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1.

Explain the different types and purposes of public, private and voluntary
organisations. Explain the size, scope and legal structures of these different
types of organisations.

Business: it consists of organized efforts of individuals that work together to do


trade, industrial and professional activities. Each business needs consumers and
investment, because in order to make a profit, the production must be marketed on a
consistent basis. Businesses can be various types private organizations, public
organizations or voluntary organizations. (mahajan, 2014)

Different types of organizations and its purposes:

Public organization:

A public organization is an entity that is run by the state and is controlled by


the government. it takes care of matters that are informed to the government by
public, through voting, protests, or debate. The government is responsible to
complete the demands of the public because it is their duty as elected
representatives and officials. Anyone can work for a public organization. It
requires same skill and experiences that anyone would need to apply for a private
sector job. these organizations pay tax. Their work is monitored efficiently in
order to ensure maximum productivity and high standards. However, these
organisations are usually non-profit organizations that provide a decent service
for taxpayers. (Sheasby, n.d.)

Private Organizations:
The private sector is that part of the economic structure that is managed by
individuals and businesses instead of the government. These companies mostly run
for profit. the private sector is larger, where the government places comparatively
little limits on businesses. Such companies may issue shares and have investors,
but their shares do not deal with stock offerings and are not provided by an
initial public offer. (techtarget, 2013)

Voluntary Organizations:
The third category of different organizations is known as the voluntary sector. it
is often referred to as non-profit organizations, NGOs, organizations from the
third sector, or organizations from civil society. Each of these words represents a
somewhat different emphasis. The definition emphasizes the non-profit component of
voluntary organizations, but does not differentiate between other organizations,
such as state run or government organizations, that may not be pursuing profit.
Likewise, NGOs may generally refer to both private profit organizations and
voluntary organizations, although the term is usually reserved for large
international non-profit organizations. The word "voluntary," as the name implies,
emphasizes the fact that people create such organizations voluntarily and are thus
autonomous, independent of both government and the market. The concept is often
used to refer to the role of volunteers in non-profit organizations. (sociology,
n.d.)

Sizes of Business

Small Sized Business:


If a business is small in terms of its employees, volume of sales and structure of
the organization then it is known as small sized business. A small business varies
from country to country, but for different purposes, the United States approaches
this issue in different ways. The U.S. Small Business Administration, or SBA,
describes a small business as a business with less than 500 employees, but the size
of the company can also be measured in terms of sales volume and structure.
(Infosino, n.d.)

Medium Sized Business:


Medium-sized companies have certain specifications to which they belong they have
about 100-999 employees and can generate between $10 million to $1 billion annually
on average. Being a medium-sized company would mean having more advanced tools than
a small business, having able to pitch consistency to working conditions to boost
employees, and being able to provide autonomy as the chain of command may be
shorter, unlike large businesses, and being able to revert more rapidly to market
shifts. Then again, we won't be able to compare work conditions or business finance
if lager firms are smaller. (accaglobal, n.d.)

Large Sized Business:


Large enterprises are those employing 500 or more employees in most mining and
manufacturing sectors or those not making products with an average annual income of
$7 million. In some sectors, there are exceptions to these requirements. The size
of a company can also be measured by foreign and domestic affiliations. An alliance
applies to a case where one corporation has power or control over another company
or where a third party has leverage over two separate companies. A group has over
50 percent or a large majority in voting shares in a large corporation. (Richards-
Gustafson, 2019)

Scope of Businesses:

Manufacturing Business:
Any organization that uses components, parts and raw materials to produce a
finished product is called manufacturing business or organization.th finished
products are either sold to consumers or for resell purposes to other companies.
This business comprises of machines, robots, computers, and humans that all work in
a specific manner to create a product. Manufacturing plants use an assembly line,
which is a system in which an object is transferred in series from one workstation
to the next. With less manual labour, the finished good can be brought together
quicker by pushing the product down the assembly line. Some industries also call
manufacturing business as Fabrications. (Hill, n.d.)

Merchandising Business:
The dealer sells a product in a merchandising sales contract and passes to the
buyer the legal ownership of the products. The basis for reporting the transaction
is a legal document called an invoice. Merchandising companies are buying ready-
to-sell products and then marketing them to customers. Merchandising businesses
include car dealerships, clothing stores, and supermarkets, all of which earn
revenue through the sale of goods to consumers. (courses.lumenlearning, n.d.)

Service Business:
Service businesses are those delivering commercial activity and project efficiency.
The product is not a tangible product in these companies, but rather an operation
that benefits a third party in different areas. This role is directed at assisting,
among others, a company or person in matters such as consulting finance, shipping,
cooking, hospitality traveling and maintenance. (myaccountingcourse, n.d.)

