Understand Different Approaches

To Management And Leadership

Commerce Essay
steve Ballmer, Microsoft. Without a doubt, Mr. Ballmer is the worst CEO of a large
publicly traded American company today. Not only has he singlehandedly steered
Microsoft out of some of the fastest growing and most lucrative tech markets (mobile
music, handsets and tablets) but in the process he has sacrificed the growth and profits
of not only his company but "ecosystem" companies such as Dell, Hewlett Packard and
even Nokia. The reach of his bad leadership has extended far beyond Microsoft when
it comes to destroying shareholder value - and jobs.
Microsoft peaked at $60/share in 2000, just as Mr. Ballmer took the reins. By 2002 it
had fallen into the $20s, and has only rarely made it back to its current low $30s
value. And no wonder, since execution of new rollouts were constantly delayed, and
ended up with products so lacking in any enhanced value that they left customers
scrambling to find ways to avoid upgrades. By Mr. Ballmer's own admission Vista had
over 200 man-years too much cost, and its launch, years late, met users avoiding
upgrades. Windows 7 and Office 2010 did nothing to excite tech users, in
corporations or at home, as Apple took the leadership position in personal technology.

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So today Microsoft, after dumping Zune, dumping its tablet, dumping Windows CE and
other mobile products, is still the same company Mr. Ballmer took control over a decade
ago. Microsoft is PC company, nothing more, as demand for PCs shifts to mobile.
Years late to market, he has bet the company on Windows 8 - as well as the future of
Dell, HP, Nokia and others. An insane bet for any CEO - and one that would have
been avoided entirely had the Microsoft Board replaced Mr. Ballmer years ago with a
CEO that understands the fast pace of technology shifts and would have kept Microsoft
current with market trends.
Although he's #19 on Forbes list of billionaires, Mr. Ballmer should not be allowed to
take such incredible risks with investor money and employee jobs. Best he be retired
to enjoy his fortune rather than deprive investors and employees of building theirs.

There were a lot of notable CEO departures in 2012. Research in Motion, Best Buy
and American Airlines are just three examples. But the 5 CEOs in this column are well
on the way to leading their companies into the kind of problems those 3 have already
discovered. Hopefully the Boards will start to pay closer attention, and take action
before things worsen.
Some say that Steve Sinofsky, credited with bringing order to the sometimes-chaotic
software development process at Microsoft - partly by cutting layers of management,
should be the man to replace Steve Ballmer.
Meetings with Sinofsky can be tough, colleagues say, but he doesn't swear like Gates or
scream like Ballmer.
Sinofsky has blogged at length about his management ideas, and even taught a
management class at Harvard Business School. Some of his best blogs were used as
the basis for a book called 'One Strategy: Organization, Planning, and Decision Making,'
published by Wiley in 2010, which he co-authored with a Harvard academic.
Sinofsky writes in his blog about cutting the number of managers between him and the
lowest rung of the Windows unit to three or four from seven previously.
This streamlining, along with rigorous planning, has become his signature at Microsoft,
but has ruffled some feathers at the company because it has reduced the number of
general manager positions, where people got to use a wide variety of skills, and focused
instead on the core functions of making software: developing, testing and managing
specific programs.
But few dispute the results.
"For sure it flattens the organization, it definitely eliminates fiefdoms," said the former
Windows executive.
"Bill Gates had the most amazing mind I've ever encountered. You could show him a
PowerPoint slide and he would ask why it was different from the one you showed him
three years ago," said another former Microsoft executive. "Steve Ballmer is the most
intuitively mathematical person I've ever worked with. Steve (Sinofsky) is neither of
those things."
Sources:
http://www.forbes.com/sites/adamhartung/2012/05/12/oops-5-ceos-that-should-havealready-been-fired-cisco-ge-walmart-sears-microsoft/3/
http://www.msnbc.msn.com/id/46556568/ns/technology_and_sciencetech_and_gadgets/t/microsofts-next-steve-windows-boss-faces-biggesttest/#.UAVLf_Wqnm4

Role
An executive in the committee tasked to adviseMicrosoft CEO Steve Ballmer has just
assigned you to conduct an investigation into how a sample of organisations, including

Microsoft and one other company of your choosing, approach the management of their
activities. Your analysis will extend into an examination of organisation structure and
culture, as well as management style.

