Microsoft vs. Red Hat Corporate Strategy

Introduction

Corporate strategy refers to the policies, schemes and devices a firm or an organization applies regarding the sales of its product as well as maintaining cohesion between and development of all its departments at large. Marketing is one of the most imperative phenomena of every business plan and an essential part of every corporate strategy. It is the method of discovering and categorizing the needs and requirements of the customers in order to gratify these needs in a better way in comparison with the rival companies, firms and organizations within the scenario of perfect competition.

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“Marketing is” Boone & Kurtz (1998) view, “the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, organizations and events to create and maintain relationships that will satisfy individual and organizational objectives.” The above statement fervently proves the very fact that all the concepts affiliated with and involved in the business activities look for marketing as the pivotal part of all strategies and plans devised and implemented to improve the volume of sales and production on the one hand and satisfy the customers’ needs on the other. Marketing aims at focusing on the customers’ growing as well as ever changing needs to shape the product in such a way that it may attract the customers and they can find novelty and innovation in the product. “A business firm”, Logan (1976: p 2) submits, “like any other social institutions, can endure only if it continues to contribute to the needs of society.”

Main Text

Since, corporate strategy is thought to be an inevitable part of every corporate firm’s management plan on which all its functioning stands, all the organizations either large or small devise methods and apply techniques for the growth and success of their product and merchandise. Such sets of devises are called the organization’s strategic plans that support the company in enhancing its volume and capacity. “Strategy is”, Johnson & Scholes view, “to do with the matching of the activities of an organization to the environment in which it operates keeping in mind customers’ needs and satisfaction.” (1993: p 6) Thus, there always exists the need for a comprehensive and transparent methodology of formulating a strategy.

“Marketing strategy involves”, Lamb, Hair and McDaniel, submit, “three activities: selecting one or more target markets, setting marketing objectives and developing and maintaining a marketing mix.” (2006:14). Hence, the main objective behind marketing strategy is not only the decision making regarding main issues of grave concern of an organization focusing on marketing, but also it concentrates on the implementation of the strategy planned in a proper way in order to obtain the appropriate results according to the changing scenario of global market. “Simply put”, McNamara (2003) opines, “strategic planning determines where an organization is going over the next year or more, how it’s going to get there and how it’ll know if it got there or not. The focus of a strategic plan is usually on the entire organization, while the focus of a business plan is usually on a particular product, service or programme.”

Microsoft Vs. Red Hat

The contemporary world is fast changing and developing into a global village. The competition between the nations in corporate sector looks at its climax point. Nevertheless, the competitive environment has supported the companies improving the quality and maintaining the price, and indirectly benefited the consumers, yet all that has created difficulties for the enterprises, who have to work harder in such a precarious situation. “Competition is”, Bill Gates (1995: p 231) states, “a boon for consumers, but it can be tough on investors, especially those who invest in a product that does not exist yet.” The industries have to remain updated every moment regarding changes taking place in global market to present the consumers the best of the best. The comprehensive and quick information regarding any change taking place within the business environment turns a company into leading position. “How you gather, manage and use information”, the Chairman of Microsoft Corporation Bill Gates submits, “will determine whether you win or lose.” (1999: p 1).

Microsoft Corporation is among the top international industries of world ranking. The Corporation’s Chairman and Founder, William Bill Gates, got tremendous achievements and chain of extraordinary successes even at such a young age. Owner of many enterprises, estates and business networks, as well as author of three books and many essays and lectures, Gates enjoyed the assets worth $56.0 billion approximately; and he has been estimated as the richest personality of the contemporary world for the last many years. In the same way, Red Hat Inc. is also a growing open source software organization, which is challenging the giant computer companies with the help of continuous hard work and specific comprehensive corporate strategy and unique business culture of its organization. Red Hat introduced its own version of Linux open source operating system on the basis of unique market methodology.

Organizations maintain some specific cultural traits which distinguishes them from other firms and corporations. Organizational culture is the central part of a company’s market policy, organizational behavior and human resource department. The same is the case with Microsoft and Red Hat. Both these companies have presented their corporate strategic models their experts have devised to capture the markets of the world. Since business activities are not limited to one specific area of the world and have attained the position of multinational competition between the companies; it is therefore the companies have also examined all aspects while making decisions regarding internal and external policies and organizational behavior. “Business has”, Ball & Wendell (1993: p 6) submit, “entered the era of the one-world market. Increasingly, companies are going overseas to attain sales and profits unavailable to them in their home markets.” The corporate culture of multinational companies and organizations rests on the foundation of internal and external factors.