Hybrid Business:
The term "hybrid business" may refer to a company that not only makes use of
conventional distribution methods, but also uses internet technology to quickly
expand its market and make the product or service more available. Improved
flexibility for completing payments is one of the advantages that hybrid companies
offer their customers. Because such companies have already set up an online payment
system, the consumer is no longer required to travel a long distance or go through
a lengthy process to make transactions. It helps the consumer while also saving the
company on salaries and other related expenses. With the advances in technology
over the past few decades, hybrid companies have grown quite quickly. Today, e-
commerce is an important part of the activities of many large enterprises, taking
the industry to the homes of people. As such, in this context, more and more
conventional companies are becoming hybrid firms. In addition, innovation has also
made online purchases safer, growing consumer confidence and improving online
business. Therefore, hybrid companies are able to expand the scope of their
operations and grow to international markets more rapidly than ever.
(businesspundit, n.d.)

Organizational Structures of Business:

Hierarchical:
A hierarchical structure follows a pyramid's form. Apart from one, normally the
CEO, the employee in the company is subordinate to someone else within the
organization. The structure consists of multiple entities that fall into the
employee-level floor, located at the bottom of the pyramid. Employees identify
established leadership levels within the organization; authority and accountability
levels are apparent. Promotion programs inspire workers to perform well.
Hierarchical systems encourage the production as specialists of employees.
Employees may expand their focus area and become specialists in specific functions.
Employees are committed to their agencies and are working for their area's best
interest. Communication between departments appears to be less successful than in
flat organizations. Rivalry among departments can be inflamed as each division
takes decisions that benefit rather than the company, its own interests. Greater
bureaucracy also hinders the pace of change for an organization. It may take longer
to respond to customers. Wages of several management levels increase the cost of an
enterprise. (Meehan, 2019)

Flat:
A flat organization refers to a structure of a company with little or no management
levels between the employees of management and staff level. The flat organization,
though encouraging their increased participation in the decision - making process,
supervises workers less. This raises the level of accountability of the workers in
the company. This eliminates unnecessary management layers and increases inter-
employee teamwork and interaction speed. Few - management rates promote an easier
process of decision-making among employees. Eliminating middle management salaries
lowers the operating expenses of an enterprise. Employees frequently lack a clear
supervisor to report to, creating confusion between management and potential power
struggles. Flat companies tend to generalize a bit but no experts. The employees '
specific job role may not be obvious. Flat structure can restrict an organization's
long-term growth; management can agree on new opportunities to sustain the
structure. Larger organizations, unless the organization splits into smaller, more
manageable entities, struggle to adapt the flat structure. (Meehan, 2019)

Matrix:
A matrix organizational structure is a structure of a corporation in which
reporting relationships are defined as a grid or matrix rather than in the
conventional hierarchy. In other words, workers have dual roles of responsibility-
generally to a functional supervisor as well as a product manager. One of the most
complex accounting mechanisms that a corporation can adopt is an organizational
matrix model. (Woods, 2018)

holacracy:
Holacracy -powered organizations at all levels focus on mission: organizational
intent, group purpose, and individual purpose are all clear and coordinated. In a
holacracy, instead of hiring a person to fill a pre-defined role (such as that
described in a job description), people choose to take on one or more positions at
any given time and have flexibility to move between departments and roles if they
have expertise or ideas that would be helpful to the company. (Hargrave, 2019)
Growing member of the team focuses the resources in accordance with the wider goal,
maximizing the full potential of your organization. Each serve as a sensor for the
company and has ways to make organizational changes to their challenges and
opportunities. Smaller, gradual decisions replace large-scale re-orgs to help the
company to adapt to a changing environment quickly and retain flexibility as they
expand. Static job descriptions and organizational names are visible and changing
fluid roles and responsibilities as the company evolves. This transparency allows
companies to grow as they streamline their work and retain consistent ownership.
(holacracy, n.d.)

Legal Structures of Business.

Sole Proprietorship:
This is the largest corporate entity in the world. The company has only one
shareholder, as the name implies. The manager may choose to use his or her own name
or "d / b / a," meaning "business as." The criteria are limited�just a number of
social security and the permits and licenses required. Small businesses often have
a top choice because they are so inexpensive to start up. Benefits include the fact
that profit is paid as a corporation once, rather than twice, and then as a private
source of income. Sole ownerships are not subject to as much interference and
taxation from the state as some other types of business. One important point to be
aware of is that there is no difference between the person and the company under
the law. This can sometimes undermine the personal assets of the owner when
financial problems happen to the company. In the opposite, the same is true if the
business owner faces challenges such as divorce, sickness, or some other personal
difficulty, the business could be negatively affected. It takes a smart person to
run this type of business successfully. We are 100% responsible for all decision-
making and capital raising. There are also some incentives for workers that cannot
be completely excluded from the company's profits. (jones, 2013)

Partnership:
This type of training occurs when two or more entities form a written agreement for
joint operation of a company. Partnerships between other companies and between one
or more companies and one or more individuals can also be created. It's also quite
simple and inexpensive to make this choice. Partnerships, however, have their own
special set of issues of tax and liability. That type of business, of course, makes
it possible to share obligations when it comes to raising money, making important
decisions and managing operations. On the flip side, no matter how big or small,
unresolved issues can threaten the company when conflicts arise. (jones, 2013)

Corporation:
The most versatile form of organization is set up by going through the process
known as "incorporation." Corporations are chartered by the government and have
several legal privileges. Because the company has separate legal status, its
members have limited liability. In this way, the owners are shielded from personal
legal liability if the company is sued. Corporations, however, face a lot of
scrutiny and are held accountable at a higher level for their acts. (jones, 2013)

