Case Study:

Microsoft
Professor Gary Ebels
Alexandria Ingraham
April 02, 2016

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Today Microsoft is a very well respected company. This hasnt always

been the case though. When the company was just starting out, they had many
lawsuits filed against them. In the 1990s they had many lawsuits that were
accusing them of trying to create a monopoly in the computer software industry .
There are several aspects of the software industry that made this simpler than
other industries. Microsoft has been trying to regain their reputation ever since .
These issues didnt just come out of nowhere. They came from the
leaders at Microsoft making unethical decisions . They came from Microsoft trying
to get people to do what they wanted. One example of this is when they put
internet explorer in their software, so you had to use it . They also made it so
other browsers wouldnt work with their software .
One of the aspects from the software industry that helped create the
opportunity for Microsoft to try to create a monopoly and anticompetitive market
would be that software is all relatively similar so its easy to make them like each
other. Also since they are similar it makes it hard to see where one companys
aspects end and theirs begin. Being the leader in the industry can make you try
new thing in the industry and you dont know how they will go over until you try
them, and they did not go over well for Microsoft.

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When they were starting out Microsoft had a poor corporate culture .
They were trying to do things that were unethical . They thought they could get
away with making people have the products they wanted them to use . Their
leadership was also not where it needed to be ethically . If the leaders had acted
more ethically, they wouldnt have ended up in so many lawsuits . Leaders are at
the front of the company. If a lower level employee sees a higher up leader
making those unethical decisions, they will assume that that is what the company
wants to support. That causes the employees to start acting in this unethical
behavior as well.

Since they have gone through all these problems, Microsoft has really
turned around their social responsibility and philanthropic efforts . They now take
pride in the way the company is run. They have turned their reputation from
being very bad and people not trusting them, to being a very well respected
company, with people trusting to do business with them .
One of the major things that led up to theses unethical dilemmas would
be the size and type of industry they are in . Software wasnt a huge market back
then. They were also the front runners of the industry. Since they were at the
front, they thought they could get away with not doing the ethical decision and

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making their products compatible with others . Something else that led up to
these dilemmas would have to be them pushing boundaries . When they were
first starting out, they were innovating and pushing the boundaries . That didnt
stop when it came to pushing ethics to the limit and passed .
One of the biggest consequences of their ethical and legal issues would
have to be their tarnished reputation. They lost a lot of business because they
were unethical. Another consequence would be all the money they had to pay
out to other companies.
After they were forced to try to abide by the law drawn out in the rulings
of the cases, they started to get their ethics in perspective . In the United States
they are very well thought of and a trusted company. In other countries, they are
still having some legal issues that they are being charged for .
Despite all these things happening to them Microsoft is still leading in the
industry. They have tried very hard to earn their reputation back . They have even
survived the changing of their leadership . This can cause a stir in many
companies, but Microsoft kept it together. When you get new leaders in it takes a
little bit for the new leaders to adjust and understand Microsofts vision of what
they have come from and where they want to go with the company. This time it
was a whole new legal and ethical direction. They wanted to set the goal of

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earning their reputation, as well as showing the customers how ethical and fair
you really are.
This case really made the points in the book make sense . Corporate
culture was a topic in the book. A company wants to have a great corporate
culture. At the beginning of their career Microsoft had a very bad corporate
culture. With time they were able to bring it up and raise their standards of how
they wanted their corporate culture to be. When the corporate culture was still
bad, they were having issues with intellectual property rights, another topic in the
book. Some of the lawsuits in the 1990s were because they were thought to
have broken these rights. The acts that they violated were the Sherman Antitrust
Act and the Clayton Act. The Sherman Antitrust Act , put into effect in 1890, was
designed to prevent monopolies. During this period, Microsoft was starting to
become monopolistic. The Clayton Act, from 1914, makes price discrimination,
exclusive dealing, and other efforts to restrict the competition illegal . Microsoft
was trying to get customers to have to use all their products and no one elses,
by making their products not work with all browsers.
Microsoft has had many legal and ethical issues . Leadership in the
company had an impact on creating these legal and ethical issues . If they had
made more ethical decisions, many of the lawsuits wouldnt have been filed .

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Since these earlier days they have made a huge turnaround, in the U .S. They
have a better reputation and more ethical leaders in charge . Although in other
countries lawsuits have been filed recently.

There are many ways these lawsuits could be prevented . One way this
could be prevented is by not trying to get consumers to just use products
associated with your company, let them have the choice to use it or not . They
should have made their software compatible with most processors and browsers .
They should have been thinking about how the customer would feel about only
having one option they had to use with their Microsoft software . Another way to
prevent this in the future would be to have the leaders really know what the
values of the company are and how to achieve them .
As of 2015, Microsoft was rated one of the top ethical companies for the
fifth year in a row. They have come a long way since they first started out. From
being very unethical and having many legal issues arise, to being one of the
most ethical companies for five years in a row. Even though the company started
out with unethical decisions from the leaders, they moved past it and even
changed leaders and are just growing in strength since then .

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Many companies go through a period where they are trying to figure out
where they want to go with the company. For Microsoft, they took a while to
realize they wanted to be well respected by their customers and have their trust .
They started out on a bad note, but have gradually earned back the trust of their
customers. Many of the issues experience by Microsoft could have been easily
avoided.

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References
Ferrell, O., Fraedrich, J., & Ferrell, L. (2013). Business Ethics: Ethical Decision
Making and Cases (9th ed., pp. 374-381). Mason, OH: Southwestern
Cengage Learning.
Harnick, L. F. (2015, March 9). Microsoft on the World's most ethical
companies list 5 years in a row. In Microsoft.com.

What's wrong with Microsoft?. (2006, July 13). In ABC News.

Markoff, J. (1997, December 17). Microsoft's Legal Problems Grow As States Join in
Antitrust Effort. In New York Times