Voice of Microsoft Corporate Social Responsibility - Case Study Example

Voice of Microsoft CSR

Introduction

Corporate social responsibility is a practice of business organizations which includes participating in initiatives or programs that can be advantageous to the society (Porter and Kramer, 2009). It is the ongoing commitment by the enterprises to act ethically and contribute to the economic development of the local community as well as improve the life quality of workforce. In this paper, Microsoft has been selected as a CSR organization case study. The core business of the company is to manufacture, develop, support, license and sell consumer electronics, computer software and personal computers all over the world (Microsoft.com 2016). The best acknowledged products of the firm are the Microsoft Office suite, Windows operating system and Internet Explorer browsers. In 2015, Microsoft generated revenue of US$ 93.59 billion but net income declined to US$ 12.19 billion. The company has a strong brand name and value all over the world, which supports it to survive in all business conditions. The firm concentrates on the framework of sustainability, value chain and moral obligation to receive best outcome from its CSR activities. The sustainability framework focuses on efficient uses of resources, economic competitiveness and environmental health. The value chain framework considers linking suppliers, minimizing costs and keeping up with margins. The moral obligation framework is based on performing business and CSR activities on ethical grounds.

In this particular paper, KPIs of the company has been outlined along with its vision, culture and ethics that support Microsoft in analyzing its organizational activities and performance in serving the society. Moreover, the principle of game theory, corporate strategy and strategy in international context would be highlighted to gain insight of the firm’s CSR activities. Therefore, the focus would be on analyzing the CSR initiatives adopted by the company and how they support it in enhancing their firm performance and gaining competitive advantage. Microsoft is a responsive CSR as most of the activities are catered for the growth of the people of different backgrounds. This paper would discuss about the benefit of strategic CSR on responsive CSR for receiving better market value.

Discussion

The key performance indicators (KPI) of the company are their net income, sales, production, and increase/decrease in customer base. These KPIs of Microsoft are somehow supported by CSR activities done by the firm. CSR activity contributes by building a strong image of the company in the society (Carroll & Shabana 2010, p. 36). Due to well-coordinated CSR activities, the company is able to engage potential clients and focuses on a healthier and more productive world. CSR helps the company make substantial contribution in building brand loyalty and developing personal connection with people. Also, CSR considerably supports in building positive image of the firm.

From the international perspective, the firm has been facing tough rivalry from the Android operating system over the past few years. According to Caulfield (2013, p 233), in order to succeed in the international market, the firms are required to develop market strategy to achieve competitive advantage. It is one of the main reasons due to which Microsoft suffered decline in their profit in 2015. However, the company is highly focusing on their competitive strategy to tackle the market competition. The firm makes investment in Research & Development and form alliance with other companies to gain competitive advantage (Microsoft.com 2015). For instance, the strategic alliance between Microsoft and HP has helped the former in shifting familiar platforms from desktops and mobile devices to cloud and data centre with the underlying aim of building integrated solutions. Microsoft has also formed an alliance with Dell, IBM and Facebook to gain long-term advantage and retain a large customer base. On the other hand, Microsoft is upgrading its recruitment process for better management and acquisition of human resources. The company sources its employees from diversified backgrounds for creating highly multicultural workplace. Investment is made by the company in training and development of the employees for enhancing their IT skills and capabilities (D’Amato, Henderson & Florence 2009, p. 28). Moreover, the company re-entered the market of smart phone hardware and personal computer production and involved in producing wide array of other software to deliver best technological solutions to customers. Therefore, it can be pointed from the discussion that developing strategy keeping the view of international perspective helps in improving the organizational culture and increase performance.

Being the technology giant, Microsoft is not too separated from CSR activities. As per FORBES, Microsoft is rated number one for being most CSR. In Microsoft, the organizational behavior is influenced by game theory model which assist the decision makers of the company in handling conflict situation for maximizing gains (Wirl, Feichtinger & Kort 2013, p. 177). According to Caulfield (2013, 229), CSR is followed by the companies for number of reasons like securing business inputs, improving governance of rivalry, increasing demand potential, etc. For example, through strategic CSR practice, one organization like Microsoft can encourage local demand by enhancing the accessibility, quality or availability of goods and services to its customers. Further, Hohnen & Potts (2007, 41) explained that organizational ethics and culture can be effectively shaped by CSR activities. It has been discussed that an organization would find it tough today to survive without the support of the society. For example, a non-ethical firm using poisoned water recourse for making drinks instead of using other recourse for saving money then such firm would face lawsuits and would be forbidden for sales. Therefore, it has become important to meet the society’s expectation to operate effectively. Thus, it can be pointed that application of game theory supports Microsoft in making decision for developing CSR activities that can ensure expected competitive advantage and market gain.