Limited Liability Company (L.L.C):


Such types of companies have many of the same built-in benefits as firms. LLCs may
be owned by a number of organizations, including individuals, trusts, other LLCs,
and companies, along with their limited liability. If set up in compliance with the
required rules, an LLC can be treated as a corporation, which is a benefit.
Nevertheless, the formation and operation of an LLC requires quite a bit of
paperwork to ensure it is not treated as a company. Although all four of these
common business organizations are fairly straight forward, there are slight
differences concerning their establishment and activity that may vary from state to
state. (jones, 2013)

2. Analyze how the structure, size and scope of these different organisations link
to their business objectives, their product and the services they offer.

Public organizations.
Samsung is a public organization. Samsung is a manufacturing organization. Samsung
is a south Korean organization. Samsung belong to the large sized organization.
Samsung is one of the largest producer of electronic devices in the world. Samsung
specializes in different products like mobile phones, mobile accessories, TV�s,
washing machines and many more. Samsung has become one of the most famous and
powerful technology producer and produces about a 5th of South Korea�s total
exports. (Bondarenko, n.d.) Since the first mentions of the Galaxy Note 7 phones
popping up in August, the bad news just keeps rolling in. Not only has the
corporation been forced to recall millions of Note 7 smartphones around the globe,
it also has to suffer the PR nightmare that travelers around the world are told not
to toggle on their Note 7 apps while on board. To make things worse, there are now
many rumors of AFTER fire-catching devices being recalled, which caused Samsung to
stop producing Galaxy Note 7 and could well lead to a second recall. Not quite so.
Not only does Samsung's share price increase by nearly 10 percent after Samsung
launched Galaxy Note 7 in early August, it even reached an all-time high on Friday
after the company provided positive guidance on its third quarter earnings. First
of all, the recall impacts only a tiny percentage of Samsung's large phone market.
Second and more critically, in more than just electronics, Samsung Electronics is a
world-leading company: as our chart shows, the corporation earns hundreds of
billions of dollars in revenue, selling everything from electronics to display
panels. (Richter, 2016)

Private organization
Emaar Properties, the biggest builder in the UAE, reported Dh421 million (US$ 115
million) net profits for the first three months of the year, down 45 per cent from
last year's same period. A decline in home and office distribution in the world's
tallest building has led to a 45 per cent decrease in first-quarter earnings for
Emaar Properties, the biggest builder in the country. The company reported a net
profit of Dh421 million (US$ 114.6 million) for the first three months of the year,
but suffered a decline in revenue due to a lower delivery of homes and offices and
a greater loss from associated companies in the quarter. Emaar said that it handed
over 270 units in Burj Khalifa and other sites, similar to more than 1,300 in the
first three months of last year. Emaar's shares slipped on the financial disclosure
yesterday by 1.4 percent, closing at Dh3.44. Over the year, the stocks were down
3.1%. (Hope, 2011)

Voluntary organization
Emirates Red Crescent is a charitable aid organization that promotes official
governments in times of war and peace. It began on January 31, 1983 and was
globally recognized as a member of the Red Cross and Red Crescent Societies
International Federation in 1986. (rcuae.com, n.d.) The federation's main objective
is to promote the relief operations of national Red Cross and Red Crescent
organizations in non-conflict areas, while concentrating its attention on survivors
of natural and man-made disasters such as drought and hurricanes. The Union further
supports and assists nations in the creation of Red Cross and Red Crescent
societies. (Britannica.com, n.d.)

3.Introduce your chosen organisation, by giving out the background details of the
organisation, the products and services they supply, the size and scope of the
organisation, their vision, mission and business objectives, the organisational and
legal structure, including information about their stakeholders using the business
model canvas.

Company profile:

Microsoft:

An Overview of Microsoft

Established in 1975, Microsoft now operates in over 190 countries. Besides being
the Windows OS maker, it is a well-known and leading player in the cloud.
Competition has been growing rapidly in the technology industry in recent years,
and apart from Google and Apple, there are several cloud players including Amazon,
IBM and Oracle whose products and services compete with Microsoft's. Its revenue in
2017 increased to $90 billion from $85.3 billion in 2016. Improved cloud business
revenue as well as increasing product and service scope are important reasons that
have helped Microsoft achieve growth in recent years. (Pratap, 2018). It dominated
the software market, offering software and hardware products, operating systems,
apps and devices, cloud computing, and suites for office software. Microsoft
Corporation is currently led by Satya Nadella. The company is based in Redmond,
Washington, USA. (Parker, 2019)

Microsoft is probably the most successful international American computer company


in the world. For more than 40 years, it has been at the forefront of technological
progress and has made significant contributions to the technology industry.
(Parker, 2019)

Microsoft�s Mission Statement & Vision Statement

The success of Microsoft Corporation as a global company of computer technology is


based on fulfilling its corporate mission and statements of vision. The declaration
of vision drives the company's progress towards a planned future environment. The
business vision for Microsoft defines what the corporation can do for personal and
institutional clients. On the other hand, the mission statement of an organization
provides the overall strategic approach to growing the business and fulfilling the
corporate goal. (GREGORY, 2019)

