IST 8100 Supplemental Cases

Inside Microsoft

During last fall's United Way campaign at Microsoft, two vice-presidents made a wager on whose division would generate the most contributions. The loser, it was agreed, would have to swim the length of "Lake Bill," a small artificial lake at the Redmond corporate campus named after Bill Gates, cofounder and chairman of the world's No. 1 computer software company.

When the campaign wrapped up, however, there was disagreement about who had won. One division had pulled in more money, but the other had a higher percentage of giving. Statistically, both were claiming victory.

To settle the dispute, it was decided that both had "lost" and would be forced to swim the lake. At noontime on the eventful day, employees crowded around the oversized pond to witness the proceedings. Prank­sters, concerned that the lake might be too comfortable despite the 38-degree late-fall chill, threw in chunks of ice to lower its temperature.

First up was the colorful Steve Ballmer, vice-president for systems software, a great quipster who once called Intel's 80286 computer chip "brain-damaged." With dramatic flair, Ballmer slowly stripped down to red bikini shorts, dived in, and splashed his way to the other side.

Following him was Mike Maples, vice president for applications, who had come to Microsoft after 23 years with IBM and conducted a sweeping reorganization credited for improving efficiency and team­work within the company. Maples removed his suit jacket, watch, and shoes; emptied his pockets; and, attired in a glistening wetsuit, jumped in amid the hoots, howls, and cheers of onlookers.

The incident, which immediately assumed a select place in the pan­theon of Microsoft legendry, illustrates one side of the company's care­fully fostered corporate culture. People who work there, from division managers to marketers to programmers to free-lancers hired on a per-project basis, describe Microsoft as an exhilarating work environment fed by adrenaline, constant brainstorming, and creative drive. Workers wear whatever they want to the office, set their own hours and, because of the corporate campus' innovative X-shaped buildings configuration, have windowed offices of their own. In warm weather people dine outdoors and are entertained by the multiple talents of fellow workers-jugglers, unicyclists jousting with sticks and garbage-can lids, and live music.

If hunger should threaten to interrupt an important project, each wing is supplied with a fast-food "7-Eleven" equipped with a variety of snacks and beverages, the latter provided free. For fitness buffs, member­ship in a sports/health club just five minutes away is a “Bennie.” And no one wants for the latest techie toys: Nearly every office has at least two computers-an IBM or work-alike "clone," and an Apple Macintosh-and many have more. It's not uncommon to see half a dozen or more video monitors sitting on shelves and desktops in a single office.

All of this is in addition to considerable rewards-professional and material-associated with employment at Microsoft. Many of those who guided the company through its formative years during the early 1980s became instant millionaires when its stock went public in 1986. Even those who joined Microsoft as recently as two or three years ago now head entire divisions. Evidence of growth is everywhere, from bulldozers working on a new computer complex to workers asking for directions in one of eight sleek new buildings at the headquarters complex. The com­pany, with $600 million in sales and $125 million in profits, nearly dou­bled in size last year to 2,000 workers at the corporate campus and 3,800 worldwide. Although Gates has cautioned that margins will narrow be­cause of greater focusing on research and development, which don't show immediate results on ledger sheets, few analysts see the company reaching a plateau for some time.

Ask anyone who works there, and they'll tell you roughly the same thing. "Microsoft is a great place to work," they will say, "if you don't mind working a lot."

It is the second part of the equation that casts the only shadow on Microsoft's corporate landscape. There is a difference between having fun and venting nervous energy, between riding an adrenaline high and run­ning on empty, and insiders say the demanding pace and push of the high-tech fast lane eventually extract a heavy toll on workers' well-being. The company's awesome growth-it had just 200 employees as recently as 1983-has produced an inevitable share of winners and losers, and competitiveness remains high as rising stars jockey for control of corpo­rate fiefdoms. Stock options during the company's early growth produced numerous wealthy sub-30-year-olds, and for a while buttons showed up on lapels bearing the inscription FYIFV standing for "F--- You, I'm Fully Vested." Many of those associated with Microsoft's early success, in fact, have left the company-partly to explore other opportunities, partly be­cause they are financially secure, but also because, they say, Microsoft simply expects too much in human terms from its employees. One former executive has even talked about forming a support group for "re­covering" ex-Microsoft workers.