Organizational culture is also closely linked to CSR and corporate citizenships. As per Rangan, Chase & Karim (2012, p. 35), culture is a determinant of sincerity, behavior, honesty and teamwork of the employees. The culture of a firm supports in forming a foundation upon which the management can formulate and manage their social responsibilities. It has been cited that culture of an organization is imperative for the achievement of the business and the behavior of the employees are controlled. Therefore, it is the responsibility of the top management to provide and build a culture where employees within and outside the company feel motivated and connected which supports in achieving the moral obligation. Porter & Kramer (2009, p. 84) argue that staff morale and internal corporate culture can influence organization’s research and effective sales strongly. It has been evaluated that motivated and contented employees largely contribute in CSR activities of the organization. Therefore, it can be pointed that ethics and culture are positively linked with the CSR. Microsoft manage ethics in its workplace as a part of CSR activities by forming an ethics management program in order to guide and positively influence the behavior of workers so that each work is done based on ethical phenomena(Porter & Kramer 2009, p. 88). By acknowledging ethics and culture, Microsoft maintains high standard of corporate citizenships which makes them more socially responsible towards meeting legal, economic, social and ethical responsibilities.

The mission of Microsoft is to empower each individual and organization to attain higher value. The company is constantly investing its strongest assets for driving greater empowerment and inclusion of people that do not have technology access (Microsoft.com 2016). Microsoft is highly involved in CSR activities and it is world famous for its range of activities. It significantly contributes in the growth and strengthening the brand value/image of the company across the borders. It is evident that the company is involved in providing education and empowering both male and female workers. This initiative supported the firm in helping 99% of employees to complete their annual training within the set time period on Standards of Business Conduct. By actively promoting CSR activities, Microsoft is well supported in shaping the perception of consumers and building a firm’s image through different media. Also, a positive workplace environment is built as Microsoft has s true conscience which forms a sense of teamwork and community, thereby leading to a more productive performance. The CSR activities are measured through assessing the involvement of individual worker in team performance, determining competitive advantage, by analyzing the increase in revenue and net income and by evaluating the benefit received by the society from CSR activities.

As per Hoi, Wu & Zhang (2013, p. 2041), the above CSR activities helped the people to develop IT knowledge and also software and hardware learning. Due to this, company has been able to gain better performance from their employees, which supported the firm to enter into personal computer production market. It is one of the KPIs of Microsoft, which shows the level of knowledge development of workers through training and development. Comparing Microsoft with Apple’s CSR, it has been revealed that Apple Inc. has least investment in education and empowering workers than Microsoft (Baumann-Pauly et al. 2013, p. 698). However, Microsoft is required to invest in education of local or small minorities group so that they can educate themselves for accessing the technology for their future development.

On the other hand, it has been found that Microsoft has significant contribution in health care which makes them a good corporate citizen. The company pays hundred percent of health care premiums to the people for securing their life. It not only helps in motivating the employees but also provide a health security to the workers of all age group. As per the report of Forbes in 2009, a company has been successful in retaining employee to about 94% and 70% consumer were satisfied with this CSR initiative of Microsoft (Caulfield 2013, p. 41). On the contrary, Apple has unclear health coverage and retail stores of the company were successful in retaining 80% employees; however, less than Microsoft. It indicates the people that are associated with Microsoft are much more satisfied as the company largely cares about their health and safety. Further, on equality terms, Microsoft provides better opportunities to minorities or women to grow and be an important part of the company. It has been reported that out of 10 Board of members, three are women. It shows that the company believes in empowering women and gives authority to take decision on different organizational matters. In Apple, only one female out of seven members has an association in Board of members of the company. Therefore, it can be pointed that Microsoft is trying to provide equal opportunities and treatment to female for their personal and professional growth. This CSR activity helped the company in building higher brand image in the society. According to D’Amato, Henderson & Florence (2009, p. 36), Microsoft has least involvement in encouraging women empowerment and their equality in the backward community. Therefore, it can be suggested that Microsoft can promote women education and develop technology infrastructure so that women can get acquainted to latest technology and enhance their knowledge and perform job role effectively.

Environment protection is one of key CSR activity performed by Microsoft. It not only makes the company socially responsible but also creates a higher brand value. In 2014, the company bought 3 billion kWH (kilowatt) of renewable energy (Microsoft.com 2016). It helped in saving 21.7% of energy. The renewable energy is purchased so that all the people in the society can consume energy and pressure from energy source can be reduced. It is one of the factors, which helped the company to reduce their cost of operation. It is one of the biggest achievements as CSR activity assisted in reducing the carbon emission effect on the environment and society. However, in comparison to Apple, it has been found that Microsoft is slightly behind in reduction of carbon emissions, which puts Apple above Microsoft on ethical grounds in relation to protection of environment. Thus, it can be pointed out that, in order to be recognized as a top social responsible company, Microsoft needs to cut down their carbon emission percentage each year as it can attract more customers from the globe (Rangan, Chase & Karim, 2012, p. 92).

