Microsoft Case Study Harvard Business School

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Bill Gates Believed Microsoft’s core source of competitive advantage was the ability to attract, motivate and retain superior people. In attracting employees Microsoft mainly targeted the stars. Stars are the core employees that can add value to the organization through their knowledge, skills and abilities (Boselie, 2010). At Microsoft there has been a hands on mentality made for ambitious people.

Lepak and Snell (2007) built a theory about different employees and its HR strategies. Microsoft has an internalized and relational focus with its employees. Strategic value of employees is high because employees are given high autonomy. In general all employees are highly unique. This is why Microsoft has always wanted to hire young and smart people. Young people are still more creative than older people, and can be shaped by the company. The lack of experience was seen as beneficial and trainings were given internally. This makes Microsoft’s staff knowledge based, and therefore human resource management has to be commitment based. Motivation at Microsoft was stimulated by a good performance evaluation procedure inside the company. Highly elaborated feedback gave its employees a good overview of their performance. Furthermore, Microsoft was among the most highly desired companies to work for. People at Microsoft always had the feeling their contribution could change the world In retaining its employees, salaries were increased over the last decades to stimulate people to work for Microsoft. Furthermore, more exciting stock options were granted to good performing employees. The gap between salaries at Microsoft and other multinational companies was reduced.

The employment relationship Microsoft offers could be placed in the mutual investment category of the employment model by Tsui and Wu (2005). The mutual investment category is a balanced long-term investment based on an economic as well as a socio-emotional exchange (e.g. training and growth opportunities). Expected contributions from employees is extremely high at Microsoft. Therefore Microsoft has to ensure it is always offering good inducements. Under-investment is a pitfall human resource management continuously has to be aware off. Employees at Microsoft do have a good psychological contract. Employees have high levels of autonomy in doing their job. Although signals of burnout were spotted in the company, the increase of economic and socio-emotional inducements made the exchange more balanced. The model underneath shows that a high employee performance combined with a low employee satisfaction can cause burn out. Microsoft has always been in the category of sustainable competitive advantage. Emphasis at human resource should be placed on employee satisfaction. Whenever Microsoft’s employees remain satisfied, high performance will not create burnout.

Organizational Culture
The organization culture framework can be used to compare the current with the desired organizational culture of Microsoft. There are four focuses namely support, innovation, goal, procedure.

In the present situation Microsoft has a tough support culture where commitment, cooperation and participation is fairly high. However, the care and openness of the organization is low due to the fact that the interaction between employees about non work matters seems relatively low in contrast to interaction about work matters. Over the years the spirit has decreased due to the growth of the company, which decreased the family culture. In the future it would be desirable to increase the support focus to improve the key values in the present culture that are lacking at the moment. Innovation focus

Microsoft scores high on creativity and expertise, but seems to score low on the other key values of innovation focus. A desired culture would be to increase innovation to compete on the market e.g. the new dotcom industry. Goal

Microsoft’s initial goal lacked relevance, therefore the...
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