconsistencies and discrepancies in the data. This therefore leavesthe secondary researcher with no option than investigating andextracting the information that is most relevant to the research thatthey are conducting.

After filtering the information and literature that I would use in myresearch, I presented it to my colleagues for feedback andcommentary. The reason for this was to be informed of anymethodological or conceptual errors that I may have made. Per theresponse I received, I had to go back and rectify some of theinformation that I had decided to use in the paper. Of importance wasdetermining the exact organization of production of MicrosoftCorporation, given that it is a multinational corporation that hasseveral production lines across the globe. Given this, I went back todoing an empirical research for the company, to unearth significantand crucial facts about its production operations. I contributed tothe accuracy of the research by finding out facts from onlinesources. Initially, my group members were working with the assumptionthat Microsoft is headquartered in Seattle. However, thanks toresearch about the company’s history and operations, I brought totable facts about its headquarters, branches and subsidiaries. Thiswas important for completing other parts of the research, whichneeded such information, such as the organization of business andorganization of labour.

Relation to Broader Themes and Concepts

I did research about Microsoft’s organization of production. Inbusiness, productivity is an objective concept. It is therefore canbe measured against a given universal standard. Given this, as I wasconducting research about Coca Cola’s organization of production, Ihad to consider its productivity for strategic reasons like corporateplanning and organization improvement. Microsoft is a multinationalcompany, which has many competitors in its respective industry. Thismeans that it has to have tactical strategies to control itsperformance and outdo its competitors. Therefore, when one isresearching about its organization of production, the management hasto keep in mind the number of customers that it serves. It is commonknowledge that the Company is the leading Computer TechnologyCorporation in the sphere, and per se, it was not essential toconduct a competitor analysis to ascertain is production strategies.

Secondly, this research dealt with the broader theme of massproduction by global businesses. Yi and Chan (2013) say thatproductivity is a useful relative measure of actual output, comparedto the investment in resources. All this is measured across someknown entities. Van Beveren (2012) further says that as the outputincreases for a certain level of input, there is an observed increasein an organization’s productivity. This means that a productivitymeasure is a description of how well an organization uses itsresources to realize a certain level of output. In my research, Ifound out that Microsoft Corporation performs well in theproductivity index. This is because it uses its resources tosufficiently serve its ever-increasing global customer base, at thesame time realizing growing profits and maintaining high quality inits production.

In this module, we learnt about business models and businessstrategies. In the new competitive environment for manufacturing andproduction, there has been an increasing number of ways in which theleading companies manage their businesses. This means that beingsuccessful in the turbulent and competitive climate requires abusiness to improve its competencies in terms of the business modelsthey use, the processes they have in production and equallysignificant, their technological capabilities. According to Suber(2014), companies whose production is capable to serving theever-growing customer base in the rapidly changing market have acompetitive advantage over those that do not. In my research, Ilearnt that Microsoft has done exactly what it needs to do to serveits customers, as well as maintain high qualities. This is why thecompany diversifies its production plants, having them put up instrategic geographical locations across the world. By not centringits production base, the company is able to respond to the dynamicand ever changing market and satisfy the economies of scale.

Globalization has an impact on all multinational corporations. Suber(2014) asserts that exposure to international trade aggregatesproductivity. This is the reason why the new international marketgoverns and to a certain extent dictates the way in whichmultinational corporations operate and how they invest in theirproduction organization. All multinational corporations are nowfocusing primarily on promoting and managing brands. The belief bythese corporations is that while all products are made in theirfactories, the brand is created and maintained in the consumers’minds.

While doing research about Microsoft’s production organization, Irealized that the corporation had embraced globalization as an effortto promote and manage its brand. This is why it opened up majorproduction lines in India and China. However, there are somearguments that the company opened up these branches as a strategy tominimize operation costs. The Asian labour market is known for itsaffordable and high quality labour, especially when it comes to theproduction of technological products. Nevertheless, it cannot bedisputed that Microsoft is one of the leading multinationalcorporations that has embraced the concepts of globalization.