"They have a glamorous reputation and have done some innovative things involving partnerships," says Alene Moris, a Seattle career con­sultant. "But they also stretch people to unbelievable limits. It's always push, push, push, and the stakes are constantly being raised." A former Microsoft higher-up says derisively, "If Microsoft is a great place to work for a corporation, that speaks pretty badly for most corporations." And an editor who interviewed for a position there came away with the im­pression that although Microsoft "has a lot of nice qualities to it and the company does many things to create a pleasant environment, work def­initely comes first. It's a velvet sweatshop."

The delicate balance between work and human potential at Mi­crosoft is an issue that extends well beyond one company and its em­ployees. Computers are playing an ever-expanding role as the work force changes to a service and information-based economy. The transition is proving to be a not altogether smooth one.

For the Pacific Northwest, long known as the laid-back quality-of-life capital of the U.S., the high-tech juggernaut holds additional cataclysmic implications. The Eastside's [East of Lake Washington; east of Seattle-Bellevue, Redmond] growing technology corridor has brought high-powered, single-minded new college graduates and industry wunderkinds here from California, New York, and elsewhere for whom work is the elixir of life. Where that leaves the so-called Mount Rainier factor and the Northwest's other amenities is uncertain. "There are programmers at Microsoft," says an editor there, "who after two years have never even been to Seattle."

"Working evenings and weekends is just expected of you here," says one Microsoft supervisor. "Everyone else does it, so you have to as well, just to keep up." Asked about hobbies or outside interests, the typical response of a Microsoft employee is to name a certain activity such as painting, mountain climbing, sailing, or whatever, followed by: "But I don't have much time for it anymore." Sixty-hour workweeks without overtime are common. "They tell you to take comp time, but hardly any­one does," says one worker. "There's just too much to do."

"There's something in the high-tech industry that forces you to work at a pace where you don't have another life," observes Posy Gering, man­ager of communications at nearby Microrim, a storybook success itself that produces the second-best-selling database software in the world. "I've known ex-Microsoft people here that were driven away by it, and the same people are driven away from here as well."

The impact of this singular approach to life on the Northwest char­acter is hard to quantify in absolute terms, but its presence is being felt in key socioeconomic sectors. The fast lane is taking over: Cars are crowd­ing the highways, housing prices are skyrocketing, production is boom­ing. High-powered professionals are moving here from New York, Chicago, and Los Angeles, bringing with them the infrastructural stresses of an expanding population but also the problem-solving skills, high ex­pectations, and leadership potential needed to address growth problems. "When these people discover there's more to life than debugging code," as one pundit puts it, "you're going to see great things from them."

But Microsoft's work ethic also is very much a product of its co­founder and CEO, Gates, a hands-on, proactive executive referred to as "Chairman Bill" in alternately respectful and irreverent terms. The youngest self-made billionaire in history, Gates, 33, keeps a tight rein on productivity by setting a manically driven example himself and intermit­tently cheerleading, cajoling, and upbraiding his inner circle of managers to maximize performance. "Bill almost always is there on weekends," says a Gates associate, "and he keeps track of who's there and who isn't. If any of the 40 or 50 key people are missing, he'll call them up and ask, "What's the matter? Why haven't I seen you around?" Much of the corporate campus is lit up and bustling around the clock. Microsoft President Jon Shirley says that Gates "will work till 9 or 10 at night, then go out for some dinner, and will be back on his computer at home answering elec­tronic mail past midnight."

It was Gates' idea to leave parking slots unassigned at Microsoft-a subtle but ingenious device to reward early comers. There are no wall clocks at Microsoft-a phenomenon the company denies has any signif­icance, but one which discourages a punch-clock mentality. "It's like time is irrelevant," observes a recent visitor from Silicon Valley. "What better way to get people to concentrate on their work?"

