Microsoft Corporation Organizational Structure

When you hear the names Bill Gates or Paul Allen, the next thing that automatically comes to mind is the name Microsoft. Microsoft was co-founded by bill gates a Harvard college dropout and his childhood friend Paul Allen; both with a passion for computer programming in 1975. The company is one of the most if not the most recognizable brand in the world. It develops numerous computers soft wares and provides technical support to its customers and corporate businesses. It has become the richest corporation in the world, raking in over 60 billion dollars in revenues last year alone. This is more than what other companies make in three years.

The success of an organization depends on how it is managed. The management does not necessarily mean those at the top; it cuts across the board all the way to the genitors of the company. This form of arrangement then constitutes the structural organization of a company. The structure of Microsoft has got a vast network of interconnected departments headed by experts in different fields; overseeing other junior personnel attached to them. The headquarter might be in Washington but the structural network runs across the entire globe. At the helm of Microsoft sits the chairman who formulates the company’s overall technical strategies. The second in line is the Chief Executive officer who oversees the product development, marketing, sales, business development, operations and support. All others departments e.g. business division, platform products, server and tools, windows Core OS division, entertainment and devises division and MSN and personal service division; have departmental heads overseeing them and directly reporting to the Chief Executive officer. Therefore it is safe to say that the Microsoft Corporation works on an organizational structure that is called

a matrix; it is called matrix because workers have bosses they report t to both horizontally and vertically in the organization.

Another organizational structure that other companies use is of the functional type. This is where the different departments are separated by the kind of functions they perform. These departments may include, human resources, purchasing, sales accounting and marketing. All these departments are managed independently, reporting to different bosses. The departments can be found in different geographical areas (Campa & Kedia, 2002, p.61).

Small organizations have simple structures; most of them lack functional departments and work as general units with one boss at the top. In reality all these kinds of structures are formulated according to the dynamics of the organization. A complex organization like Microsoft will go for a complex matrix structure and a coffee shop on the other hand will use the simple structure. However, the three structures have similarities and differences. They are similar in that all of them have method of operation that they follow to achieve their goals. A functional structure allows for production of limited production at a low cost; the management s also centralized. This is the case for the simple structure too. On the other hand a matrix structure is both expensive and allows for unlimited production, normally of more than one product or service.

Marketing is essential for any company that seeks to maximize revenues from the sale of its products. Product consumption will depend on how efficiently the marketing team presents it to the customers. This requires proper planning and a team that is highly skilled. Microsoft has been able to sell its products in great quantities because it has a high level marketing department that formulates marketing designs that are very effective.

Companies that are large scale in nature have multi-billion dollar budgets to meet their production requirements. Financial planners are a key asset to the companies. Without them some of the services would be put on hold. The financial department therefore becomes handy in the determination of how finances are used in the other different departments in the organization; giving priority to departments with high budgetary requirements.

The output of workers in a company depends on how the workers are managed. Workers who are generally satisfied with their positions and feel that their grievances are heard; perform at an optimal level. The human resources department has this responsibility to fulfill. In addition, this department ensures that the company has the right personnel in terms of professional skills and conduct. Therefore companies like Microsoft will always create departments that enhance growth of business. This ensures the smooth running of the company with minimal glitches to worry about.

Structural designs are chosen according to the company’s requirements. Microsoft has its products consumed by people around that world (Chandler, 1962, p.4). Therefore it is very important that it has branches spread out in different countries for effective product management. The nature of the product that this company offers moves it to incorporate different structural designs to form a wholesome model. Geographically, Microsoft has its branches and or outlets all over the world but most of them are in the United States, Europe and Asia; this is because most of its product and service consumption is concentrated in those regions.

Product consumption and changing market trends tend to push for more customized structures. It is therefore necessary for companies to move towards ensuring that the customers’ needs are met. Products that do not capture the market’s attention tend to be a waste of resources. This initiates the need to listen to the consumer wants and design products to this effect; hence the consumer-based structure design.

Some companies only produce a single product and this makes it easier to decide which structural design best suits its needs. A single product calls for a functional or simple model that is effective and low cost.

Departmentalization ensures that work is decentralized hence enhancing performance and quality of product. Different teams are allocated specific functions and or tasks to manage, all these tasks are parts of a project that would otherwise consume a lot of time if left to a single department. Departmentalization ensures inputs from different professionals. It makes the workers appreciate that their collective effort is worth the output of the final product (Nickerson & Zenger, 2003, p.65)

The hybrid and matrix structures incorporate several other designs in their models. A matrix structure has departments and other elements from other structures like the functional structure. Matrix structures are commonly used within large companies; with a complex product and customer requirements. A hybrid design on the other hand is a combination of different structure designs. These could be used differently in the corporation. One outlet of the company can use the functional design while the other uses consumer-based.

Structural design application will depend on the production requirements and market goals. Microsoft’s structure has worked well in furthering its prowess in the computing and technological solutions.


  1. Campa, H., & Kedia, S. (2002). “Explaining the Diversification Discount.” Journal of finance, 57, 1731 – 62.
  2. Chandler, A., Jr. (1962). Strategy and structure. Cambridge, MA: MIT Press.
  3. Nickerson, J. & Zenger, T. (2003). “Being Efficiently Fickle: A Dynamic Theory of of Organization Choice.” Organization Science, 13, 547 – 66
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