This paper compares the organizational change strategies undertaken by General Motors (GM) and Microsoft, focusing on the rationale and driving forces behind each company's restructuring. GM reorganized its North American sales and marketing division into a flatter structure to improve customer service and competitive speed, separating marketing expertise from sales and service functions. Microsoft, by contrast, combined its Global Agencies and Global Accounts divisions to strengthen advertising differentiation and public image. The paper identifies internal and external forces behind each change and concludes that both strategies, though structurally opposite, were equally valid responses to each company's specific competitive challenges.
This paper compares the organizational change strategies of General Motors (GM) and Microsoft, examining the rationale and driving forces behind each company's restructuring and identifying the key structural differences between their approaches.
The main rationale for General Motors' organizational change focused on the functioning of its sales and marketing division. The historically combined sales and marketing organization had become uncompetitive in a marketplace where faster sales created a better competitive edge. Faster sales also meant that better customer service was required. To accomplish these two goals, the company created a flatter structure in which qualified personnel were appointed to roles requiring specific expertise (Luft, 2010).
The focus became singular: marketing experts were concerned exclusively with creative strategies to showcase products, while sales and service personnel focused exclusively on working with customers and dealers. In this way, customer service improved, which in turn created a better competitive edge, as satisfied customers tend to spread favorable reports about a company.
External forces driving this change included increasing competition from other vehicle manufacturers working to recover from the economic downturn. Internal forces centered on the drive to align personnel expertise with the areas where it could best serve the company and its customers. The developed structure aimed to simplify sales operations, placing as few layers as possible between the executive in charge, the dealer, and the customer.
Microsoft's change strategy had a more singular focus, with its rationale relating exclusively to its advertising business. The primary rationale for change was to differentiate the company's advertising division from other agencies, such as the MSN portal (Shields, 2011).
Like GM, Microsoft made specific changes to management and sales positions in order to more clearly focus on the creativity at the heart of Microsoft's proposed image. The main driver for this change was external: to enhance not only the competitive differentiation of the company, but also its image in the public eye.
Whereas GM divided its sales and marketing divisions, Microsoft's change focused on combining two separate divisions — Global Agencies and Global Accounts. The former focused on top advertising agencies, while the latter focused on top clients. To support this combination, a new vice president was appointed to report directly to the top executive. The Global Agencies division's leading executive was placed in charge of the global marketing team in a more integrated role.
"Contrasting structural approaches and client needs"
Neither strategy nor rationale could be considered more important than the other. In both companies, change occurred as a result of particular areas that needed either a more specific or a more integrated approach. Each type of change was implemented to create a better competitive edge for the respective company, and each was an appropriate response to the unique operational and market conditions that company faced.
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