If "technaholism" sounds like the demonic work of invading space aliens in the bucolic Northwest, they are more E.T. than Darth Vader. Partly because companies see themselves as pioneers on the technolog­ical landscape, partly because the word "unions" makes the blood drain from their face, they offer an entire supermarket of carrots to workers who in their own right are high-achievement, self-driven personalities. For anyone interested in being on the cutting edge of the industry, Mi­crosoft is high-tech heaven.

It starts with the woodsy corporate headquarters on the outskirts of Redmond-a relaxed, genial setting evocative of the quiet intellectual industry of a college campus. Informality is the rule: Suits or ties are rare, and everyone, even Gates and Shirley, is referred to by his or her first name. Workers stroll through corridors chatting softly but intently, oc­casionally in a foreign language (a result of the company's overseas in­tern program). Groups of two or three will gather in a co-worker's office or in a hallway to engage in a "collective brain dump," high-tech jargon for brainstorming. Offices are decorated with posters, dartboards, inflat­able toys, streamers, and quirky personal impedimenta, from fish tanks to motorized mice (a play on the Microsoft mouse, a pointing device for PCs). Until the company grew too big, each terminal was named after a character in "Our Gang" or "Sesame Street."

Another key component of Microsoft's informality is its seductive E-mail (electronic messaging) system, which Shirley says epitomizes the corporate culture at Microsoft. Workers can message each other-even Gates and Shirley-day and night, to and from home or office computers, in an instant communications network that, Shirley notes, "flattens the corporate hierarchy considerably." The sophisticated system displays a queue showing the time and date and sender's "log-on," or nickname, for each message and a brief description of its contents. If there's a drawback, it comes under the heading of too much of a good thing: Nathan Myhr­vold, director of advanced development, typically receives 200 messages a day, and is still plowing through a backup queue of some 1,600 messages left over from a three-week hiatus when his wife had twins in January.

"For me the essence of Microsoft is the hallway, where people get together to talk about anything," says Pete Higgins, general manager of the analysis business unit who, dressed in an open-collar shirt and slacks, looks like a summer camp director. "Business gets done, but it's all in a very casual atmosphere. Sometimes I'll go out to lunch and peo­ple will say, 'Aren't you working today?' I tell them this is what I wear to the office."

"There's lots of computer companies you can go to work for, but there's no company like Microsoft anywhere in this industry," adds John Neilson, product manager for applications marketing. "You get to work with some of the smartest people around, and everywhere there are great ideas bubbling to the surface. That's what Microsoft is-a company of ideas." As an example he points to Microsoft's innovative in-house press, which has produced a distinctive line of appealingly designed manuals and how-to books as well as, through its Tempus imprint, revived leading out-of-print works on science and technology: "You won't find any­thing like Microsoft press anywhere else in the industry."

However much pride Microsoft takes in its workplace innovations and gung-ho atmosphere, the company is considerably less forthcoming about the pressures of breakneck deadlines and constant growth. Work­ers quick to extol the multiple charms of their employer prefaced all neg­ative comments with a request for anonymity, and even ex-Microsoft employees expressed concern about repercussions, since many still have affiliations with Microsoft or the high-tech industry. Halfway through the research for this article, sources began calling back frantic, demand­ing to know which parts of their statements would be used-the result of a memo from Shirley requesting that any contacts with outside media be sanctioned first by corporate communications. In some cases, sources were asked to check with the reporter about what would be printed, and report back to the company their findings.

While this strategy had its Orwellian aspects, it is not surprising for a company so prominent in the high-tech fishbowl as Microsoft. Since the Wild West days of backroom bargaining and intellectual thievery during Silicon Valley's teeth-cutting, where widespread chip thefts led to strip searches and program code took on the aura of crown jewels, the high-tech industry has nurtured a fetish for secrecy and information management. In Microsoft's case, Gates is known as a thin-skinned al­beit voracious reader of mass media (as well as biographies and history). "If he sees something he doesn't like in print, he'll call people on the carpet," says one source. Gates has granted selective interviews but was traveling over a two-month period and said to be doing "very little me­dia work" during the preparation of this story. Repeated requests for an interview were denied.