Microsoft�s Corporate Mission Statement:

The corporate mission of Microsoft is "to empower every person and organization on
the planet to achieve more." This statement of mission shows that the business is
about empowering people and organizations. Such empowerment is achieved by using
the computing products of the company. In Microsoft's corporate mission statement,
the following components are important:

� Empowerment
� Every person and every organization on the planet
� To achieve more

The corporate mission's first aspect reveals what the services from Microsoft can
do for consumers. Such empowerment, for example, can take the form of quick data
processing in offices and improved access to information in homes. The second
component of the company's mission statement describes the target market, including
both people and organizations around the world in this situation. The strategic
mission of the organization further states that in terms of achieving more, its
information engineering and software products support consumers. The corporate
mission statement of Microsoft is identical to the statement of vision of the
organization, provided that both statements contribute to empowerment. The company
mission statement, however, places greater emphasis on the realistic benefit of
achieving more. (GREGORY, 2019)

Microsoft�s Corporate Vision Statement

The corporate vision of Microsoft is to "to help people and businesses throughout
the world realize their full potential." This statement of vision shows that the
company presents its business and computing products as tools that people, and
business organizations can use to develop. The following components are found in
Microsoft's corporate vision statement:

� People and businesses throughout the world


� Help to realize
� Full potential

The first element of the declaration of vision partially determines the target
market of Microsoft, which is the global market. The firm frequently markets its
services to companies rather than offering software products only to individual
customers. The second component of the corporate mission document by Microsoft
demonstrates what the company plans to do. The company, for example, aims to
provide products that help customers achieve their full potential specified in the
corporate vision's third component. Therefore, the business strategy of Microsoft
describes the target market, what the software services of the organization are
doing, and what consumers will accomplish through these products. (GREGORY, 2019)

Microsoft business objectives:

� Establish and maintain Microsoft owners ' accountability by properly


distributing rights and responsibilities among Microsoft Board members, managers
and shareholders.
� Provide a structure through which management and board set goals and
performance monitoring.
� Strengthen and protect the corporate integrity culture and responsible
business practices.
� Encourage resource efficiency and require accountability for resource
management. (microsoft, n.d.)

Microsoft organizational structure

The corporate structure of a company refers to the organization's anatomy and


arrangement and its components. The organizational structure emphasizes the
importance of company efficiency in the case of Microsoft. The organizational
structure of Microsoft Corporation allows the company to grow, especially after the
structural change of the company implemented in 2015. (lombardo, 2018)

Microsoft's initial organizational structure was functional.With only 11 employees,


the company started and continued to expand over the years.Microsoft now has a
divisional organisation, starting in 2010. That division or category of items
focuses on a particular line of goods and services. Each group has its own R&D,
Sales and Customer Service Staff (Research and Development). (Berzins, 2013)

Figure 1 original structure of Microsoft in the


beginning

Microsoft's new divisional organization model is the result of this consolidation


effort.

Figure 2 current structure


of Microsoft

Microsoft's new corporate model transformation and switching to divisional


organizational structure gives the company the following advantages:

First, the Heads of Engineering Groups report directly to CEO Satya Nadella under
the new organizational structure with positive implications for new product
development initiatives and potential for innovation. This is especially important
if the marketplace is to be able to introduce new products and services in the
short term. In addition, as illustrated in the figure above, a clear distinction
between engineering groups and business functions is an indication of the
technology giant's focus on business directions within engineering groups such as
cloud and artificial intelligence. (Dudovskiy, 2019)

Second, corporate transformation effectively removes bureaucracy of company


processes and procedures, increasing the business ' ability to respond to
developments in the current marketplace. (Dudovskiy, 2019)

third, the program resulted in the reduction of nearly 7,400 jobs, thus saving
considerable amounts of financial resources that can be channeled into new product
development and, in many other ways, increasing the company's productivity.
(Dudovskiy, 2019)

Microsoft stakeholders and business model canvas

In the case of Microsoft, stakeholders include individuals and groups with


significant interest in the performance of the company and interest in the impact
of its computing products. As a major player on the global market, the organization
should develop an ongoing corporate responsibility policy to ensure that the
related strategies serve the needs of investors and improve the product and
corporate image. (smithson, 2017)

The following are the major stakeholder groups that are significant in the business
of Microsoft, arranged in accordance with the company's CSR strategy
prioritization:

� Customers (highest priority)


� Employees
� Communities
� Investors
� Governments

Model canvas:

Microsoft is making money by selling to millions of consumers operating systems and


office software. It also markets the same services to big companies that allow both
sets of customers to use computers cheaply and efficiently to perform thousands of
daily tasks. (Oakley, 2018)

� Customer segments:

mass market
individuals
enterprises
developers
IT admins

� key partners:

OEM
manufacturers
suppliers
Foxconn
telco companies
wholesalers
retailers
value-added resellers
distribution partners
technology alliances
Microsoft partner network
acquisitions (LinkedIn, skype, Nokia devices and services, yammer, Mojang,
Hexadite, etc.)
Linux foundation
Open Networking Foundation
academic
Government