Tasks:
Using the facts of the company presented in the case above and that of another
company of your choosing, compare and contrast different organisational structures and
cultures (1.1)
Explain how the relationship between an organisation's structure and culture can impact
on the performance of the business (1.2)
Discuss the factors which influence individual behaviour at work (1.3)
Compare the effectiveness of different leadership styles in different organisations (2.1)
Explain how organisational theory is the foundation for the practice of management
(2.2)
Evaluate the different approaches to management used by different organisation (2.3)

GRADING
Pass is achieved by meeting all the
requirements defined in the assessment
criteria.
Merit Identify and apply strategies to find appropriate solutions (M1)

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Characteristics / Possible Evidence - Use of comparative chart that is sufficiently

detailed to show that an effective approach to study and research has been applied to
both organizations.
Select and apply appropriate methods/techniques (M2)

Characteristics / Possible Evidence - Appropriate methods have been applied in

organizational structure, culture and approaches to management related to given
organizations as well as sources are justified.
Distinction Use critical reflection to evaluate own work and justify valid conclusions
(D1)
Characteristics / Possible Evidence - creativity has been used to generate and justify
valid comments on approaches to management and styles of leadership.
Take responsibility for managing and organizing activities (D2)
Characteristics / Possible Evidence - independence demonstrated and substantial
activities have been planned, managed, and organised related to the practice of
management and leadership.

A REPORT ON MICROSOFT AND FEDEX'S

ORGANIZATIONAL STRUCTURES AND
CULTURES
Prepared for:
Mr. John Andre (Lecturer)
Organizations and Behavior
Banking Academy, Hanoi
BTEC HND in Business (Finance)
Prepared by:
TRAN MAI TRANG - AMY
Registration No.: ITP F05-229 (F05A)
Submit Day: 21st November, 2012

Table of Contents
INTRODUCTION
The assignment is about six outcomes of Organizations and Behavior subject. The
scenario company is Microsoft, founded in 1975, which is the worldwide leader in
software, services and solutions that help people and businesses realize their full
potential (Microsoft, n.d.).The other company to compare with Microsoft is Federal
Express Corporation (FedEx Express), the largest company in providing a portfolio of
transportation, e-commerce and business services under the FedEx brand. FedEx

Express is an express transportation company, offering time-certain delivery within one

to three business days and serving markets. FedEx Ground Package System, Inc.
(FedEx Ground) is a provider of small-package ground delivery service. FedEx Freight
Inc (FedEx Freight) is a provider of less-than-truckload (LTL) freight services. FedEx
Corporate Services, Inc. (FedEx Services) provides the Company's other companies
with sales, marketing, information technology, communications and back-office support
(FedEx, n.d.).
This assignment is going to explain and compare the organizational structures, cultures,
leadership styles and performance of these two companies to find out about the
organizational theories that underpin the practice of management.

1.1 Compare and contrast different

organizational structures and culture
1.1.1 Microsoft's structure and culture
Microsoft's Organizational Chart
(The Official Board, 2012)
According to the chart above, Microsoft has a flat structure. We can see that Microsoft
has five product groups are Windows & Live Windows Group, Server Software, Online
Services, Microsoft Business and Entertainment and Devices. Each product group,
which focuses on a specific line of goods and services, has one executive reports
directly to the CEO. Each group has its own R&D, sales, and customer service staff
(Daft, 2009). This structure allows larger spans of control. Microsoft also has a matrix
structure which works alongside the flat structure. The matrix structure is a structure
where project teams are made up of workers with various specialisms from different
functions of a business (BPP, 2004). The legal structure of Microsoft is Limited Liability
Company because the company went public on March 13, 1986 (Time, n.d.).
Microsoft has a task culture because it is a huge company with 94,420 employees
around the world, just 56,934 in USA only (Microsoft, n.d.). It is impossible to manage a
firm of that huge amount of workers with a person culture or a power culture.

A two-time award-winning journalist Kurt

Eichenwald described Microsoft's work
culture as the "cannibalistic culture"; a
management system known as "stackranking" - a program that forces every

unit to declare a certain percentage of

employees as top performers, good
performers, average, and poor effectively crippled Microsoft's ability to
innovate, leading employees to compete
with each other rather than competing
with other companies (Vanity Fair, 2012).
1.1.2 FedEx's structure and culture
FedEx's Organizational Chart
(The Official Board, 2012)
FedEx Corporation - "FedEx", introduced express delivery to the world in 1973, and is
the world's top express delivery service. The organizational structure of FedEx is flat.
According to Organizational Behavior - A Strategic Approach, FedEx Corporation should
change their structure, because it adopted a "multi-divisional structure" (Hitt, Miller &
Colella, 2005). The corporation gives significant authorities to the subsidiaries.
Operating independently, each subsidiary manages its own specialized network of
services. FedEx employed over 280,000 employees worldwide (FedEx, n.d.), so
obviously they have a task culture. The culture of FedEx is also market - driven culture.
All they care about is the customers; their culture center on the customer. They possess
a strong customer-service organizational culture (McNeal, 2011).