Whether the subject is corporate culture, media sensitivity or market position, much of the Microsoft persona can be attributed to simple growing pains. Just 14 years old, if the company were a basketball player, it would be able to look down at the rim. Whatever else can be said about Gates, as a pure businessman he has the Midas touch, and that doesn't mean mufflers. At each juncture of the burgeoning PC industry, Microsoft has made savvy, far-reaching decisions guaranteed to expand profitability and market position. In a make-or-break industry with more losers than an $8 million Lotto, Microsoft's record has been impeccable.

Nevertheless, as industries go, both Microsoft and personal comput­ing are in their infancy. Change happens so apocalyptically that stars incinerate like meteors and millions can be lost on a seemingly minor decision. The flip side of suddenly having it all is knowing you can lose it just as fast.

Perhaps that factor, more than any singular work ethic or corporate policy, explains the state of constant liftoff at companies like Microsoft. "They know that they're not producing something that will be needed in 10 years-in fact, by the time they finish producing something it may be obsolete," says a leading financial adviser to high-tech investors, including several at Microsoft. Partly because of that, and the realization they may not be able to keep up their current pace forever, they tend to be conservative investors "more comfortable in traditional programs of bonds, CDs and tax-free issues," the adviser says.

This sense of stewardship may also explain, to a certain degree, Mi­crosoft's limited community involvement-the company has yet to as­sume prominence in charity and arts circles. One arts activist blames this on Microsoft's "essentially nerdy personalities-they don't have a lot of social skills or a very balanced view of life," says Bonnie Tabb, corporate affairs assistant who previously was Gates' personal assistant. "The com­pany doesn't want to be in the position of the Bank of America, which cut its [corporate giving] budget from $50 million to $5 million in just one year." Arts and charity support will come as the work force matures, she says: "Microsoft draws a lot of people from cultural centers like New York, and they have very high expectations of the symphony, theater, and arts."

If workplace progressivism and corporate philanthropy seem a lot to ask of a youthful industry, they are not ideals inconsistent with Mi­crosoft's vision of itself. Over and over, comparisons between it and the Northwest's other leader in American industry-the Boeing Co.-pop up in conversations. Both companies achieved early and prominent suc­cess, and both are net exporters. Of all major software companies, Mi­crosoft is in the best position to eventually achieve the kind of hegemony in its field that Boeing enjoys in commercial aircraft.

To do so, however, the company will have to keep attracting the best and brightest of its profession, and hang on to them. As its work force matures-the median age is just 30 partly because Microsoft hires so many recent college graduates-the company will be forced to address career issues with the same innovative, problem-solving approach that led it to the pinnacle of its industry. Already it has experimented with alternatives: Jeff Harbers, a 36-year-old manager of data-access business units who's been with the company since 1981, is in the middle of an open-ended leave of absence; another manager served a sort of "in-house fellowship," meeting with software users and vendors to plumb marketing suggestions, after the arrival of a new baby in his household.

"Programs are getting tremendously more complex, forcing the product development cycle to lengthen," Harbers notes. "We're going to have to set expectations so people don't feel way behind all the time. And if you're planning on being around for 40 years, you have to give people more in life than just their work."

In a larger context, Microsoft's workforce issues are the same as those for many of the achievement-oriented, high-pressure Baby Boom profes­sionals who during the 1980s embraced work as their badge of identity but are now having to reevaluate its impact on their personal lives, friendships, and family and life goals. Companies where employees typ­ically work 10- or 12-hour days are experimenting with four-day workweeks, mental health days, and work-at-home options, simply so work­ers have time to look after personal affairs.

"There's so much excitement at companies like Microsoft, it's addic­tive-the workers become hooked," says Alene Moris. "It isn't until they get sick or make a big mistake on the job or are confronted by an angry or neglected spouse or romantic partner that they finally can step back and evaluate. In a way they need to recognize the fact that growing this fast is not wise, but I don't know how you can teach any American that."

It's a ticklish proposition for any fast-moving company: keeping work­ers motivated, creative, and energized while still offering them the chance for a balanced, self-nurturing existence. As big as its corporate map has grown and promises to keep growing, all roads at Microsoft still lead back to one source. An insider puts it this way: "If Bill Gates would just get mar­ried," she says with a sigh, "then I think you'd see a big change."