� key activities:

product design and development


R&D build
software development
release management
change management
licensing
customer support
operations
deployments
infrastructure management
quality control
hardware and electronic manufacturing
sales
marketing

� key resources:

Microsoft is a business empire without equal that its products are used in every
computer on the planet
Microsoft has become a symbol of all that is great about the information age
leadership from Satya Nadella
Bill gates a technology advisor
software developers
sales force
experienced personnel
technology
IT infrastructure
data centers and other networking areas
intellectual property
talent and corporate culture
innovation
determination
Microsoft was the third largest maker of mobile phones selling 33million units
AI and research division
Bing web search engine

� cost structure:

software development
hardware manufacturing
acquisition and investment
marketing and sales
R&D
Staff
customer service
new projects and development
product roadmap
data centers
IT operations and maintenance
taxes
� value proposition:

brand
to increase productivity at the highest level
world�s largest software maker of windows the flagship operating system
one of the worlds most valued companies
personal computing and operating system
intelligent cloud systems
productivity and business services
it also produces wide range of other consumer and enterprise software for desktops
and servers
computer hardware
consumer electronics

� customer relationships:

trust
quality
performance
differentiation
reliability
automation
dedicated sales for large accounts
customer assistance
certifications
community
partner program
same side and cross side network effects
benefits to each group exhibit demand economies of scale

� channels:

internet blogs
company websites
flagship stores
Microsoft stores
Microsoft azure marketplace
global sales and support teams
multiproduct sales force
retailers
OEM
ISPs
blogging
events
PR
Microsoft connects
future decoded is a business networking event held every year by Microsoft that
allows business partners to share their views
technical reference for developers and articles for various Microsoft magazines

� revenue streams:

subscriptions
revenue from SaaS services
license fee
ad revenues
hardware sales
expressed as percentage: 28% office, 22% windows server and azure, 18% other, 11%
XBOX,9%windows,7% Ads and 5 % surface. (vizology, n.d.)

4.Using the organizational structure chart of the chosen organization, explain the
relationship between its different functions and how do they link to the
organizational objectives. Analyze the advantages and disadvantages of
interrelationships between different organizational functions in your chosen
organization, and the impact it is having on the organizational structure.

Microsoft organizational structure

Organizational functions of Microsoft:

Specialization.

Every worker is appointed to perform different duties and satisfy customer needs.
This is
achieved by tossing variety, each is allocated to different tasks to take orders,
manage
money or checks, and one is assigned to execute the requested job. (Kenton, 2019)

Advantages.
� Risk reduction: once an employee starts performing the same task on a
daily basis, it becomes one of the habits of an employee. The employee
becomes
used to procedure of the task very well. This makes the work easier and
reduces
chances of risk.
� Accurate time management: once an employee performs the task daily,
he/she understands how much time is taken for the task.

Disadvantages.
� Complacency: repeated tasks run the risk of value, and repetition also
contributes to complacency, so much so that errors will happen. The
brain and
the body become immersed in new tasks and habits, requiring a focused
concentration.
� Isolation: If workers are trained in just one dimension of the target of the
business, they may not feel connected to the whole system, to say
nothing of
feeling distant with their colleagues. The intrinsic satisfaction comes
from an
entire procedure being known.

Span of control.
Control span Leadership time commonly known as time span indicates how many
subordinates a superior manages. It is one of the basic functions of the
organization.
Simple meaning is - how many people report directly to one manager. The central
concern in leadership is to assess how many people a director may successfully
supervise.
The range of management is also referred to as the extent of power, the scope of
jurisdiction, the scope of oversight and the scope of obligation. Management period
refers
to the number of employees, a manger may handle effectively. The number of
subordinates reporting directly to the manager is known as span. (Studymode, n.d.)
Advantages.
� In Microsoft, the degree of command increases the level of interaction
between
the supervisor and the team members. Increased contact improves the ability to
effectively supervise the activities carried out by employees, which may increase
productivity.
� The breadth of command increases interaction between the manager and the
members of the team. The team members can easily access assistance from the
manager. Improved collaboration frequently tends to speed up decision-making
and problem-solving.

Disadvantages.
� Depending on the number of employees in the organization, the period of
command may be expensive to enforce.
� Command period will impair team members ' ability to exercise flexibility
in
decision-making and problem-solving processes.

Departmentalization

At Microsoft, customer departmentalization allows the company to understand the


customers better and respond to their needs. Microsoft is organized by four
customer
segments so are software developers, small businesses, and large corporations.
Products
and services the company designs for the consumers include Bing, Windows, Windows
Phone 7, Xbox360, and Microsoft retail stores, which give company direct contact
with
consumers. The basis by which jobs are grouped together is Functional, Product,
Geographical, Process and Customer.

� Functional: grouping jobs by functions performed.


