Organizational Structure Planning and organization are crucial for an organization to achieve maximum effectiveness and success. Microsoft Company, for instance, has an organizational structure consisting of board of directors who include Steve Ballmer as chief executive officer (CEO), senior leaders, executives, and technical leaders.
Founded in 1975, Microsoft has grown today into a worldwide leader in software and services (Microsoft, 2009). The organizational structure of Microsoft proves to be efficient and effective. A comparison to other organizations demonstrates the importance of an organizational structure and shows commonalities as well as differences in structure. A further analysis of Microsoft Company explains the impact of organizational functions to the organizational structure. Lastly, the organizational design of Microsoft exhibits the best structure to meet the organizations needs.
The organizational structure for Microsoft’s management, functions, and design all play a key role in the success of Microsoft. The organizational function of any company starts with the employees. Employees are grouped based on knowledge and experience into departments such as marketing, finance, human resources, operations, etc… and is referred to as departmentalization. “Organization structure is comprised of functions, relationships, responsibilities, authorities, and communications of individuals within each department” (Sexton, 1970, p. 3) and is depicted in an organizational chart. An organizational chart identifies the business functions and reporting order. There are two concepts that organizations are structured and they are differentiation and integration (Bateman & Snell, 2009, p. 290).
Differentiation is defined as people who perform different tasks whereas integration is the where the differentiated people are coordinated to accomplish a specific goal. Division of labor is a part of differentiation, which divides jobs into maller tasks and when an employee performs a specific task, it is known as specialization.
In some cases, companies divide organizational functions into divisional structure, which contain all the necessary resources required to function. For example, a software company might have a division for home software and a division for business software both providing development and support. Microsoft is the largest software company in the world that offers services for home and business. The company also provides entertainment through video games for Xbox and music for Zune.
In the case of Microsoft (2009) there are many different positions within the company from Business Services & Administration to Software Engineering: User Experience and has locations throughout the world. Since Microsoft’s main function is to develop software, it would stand to reason that the largest department within the company pertains to information technology with many specialized departments from development to support. Microsoft has many divisions within the company that include home software and business software and provide development and support.
The function of the human resources department is to organize the employees based on their qualifications. The finance department’s function is the flow of cash from accounts receivable to payroll. Microsoft is known all over the world but continues to have a marketing department that provides informational ads and websites. Microsoft continues to be a well oiled machine with the help of its organizational functions. According to Montalbano (2005, September), “Microsoft reorganizes makes sense for the largest software company, which was getting too big and unwieldy under its former structure to continue to be managed efficiently. (para. 1).
Microsoft has changed to a three-division structure instead of six; the company now only has divisions in the product, service, and customer departments. According to Montalba no (2005, September), states, Rob Enderle, “The restructuring will enable Microsoft to more efficiently deliver products, combining technologies from divisions that previously had difficulty working together, because they were in separate organization. ” (para. 5). The disconnection of the departments was preventing Microsoft from effectively serving the customer and producing innovative product.
The reorganizing of Microsoft will allow the employee’s to communicate better between departments and management. This will allow the company to be more responsive to change and focus on excellent service, quality products, and the customer. Microsoft displays an effective and efficient organization due to the organizational structure, management, functions, and design. Microsoft consists of different committees such as audit, compensation, finance, governance, and antitrust compliance. Microsoft has a board of directors as well as an executive team. Microsoft, in fact, is similar to other company’s organizations, such as Dell.
In addition, Microsoft implements different organizational functions such as employees, human resources, and finance departments that improve the success of the organization. Another factor contributing to Microsoft’s success is the organizational design. In summary, Microsoft would not be as successful without implementing the proper organizational structures, management, functions, and designs.