A recent stroll across the main Microsoft campus in Redmond, Washing-ton, would most likely show a view that looks remarkably like a well-kept university campus: clusters of buildings, beautiful expanses of grassy areas, a softball field here, a tent going up for a picnic there, and maps and direction markers at each intersection. There might be, at nearly any time of day, a group of young people tossing Frisbees, using that softball field, or a group of jugglers on the mall. The idyllic serenity is broken by the sight of large cranes and construction barriers at differ­ent spots around the grounds.

But this is no ordinary campus. In addition to the thirty-eight Head­quarters complex buildings are another fourteen buildings owned domes­tically. Microsoft, at age twenty-three, also lists 113 U.S. Domestic Leased Sites, including large product support centers in North Carolina and Texas. One hundred seventy-six additional leased and nine owned inter­national operations sites can be found in over sixty countries ranging from China to Dubai, Croatia, Russia, Romania, and Uruguay. Indeed, Mi­crosoft business is fueled heavily by international sales-some 56 percent of revenues now coming from overseas (year ending December 2002).

Microsoft's campus is different in other ways as well. Most offices are a similar size, but each seems to be treated as an individually decorated enclave, as if proclaiming proudly, "I may have to move again in a few weeks, but this is my place, and what I put here is my personality." The campus is wired technology personified. E-mail has long been exten­sively used, as has voice mail. A highly developed Intranet web calls up hundreds of thousands of details about the company, anything from hourly stock prices to building and room diagrams.

Conversations are regularly laden with Microsoft and software tech jargon: "net-net," "drill down," "bandwidth," "off-line," "push back" were but a handful of the phrases readily provided as examples of com­monplace Microsoft terminology. Employees are also a frequent source of techie "TLAs (three letter acronyms)."

Microsoft by the close of 2000 employed over 30,200 workers world-wide, two thirds in the United States. With growth and maturity, structure and organization have changed-often-but have retained important vi­sionary roots. John Shirley and Mike Maples, early key senior officers, have left the company, but they bestowed a legacy of standard setting, organizational structure, and efficiencies that are still widely acknowl­edged. As large as Microsoft has grown, even the company picnic has now moved off the main campus. An entire sales force meeting in New Orleans recently drew over 6,000 people from worldwide spots. The most recent annual employees meeting was attended by over 9,600 employees in Se­attle's Kingdome (ironically doomed for demolition to make way for a new stadium for Microsoft cofounder Paul Allen's football team, the Sea-hawks). The company Christmas party, however, has also been a victim of growth, having moved from several floors of the Westin Hotel in Seattle, to the Washington State Convention Center straddling Interstate 5 through downtown, and now relegated to individual project or business group parties for employees and families.

Indeed, the maturing of Microsoft has changed even the intensity of the pressure to work so much. "The precious commodity now is time," reported one Microsoft manager recently, an employee who was a re­bounder, having left Microsoft with a company colleague to form a new business venture. They had some success, he said, but after selling his share of the new company, he was happy to be back at Microsoft, where exciting things keep occurring and where there are opportunities and challenges to shift focus and do something different. In fact, the variety of work at Microsoft seems to be one of the major appeals. Employees often change assignments and projects. There are twenty-somethings at Microsoft who have already done the globe-trotting cycle of traveling across the world delivering workshops and seminars to groups of 40 to 400. Now they are back at HQ, doing more sedate things such as leading small groups of chief financial and operating officers of major corpora­tions in the Microsoft Executive Briefings boardroom.

There still are no wall clocks at Microsoft, still no reserved parking spots, although valued carpool signs and disabled parking areas are com­monplace. There is still a very competitive drive among work groups internally-as much as there is a corporate drive to be the best, to be at the top. The expectation of working late and putting in extremely long hours is reportedly diminished but has not disappeared. Development deadlines, "shipping dates," and decreased time in developing the new­est version of virtually every product all still drive a pace that pushes the work cycle (but not overtime-except for contract employees, of whom there are many).