� Product: grouping jobs by product line.
� Geographical: grouping jobs based on territory or geography.
� Process: grouping jobs based on product or customer flow.
� Customer: grouping jobs by type of customer and needs. (Marksberry,
2012)

Advantages.
� The organization will gain economies of scale by centralizing all the
resources it
needs by finding different specialists in this region.
� There is strong teamwork within the organization of Microsoft, and top
management can effectively coordinate and monitor various activities within
divisions.

Disadvantages.
� It causes a lack of communication between the different departments.
� Individual employees may start identifying with their department and their
goals
rather than the organization�s goals.

Centralization and Decentralization.


The degree to which decision making is concentrated at a single point in the
organization.
The top managers make all the decisions and lower level employees simply carry out
the
orders, it is known as centralization.
Organizations in which decision making is pushed down to the managers who are
closer
to the lower level are known as decentralization. (Marksberry, 2012)

Advantages of centralization
� Minimizing administrative costs and expenses.
� Making a major difference to the greater stability.
� Responsibilities and tasks are well established.

Disadvantages of centralization
� Attentions and assistance may not be matched in each agency or region.
� Delayed job data the lead in government inefficiency.
� Differences in economies and knowledge services between the center and
other locations were important.

Advantages of decentralization.
� Cutting down the top-level overload.
� Offers diversification.
� Quick decision-making.
� It promotes motivation.

Formalization.
The degree to which jobs within the organization are standardized and the extent to
which
employee behavior is guided by rules and procedures. There are highly formalized
jobs
offer little discretion over what is to be done. Low formalization means fewer
constraints
on how employees do their work. (Marksberry, 2012)

Advantages.
� Makes Optimal use of capital that contributes to excellent performance and
� creativity.
� It has direct control over its top management.

Disadvantages.
� Lack of product mobility these results in expensive implementation.
(Marksberry, 2012)

5. Identify the positive and negative impacts the macro environment has upon your
chosen company�s business operations, by giving out suitable examples. Apply the
PESTLE model to support the detailed analysis of the macro environmental impact.

Macro environment: A macro environment is the situation that occurs in the economy
as a whole, not just in a industry or region in general. The macro climate
generally includes developments in GDP, unemployment, wages, expenditure, and
monetary and fiscal policy. In comparison to the success of an individual business
sector, the economic climate is closely linked to the general business cycle.
(CHAPPELOW, 2019) To analyze the macro environment of a company, PESTLE analysis is
done.

These external factors, in Microsoft's case, reflect the computer hardware and
software market performance. Such factors are the issues relevant to the business
of the company. By including these problems, as defined by the PESTEL / PESTLE
analysis Microsoft will build effective approaches to establish efficiency and
sustainability for companies. (FERGUSON, 2017)
Figure 4 pestle analysis of
Microsoft in 2011
PESTLE analysis

Political: This area of the PESTEL / PESTLE method of research deals with the
impact of governments on the computer hardware and software business ' remote and
macro environment. The following global external factors are important in strategic
decision-making for Microsoft:

� political stability in most countries (opportunity)


� Increasing government funding for technology (opportunity)
� Increasing international trade agreements (opportunity & threat)

Most markets around the world are creating opportunities for Microsoft to increase
its investments and corresponding performance through political stability. For
example, to generate a similar increase in revenue, the organization should boost
its sales and marketing resources in Europe. On the other hand, Microsoft's growing
government support for automation presents opportunities to increase its sales of
computer technology through government clients. This external factor is important,
considering large-scale transactions affecting government agencies. Increasing
international trade agreements often establish a centralized and macro-environment
that facilitates a rise in the global sales of Microsoft. The company benefits from
easier business deals in overseas markets through this external factor. Rising
international trade agreements, however, are also a threat to Microsoft. In these
deals, foreign firms through developed countries such as the United States could
increase their productivity. (FERGUSON, 2017)

Economic: In this field of the PESTEL / PESTLE research system, the market impact
of the economic situation on the distant and macro-environment are considered.
Microsoft must include the following global economic factors in computer hardware
and technology business strategies:

� substantial economic prosperity of most developed countries (opportunity)


� Fast development in developing countries (opportunity)
� The disposable middle-class income (opportunity).

Microsoft benefits from the large majority of developed countries ' economic
stability. For example, in these markets, the company can expect stable
performance. For high-growth developing countries, Microsoft also has potential
sales profit increases. This potential is the result of steady growth in the global
sales of Microsoft. In contrast, the social external factor of the overall global
increase in discretionary middle-class wealth provides the company's prospects for
higher income. This condition is so because Microsoft is one of the most important
sources of revenue for middle-class customers. The organization can therefore take
advantage of growth opportunities in its remote and macro-environment. (FERGUSON,
2017)

Social: This area of the PESTEL / PESTLE Analysis model looks at how the social
situation affects the remote or macro environment of Microsoft, particularly with
regard to the behaviors and expectations of customers. The following external
socio-cultural factors influence Microsoft on the computer technology market:

� stable attitudes towards leisure (opportunity)


� Increasing cultural diversity (opportunity & threat)
� Stable demand for high-quality customer service (opportunity)

