MD 4044 Entrepreneurship: Analyzing Bill Gates' Business Decisions

This report provides an analysis of Bill Gates' entrepreneurial journey and his contributions to the global economy through Microsoft. It discusses the key decisions made by Gates, including the pivotal decision to license the 86-DOS operating system to IBM, which significantly impacted Microsoft's growth. The report also addresses the ethical challenges faced by Gates, particularly regarding tax avoidance, and explores the legal disputes, focusing on the Anti-Trust Case brought against Microsoft. The analysis covers the implications of these events on Gates' reputation and the overall business landscape. Desklib provides a platform for students to access similar solved assignments and study resources.

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Bill Gates and Entrepreneurship
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1BILL GATES AND ENTREPRENEURSHIP
Table of Contents
Entrepreneurs and their contribution towards the creation of a strong economy (604 words). .2
Difficult Decision made by Bill Gates (450 words)...................................................................3
Ethical challenge faced by Bill Gates (487 words)....................................................................5
Legal Dispute faced by Bill Gates (452 words).........................................................................6
References..................................................................................................................................8

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Entrepreneurs and their contribution towards the creation of a strong economy (604
words)
According to Brinckmann and Kim (2015), entrepreneurship is the process through
which entrepreneurs create new business ventures and also formulate the blue print for the
effective management of the same. On the other hand, Kyndt and Baert (2015) have
articulated the viewpoint that in the majority of the cases it is seen that the business ventures
or the business ideas developed by the entrepreneurs are not radically new ones rather they
are the usage of the older business ideas in the a newer form .On the basis of this, it can be
said that one of the most important character traits of the entrepreneurs is to identify the
business opportunities presented by the current business market (Kickul and Lyons 2016).
The growth of economy has been initiated by the global business. In this regard, the
global underprepares have been continuously supporting exchange of ideas and wealth from
country to country so that the developing nationals along with the developed ones can grow
simultaneously (Li and Zhu 2018). Furthermore, the business ventures which the
entrepreneurs establish through the identification of the business opportunities contribute a
significant amount of capital towards the world economy. In this regard, it needs to be said
that a significant amount of capital which is being generated by these business ventures goes
to the national governments as tax money and other kinds of subsidiaries. The net revenue
generated by the organization Microsoft, the entrepreneurial venture of Bill Gates, for the
year 2018 was US$110.36 billion (Microsoft.com 2019). It is pertinent to note that a
substantial amount of this capital went to the national government of USA and also of the 170
different nations in which the concerned organization is operational as tax money, tariff
charges, import and export charges and others (Microsoft.com 2019).

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The Taxes paid by the various organizations to the national governments is being
utilized by them for undertaking different kinds of developmental projects (Schivardi and
Michelacci 2017). In addition to this, it is also seen that this capital is being invested by the
national governments for the further development of the trade as well as commerce of the
concerned nations. Furthermore, this had boosted the GDP and the national economy of USA
is a significant manner and in addition to these it is there are many organizations like the ones
related to computer parts services, software related products and others are dependent on the
business of the concerned organization (Romero 2016). More importantly, the economic
contribution made by Gates towards US’s economy had helped the nation under discussion
here to overcome the adverse effects of the financial crisis which it faced in 2007-2008
(Mishra and Zachary 2015).
Apart from the revenue contribution to grow the economy, the global entrepreneurs
also help in addressing the problem of unemployment as well (Aulet et al. 2018). As opined
by Yoffie and Cusumano (2015), one of the biggest problems that the world is facing
currently and which is taking a toll on its economy is the problem of unemployment.
However, the entrepreneurs through the business operations of their business ventures create
various job opportunities for the unemployed people. In this regard, it can be said that the
business venture that Gates established, namely, Microsoft currently offers employment to
more than 135,000 people from the different parts of the world in addition to various
internship programs that the organization offers (Microsoft.com 2019). This is perhaps one of
the major reasons for the low unemployment rate of USA (4%) which in comparison with the
unemployment rates of the other first world nations like France (9.1%), UK (4.3%) and
others is significantly low (Duchek 2018).