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In short, both Microsoft and FedEx Corp. have a new style of management which is flat
structure and task culture. However, FedEx is flatter than Microsoft in organizational
structure. To look deeper, we can see differences in their culture as one cares about
money, the other one cares about the customer.

1.2 Explain how the relationship between

an organization's structure and culture
can impact on the performance of the
business
1.2.1 Microsoft
Microsoft has a flat organizational structure and a task culture which is consider the new
method of management. It is believed to be the right way to manage a company. This
seems to works well when Microsoft's 2011 revenue reached $69 billion (Microsoft,
2011). They make a very huge amount of money. The flat structure creates a lower
hierarchy of power in Microsoft. It also allows CEO's direct involvement to make
decision process quicker and less time consuming.
Microsoft was topped ranking of the world's 25 best multinational workplaces released
by The Great Place to Work Institute (Industry Week, 2011). It is noticeable that
employees satisfy their working environment in Microsoft. However, the "stack ranking"
program can kill Microsoft's creativity. The destructive management technique can be
seen the key problem in Microsoft its management system (Frederick Allen, 2012). It
can lead to risk of losing big amount of money.

1.2.2 FedEx
FedEx increased revenue 12% in the February-to-May quarter and 13% in the fiscal
year that ended May 31, reporting total annual revenue of $39.3 billion (William Cassidy,
2011). It is a large amount of money. The culture of FedEx influences its employees to
work more effectively. It encourages them not only work hard but also work smart.
FedEx's managers also make right decisions, catching up with market trends and
changing business needs.

1.3 Discuss the factors which influence

individual behaviour at work
The factors which influence individual behavior at work are: personality, perception,
attitude, ability and aptitude, conflict, stress, and change.
For the people of Microsoft, their personality is highly competitive. As discussed above,
it is obviously that Microsoft has the culture of competition so the people who are
working in a competitive culture will become competitive. If they are not yet competitive,
the culture will itself make them competitive. Because they are competitive, they know
how to get the money from customers and they will do it so well.

Microsoft had always been characterized by a culture that was extremely competitive.
When the company introduced new products then rocketing sales, the people
responsible for the products did not meet to celebrate. Instead, they found what could
have been done better instantly. Therefore, the company had always been a leading
competitor, and Gates often sent out memos to remind employees about the
competitive threats ahead. Gates truly drove a culture of innovation and vision
(Microsoft People Problems, 2003). Thus, people were promoted to strive for the
highest standards. However, when Gates left, Steve Ballmer has been a new CEO.
Steve has been driving a culture of production rather than innovation (Kurt Eichenwald,
2012). For example, two ex-employees reviewd on Glassdor (Glassdoor is a website
that collects information about workplaces and companies) that stack ranking made
Microsoft be a "less desirable place to work" and "higher stress workplace" (Julie Bort,
2012).
One more thing is that, Microsoft has discrimination between black and white workers of
the corporation. In 2001, a group of current and former employees accused Microsoft of
racism. The seven African American people required $5 billion in compensation,
claiming they were paid less than their fellow employees and repeatedly passed over for
promotions given to less-qualified white workers. The workers also claimed to have
been subjected to racial harassment and retaliation when they complained. According to
Willie Gary, who is a lawyer, pointed to 1999, government statistics that showed only
2.6% of Microsoft's 21,429 employees, and only 1.6% of the company's 5,155
managers, were black (BBC, 2001).

2.1 Compare the effectiveness of

different leadership style in different
organizations
2.1.1 Microsoft
Bill Gates's leadership styles are participative style and authoritative style. The reason is
that, Gates involved his subordinates in decision making so they were good at
delegating. He is a flexible person and he recognized his role was to be visionary of the
company. Whenever needed, he brought professional managers for managing. Gates is
a strong and energizing person. His enthusiasm, hard working nature and judgment
skills reflect his personality. His motivating power and involving his friends to working
with him became the success of Microsoft (Dip Kumar Dey,n.d.). Besides, Gates paid
special attention to recruit and retain the best talent. He believed that the recruitment of
talented software engineers was one of the most critical elements in the software
industry. Gates looked for recruits who included the capacity to grasp new knowledge
quickly and deep familiarity with programming structures. Despite a great number of
potential recruits applied for jobs at Microsoft, Gates assumed that the best talent would
never apply directly. Consequently, Microsoft's HR managers had to hunt for the best
talent and offer them a job. Giving autonomy to his managers, Gates delegated

authorities to managers to run their independent departments. Gates involved a little in

autocratic style, because control is basic to his nature and his management practice. He
had an obsession with detail and with checking up. He tried to monopolize the World
Wide Web software market and had legal problems with the department of justice. Also
he did not like complaints (Dhananjay Kumar, n.d.). Microsoft used these styles of
leadership very well as the company has great performance with net income of $14.569
billion (2009).