From the CSR activities of Microsoft, it has been understood that the company is more of responsive CSR and due to this; the company can face tough competition from their major rivals like Apple and Google in terms of customers’ base, profit and shareholders, etc. Microsoft, being a good corporate citizen would be successful in attracting customers but considering the market competition, rate of growth can be slow in contrast to other big firms (Panda et al. 2015, p. 227). Therefore, it can be pointed out that Microsoft can move from responsive to strategic CSR for gaining higher market value and public support. A strategic framework would be developed to become more responsible towards the society, people and environment. The management of Microsoft would have to categorize and classify their excess of CSR plans for initiating or devising a strategic CSR. The company shall have to diligently accumulate each program within the organization that can create premeditated environmental or social contribution (Hohnen & Potts 2007, 72). Therefore, the firm would require auditing their CSR programs and their investment in each program. It is evident that Microsoft does number of CSR activities in protecting environment, energy consumption, health and safety, workers education, labor rights and empowering women, etc (Microsoft.com. 2015). Thus, in order to progress to strategic CSR, the above activities need to be audited as it would support in making the business strategy and CSR initiatives more valuable for ensuring superior social good to the society.

As per Wirl, Feichtinger & Kort (2013, p. 172), corporate strategy is developed by an organization to create higher value across businesses. In context to that, quantitative discipline is addressed to the various CSR programs of Microsoft either collectively or individually for quantifying their impacts. It would support in knowing how the company is utilizing the sources of renewable energy and its contribution to their bottom line (Carroll & Shabana 2010, p. 54).On the other hand, products and services need to be offered with added environmental and social value. It would make the company more responsible insurer and due to this, more customers would decide to deal with the company. As per Baumann-Pauly et al. (2013, p. 701), Microsoft shall shift to an affirmative and integrated approach from fragmented posture. In context to that, value chain and competitive-framework investments in CSR shall be integrated into the managers’ performance measure with P&L responsibility. Therefore, to gain competitive advantage, Microsoft shall move to strategic CSR by identifying the specific set of societal problems. It can be indicated from the discussion that building a corporate strategy not only creates value for the company but also supports in analyzing the impact of competitors in the market.

The approach of Microsoft to empower female workers embodies the symbiotic relationships between competitive advantage and social progresses. It helps in promoting the female workers in the developing nations like India and other countries. The company provides all the resources and training to educate the female workers to perform equally with the male workers. Therefore, it certainly helps in integrating the practice of Microsoft with their business activities of gaining market success (Porter & Kramer 2009, p. 84). In relation to the article of Porter &Kramer (2009, p. 87) Microsoft is highly involved in supporting the community and disadvantage group and building strong public relations. It has been reported that Microsoft has incorporated fund for improving the access of internet in underserved markets. However, Caulfield (2013, p. 237) argued that Microsoft through their CSR initiatives largely support their market activity to gain competitive advantage and improve value chain.

Conclusion

CSR activities of Microsoft largely contribute in building strong image across the world and achieving organizational success. It has been understood that corporate social responsibility activities have become a more valuable part of large organizations like Microsoft. The CSR activities did by the company positively impact its core business and supporting in their growth and increasing sales revenue. On the basis of above discussions, it can be recommended that Microsoft shall enhance their value chain and relationships with local communities can be built as it would help the company in expanding their business in underserved markets. Further, transitional period can be used for increasing the visibility of their CSR reputation by employing game theory on each department level for making rational decision related to CSR. The company is focusing on reducing carbon emission for protecting environment and makes donation for development of underprivileged society. These activities of the company make them more responsive towards the people.

The transparency of CSR activities shall be done and informed to all stakeholders and shareholders then can help becoming more competitive. However, in future, the company can make changes to its control standards by adopting strategic CSR approach for providing better access to technology. However, for being strategic CSR, Microsoft can link their business objectives with the CSR activities which would not only help in gaining social appreciation but can also support in gaining competitive advantage. Therefore, progress to strategic CSR would be effective in integrating the business activity and society. It can allow usage of resources in a more productive way and would provide significant benefit to develop the society and help in solving social issues. Also, the CSR practices can be integrated with business activities by supporting social causes through ethical practice and addressing stakeholder demands. On the other hand, the company can evaluate their CSR strategies by measuring the growth in the firm’s performance and increase in net revenue. Also, increase in the market share would be another measurable criterion for assessing CSR strategies. Therefore, it is required that the company need to adopt more strategic approach in their business operations.

Reference List

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