That Microsoft harnesses the time and energy of these bright, creative, and productive young employees is a testimony to its recruitment and hir­ing practices. It now does more recruiting among MBA graduates and uses headhunters to identify people to join part of the $2 billion R and D pro­gram. Some critics warned that Microsoft might be hard-pressed to hire 2,500 new workers needed in the 2000-01 period, because it had reached a size and an age that makes it too corporate, and because many who might otherwise apply could be wary of the predatory image of the com­pany (Mitchell, 2000). The company unabashedly acknowledges that it looks for the talented and creative. These new hires join others who are largely self-driven, and thus employees continue to build a culture where few limits have been set, where there is no lack of projects or desire or reward. Perhaps not so remarkably, many employees who have become relatively wealthy through Microsoft stock and stock options at an early age stay on "not because they have to work at Microsoft" but because this is their world, and they still want to contribute to progress and improve­ment. Newer challenges clearly are to work smarter. Because Microsoft subsidizes connecting lines to home, there is also proportionately more telecommuting to accomplish work at home yet still enjoy family or rela­tionship time. While salaries and benefits are less a driver for those who have been at Microsoft for some time, "what you have to remember," one employee cautioned, "is that there are still a lot of hungry young people here, probably more young workers in total numbers than there has ever been. The mind-set of the younger workers still drives accomplishment" (just under 30 percent of U.S. employees in 2000 were ages twenty to twenty-nine). Microsoft employees appear to talk much less of a "velvet sweatshop" and more of what they term a "golden handcuff."

In keeping with the 1990s culture and the slightly aging workforce at the company (the 2000 average age in the United States was 34.4), more employees are married with children. There are many dual-Microsoft cou­ples, and the company has been liberal in applying benefits to domestic partners. More employees now live in Seattle and do the reverse com­mute eastward across Lake Washington every morning. More employees now belong to a diversity of internal groups: BAM (Blacks at Microsoft), GLEAM (Gays and Lesbians at Microsoft), and other ethnic or special identity affiliations.

Perhaps the most striking change in Microsoft as a twenty-three­-year-old club with several millionaires has been their impact on their community-the economics, the lifestyle, the environment, philan­thropy. Their steady growth has filled corporate HQ parking lots, while helping make parking lots out of adjoining streets and highways.

Microsoft recognizes it has helped power an economic boomlet, but it also knows it is part of the problem. It has created an extensive shuttle system between the main campus and its close satellites. It rewards car-pooling, subsidizes bus passes, guarantees taxi rides home if kept late on a project, and its employees sit on community planning and transpor­tation boards. The Microsoft campus has been beautifully kept, and though no longer so "woodsy," it is groomed and greened.

As predicted, arts and charity support have indeed come with the maturing of the company and the workforce. Microsoft's first "Giving Program" netted $17,000. In the last full reported year (1999), giving in­creased 26 percent over the previous year, reaching a total of $14 million given to charitable and nonprofit groups. More than two-thirds of Mi­crosoft employees participated in the company's matching gifts pro­gram, which matches employee contributions up to $12,000 per year. Over 3,500 nonprofit groups received over $12.5 million in cash and $10 million in software donations (Micro News, 2000). Indeed, Microsoft in 2001 received United Way's annual "Spirit of America" award, signifying the single American business exceeding all others in corporate commu­nity involvement.

The company will continue to donate software to a national philan­thropic program, Libraries Online, which takes PC technology and In­ternet access to public libraries. Bill and Melinda Gates have personally taken over the pledge of $200 million to expand that program to librar­ies serving low-income communities in the United States and Canada. Gates has also recently made news by making major donations to the nearby University of Washington, as well as to Harvard University and a major research center for Oxford University in England.

Even more significantly, employees and former employees have been founding their own charitable groups and foundations to support com­munity efforts. A recent Puget Sound area story explored but a few of those: Ida Cole, who gave millions to help save the Paramount Theater in downtown Seattle; Scott Oki's Oki Foundation, which gives away nearly $500,000 a year, mostly to children's causes; Trish Millines, a thirty-nine-year-old retiree who created a foundation to help train minority children in computers (Roberts, 1999).