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Microsoft Corporation introduced collective and group work rather than individual efforts especially in its business culture. It is therefore, the Corporation is recognized and celebrated for its developer-centric culture. The Corporation invests a huge amount of money specific in the budget to hire the services of the fresh Microsoft university graduates and appoint them against various posts. It not only provides the company with fresh talent and energetic environment, but also the company extracts innovative ideas and support in introducing something new and novel. In addition, it is also helpful for Microsoft Corporation to prevaricate the budding genius join rival organizations and companies. It is therefore the Corporation faces no rival of such a great level who can manage to challenge the Corporation for the future years to come. On the other hand, Red Hat has applied the motivational factor by inspiring the students exercise their abilities by working on the personal techniques in order to bring improvements in the innovative ideas and methodologies of the company.

In addition, it is also in the corporate culture of the Corporation that the talented personnel from the local population be hired for the overseas offices and administrative structure of the Corporation. Moreover, the company always lays stress on the use of their own products at offices and administrative structures and they avoid the products of the competitors. The same strategy has been devised by the Coca Cola Beverage Industry and Honda Automobile Industry. Consuming the company’s own products exploits sense of accomplishment and achievement in the staff members and they feel pride while using their own products and their morale observes a significant boost.

Organizational Communication Of Microsoft

The communication system of an organization is very important in the world of today both in customer-focus and competitor-focus strategy. Bill Gates himself has declared communication, knowledge and information a reason, which distinct an enterprise from others. “The most meaningful way to differentiate your company from your competitor”, Gates argues, “the best way to put distance between you and the crowd, is to do an outstanding job with information. How you gather, manage, and use information will determine whether you win or loose.” (1999:1) Business communication is an imperative part of organizational behaviour, which provides the fundamentals of communications and correspondence within an organizational structure. Management of Microsoft Corporation has devised a methodology according to which all the communication between the staff is made keeping in view the technical terminology and jargon introduced and applied by the Microsoft Company. Gates looks for speedy, urgent and quick flow of information regarding any changes taking place in the corporate environment. Gates declares rapid current of each and everything new in the market and expects the same from the staff.

Motivational Strategy of Microsoft

An individual has to work hard with determination and concentration to achieve his goals in life. Both determination and concentration look for motivational effects in order to continue performing all the tasks during financial activities. Hence, motivation plays pivotal role in man’s life, career as well as organizational behavior. Thus, it is the most important thing to find out what motivation is and how an individual attains it as well as how it works in individuals’ career and whether the standard of obtaining motivation is one and the same in all individuals or vary from person to person and from one corporate culture to the other. The term motivation has been defined by different theorists differently. “Motivation is”, Kreitner views, “the psychological process that gives behavior purpose and direction.” (1995). In other words, motivation is the main factor behind performing something purposeful towards some specific direction. “It is an inner drive”, Higgins states, “to satisfy an unsatisfied need.” (1994). Motivation is an urge that supports man during the course of fulfillment of some tasks individually and collectively.

Motivational factors are extremely significant not only for the employees during their job in a corporate firm, so that they can be proved more and more productive for the organization and work place, but also it is important for the companies and organizations for the enhancement of their sales volume and creativity as well. It is the leadership of an organization that provides a staff-motivating atmosphere within an organizational structure; it is therefore the role of leadership revolutionizes the very scenario of an organization under its dynamic supervision.

Looking into the motivational strategy of Microsoft Corporation, it is evident that the company offers multiple inspirational and motivational benefits to its employees, which also endorse the theories articulated by the scholars and psychologists. The company offers all its employees free of cost medical check up and treatment facilities by the team of competent physicians as soon as an individual joins it. It provides the employees with happiness and satisfaction and physiological benefits in words of Maslow’s Need Hierarchy Theory. Famous psychologist and the father of humanistic psychology, Abraham H. Maslow has elaborated five levels of motivation in his famous Need Hierarchy Theory in 1943. These levels include physiological, safety, social, ego and self- actualizing ones. Maslow opines that as the motivation takes start from the lowest level, so the lowest level needs and requirements of the employees must be fulfilled in priority to motivate and inspire them towards their work and to develop as well as strengthen their interest in the tasks they are to fulfill.

There is a free and frank corporate culture in the company and no one is discouraged to communicate with the senior management or the member of different departments. Microsoft Corporation has also introduced a free corporate culture under the leadership of Bill Gates and Allen Paul, who had suggested for the common sitting arrangement for all the staff in order to mitigate the communication gap as well as fasten the decision making in respect of introducing new model, making marketing strategy and applying latest technology. All this gives the employees self-esteem and the feelings of being in one and the same thing and environment. Sitting and working along with the senior management fills their hearts with joy according to Kovach’s theory of motivation, which suggests least communication gap between high and low management.

