How Microsoft Growth Led to Control Problems Essay

985 Words Dec 12th, 2011 4 Pages
Critical Thinking Issue 1: Relate Microsoft’s problems with its control and evaluation systems to each of the stages of growth in the Greiner’s model. Organizational growth is similar to the life cycle of any living entity. The organization is birthed in an entrepreneur’s head and then goes through the growth cycles to create its own version of becoming a legitimate entity that the stakeholders find dependable, responsible, and having the ability to create value (Jones, 2010). As the organization grows it must develop skills and competences to create value that in turn make the organization attractive to investors thus allowing it to acquire additional resources to grow even more. Resulting growth generates more revenue it creates …show more content…
As with any organization, Microsoft started out the same way. Their first stage worked well because they set the organization up with engineers working in small groups enabling them to work together as a team. This created an environment where new products could be quickly created and developed. During the first stage of growth Microsoft’s reward system encouraged successful performance by a team. If a team successfully developed innovative software they were rewarded with stock and benefits as a team. Highly successful team members were rewarded by promotion to managers or to lead their own new teams (Jones, 2010, p. 330). However, as the company grew the focus started changing from rewarding the team efforts and the company went through as Greiner’s Model of Organizational Growth, the Crisis of Leadership. To move forward again into the Growth Through Direction, an organization moves from management by the founders to new leadership that is very business and growth oriented. During this growth phase investors become more interested supporting the organization because of the leadership shift (Jones, 2010). In addition to being more focused on the fundamentals of business management, leadership shifts to a more centralized approach (Recklies, 2001). This was the case with Microsoft. The organization was pushing for more profits and began changing its control and evaluations.
Soon Microsoft really