{"id":23320,"date":"2017-11-15T00:28:50","date_gmt":"2017-11-15T05:28:50","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/defending-a-global-business-model-in-turbulent-times\/"},"modified":"2017-11-15T00:28:50","modified_gmt":"2017-11-15T05:28:50","slug":"defending-a-global-business-model-in-turbulent-times","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/defending-a-global-business-model-in-turbulent-times\/","title":{"rendered":"Defending a Global Business Model in Turbulent Times"},"content":{"rendered":"

The technological revolution of the last 30 years has been one of the drivers \u2013 if not the most important one \u2013\u00a0 of the globalization process across the world. In this context the tech industry is global by essence<\/strong>, as the flow of information and data that are in the roots of this industry do not respond to any physical boundaries or national borders, but to the desire of people and companies to develop efficient solutions to specific and relevant problems; \u201cGlobal flows of all types support growth by raising productivity, and data flows are amplifying this effect by broadening participation and creating more efficient markets[1]<\/strong><\/a><\/em>\u201d. In this context, Microsoft<\/strong>, as one of the major players of the tech industry, has faced a major challenge in its business model during the last few years<\/strong> as isolationist policies have been rising across the world questioning not only the global trade of goods and services, but also the free flow of information and human capital transfer across countries<\/strong>. The political momentum of this trends has raised a major thread for Microsoft<\/strong> and present a major crossroad for the whole industry.\u00a0 Understanding the reason why the company management is concerned about this issue<\/strong> and how they are addressing it is the key objective of this essay, as this understanding will help us to determine how well prepared is the company to succeed in the long-term<\/strong>.<\/p>\n

Microsoft\u00a0 Corporation \u2013 a US based multinational technology services, devices and software company with revenues of 89.95 USD billion in 2016[2]<\/a> and a market capitalization of over 600 USD billion \u2013 define its mission as global<\/strong>: \u201cOur mission is to empower every person and every organization on the planet to achieve more[3]<\/strong><\/a>\u201d <\/em>\u00a0<\/strong>and the way how they seek to achieve this mission is through the flow of\u00a0 diverse knowledge across its people<\/strong>, as we can see in its strategy statement: \u201cMaximize the business impact of global diversity and inclusion to empower our people, transform our culture and delight our customers[4]<\/strong><\/a>\u201d.\u00a0 <\/em>These elements are the core of Microsoft business model, <\/strong>a model that is being tested by the isolationism trends that have raised in different countries, affecting not only the direct supply chain of Microsoft devices, but also and more important the free flow of knowledge and human capital across the company. As we can see, defending its own business model and vision is the reason behind<\/strong> why the management team of the company should and has been so active leading the defense against these political trends across the world.<\/p>\n

One of the key principles that Microsoft has been following to address the latest isolationism trends in the mid-term has been to prioritize the long-term perspectives of the business over the short-term circumstances of a certain country<\/strong>. Specifically, this mean that, if the fundamentals drivers of the business haven\u2019t changed, the company has avoided to alter long-term investment projects due to political turbulences. As an example of this we can see what happened in the UK<\/strong> in 2016, when just after the Brexit outcome, and while large multinationals announced exits from the country, Microsoft confirmed the construction of two new data centers in the country to expand its cloud<\/strong> business<\/strong> across the region. \u201cMicrosoft’s commitment to the UK is unchanged. In particular, those customers in our UK data centers should continue to rely on Microsoft’s significant investment plans[5]<\/strong><\/a><\/em>\u201d the company said.<\/p>\n

But at the same time the company has been addressing this concern in the short term actively fighting back<\/strong> different policies from governments that are preventing the company to recruit the best possible talent. A concrete example of this was the lawsuit that Microsoft filed against the US Government <\/strong>few weeks ago in order to revoke the order that will end the DACA program (Deferred Action for Childhood Arrivals) in March 2018. \u201cAs an employer, we appreciate that Dreamers add to the competitiveness and economic success of our company and the entire nation’s business community[6]<\/strong><\/a>\u201d <\/em>declared the company Chief legal officer. From my perspective is not clear how effective this action will be in defending Microsoft strategy<\/strong>, and in my opinion, the company should be working with more emphasis in developing more effective ways to allow employees work from distance <\/strong>ensuring that future policies would not affect their people.<\/p>\n

Even only time will effectively tell us the impact of the isolationism trends in Microsoft business model, we can determine that the company has been defending from them <\/strong>with both short and mid-term actions. But, what does<\/strong> remain unclear<\/strong> is how a global mission oriented company<\/strong> like Microsoft that is aiming to serve every customer in the world will succeed in times where some segments of our society are demanding more local and tailored solutions<\/strong>, being suspicious of answers that are global by nature.<\/p>\n

(796 words)<\/em><\/p>\n

[1]<\/a> \u00a0James Manyika, \u00a0\u201cDigital Globalization: The new era of global flows\u201d, McKinsey Global Institute, <\/em>February 25, 2016, \u00a0https:\/\/www.mckinsey.com\/business-functions\/digital-mckinsey\/our-insights\/digital-globalization-the-new-era-of-global-flows<\/a>, accessed on November 2017.<\/p>\n

[2]<\/a> Microsoft Corporation, 2016 Annual Report.<\/p>\n

[3]<\/a> Microsoft Corporation, \u201cCompany Overview,\u201d https:\/\/www.microsoft.com\/en-us\/about\/default.aspx, accessed November 2017.<\/p>\n

[4]<\/a> Microsoft Corporation, \u201cGlobal Diversity\u201d,\u201d https:\/\/www.microsoft.com\/en-us\/diversity\/business-of-inclusion\/default.aspx, accessed November 2017.<\/p>\n

[5]<\/a>\u201c Microsoft: Brexit won’t make us pull business in UK\u201d, 25 January 2017, The Telegraph, http:\/\/www.telegraph.co.uk\/technology\/2017\/01\/25\/microsoft-brexit-wont-make-us-pull-business-uk\/<\/a>, accessed on November 2017.<\/p>\n

[6]<\/a> \u201cMicrosoft president urges Congress: put Dreamers before tax reform\u201d, 5 September 2017, Reuters, https:\/\/www.reuters.com\/article\/us-usa-immigration-microsoft\/microsoft-president-urges-congress-put-dreamers-before-tax-reform-idUSKCN1BG2CB<\/a>, accessed on November 2017.<\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cOur mission is to empower every person and every organization on the planet to achieve more\u201d \u00bfHow isolationist political momentum across the world is threating Microsoft of accomplishing its mission? \u00bfWill the company be able to defend its global business model in a world in a world that seems suspicious of the benefits of the globalization?<\/p>\n","protected":false},"author":10330,"featured_media":23321,"comment_status":"open","ping_status":"closed","template":"","categories":[438,3239],"class_list":["post-23320","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-global-leader","category-isolationism","hck-taxonomy-organization-microsoft","hck-taxonomy-industry-technology","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"\nDefending a Global Business Model in Turbulent Times - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/defending-a-global-business-model-in-turbulent-times\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Defending a Global Business Model in Turbulent Times - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"\u201cOur mission is to empower every person and every organization on the planet to achieve more\u201d \u00bfHow isolationist political momentum across the world is threating Microsoft of accomplishing its mission? 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