Organizational Design at Microsoft

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The ongoing case study presented by Microsoft and the scrutiny of the Justice Department and Congress serves as an excellent departure point to establish the nature and premises of organizational theory and design since it allows for examination from both the viewpoint of the public and the economic aspects of the situation in which Microsoft finds itself. While issues of organizational structure and corporate policies as related to costs, revenue, profit and market structure are inherent in the study of any company or organization, it is important to recognize the unique aspects of Microsoft. Microsoft, undeniably, has a larger presence throughout the computer software industry and the users of its many products since its operating system defines, to a great degree, how work is done in the modern business world. With a company that has virtually always been in a "near-monopoly" situation such as Microsoft, it comes as no surprise that there are many who believe the company should be split into two (or more) independent organizations. However, that has little to do with the organizational design reality that actually is the Microsoft Corporation. Most companies grew out of their perpetual search for profit and how to make that profit grow bigger each year and Bill Gates and Microsoft are certainly no exception to that rule. In fact, they are the personification of the rule! Such a determined search for ever-increasing profits has resulted in large, vertically integrated organizations. But it is essential to keep in mind the fact that economic growth does not end in profit accumulation. In the case of the computer and software industry, growth came in the form of reliance on external economies, that is, keeping apace with the technological progress of other companies in the same industry rather than each company going its own way. Microcomputer companies that remain active to this day are the ones that view computers as open ended machines, ready to...
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