4BILL GATES AND ENTREPRENEURSHIP
Difficult Decision made by Bill Gates (450 words)
Bill Gates had emerged as one of the most popular as well as renowned entrepreneurs
of the world not only because of the business venture developed by him, namely, Microsoft
but also because of the contribution that he had made towards the world economy (Frederick,
O'Connor and Kuratko 2018). William Henry Gates III or more commonly called by the
name of Bill Gates (born 1955) is known as an entrepreneur, business magnate, humanitarian
and philanthropist of the 20th and the 21st centuries (Aulet et al. 2018). More importantly, he
is also famous as the co-founder of Microsoft which he founded in collaboration with Paul
Allen in the year 1975 (Smith and Boje 2017).
Mathias, Solomon and Madison (2017) are of the viewpoint that the success or the
failure of the business ventures developed by the entrepreneurs depends greatly on the
decision making abilities of these individuals. In this regard, it needs to be said that the
entrepreneur Bill Gates had made many difficult decisions in is life however the one which
not only decided his fate as a business magnate and also of this organization was the decision
to offer the 86-DOS (QDOS) operating system to the computer manufacturing organization
IBM in 1980 (Microsoft.com 2019). This was a difficult decision for Gates because of the
fact that his partner Allen wanted to hold the exclusive rights for the operating system with
them and thereby force the customers and the other organizations opt for their services
regardless of the fact whether they wanted it or not (Aghion 2017).
Yoffie and Cusumano (2015) have articulated the fact that this decision of Gates to
license the operating system to IBM not only enabled Microsoft to reach out to a much larger
customer base but in the coming years it was also being able to utilize the customer base of
IBM to attain a higher level of growth as well. More importantly, by collaborating with the
organization IBM for the operating system the organization Microsoft was successfully able
to challenge the business monopoly held by the organization Apple and the systems offered

5BILL GATES AND ENTREPRENEURSHIP
by them. It is pertinent to note that this decision on the part of Bill Gates created a temporary
rift between Gates and Allen because of the difference in business vision however Allen soon
realized the business opportunity offered by the deal. Thus, it can be said that going against
the will of his partner Allen to establish business relations with IBM was not only a difficult
decision for Gates but at the same time the decision which actually placed the organization
Microsoft on the road to success that helped it to become the one of the largest organizations
of the world.
Ethical challenge faced by Bill Gates (487 words)
The fundamental ethical issues which the businesses can face are related to integrity
as well as trust. Often the stakeholders think that a company is displaying unwavering
commitments to the ethical business practices, they trust the company but any cases like tax
violations or not paying employees properly can create problems in the stakeholder and
company relations. In case of Bill Gates, tax violation greatly affected the image of the
company when he avoided any communication with the stakeholders about this issue.
One of the major issues that affected the reputation of Bill Gated is his actions of tax
avoidance. Tax evasion has been criminal act of using unlawful means for avoiding payment
of taxes. There are plenty of tax evasion schemes, but most of these involve the distortion of
income of people as well as business. Paying a fair amount of tax in the countries where the
business of Gates is present, comes under the moral and legal expectations for such a great
business tycoon in the world. This is also associated with the social responsibility of the
business organizations. Through their taxes, the business persons can provide the funds to the
public services like education, healthcare and infrastructure of the countries. In the case of
Bill gates, he is accused of tax avoidance under the name of his company which has been
branded as immoral as well as unethical practice. This tax avoidance process directly

