Microsoft's Transformation under Nadella

This assignment examines the significant changes implemented at Microsoft during Satya Nadella's tenure as CEO. Students will analyze Nadella's leadership strategies, including a renewed focus on cloud computing and productivity tools, and assess their impact on the company's success. Additionally, the assignment explores the challenges of managing employee resistance to change during such a transformative period.

Running Head: Organizational Change and Development
SOUTHERN CROSS UNIVERSITY
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Student Name: Mohammed Keita
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Unit Name: Organisational Change and Development
Unit Code: MNG91215
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Assignment No.: 4

Organizational Change and Development 1
Assignment Title: 4
Due date: 23
Date submitted: 23 February 2018
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Date: 23February 2018
Organisational Change and Development Assignment 4
Contents

Organizational Change and Development 2
SOUTHERN CROSS UNIVERSITY........................................................................................
Topic 1: Why organisations change: turbulent times, innovation and the changing
workplace...................................................................................................................................
Case of Microsoft...................................................................................................................
Case of du Telecom................................................................................................................
Topic 2: Diagnosis by the image................................................................................................
Microsoft was like a puddle...................................................................................................
Topic 3: Planning and preparing the change..............................................................................
Topic 4: People and Culture.......................................................................................................
Topic 5: Implementing Change..................................................................................................
Topic 6: Sustaining the change..................................................................................................
Bibliography...............................................................................................................................

Organizational Change and Development 3
Topic 1: Why organisations change: turbulent times, innovation and the changing
workplace.
Case of Microsoft
In 2014, after Satya Nadella took over as the CEO of Microsoft, the company went through a
much-needed restructuring process. Microsoft cut down 18,000 employees. Most of these
employees were from Nokia which was the phone business acquired by Microsoft in 2014.
Additionally, 5000 employees were laid off from Microsoft as part of the same restructuring.
Reason for this reorganization was Satya Nadella’s idea of a leaner and agile organization
which can anticipate and innovate quickly with faster decision making (Etherington, 2014).
Case of du Telecom
In 2013, UAE’s Du Telecom signed a MoU with China’s Huawei Technologies. In a three
year agreement, Huawei had agreed to help Du Telecom in developing an advanced mobile
and broadband network.
The rationale behind signing this MoU was to expand Du Telecom’s networks to include
technologies like LTE-Advanced, 4.5G and 5G capabilities in order to tap the exponential
growth seen in consumer data usage (Tomás, 2015).
The major External pressures which lead these organizations to change are market decline
and extensive competition. Before Nadella took over as CEO, Microsoft’s products were
facing poor reception in the market. Microsoft was also facing competition from Apple and
Google. As in the case of Du Telecom in order to tap the growing demand, they had to
collaborate with an organization that has experience. The Internal pressure faced by
Microsoft and Du Telecom is the pressure to grow their market share and form a
collaboration with Nokia and Huawei Technologies respectively.

Organizational Change and Development 4
Topic 2: Diagnosis by the image.
Microsoft was like a puddle
Before Satya Nadella took over as CEO, Microsoft had started to lose its control over the
market. Windows 8 had not performed very well and the company was struggling to make its
way into the smartphone revolution. Zune, which was launched to compete against iPod, had
been a product failure and to add insult to injury, the customers were losing faith in the
company (Palmer, 2017). The industry was shifting from Microsoft’s windows to Apple’s
iPhone and Google’s android resulting in a market share of less than 4%. Even the stock
prices had stalled despite increased revenue and profits (McCracken, 2017). Initially,
Microsoft talked about having its operating system Windows on every PC but by 2014 the
scenario had changed completely. Mobile phones had made PCs obsolete. Microsoft needed a
turnaround strategy in order to compete with Apple and Google whose innovations were
quickly expanding their market share.
Topic 3: Planning and preparing the change
Problems with Choice of agent: In an organization, which was undergoing technological
change, a manager who was considered an expert was selected to be the change agent. But
this decision was proved to be wrong as this manager had no influence over its team. He was
unable to communicate the top management’s vision of change to the employees. Due to lack
of influence, he was not able to stay abreast with the concerns people had with the change
process. A person with subject expertise is not necessarily the right person for implementing
change.
Quality of change relationship: In the same organization a new technological advancement
required a certain kind of training. When the employees got this news through grapevine,
they resisted the change as they feared to lose their job despite the fact that the management
had no such intentions. Due to poor communication with that group that is targeted for
change implementation, the organization can face employee resistance at the beginning of
change process (Heathfield, 2017). If the employees are resistant to change, it can adversely
affect the quality of change relationship.
Identification of the group to be targeted for change: Sometimes the target of change
implementation might be wrong. For the two organizations which merged recently the focus

