Organizing function in management

Organizing Function of Management at Microsoft

The management teams at Microsoft concentrate on how to gain the greatest levels of productivity and profitability from the resources they have, as many are shareholders in the corporation. The role of stock options and equity ownership, which is commonplace in Microsoft management, serves as a powerful motivator to continually monitor how resources and technology are used (Melkman, 2000). In the context of management functions, control is considered to be one of the most critically important to Microsoft's continued success. The control and efficient use of knowledge and technology are essential to the Microsoft business model being successful in generating new products and services (Melkman, 2000).

In assessing the control function of management in Microsoft, the organizational structure and culture need to first be evaluated. Microsoft is managed as a series of small, relatively autonomous groups, each focusing on their specific part of a project. This type of organizational structure with a span of control for managers of not more than eight employees has been proven to be instrumental in making knowledge transfer and the use of technology effective (Melkman, 2000). The use of smaller teams organizationally also promotes a higher level of knowledge and technology control and alignment to goals that lead to innovative new concepts being developed over time as well (Miles, 2007). One of the key factors in Microsoft's success continues to be their reliance on small teams creating the potential for higher levels of innovation and new product ideas over time.

As product lifecycles continually get more compressed in their most competitive and core markets, Microsoft is faced with the challenge of making their development teams as efficient and productive as possible. The reliance on smaller teams also makes each team member accountable for their performance and how they manage their time to the goals of the overall group (Melkman, 2000). This acts as an internal control on the many action items and projects being worked on at any given point in time. The control of knowledge and technology within the Microsoft work teams then is not driven by a transactional leadership style but more one that focuses on transformational leadership styles. While the managers at Microsoft certainly have the authority to provide immediate rewards for excellent performance, there is seldom a transaction-based leadership mindset used for control of groups. Instead, as managers and many senior technical staff members have stock options and vested stock grants the transformational leadership approach of seeing how their specific project can help to keep the company has proven to be far more effective.