Stable views towards leisure give Microsoft opportunities to develop services that
can satisfy the leisure needs of consumers. For example, for this purpose, the
company can increase its investment in innovative computer gaming products.
Increasing cultural diversity in terms of product-customer mismatch in the remote
or macro-environment is also a potential threat to Microsoft. For example, customer
satisfaction could be decreased as only the increasing social communities were
fulfilled by the goods of the business. Nonetheless, in order to address this
problem, Microsoft has an opportunity to improve its goods and services. (FERGUSON,
2017)

Technological: In this area of the PESTEL / PESTLE analysis model, the effects of
technology on the remote or macro environment of the computer technology industry
are identified. Microsoft needs to integrate the following current technical
considerations in its strategies:

� increasing growth of mobile technology (opportunity & threat)


� Growing online transaction size (opportunity & threat)
� Rising market efficiency (opportunity)

By rapidly innovating its mobile devices, Microsoft Corporation can improve its
performance. This trend is focused on mobile technology's rapid adoption and rising
demand. This new technical element, though, is also a challenge that makes rivalry
against Microsoft harder. More companies in technology could take advantage of this
opportunity to enter the market. On the other hand, the increasing number of online
transactions offers Microsoft the opportunity to develop more services to help
secure online transaction processing. Such an increasing volume of online
transactions, however, challenges the company with a corresponding increase in
cybercrime attacks. In addition, the company has the opportunity to grow through
products that allow companies to automate their processes more (FERGUSON, 2017)

Ecological/environmental: The impact of ecological issues on the environment of the


computer hardware and software industry is considered in this area of the PESTEL /
PESTLE Analysis model.

� Increasing preference for green products (opportunity)


� Increasing focus on business sustainability (opportunity)
� Increasing availability of recyclable materials (opportunity)
� Increasing availability of recyclable materials (opportunity)

Microsoft Corporation has the opportunity to enhance its sustainability standing


based on the growing preference for green products. For example, the company can
develop more environmentally friendly products and increase its business operations
' use of green energy. In addition to this, Microsoft's efforts to improve its
sustainability tackles the potential explicitly focused on societies ' growing
focus on business sustainability. The increasing availability of recyclable
materials is also an external ecological factor that the company can use as a basis
to increase the use of recycled materials in its computer hardware and software and
packaging products. (FERGUSON, 2017)

Legal: In this field of the PESTEL / PESTLE Analysis system, the market importance
of laws and regulations is calculated. The following legal external factors
influence competitive performance in Microsoft's remote and macro environment:

� The restrictions on electronic waste management (opportunity & threat)


� Improving patent laws (opportunity)
� Energy consumption legislation (opportunity)

Increasing restrictions on technological waste management present Microsoft


Corporation with an ability to introduce more efficient recycling and disposal
strategies that enhance brand image. That legitimate external factor, though, is
also a risk that could present additional challenges for the organization in
mitigating its business' environmental impact. On the other hand, by gradually
reducing problems such as computer software theft, changing patent laws accelerate
Microsoft's global growth. The organization also has the opportunity to improve its
products to help consumers minimize their energy consumption through more energy-
efficient computing technology. (FERGUSON, 2017)

Oppurtunities and threats

oppurtunities

�political stability in most countries


�Increasing government funding for technology
�Increasing international trade agreements
�substantial economic prosperity of most developed countries
�Fast development in developing countries
�The disposable middle-class income
�stable attitudes towards leisure
�Increasing cultural diversity
�Stable demand for high-quality customer service
�increasing growth of mobile technology
�Growing online transaction size
�Rising market efficiency
�Increasing preference for green products
�Increasing focus on business sustainability
�Increasing availability of recyclable materials
�Increasing availability of recyclable materials
�The restrictions on electronic waste management
�Improving patent laws
�Energy consumption legislation
threats

�Increasing international trade agreement


�Increasing cultural diversity
�increasing growth of mobile technology
�Growing online transaction size
�The restrictions on electronic waste
management

Porter�s five forces analysis of Microsoft:

Michael Porter created the concept of Five Forces Analysis to identify the external
factors that are important to the business environment of an enterprise. Such
external factors, in the case of Microsoft, are a consequence of other firms '
operations in the computer hardware and software business. (ferguson, 2017)

The intensities of the five forces in Microsoft�s industry environment are as


follows:

� Competitive rivalry or competition (strong force)


� Bargaining power of buyers or customers (moderate force)
� Bargaining power of suppliers (moderate force)
� Threat of substitutes or substitution (weak force)
� Threat of new entrants or new entry (moderate force) (ferguson, 2017)

Competitive rivalry
Although Microsoft is the pioneer of many technologies of personal computers, the
current electronics industry is very competitive. many of the products such as
operating systems and other software are now also being made by other companies
that provide the same level of features that Microsoft does.in this industry they
make huge investments in the R&D facilities in order to be the most innovative.
There is a certain level of customer loyalty however the competitive rivalry is
high for Microsoft. (adamkasi, 2017)

Threat of new entrants


the threat of new entrants is low as the entry barriers are high. designing and
development companies are very expensive. the success takes a lot of times plus
there is a lack of people that have such proprietary knowledge. Existing businesses
have cost advantage and brand loyalty. however, the hardware sector has many new
companies that can grow and capture shares in the market. (adamkasi, 2017)

