Microsoft Corporation’s organizational structure enables the business to grow, especially following the firm’s structural changes in the past several years. A company’s corporate structure refers to the anatomy and arrangement of the organization and its components. In Microsoft’s case, the organizational structure stresses the importance of business output. Considering the company’s dominance in the IBM PC-compatible operating system market, this company structure helps maintain competitive advantages, in accordance with Microsoft’s generic competitive strategy and intensive growth strategies. The company’s long-term success depends on the suitability of its corporate structure to market conditions and industry forces.
Microsoft Corporation’s organizational structure reflects the needs of the information technology and online service business in response to market dynamics. A responsive company structure and organizational design ensure the company’s long-term success.
Features of Microsoft’s Corporate Structure
Microsoft Corporation has a product type divisional organizational structure. This structure involves divisions that are based on certain computer hardware and software products, or organizational outputs. The following characteristics are significant in Microsoft’s organizational structure:
- Product type divisions (most dominant structural feature)
- Global corporate groups
- Geographic segments
Product Type Divisions. Product type divisions are the primary characteristic of Microsoft’s organizational structure. In this characteristic, the company uses product or output as the main criterion for grouping personnel and related resources. For example, the organization has a self-contained division for Intelligent Cloud products and separate divisions for other products. This structural feature contributes to the company’s organizational capacity for product innovation. The following are the product type divisions in Microsoft’s corporate structure:
- Productivity and Business Processes
- Intelligent Cloud
- More Personal Computing
- Corporate and Other
Global Corporate Groups. Global corporate groups are a secondary characteristic that defines Microsoft’s organizational structure and its hierarchy. These groups are based on the functions essential in the computer technology business. For example, the Human Resources group addresses the company’s workforce needs and related concerns. This structural characteristic ensures that the organization functions as a whole. The following are the global corporate groups in Microsoft’s organizational structure:
- Office of the CEO
- Worldwide Commercial Business
- Marketing
- Microsoft Global Sales, Marketing and Operations
- Corporate Strategy and Operations
- Microsoft Cloud and Enterprise Group
- Human Resources
- Finance
- Business Development
- Applications and Services Group
- Windows and Devices Group
- Technology and Research
- Legal
Geographic Segments. Microsoft Corporation’s corporate structure also involves geographic segments as the least significant characteristic. These segments are used to group operations in the company’s financial reports. The following are the geographic divisions in Microsoft’s organizational structure:
- United States
- International
Microsoft’s Organizational Structure – Implications, Advantages & Disadvantages
The main implication of Microsoft Corporation’s organizational structure is the ability to focus on product development. For example, the company uses its Intelligent Cloud division to offer cutting-edge cloud computing services. A corresponding advantage of this corporate structure is its contribution to the competitiveness of Microsoft’s products.
A disadvantage of the company’s organizational structure is its minimal consideration for regional market differences. Regions have varying preferences with regard to Microsoft’s computer hardware and software features, such as in the case of smartphones. Thus, a recommendation is for the company to integrate regional market differences in its organizational structural design.
References
- Denisenko, M., & Shatska, Z. (2021). Formation of business structure in the context of the influence of integrating factors of the internal environment. Economics, Finance and Management Review, (3), 15-20.
- Junge, S., Luger, J., & Mammen, J. (2023). The role of organizational structure in senior managers’ selective information processing. Journal of Management Studies, 60(5), 1178-1204.
- Microsoft Corporation – Executive Officers.
- Microsoft Corporation – Form 10-K.
- Microsoft Corporation – Segment Information.
- U.S. Department of Commerce – International Trade Administration – Software and Information Technology Industry.