6BILL GATES AND ENTREPRENEURSHIP
undermines the integrity of the tax system. More importantly, it can be said that Bill Gates
was following the ethical theory of Kantianism which states that “the end justifies the means”
and this theory was used by him and his organization Microsoft for the evasion of tax money
(Aghion 2017). However, he and his organization should have used the theory of
Utilitarianism which focuses on “the kind of action that offers maximum amount of benefit to
the majority of the people” by paying the requisite amount of tax money (Mathias, Solomon
and Madison 2017).
Bill Gates has accepted his association in the poverty in the sub-Saharan Africa and
other poor countries. In order to respond to the urge for changing the world and also by
getting inspired by the book of Kevin Salwen “The Power of Half” he and his wife Melinda
had decided to give up more than 95% of their wealth in the coming to charity and also trying
to convince other billionaires of the world to do the same (Duchek 2018). Based on this,
Gates have argued that he did not have initiated any unethical action as his organizations are
doing something much better for the society. Rather than accumulating his wealth to the
country’s government, he is providing funds to the welfare of these poor countries to whom
even the World Bank does not provide assistance. However, this is an important issue which
has hampered the reputation and image of Bill Gates in the business world.
Legal Dispute faced by Bill Gates (452 words)
Bill Gates and his business venture Microsoft over the years had faced various kinds
of disputes however one of the most important legal disputes which adversely affected the
business prospects of the concerned organization was the Anti-Trust Case brought against the
organization. Bill Gates and his organization Microsoft had to face Antitrust case (1980s)
filed by the US Department of Justice (DOJ) and 19 other district attorneys of the nation for
the violation of the Sherman Act and thereby the use of unethical as well as unfair practices

7BILL GATES AND ENTREPRENEURSHIP
to monopolize the business market of USA (Mathias, Solomon and Madison 2017). It is
pertinent to note that the DOJ found that the organization Microsoft and Gates were taking
the help of unethical typing up practices with the various computer parts manufacturers and
also forced the customers to use the software or applications offered by them in a bid to gain
monopoly in the business market of USA. For example, it was seen that more than 90% of
the computers manufactured by Intel came with a pre-installed version of Windows and also
Internet Browser and the customers were forced to use them although there were better
quality of choices available to them (Mandal and Vong 2017). These practices used by the
organization and Gates were not only unethical but at the same time reduced the free-will of
the customers and also the choices that they had in a significant manner. The net result of this
was that the verdict of Judge Jackson, who presided over the case asked the organization to
divest and create two smaller companies, one would deal with the manufacture of computers
and the other would deal with the software business organization (Smith and Boje 2017). In
addition to the above mentioned structural change, the organization was also asked to certain
behavioral changes as well which required the organization and its CEO Bill Gates to amend
the unethical business practices used by them. Furthermore, the organization was also
subjected to a supervision of 10 years during which the legal authorities would scrutinize the
business practices used by it (Mathias, Solomon and Madison 2017). However, after
repealing a new settlement was reached which demanded that the organization rather than
divesting should give up the unethical practices that they had been following for the
attainment of monopoly in the business market of USA and also recommended some
behavioral changes that the organization was required to follow (Mandal and Vong 2017).
This is generally considered to be one of the major legal disputes that Bill Gates and his
organization Microsoft had faced over the years because of the reputational as well as the
business damage that the concerned dispute caused to the concerned organization.

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References
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Business Economics, 48(1), pp.9-24.
Aulet, B., Hargadon, A., Pittaway, L., Brush, C. and Alpi, S., 2018. What I have learned
about teaching entrepreneurship: perspectives of five master educators. In Annals of
Entrepreneurship Education and Pedagogy–2018. Edward Elgar Publishing.
Brinckmann, J. and Kim, S.M., 2015. Why we plan: The impact of nascent entrepreneurs'
cognitive characteristics and human capital on business planning. Strategic Entrepreneurship
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Duchek, S., 2018. Entrepreneurial resilience: a biographical analysis of successful
entrepreneurs. International Entrepreneurship and Management Journal, 14(2), pp.429-455.
Frederick, H., O'Connor, A. and Kuratko, D.F., 2018. Entrepreneurship. Cengage AU.
Gielnik, M.M., Frese, M. and Stark, M.S., 2015. Planning and entrepreneurship. In The
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Kyndt, E. and Baert, H., 2015. Entrepreneurial competencies: Assessment and predictive
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Romero, S., 2016. Bill Gates speaks K'ichee'! The corporatization of linguistic revitalization
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