Bargaining power of suppliers


in this industry the companies don�t have many suppliers as the software is an
intangible product that is developed on their own. the suppliers supply components
like tablets, game console etc. the switching cost of suppliers is low therefore,
they aren�t in a position to bargain or influence price. (adamkasi, 2017)

Bargaining power of buyers or customers


the buyers which make use of software made by Microsoft don�t switch to the other
software as it performs the same functions. switching cost of customers have become
fluent with the software of Microsoft. moving to another software takes time to
adapt thus buyers continue to use them even if Microsoft slightly raises the
prices. but in the case of hardware products the bargaining power of buyers is high
therefore, the bargaining power of buyers is moderate. (adamkasi, 2017)

Threat of substitutes or substitution


the substitutes of software are manual writing and record keeping which have become
obsolete now. the substitutes of hardware products such as tablet is to use a
writing pad, carrying a camera, counter and devices that perform the functions of
tablets which is not practical thus there is no threat of substitution against
Microsoft. (adamkasi, 2017)

6.Conduct an internal and external analysis of your chosen organization to identify


its
strengths and weaknesses. Explain how these strengths and weaknesses interrelate
with
the external macro factors. Apply the SWOT analysis to justify how it can influence
decision making of the internal and external analysis done in your organization.

Microenvironment: Components of the micro-environment are within the organization's


immediate environment. These are the initial areas to work on in order to shape the
firm's strong and credible image in the larger or macro-environmental context.
(Bhasin, 2018)

The SWOT Analysis is a method for assessing corporate strengths and weaknesses
(internal strategic factors) and business-related risks and opportunities (external
strategic factors). These considerations highlight the importance of unique product
development, cyber security, and market diversification in the case of Microsoft's
SWOT analysis. (ferguson, 2017)

Strengths:

� Global leadership in cloud sector


� Effective leadership by Satya Nadella
� High profitability of the business and solid financial position
� The most valuable company in the world
� Diversified product portfolio (Dudovskiy, 2019)
The strengths in Microsoft's SWOT analyses in this area indicate that the company
has strong foundations on which to compete with other major global corporations.
(ferguson, 2017)

Weaknesses:

� Lack of innovation
� Weak position of Microsoft Edge browser application
� Occasional technical issues with Windows updates
� Dependence on hardware manufacturers
� Security issues of Microsoft products (Dudovskiy, 2019)

To ensure competitiveness, Microsoft needs to improve product features and step up


its hardware development efforts. (ferguson, 2017)

Opportunities:

� Engagement in mergers and acquisitions


� Developing innovative products and services
� Focusing on smartphone segment
� Developing mobile advertising
� Enhancing security against cybercrime (Dudovskiy, 2019)

Microsoft's SWOT analysis indicates the need for diversification and consumer
enhancement in this field. (ferguson, 2017)

Threats:

� Exchange rate risks


� Emergence of new competitors
� Anti-monopoly and other lawsuits
� Economic crisis
� Emergence of CSR-related scandals (Dudovskiy, 2019)

The method of SWOT analysis by Microsoft demonstrates the importance of quality and
enhancement of the service. (ferguson, 2017)

Conclusion:
To remain the leading software provider, Microsoft needs to work on its weak
aspects and embrace opportunities. Microsoft may need to expand its innovation pace
as the competition challenge has grown considerably. The company may invest in
acquisitions and launch lower-priced bundles for development and underdevelopment
in order to find faster growth. (Parker, 2019)

7.Critically evaluate the impacts that both macro (PESTLE) and micro factors (SWOT)
have had on the business objectives and decision making of your chosen
organization. Based on the critical evaluation, recommend changes which would help
the company further, in pursuit of their business objectives and decision making.

Comparison of PESTLE and SWOT:

The study of PESTLE applies to political economic social technological legal and
environmental factors that affect the business environment. Application of SWOT
applies to strengths weaknesses opportunities and threats Those considerations are
strategic planning's key determinants. Businesses can fail to achieve desired goals
without SWOT and PESTLE analysis. (pestleanalysis, 2016)
Inter-relation and benefits of PESTLE and SWOT analysis:

� Both the analysis gives a simple basis of structure that helps perform the
analysis.
� They bring out the different departmental skills of the company that have the
same goals.
� They help identify the threats and reduces the future risks of the business.
� They let the employees adapt to strategic thinking.
� Both the analysis bring out a method to look for the oppurtunities and
exploit them.
� They also help evaluate the impact of different decisions before implementing
them. (Woodruff, 2019)

The research process draws together workers ' opinions which outcomes in a better
understanding, recognition, and mission progress.

Recommendations:

To remain the leading software company, Microsoft has to work on its weak aspects
and work towards its opportunities.

� Microsoft should upgrade its software and work on new innovations.


� To increase its competitive position in the overseas markets, Microsoft
should develop new strategic alliances with other companies.
� Continue to enhance Microsoft's brand image.
� Reduce prices to reduce the use of their software systems illegally.
� It should diversify the business to enhance its potential growth and
development.
� It should resolve the problem of cybersecurity and also give awareness of
cyber theft by advancing the software system.