Reference no: EM131652278

Organizational structure is an important element of organizational strategy. To that end, let us take the case of Microsoft, which decided in June 2013 to transform its organizational structure in line with that of its competitors like Apple. Instead of having many separate (and competing) divisions, it remade itself into four separate divisions, representing operating systems, apps, cloud, and devices (hardware). You can read the official announcement by Microsoft here. At that time the market capitalization of Microsoft was $300b.

Please comment on the substantive aspects of this transformation. Clearly, this was an attempt to unify the corporate strategy of Microsoft, without having different divisions behave as if they were stand-alone companies. Such transformations are rarely without pain. Some folks lose power, ways of doing things have to be scrapped, and there is a lot of resistance during the transition period.

Do you such moves by companies are important strategic actions, or are such announcements really an act of window-dressing? Microsoft is doing much better in 2017, with a market capitalization close to $550b (which makes it the #3 company in the US), and has become an important player in the world of technology management again, especially under the new leadership of Satya Nadella. Do you think Microsoft began to compete better with Google and Apple as a result of this transformation?