The giving effort has been ambitious and remarkable, with yearly goals constantly increasing. And employees can afford it-apparently individu­ally, and certainly on the corporate side. Microsoft's corporate revenues were up 28 percent for FY 98, to $14.48 billion; income after taxes was up even more (39 percent) to $4.49 billion (Microsoft Fast Facts). Microsoft touts a company group tasked with the investment and management of what had reached, by the end of 2000, a total of $19.2 billion. By the end of September 2000 Microsoft's market capitalization had passed General Electric into the first spot, with $240 billion, to GE's $235 billion.

A little perspective: in 1990 Microsoft first reached $1 billion in sales, by 1994 $4.65 billion; IBM's 2000 market capitalization was at one point $120 billion and General Motors a mere $33 billion. Almost since the company went public in 1986 and started to turn handsome profits, ex­ecutives have warned that the company could not keep up the trend. Analysts largely have not believed them-and with reason. With its re­lentless aggressiveness in pursuing more and more ways to engage the globe-in financial transactions, in news, in entertainment, in data­bases, in communications, in Internet-Microsoft has steadily bought or partnered into technology that has positioned it to be a player in most ventures on its playing field.

The corporation has, of course, been widely criticized for its hard­ball approach to takeovers and partnerships and pressing deals with computer or component manufacturers. Recent history of the "Internet wars" has Microsoft in one very familiar role: that of picking up market share in Internet business and being vilified by comments from compet­itors. A second role is less familiar: not just being the target of jilted part­ners or potential partners but feeling the pressure of the federal government in the form of antitrust lawsuits. This situation has become a longer shadow, sapping a tremendous amount of time and energy of Microsoft's corporate legal department. What many now fear is that Mi­crosoft could somewhere in the future be "the universal gatekeeper of thought" (Andrews and Flores, 1999). Competitors in Silicon Valley have spoken and acted on the basis of "Anyone but Microsoft" as they entered into businesses and developments (Andrews, 2000).

These legal troubles have kept Microsoft employees from top to bot­tom rather touchy about criticism and negative stories. Ever more care­ful about being the "top dog" or, more typically, "the target," employees who have been provided with a great deal of ownership and responsibil­ity, in addition to their material benefits, have been naturally reluctant to sound ungrateful. Most, like their top officers, are unrepentant about Microsoft's mostly victorious, stunning run of successes. "Now," many employees say, "we feel the pressure of no longer being regarded as the darling of the industry, the 'new guy.' Now, we're the bad guy."

Steve Ballmer, now president, increasingly has been the preacher of greater customer attention and greater internal communication. More­over, he has increasingly been the point man in Microsoft directions and has battled competitors and an unfriendly Federal Department of Jus­tice. Chairman Bill Gates too, has warned the company of complacency and lack of motivation. While he may have become less at the forefront in company day-to-day affairs, and while he may now be a family man with a young daughter, he has not slowed down and still represents the vision of the company. He has been seen to jet about more, to host cor­porate, media, and government leaders at his new $53 million mansion on Lake Washington. He has continued to promise he will give away most of his billions, but readers are urged to read or view the Gates ad­dress at the 2000 Microsoft annual meeting. He closed that presentation saying the company was "still very much in the beginning" of what it will ultimately accomplish. "Our work," he said, "has not changed the way people do things nearly as much in the last twenty-five years as it will in the next ten" (Micro News, 2000).

QUESTIONS FOR DISCUSSION

1. What distinctive differences can be seen in Microsoft's formative stages and in how its culture appears to be evolving? How do you account for those changes?

2. Both in early organizational life and in a maturing stage, what organiza­tional norms, beliefs, values, or customs at Microsoft seem to be communi­cated informally? What elements are communicated formally?

3. How do organizational stories, symbols, and assumptions reveal Microsoft's philosophies, purposes, and goals?

4. Based on how things have altered over a brief period, what would you try to do as you went into Microsoft Corporation now to identify the status symbols for its employees? The specialized vocabulary or jargon necessary to understand what is going on? The way decisions are made? The expecta­tions for achievement and success?

5. As Microsoft has continued to grow in size and the extent of operations, what cultural elements do you believe it has tried to cultivate and retain? To change? Why?

Answer rating: 100% (QA)

1 The cultural life cycle of the firm with its different stages is based on the founders vision that ... View the full answer