2.1.2 FedEx
FedEx has a complex leadership style. The leadership style is combined between
affiliative style, participative style and democratic style. Because FedEx has a flat
structure; the managers give their subordinates authorities so they are good at
delegating. Also, to be able to give subordinates authorities, they must trust their
workers. Workers at FedEx are smart people so they do not want to be told what and
how to do things. FedEx Corp. under the guidance of CEO Fred Smith has been named
the "Top Corporation of the Decade" by Fortune magazine (Dumain, 2004).
Smith was determined to make employees an integral part of the decisionmaking process, due to his belief that "when people are placed first they will provide
the highest possible service and profits will follow" (FedEx, n.d.).
Microsoft and FedEx have different leadership styles so they apply it differently to create
different working environment for their workers. However, they both earn a huge amount
of profit and manage their company so well. FedEx seems to have the right way to
apply its leadership style on its employees than Microsoft.

2.2 Explain how organisational theory

underpins the practice of management
2.2.1 Theory X and Y
It can be easily seen that Microsoft and FedEx use the Y theory. Because both
companies care about how their employees feel. Furthermore, workers at Microsoft and
FedEx are smart people so they do not want to be told things. Workers at Microsoft and
FedEx are very ambitious, passionate and committed to their work. Because the work
load at Microsoft is very pressure but there are still many people wish to work at
Microsoft. Because the salary they pay is high, $87,965 for normal employees and
much higher for managers, engineers or directors. They all have a regular salary over
$100,000 each person (Salary List, 2011). Theory Y is about trust. Both Microsoft and
FedEx have flat structure; authorities are given through the chain. Therefore, they must
trust the workers. It creates not only the trust of managers in workers, but also the trust
of workers in managers. This theory helps to build a strong relationship among workers
and managers and then it leads to a strong organization. It is obviously that Microsoft
and FedEx are both strong in structure, culture and financial.

2.2.2 Scientific management

FedEx doesn't apply this theory in its management. Because based on the theory, the
application of this approach was to break each job down into its smallest and simplest
component parts or "motions" (BPP, 2004). Although the theory improves productivity, it
creates de-humanity in the organization. Moreover, everyone at FedEx is smart and
talented. Therefore, it is wastes to hire smart people to tell them just do the same job
day by day. Scientific management doesn't work in an organization that needs
innovation and ideas like FedEx.

2.2.3 Bureaucracy
Under the dominated decade of CEO Steve Ballmer, Microsoft applied this theory in its
management. For this reason, Microsoft was complained that "toxic environment" and
"bad managers" for anyone who want to join the corporation. Current and former
employees in Microsoft were affected seriously by bureaucracy and management of the
company for years (Matt Rosoff, 2011). According an article, employees in Microsoft
"were more concerned with impressing bosses than creating things" (Rebecca
Greenfield, 2012). They have no incentive to innovate. Nothing has changed at all since
the departure of former CEO Bill Gates. It seems to be Steve Ballmer applied an
inefficient management system. All things have not worked out.

2.3 Evaluate the different approaches to

management used by different
organisations
2.3.1 Human relation approach
Both Microsoft and FedEx use this management approach to manage their
organization. As analyzed above, Microsoft cares about its employees in a wrong way.
Steve Ballmer applied a management system which damage people's creativity, making
them to be bored with their work. Now the dominant tech company belongs to Apple.
For FedEx, they care about their employees in a different way. They give employees
passion and convenient facilities that allows workers to be more develop. Both Microsoft
and FedEx know that how workers feel affects how well they work. However, this
method is about what workers think, doesn't matter how the leader thinks about the
workers. It is matter that the leader can create an image in the workers' mind that they
are what the leader wants them to believe they are.

2.3.2 The contingency approach

"It all depends" is what we can define this theory. Managers of both Microsoft and
FedEx have find out what is the suitable way to manage, not to find out what is the one
right way to manage. This is considered the new management way. Microsoft and
FedEx are the new organizations: everything is international, everything is new,
everything is faster and everything is turbulent (BPP, 2004). This managing method fits
these two organizations because organizations change all the time.
This method worked very well for FedEx as the leader of FedEx lead the company
through the economic crisis in 2008 to survive (The New York Times, 2012)
In total, contingency approach is the correct choice for their management.

CONCLUSION
How an organization achieves its goals and become successful is the managers and
leader's concern. Therefore, leaders and managers should build good relationship with
their subordinates as well as good organizational structure, culture and good leadership
style.

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