Finally, while doing the research about Microsoft’s productionorganization, I found out that it uses the concept of lineproduction. Ford Motors (Geisst 2009) first introduced lineproduction. It was, therefore, mainly applied to the production ofheavy machinery such as vehicles. However, due to its growingpopularity and effectiveness, other industries began using it.Microsoft uses line production for mass production of chipsets,accessories, devices and software.


Microsoft is a leading Computer Technology Corporation, whichoperates in several countries worldwide. As such, its organization ofproduction has to be top-notch, with the capability of serving itsmillions of customers worldwide. The enterprise has managed togenerate in magnitudes that serve the needs of its customers, as wellas maintain its quality. While conducting this research, I learntthat that studying about organization of production offers one anopportunity to understand the global business market of today andtomorrow. This is because there are certain factors aboutorganization of production that one learns about by conductingresearch. As I conducted secondary research about this topic, I usedempirical data to collect the facts that would be necessary incompiling a research report. This further helped me develop researchskills that can be applied in business studies. Additionally, I wasable to understand the concepts of business that are used in thecontemporary business world. I also learnt from my fellow researchmembers that integrating class work with literature review andfindings of other scholars helps someone to develop crucial researchskills that are important in the field of academics.

Bibliography (Part A)

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Bishop, T. (2004) “Microsoft Outsourcing High-end Jobs, UnionSays”, Seattle Post. [Online]. 15 June 2004. Available at:&lt[Accessed 12 March 2015].

Bose, I, Jha,A., and Joshi, H, (2014) MicrosoftIT India: A Journey in Business Model Transformation.

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Duhigg, C.and Barboza, D, (2012) “In China, Human Costs are Built Into aniPad,” TheEconomy. [Online].25 January 2015. Available at: &lt[Accessed 12 March 2015&gt.

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Gu, Z,(2005)&nbspChina`sglobal reach: Markets, multinationals, and globalization.Victoria, BC: Trafford.

Hill, C,(2008) “International business: Competing in the global marketplace,” StrategicDirection,&nbsp24(9).

Hull, L. and Sorrell, L, (2010) The Image Microsoft doesn’t’ wantyou to See: Too Tired to Stay Awake, the Chinese Workers Earning Just34p an Hour. Mail Online, [Online] 17 April 2010. Availableat:&lt[Accessed 12 March 2015].

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Luchs, M. G,Naylor, R. W, Irwin, J. R, and Raghunathan, R, (2010) “Thesustainability liability: Potential negative effects of ethicality onproduct preference,”&nbspJournalof Marketing,&nbsp74(5),18-31.

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Morimoto, R,(2012)&nbspMicrosoftSystem Center 2012 Unleashed.Sams Publishing.

Richardson,A, (2003).&nbspMicrosoft.North Mankato, Minn: Smart Apple Media.

Ross, S. A,Westerfield, R., and Jordan, B. D, (2008).&nbspFundamentalsof corporate finance.Tata McGraw-Hill Education.

Schneeman, A,(2013).&nbspThelaw of corporations and other business organizations.Clifton Park, NY: Delmar Cengage Learning.

Schwarz, M,and Yenmez, M. B, (2011) “Median stable matching for markets withwages,”&nbspJournalof Economic Theory,&nbsp146(2),619-637.

Zsidisin*, G.A, Melnyk, S. A, and Ragatz, G. L, (2005) “An institutional theoryperspective of business continuity planning for purchasing and supplymanagement,”&nbspInternationaljournal of production research,&nbsp43(16),3401-3420.

Bibliography(Part B)

Geisst, C. R,(2006)&nbspEncyclopediaof American business history.New York: Facts On File.

Khan, J. A,(2011).&nbspResearchmethodology.New Delhi: APH Publishing Corporation.

Suber, JoyceL, (2014)&nbspInter-organizationalCompetition: Does the Leader Cause Cohesion or Chaos?.Authorhouse.

Van Beveren,I, (2012) “Total factor productivity estimation: A practicalreview,” Journalof Economic Surveys,&nbsp26(1),98-128.

Yi, W, andChan, A. P, (2013) “Critical review of labor productivity researchin construction journals,”&nbspJournalof Management in Engineering,&nbsp30(2),214-225.