Organizational Change and Development 5
of the cultural training included the middle and lower level management. However, problems
started cropping up when the key people in the organization found it difficult to stay together
and work.
Specification of the change issues: While defining the organizational change issues
managers might completely ignore the main issue and focus on other minor issues while
developing an implementation plan. For example, an IT company dedicated its efforts in
developing advanced versions of their existing products in order to compete in the market
while completely ignoring the fact that the market has shifted to new innovations making
their products obsolete.
Topic 4: People and Culture
While implementing change it is expected that change agent might face resistance from
employees it can be both active and passive. When employees stop complying with new
organizational norms, they continue to attend the meetings and might appear to agree with the
change but do not do anything to fulfill the commitment. The active form of resistance can be
seen in the form of sharing their discontent on public platforms and involving in unionism
and politics in order to obstruct change process. Proper communication plays an important
role in the successful implementation of change. Opportunity to offer feedback should reach
every level of the organization till the lowest level. Communication is also important to help
employees identify the benefits that the change will bring for them. Listening is also
important to create a trusting and employee oriented organization (Heathfield, 2018). Another
way to lessen the resistance is to link the collaborative behavior of employees with job
performance (Hayashi, 2017).
Topic 5: Implementing Change
Technological, political and economic policies, change in governance etc. are some of the
external variables. Change in leadership and culture are some internal variables. If not taken
into account, these variables can result in failure of change implementation. When Apple
came up with iPhone Microsoft first denied that success of such a product is a possibility, but
currently, the success of iPhone is a well-known fact. Under Steve Ballmer, Microsoft kept
innovating products like Windows Vista and search engine Bing but was very late in
including technological advancements in its change strategy (Thompson, 2013). So in the
case of Microsoft, Technology was the situational variable that they did not take into account

Organizational Change and Development 6
and failed in product innovation. It was only after Satya Nadella took over as the CEO,
Microsoft was able to meet the pace with innovations happening in IT industry.
Topic 6: Sustaining the change
Change is the only thing that is constant. In order to survive the fast moving business
environment, businesses should embrace change. Technology and innovations are the most
important drivers of organizational change. Adapting to this change is important as it
increases productivity and saves time (Richards, 2018). For an evidence-based practitioner, it
is important to note that as a change agent, their role as an influencer, communicator and a
progressive thinker will play a key role in the success of change management. A future
change agent should not only prepare himself/herself with the subject expertise but build
leadership skills as well to successfully lead the change implementation by motivating and
communicating employees so that everyone in the organization shares the same goals and
vision. For managing organizational change successfully, a change agent should cautiously
address the fear of change in the minds of employees. Stress caused is directly proportional to
the level of change experienced. In order to address this fear, change agents should ensure
that the employees are heard and the management is communicating the expectations
continuously and correctly. Secondly, it should also be ensured that the teams receive training
for the skills required for them to stay updated.

Organizational Change and Development 7
Bibliography
BORT, J., 2015. How Satya Nadella has changed Microsoft in just one year. [Online]
Available at: https://www.businessinsider.in/How-Satya-Nadella-has-changed-Microsoft-in-
just-one-year/articleshow/46115078.cms [Accessed 12 January 2018].
Etherington, D., 2014. Microsoft CEO Gears The Company For Change, And A Renewed
Focus On Productivity And Platforms. [Online] Available at:
https://techcrunch.com/2014/07/10/microsoft-ceo-gears-the-company-for-change-and-a-
renewed-focus-on-productivity-and-platforms/ [Accessed 12 January 2018].
Hayashi, S.K., 2017. Strategies For Managing Employees Who Resist Change. [Online]
Available at: https://www.forbes.com/sites/forbescoachescouncil/2017/03/17/strategies-for-
managing-employees-who-resist-change/2/#3d97107c66ee [Accessed 17 January 2018].
Heathfield, S.M., 2017. Communication in Change Management. [Online] Available at:
https://www.thebalance.com/communication-in-change-management-1917805 [Accessed 17
January 2018].
Heathfield, S.M., 2018. How to Reduce Employee Resistance to Change. [Online] Available
at: https://www.thebalance.com/how-to-reduce-employee-resistance-to-change-1918992
[Accessed 17 January 2018].
McCracken, H., 2017. Satya Nadella Rewrites Microsoft’s Code. [Online] Available at:
https://www.fastcompany.com/40457458/satya-nadella-rewrites-microsofts-code [Accessed
16 January 2018].
Palmer, A., 2017. Microsoft Has Been Completely Reborn Under CEO Satya Nadella.
[Online] Available at: https://www.thestreet.com/slideshow/14209806/1/microsoft-gets-
rebooted-under-ceo-satya-nadella-here-are-his-6-biggest-achievements.html [Accessed 16
January 2018].
Richards, L., 2018. Why Is Change Important in an Organization? [Online] Available at:
http://smallbusiness.chron.com/change-important-organization-728.html [Accessed 17
January 2018].

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Sahota, D., 2013. Du signs project management agreement with Huawei. [Online] Available
at: http://telecoms.com/136912/du-signs-project-management-agreement-with-huawei/
[Accessed 12 January 2018].
Thompson, N., 2013. Why Steve Ballmer Failed. [Online] Available at:
https://www.newyorker.com/business/currency/why-steve-ballmer-failed [Accessed 17
January 2018].
Tomás, J.P., 2015. Du and Huawei work on advanced mobile networks for the UAE. [Online]
Available at: https://www.rcrwireless.com/20150706/europe/huawei-du-advanced-mobile-
uae-tag23 [Accessed 12 January 2018].