MICROSOFT CORPORATION

Microsoft, founded by Bill Gates and Paul Allen on April 4, 1975, is the world's largest
software company that has been operating for about 46 years. The company has made a
significant impact in the world's technological advancements. However, despite of the
company's success, it also experienced poor performance due to the ineffective and inefficient
management of its operations, as well as its employees which was described as the company's
lost decade. Vanity Fair contributing editor Kurt Eichenwald blamed the company's use of
stack-ranking system to evaluate its employees' performance and its too much focus on
Windows and Office.

STACK-RANKING SYSTEM
Through this performance evaluation technique, each business unit's management team
reviews its employees' performance and ranks them according to their performance. Such
method has the objective of pushing the company's employees to perform exceptionally either
to be considered as top/good performer, or to avoid being evaluated as poor performance.
However, according to the company's former employees, such performance evaluation method
leads to employees competing with each other to gain good evaluation rather than to meet the
company's overall objectives. As per Eichenwald's interview with the former and current
Microsoft employees, this evaluation method has been the most destructive process in the
company. The following are the are the results of stack-ranking system which leads to negative
effects on the company's overall performance:
A. Lack of collaboration between employees.
B. Incompatible work outputs of employees.
C. Ineffective communication between employees.
D. Inefficient business operations.
E. Unhealthy working environment.

MICROSOFT'S LOYALTY TO WINDOWS AND OFFICE

Additionally, Kurt Eichenwaid blamed the company's too much focus on Windows and
Office as one of the main factors that led to the company's lost decade. Such obsession in
Windows and Office hindered the company from launching and innovating other products and
services. In fact, the Microsoft's former executive stated that the company's loyalty to Windows
and Office has prevented the company from adapting to new and emerging technologies which
can be useful in developing and creating other products and services that can significantly
contribute to the company's success in the industry.

WHAT WERE THE RELEVANT ACTIONS OF THE COMPANY IN ORDER TO ELIMINATE

OR REDUCE THE NEGATIVE EFFECTS OF SUCH ISSUES IN THE OVERALL
PERFORMANCE OF THE COMPANY?
A. The company's stack-ranking system is now being eliminated.
  The company will develop a new approach performance evaluation and development
that aims to promote teamwork, collaboration, and communication between
employees.
 The new approach will provide more emphasis on employee growth.
 Ranking of employees will be eliminated in order to avoid competition within the
organization.
 Microsoft HR Chief Lisa BrummeL issued a memo which provides the following key
points:
 More emphasis on teamwork and collaboration.
 More emphasis on employee growth and development.
 No more curve.
 No more ratings.

B. The company plans for massive company-wide reorganization.

 The company will shift to creating and developing new devices and services.
 The company will take new opportunities as they adapt to new form of technologies
and consumer demands.
 The company will prove itself that it can deliver premium hardware experiences to its
consumers.
 Creation of new structures that would create four separate divisions which includes:
 Enterprise Business.
 Hardware.
 Applications and Services.
 Operating Systems.