Microsoft in 2005

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Case Details:

Case Code : BSTA139
Case Length : 15 Pages
Period : 1998-2005
Organization : Microsoft
Pub Date : 2005
Teaching Note :Not Available
Countries : US
Industry : Computer Software

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

When Microsoft hired computer scientist and speech recognition expert, Kai-Fu Lee away from hardware maker Silicon Graphics in 1998, the move underscored how thoroughly the software giant dominated the computer industry. Not only did Microsoft monopolize PC operating systems and hold an edge in Web browsers, but it also attracted the world's brightest technologists.

In July 2005, when Lee left Microsoft to join Google, it seemed to signal the reversal of Microsoft's fortunes. In a completely defensive move, Microsoft sued to stop Lee from working for the upstart, citing a noncompete agreement in Lee's employment contract...

Growing Employee Disgruntlement

For most of its three decades, Microsoft had faced intense criticism from the outside world. Rivals and competitors complained about the company's heavy-handed tactics. Microsoft had been dismissive of these remarks. But now much of the sharpest criticism came from within. Dozens of current and former employees were criticizing the way the company operated internally...

New Product Development

Contrary to widely held perceptions, Microsoft's top management believed the company had not lost its ability to innovate. Senior managers pointed out that there were several areas where exciting work was going on.

One was MSN, the Internet operation, where the search group was the underdog competing against Google.

Another was the Xbox group, which was racing full speed against Sony's leading PlayStation 2 to win over the next generation of video gamers...

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