The Microsoft case describes how the company was build and gives an insight in their Human Resource policies, from the early 1980 until the 2001. Bill Gates believed that in order to develop outstanding software, attracting the right people was crucial. The focus of their HR policy was to attract intelligent technical people. These technical people were the foundation of Microsoft’s great success. However (senior) management functions were also given to these technical employees, of which some had little management skills. Furthermore Bill Gates created a competitive work environment in which there was an enormous drive to achievement. By doing so the employees were challenged to perform at their best. Microsoft employed a hiring policy that they called “n minus 1”, where the “n” stands for the number of people really needed.  By doing so they wanted to create a work environment that pushed employees and improves their dedication to the company. In addition employees were given the opportunity to receive part of their salary in company shares, by doing so Microsoft ensures their employees felt connected to the business.
2. Problem statement
How can Microsoft use human resource management to attract, motivate and retain superior people in order to maintain and create a sustainable competitive advantage?
3.1 Competitive advantage Microsoft
3.1.1 Source competitive advantage
According to Bill Gates Microsoft’s competitive advantage is the ability to attract, motivate and retain superior people. In the early days of Microsoft this was true because their employees consisted of top students who were highly motivated and had a clear vision. Their goal was “to put a computer on every desk and every computer running on Microsoft software”. As stated in the case; one of the ex-employees felt he was literally changing the world. This emphasises on the fact that Microsoft has the ability to attract highly motivated people, at that time. As the company develops Microsoft has a hard time keeping this competitive advantage due to exponential growth. The size of the company makes it necessary to rewrite and reorganize processes and procedures. Therefore the creativeness and innovation of the company has its limitations. They also need to attract good managers to guide and lead the employees. Microsoft is good at attracting technical people; but is not experienced in attracting managers.
Now Microsoft is trying to retain the level of competitive advantage that they had in the early days. With attracting experienced people from outside they break with the traditions of filling new management jobs from within the company. They realised not all technical people will become good leaders and therefore they attract managers from external companies, such as Rick Belluzzo, a senior of HP.
The VRIO frame
The VRIO frame is used to analyse whether Microsoft has a sustainable competitive advantage. The outcomes of this analysis are presented in the table and explain underneath.
|Resource: employees | |Valuable |Rare |Difficult to imitate? |Supported by |Competitive |Performance | | | | |organization? |implications | |
Source: Barney and Wright (1998)
According to Bill Gates, Microsoft is in the intellectual property business. Hence, knowledge of the employees is very valuable to Microsoft. The employees have to be able to solve difficult problems they have not faced before. In order to find creative and useful solutions they have to be highly intelligent. This also underlines the statement of Bill Gates that the knowledge of the employees is very important.
The employees of Microsoft are...