Management Functions

Outline

I. Overview

II. Current Technology Assessment

III. Value Chain Analysis

A. Value Chain Defined

B. Value Chain and the Customer

C. Technology Supporting Business Functions in the Value Chain

D. Technology and Partnering Activities

IV. Social Contract

A. Social Contract Defined

B. Social Contract in History

C. Social Contract in the Business Perspective

D. Regional issues with Social Contracts

V. Global Issues

VI. Managing Changes

VII. Conclusion

Overview

"In 1991, Microsoft Corp. became the first software company to create its own computer science research organization. Microsoft has developed into a unique entity among corporate research labs, balancing an open academic model with an effective process for transferring its research to product development teams. Microsoft recognizes that to create the foundation for future technology breakthroughs, it is necessary to support long-term computer science research that is not bound by product cycles" (http://www.calibex.com/serv/calibex1/buyer/outpdir.jsp?search=microsoft+products). Today, the world-renowned scientists of Microsoft Research make up one of the largest, fastest-growing, and most highly respected software research organizations in the world -- one that will help define and redefine the computing experience for millions of people for decades to come"

Microsoft offers a variety of products such as operating systems, business/personal management software, multi-media software, databases, and exchange servers. They also provide help centers online and provide services over the telephone to help you with any problem you are having with their products (http://support.microsoft.com/default.aspx?LN=EN-GB).

Value Chain Analysis

Before you can discuss Microsoft's value chain, you must first understand what a value chain is. According to the Internet Center for Management and Business Administration, Inc., the value chain can be described as:

A way to analyze the specific activities through which firms can create a competitive advantage by modeling the firm as a chain of value-creating activities. (QuickMBS.com)

The article further describes the value chain as maintaining five primary activities (Inbound Logistics, Operations, Outbound Logistics, Marketing & Sales, and Services). The goal of these activities is to "create value that exceeds the cost of providing the product or service, thus generating a profit margin." (QuickMBS.com) The primary activities can be defined as: "Inbound logistics include the receiving, warehousing, and inventory control of input materials. Operations are the value-creating activities that transform the inputs into the final product. Outbound logistics refer to the activities required to get the product to the customer, including warehousing, order fulfillment, etc. Marketing & Sales are those activities associated with getting buyers to purchase the product, including channel selection, advertising, pricing, etc. And Service, defined as activities that maintain and enhance the product's value including customer support, repair services, etc." (QuickMBS.com)

Microsoft's objective is to provide a product that satisfies the needs of the customer. The establishment of the value chain was designed just for that reason. The Microsoft Research team is continually developing new technologies to enhance the customers overall service. According to the Microsoft Research website, a Microsoft Research spokesperson stated:

At Microsoft Research, we have an insatiable curiosity and the desire to create new technology that will help define the computing experience. Whether inspired by a suggestion from a customer or simply the search for a better way, we're driven to innovate and push the state-of-the-art in computer science as far as our imaginations can reach. (Microsoft Research.com)

This development of new technologies offers support to all aspects of Microsoft's business functions and their value chain. In an e-article discussing the effects of the internet on the value chain analysis of Microsoft, Sanjiv Sidhu, CEO, i2 Technologies stated:

The Microsoft Value Chain Initiative enhances i2's Value Chain Planner solution by providing a unique opportunity for all participants in the supply chain to replace billions of dollars of trapped inventory with information and to significantly enhance performance for the end consumer. (Microsoft.com)

An example of this would be utilizing a virtual warehouse to store customer downloadable products. This allows Microsoft to provide desired products without generating a huge surplus of inventory and the ability to reduce infrastructure costs. Tracking the customers' wants allows operation to develop better products with the customers' interests in mind. These same technologies facilitate the flow of the value chain by identifying product needs and helps direct marketing strategies with sales and services to the consumer.

With the introduction of the internet, Microsoft was provided with the means of tracking their products worldwide. The tracking of their products allows the organization to direct sales and marketing strategies toward identified consumers interested in a particular product. This same technology also allows online surveys, conducted by the consumer, and facilitates the controlling function of management throughout the value chain process.

The internet also assists Microsoft with collaboration efforts with universities and product groups with joint partnering activities. These activities are beneficial for the customer because it gives the consumer a stake in the development of new products and identifies antiquated/obsolete products. Examples of these activities include full integration of Microsoft products with the products of other leading technological organization through the help of consumer inputs and data exchanges. This collaboration allows Microsoft to better respond to the customers' needs and provides the much needed edge to remain at the forefront of the computer software industry. As a leader within