Microsoft Corporation’s Organizational Behaviours

Organization Structure

In the course of time, the Microsoft Corporation structure changed several times. However, mostly, these changes were not significant. Currently, the organizational structure of Microsoft is divided into two main divisions which are managed by the CEO, namely, the Business Functions and the Engineering Groups (“Facts about Microsoft,” 2017). Thus, the Business Functions group is divided into nine subgroups:

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Business Development Group (the development of business partnerships).

  • Corporate, External, and Legal Affairs (the company’s legal work, patent licensing, public policy, intellectual property, government affairs, corporate philanthropy, social responsibility, and corporate governance).
  • Corporate Strategy & Planning (the planning and execution of initiatives, and the development of engineering and business strategies).
  • Finance Group (the allocation of finances).
  • HR Group (the selection and allocation of the workforce).
  • Global Sales, Marketing, and Operations (running worldwide operations, and developing the initiatives in emerging and developed markets).
  • Marketing Group (the development of global marketing and consumer business strategies).
  • LinkedIn (the development of LinkedIn).
  • Worldwide Commercial Business (the development of the global commercial business including public sector, enterprise, small and middle-market, partner and developer, and services) (“Facts about Microsoft,” 2017).

The Engineering Groups division comprises four subgroups:

Cloud and Enterprise Engineering (the production of Microsoft Azure, Microsoft Visual Studio, and Microsoft Dynamics).

  • Office Product (the production of applications from the Microsoft Office family).
  • Windows and Devices (the production of core Windows products).
  • Technology and Research (the development of Bing and Microsoft Research) (“Facts about Microsoft,” 2017).

This organizational structure has its advantages. First, heads of Engineering Groups report directly to the CEO (currently Satya Nadella) and explain the possible implications regarding the development of a new product and the innovation potential. Second, the elimination of bureaucracy and the increase of businesses’ flexibility that allows quickly adapting to changes in the market.

The six key elements of this organizational structure are:

  • A short chain of command.
  • A wide span of control.
  • Centralization.
  • High specialization.
  • Formal structure.
  • Rigid departmentalization (“Facts about Microsoft,” 2017).

Organizational Culture

The original Microsoft organizational culture laid in 1975 by the founders of the corporation, Bill Gates and Paul Allen, considered innovative at that time and was focused on the performance. Since that time, Microsoft organizational culture has undergone certain changes, and now, it includes the following three key features:

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  • Openness (all the company’s employees have opportunities to express their opinions).
  • Value for innovation (the integration of innovation and creativity).
  • Diversity and inclusion (the creation of an environment that helps the company capitalize on the inclusion of solutions and ideas and the diversity of the people in order to meet the customer’s needs) (Dudovskiy, 2017).

Motivation Programs

Microsoft Corporation also has certain motivation programs that provide benefits for the employees and serve as an incentive for them to work more productive (Kapur, 2014). First, in terms of healthcare benefits, the employees receive comprehensive healthcare coverage. Second, regarding family issues, the company provides maternity leave, adoption fee assistance, discounts on child-care services, and paid time off for new parents. Third, in terms of investing, the employees have an opportunity to buy Microsoft shares at a discount.

Also, Microsoft Employee Financial Education Program provides information that helps the employees make reasonable decisions and develop their financial portfolio. Fourth, Microsoft provides a philanthropy program; namely, they match the money contributed to various charities and educational institutions. In addition, nearly $20 is donated per hour to the organizations that the employees support. Fifth, concerning learning and development, Microsoft provides tuition assistance for graduate and undergraduate coursework, places a great emphasis on career development, and encourages constant learning to develop skills of its employees (Kapur, 2014).

Decision Making and Communication Systems

Microsoft’s decision making and communication systems do not much differ from that of other similar organizations. The process of making decisions begins with the CEO and other executive officers who develop the strategy of the company and set goals and directions. Then, the task of the heads of the departments is to apply these goals to their areas of responsibility. The task of managers is to explain these goals to the employees so that they start working on their achievement. The communication system is mainly formal; therefore, the tasks are assigned gradually from top to bottom, and the employees communicate mostly with their direct superiors (Smithson, 2017).

Thus, Microsoft’s decision-making process consists of the following steps:

  • Setting a direction and the development of the overall strategy of the company.
  • Identifying problems and obstacles.
  • Finding solutions and alternatives.
  • Implementing the chosen strategy.
  • Evaluating the outcomes (Smithson, 2017).

Additionally, the company’s decision-making process comprises the following aspects:

  • The design of goods and services.
  • Quality management.
  • Process and capacity design.
  • Location strategy.
  • Layout design and strategy.
  • Human resources and job design.
  • Supply chain management.
  • Inventory management.
  • Scheduling.
  • Maintenance (Smithson, 2017).

Leadership Style and Employees Satisfaction

The leadership style of all three of Microsoft’s CEOs is different. The current CEO, Satya Nadella, was appointed to the position in 2014. His first decision was to make a major reinvention and restructuring of the company. He was determined to refocus Microsoft’s mobile-based attempts and expand many of the company’s services to be offered on other platforms such as Mac and Linux. Maintaining close cooperation with Apple is one of Nadella’s main strategies (Weinberger, 2016).

As for the internal affairs of the company, Nadella, compared to the previous CEO Steve Ballmer, places more focus on the employees and wants them to see him as a human being first and only then as their chief. This very feature is the reason for the employees’ satisfaction and their positive attitude towards the CEO. As a result, according to the survey, the CEO approval rating changed from 51% in 2013 to 88% in 2016 (Weinberger, 2016).

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Challenges and Opportunities

Currently, Microsoft, like any other company, faces many challenges. Its main challenge is to adapt to the rapidly changing environment where the consumers hope for free operating systems, and where the PC has given way to the mobile devices such as tablets and smartphones (“Facts about Microsoft,” 2017).

Thus, the first challenge for Microsoft is to continue working and improving Windows 10, so that it corresponds to all current customers’ needs. The second challenge is the development of Windows Phone which is not easy considering the intense pressure from Android and iOS. Hence, there is another problem that Microsoft faces, which is declining PC sales. One more challenge for Microsoft is to improve Microsoft Band so that it could compete with Apple Watch.

Despite all these problems and challenges, Microsoft, being one of the world’s biggest technology corporations, has many opportunities to find solutions for its problems and overcome the current obstacles (Sheridan, 2016).

Recommendations for Improvements

The main recommendation for Microsoft to improve considering its current challenges is to focus on building technologies for the future, as the world is changing very fast, and if they do not keep up with it, they will not succeed (Sheridan, 2016). Thus, the following recommendations should be appropriate for the company’s current situation:

  • The development of Windows Phone.
  • The improvement of Windows and Office and placing more focus on their adjustment to the mobile platform.
  • The improvement of Microsoft Band.
  • The development of the Windows Store, so that it could compete with Apple App Store and Google Play.
  • The improvement of Cortana, the Windows’ voice assistant (Sheridan, 2016).


Dudovskiy, J. (2017). Microsoft Organizational Culture.

Kapur, K. (2014). How does Microsoft motivate its employees?

Facts about Microsoft. (2017)

Sheridan, K. (2016). 7 Microsoft improvements we need to see.

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Smithson, N. (2017). Microsoft Corporation’s operations management, 10 decisions, productivity.

Weinberger, M. (2016). Microsoft employees love Satya Nadella a lot more than they did Steve Ballmer.

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