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Microsoft Corporation provides the managers with the company vehicle and credit card facility, which is a token of reward against their performance and services for the Company. In addition, the company offers traveling allowance on business and even recreational trips. These steps resemble with Victor Vroom’s Expectancy Theory in which he has presented the concept of rewards as an important motivational factor. Additional benefits and incentives like company vehicle and credit card are sign of reward and an important motivational factor. Safety and quality incentives are also offered by the company to the employees just after six months of joining the Microsoft Corporation.

In addition, the company gets its employees insured by reputed insurance companies. The company also supports its employees in respect of purchasing automobiles and other commodities of domestic and personal use. Furthermore, the Microsoft Corporation management helps the staff members on getting house building finance loans too. It also looks after the personal problems of the staff members and has established an atmosphere where everyone can share his personal concerns with other members and management, which help him till his restoration to normalcy. It is due of all these benefits and incentives that the employees and workers of the Microsoft Corporation work day and night utilizing all their energies and capabilities to earn more profit and fame of their organization. Teamwork under the shadow of wonderful motivation has made Microsoft Corporation an international organization of highest esteem.

It is the fact beyond doubt that motivation always results in positive. Every company introduces its own norms, values, traditions and traits in the organizational set up, which are called the corporate culture of that company. Though leadership and top management dominate in this regard, yet staff, employees and workers of the organization also influence this culture while interacting with other members of staff. Both individual as well as collective behavior becomes the identity mark of a corporate firm. Looking into the history of all the great companies and firms, it is evident that their success is the outcome of long and continuous struggle, where so many fluctuations and crises come in their way to haunt and sabotage the journey towards progress and triumph. If an individual is devoted to his work, precise and polite in his behavior and committed to his goal, he gets achievements in his work-place. His commitment to the cause and hard efforts to achieve his destination is the source of permanent motivation for him. Being the member of such an organization where he obtains additional motivation is an extra advantage for him. Every one’s role and performance make up the motivation in the corporate firm, though big and multinational organizations encourage and appreciate their workers by motivation. It is the motivation that accelerates the profit as well as good name and fame of the organization from where he is earning his bread. Motivation is a source of inspiration for both ownership and the workers.

Conclusion

To conclude it is evident that organizational behavior is a very significant as well as astonishing phenomenon that contains worthwhile implication in the life of both individuals and organizations. It increases one’s skills and enhances his capabilities and talents. Organizational behavior provides formal and informal learning from the beginning to the end and leaves indelible imprints on individuals and organizations. The researches based on models and theories ratify the fact that organizations and companies can make far more progresses by conducting learning processes on regular basis.

“The most efficient businesses, Gates states, “have an advantage over their competitors, companies have an incentive to embrace policies and technologies that make them productive.” (1995:135) Both formal and informal learning is the part of corporate culture, the Microsoft Corporation pays due heed and special attention to it. The high management and personnel of director and senior manager levels adapt themselves in such a way that the junior staff and employees can learn something new while interacting with them. The great industry like Microsoft Corporation which is the symbol of wonderful achievements and series of triumphs is always conscious in respect of both informal and formal training. It also conducts formal training sessions which has helped the industry in respect of making distinction with other companies as well as its unique cultural characteristics will serve as role model for the business community to imitate.

References

Ball, Donald A. & McCulloch, Wendell H. International Business: Introduction and Essentials. Seventh Edition. IRWIN, INC. 1998.

Gates, Bill. (1995). The Road Ahead. Viking Penguin Books USA.

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Gates, Bill. (1999). Business at the Speed of Thought. The Warner Book Company New York.

Higgins, J. M. (1994). The Management Challenge (2nd edition). New York: Macmillan.

Herzberg, Frederick. (1959). Two Factors Theory. Web.

Knoster, T. Villa, R. & Thousand, J. (2000) A Framework for Thinking about Systems Change. In R. Villa & J. Thousand (Editions), Restructuring for Caring and Effective Education: Piecing the Puzzle Together. Baltimore: Paul H. Brookes Publishing Company. Pp 93-128.

Kreitner, R. (1995). Management 6th edition. Boston: Houghton Mifflin Company.

Lindner, James R. (1998). Understanding Employee Motivation. Journal of Extension, Volume 36 No.3.

Boone, Louis E. and Kurtz, David L. (1998) Contemporary Marketing Wired 7th Edition Dryden Press. ISBN.

Johnson, Gerry & Scholes, Kevan. 1993. Exploring Corporate Strategy. Text and Cases. Third Edition. Prentice Hall New York.

Lamb, Charles W, Hair, Joseph F & McDaniel, Carl. (2005). Essentials of Marketing South-Western College Pub; 8 edition

Logan, Newman. (1976) Strategy, Policy and Central Management, 7th Edition. South Western Publishing Company, Ohio.

McNamara, Carter 2003. Strategic Planning (in non-profit or for-profit organizations). Adapted from the Field Guide to Non-profit Strategic Planning and Facilitation. Web.

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