Microsoft, as both a firm and an operating system, at the turn of the 21^st century seemed invincible and controlled the tech industry by completely overshadowing its nemesis Apple. After launching successful operating systems like Windows XP and 2000, the company gained wealth, recognition and power by creating an almost near monopoly over personal computing devices. Although they were not the pioneers of user-friendly operating systems (accolades to Apple for developing the first mass merchandised system) they were enjoying a 97% market share. In 2000, personal computers were the only available noncommercial computing devices and Microsoft dominated them all.

As of 2005, the demand for smartphones started to increase and the market increased opportunities for new entrants. Microsofts decline started in 2007 after Apple introduced the first iPhone. The market was moving away from Microsofts products; compared to Apples Mac operating system Windows Vista was barely holding up and was considered inferior to its predecessor Windows XP. Apple showed tremendous growth over the next decade and Wall Street announced that Apple was valued higher than Microsoft in 2010. Google then introduced its Android system to compete with Apples iPhone OS. This new system was adopted by the other half of the smartphone industry. As a late entrant, Microsoft introduced their first Windows Phone in 2010 and the next year, they announced their commitment to Finnish expertise in the telecommunications sector by partnering with Nokia and functioning as one team. This arrangement permitted all Nokia devices to use Microsoft operating system which reintroduced Microsoft to the smartphone market.

By 2013 there were approximately 2.5 billion computing devices including tablets which were dominated by 3 companies; Microsoft, Google, and Apple. The total number of personal computer sales had yet to reach 500 million yet, but smartphones had already sold more than 1.5 billion units over a decade. Smart phones had dominated the tech industry as the major item in the personal computer market. Apples iPhone was a huge success which created billions of dollars worth supplementary revenue from mobile applications. In this respect, Apples iTunes and Samsungs alignment with Google enhanced user experiences with smartphones. Microsoft on the other hand was not prepared for the sudden shift in the market and although still a tech-giant they were clearly caught off-guard.

With its market cap at 20%, Microsoft desperately wanted to regain market share. They installed a new CEO who was tasked with realigning the company under the One Microsoft vision. The company was ready to change its business model, to increase the speed of innovation, increase efficiency and rebuild the company culture. To that end they announced Office 2013, a new operating system called Windows 8.1 and Xbox One, their new gaming console.

In 2013, the agreement between Microsoft and Nokia became more than a partnership as Microsoft bid to acquire Nokia in a $7.2 billion deal. Founded in 1865, Nokia is a Finnish telecommunications and technology company that engaged more than 90,000 employees and reported around $12 billion in annual revenues. This was a big move for Microsoft since Nokia had experienced its own declines as indicated by its stocks dropping by 80% in the prior few years. Both companies had ignored the winds of change and both paid the price for letting their competitors slide past them.

The acquisition of Nokia however was delayed by numerous legal issues with the Finnish government who approved the deal with the understanding that layoffs would not be forthcoming. The purchase was finally approved by the numerous international governmental regulatory agencies in the first quarter of 2014 and with purchase in hand and Microsoft felt they now had good access to the mobile phone industry with $50 billion in annual sales. Three months after the deal was inked Microsofts first major action was to lay off 18,000 people in their work force. This was the largest layoff in the tech-industry but it helped Microsoft save about $600 million a year.

Finnish Prime Minister Alexander Stubb received a call in July 2014 from Stephen Elop, the head of Microsoft Corp.'s MSFT in Your Value Your Change Short position device business and a former Nokia NOK1V.HE in Your Value Your Change Short position chief executive, alerting him that Microsoft would cut 1,100 of the 4,700 jobs in Finland that came with its purchase of Nokia's mobile phone operations. Mr. Stubb called the layoffs "extremely regrettable" and said the government would do all it could to cushion the blow to those affected. Finnish politicians issued statements calling on Microsoft to show social responsibility and offer retraining and generous severance packages to the people it is dismissing, something which Nokia has done in the past in Finland and abroad. Some went further and accused Microsoft of reneging on the promises it supposedly made about job security and Finland's place in its strategy when it was in the process of buying Nokia's handset business. "You can say we were betrayed," said Finland's newly-minted Minister of Finance Antti Rinne, a Social Democrat.

Questions:

1. What is the difference between ethics and business ethics? Was Microsofts decision to lay off 18,000 employees ethical? Why or why not?
2. Name and describe 4 types of corporate social responsibility (CSR). Which type did the Finnish politicians want Microsoft to perform?