The Internal and External Environment

The Internal and External Environment of a Business The intent of this paper is to analyze the internal and external environment of Microsoft Corporation who is a global leader in the development and marketing of consumer, personal productivity, small business and enterprise software applications and employs 71,000 professional worldwide. The company focuses on the development, manufacturing, and support of a very wide variety of devices for computing according to their DataMonitor Profile (2006). As a result of these many businesses, Microsoft contends with many political, economic, technological, competitive, supply chain and regulatory issues. The internal environment comprises of the company founders, employees, stock holders, physical environment and broader culture are equally as complex. The major external environmental issues the company is dealing with today include increasingly strong competition in its operating systems division from open source operating system vendors including Red Hat and other Linux distributors, and the brain drain to Google in the area of search according to Greene (2006). In addition there are the many legal challenges the company has operating in Europe, where unbundling of operating system features and the delivery of source code documentation are a major requirement. In addition to these factors, Microsoft also has to contend with challenges to its core business of personal productivity applications from a wide variety of competitors. Internally, Microsoft's environment is hard-driving, very focused on development schedules, and has a definite intensity of focus. The internal environment is dominated by engineering expertise and depth of insight over and above work-life balance, an issue the company has struggled with for years. In addition the internal environment is dominated by managers who have been promoted based on their technical prowess and not necessarily their management ability. This makes for a tense yet very focused internal culture where accomplishment is everything. As a result the company's internal environment is not necessarily marked by a work-life balance; instead it is a culture that rewards technical insight, intelligence and accomplishment.