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Microsoft Team Dynamics and Ethics

The stresses of knowledge transfer and knowledge management are especially prevalent in the software industry. The time and increasing cost pressures of global software development amplify and make more challenging the issues of globalization affecting every high technology business today. The need for real-time process, system and knowledge management integration across globally-based development teams is critically important if software applications are to be launched on schedule and seen as relevant to the changing computer user’s needs (Gibbs, 2009). Compounding the data, knowledge and process management aspects of a globalized development strategy that many companies including Microsoft has long relied on (Cusumano, Selby, 1997) are the cultural constraints as well as defined by Hofstede as cultural dimensions (Hofstede, 1998). Simply put, the formation of a global development team is very difficult. Its complexity is compounded by the ethical considerations of sharing knowledge globally to ensure equality of opportunity for all geographies and all programmers, making sure ethnocentrism does not take hold (Tekleab, Quigley, Tesluk, 2009). The intent of this paper is to analyze how global software development teams can be formed to ensure the highest performance possible while also taking into account the ethical considerations of globalization.

Microsoft’s Approach to Programming Team Development
Microsoft’s legacy is based on small, tightly integrated software development teams that concentrate on solving highly complex and therefore, difficult problems in close coordination with each other. This requires a more loosely defined organizational structure that gives those engineers with exceptional talent the freedom to grow professionally at their own pace while enriching others in their teams at the same time (Cusumano, Selby, 1997). Promotions and status within the Microsoft culture are more driven by expertise and knowledge than by seniority, which fuels a highly competitive environment in terms of new approaches to solving complex, difficult programming problems (Lysenko, 2006). As would be suspected, traditional approaches to creating teams that are from the more chain-of-command era do not work at all in the Microsoft environment, yet transformational leadership and leadership based on technical expertise leads to teams accomplishing exceptional amounts of work ahead of schedule as a result (Cusumano, Selby, 1997).

Transformational leadership within Microsoft is unique to the organization, as its culture highly values technological expertise, yet also has a sizeable bureaucracy within which to operate. The challenge in creating teams within Microsoft is to have team leaders who can continually manage to objectives while providing exceptionally strong technical expertise, while also mitigating or minimizing conflicts between team member’s altogether (Somech, Desivilya, Lidogoster, 2009). The role of team leader within Microsoft is considered to be one that requires exceptional levels of technical expertise and credibility as a result (Lysecki, 2006). There are also the generation gaps between and within teams across all of high technology (Birkinshaw, Crainer, 2008) with this being particularly evident in the Microsoft culture as well. That’s why it is so critical that the culture continually adopt team dynamics that concentrate on expert power over any other, especially legitimate or position power (Humphreys, Pryor, Haden, Oyler, 2009). For Microsoft, the concentration on creating transformational leaders through the use of expert power also makes it possible to get entire teams more efficiently to accomplish shared goals (Mathieu, Rapp, 2009).

The Ethics of Globalization and Microsoft
As Microsoft have development centers in many nations, the need for close coordination of development processes, systems and schedules is critically important to the success of development programs. Internally the company struggles daily with the ethics of ethnocetricism, which in other words is the tendency to keep the most career-enhancing projects in Redmond, Washington and send the secondary projects to other nations. This has been seen as one of the ethical lapses Microsoft has made in terms of managing its development (Lysecki, 2006). Externally, there are just as many ethical challenges including the alignment of Microsoft applications and operating systems to unique requirements in foreign nations that vary from data encoding, multilingual interfaces, localization and scalability testing. Microsoft relies on its developers in these other nations to ensure their applications are aligned with the needs of these markets. What Microsoft has learned over the last three years about keeping their development teams aligned globally are the benefits of social networking (Hossain, Zhu, 2009). These include collaborative platforms including Facebook private pages, Wikis and enterprise content management (ECM) portals used for managing content so it is available on a 24/7 basis. Microsoft has an inherently difficult problem to solve internally about ensuring more opportunities for their talented off-shore programmers to participate in the most challenging and professionally rewarding projects based in the U.S. This ethnocentric attitude has been viewed at times as unethical by programmers located outside the United States. Another aspect of Microsoft’s ethical dilemmas is the pricing of software specifically developed in Redmond, Washington where development expenses are at their greatest, yet sold at very aggressive prices in 3rd world nations. Microsoft’s pervasive use of bundling which began in response to Netscape’s competitive threat (Clements, 2002) continues today in 3rd world nations and is a frequently used strategy for ensuring operating systems and server products are competitive in these nations. Microsoft however, has paid development expenses for many of these products in the U.S., and uses their development centers for localization.

The ethical aspects of this on team dynamics are obvious (Lysecki, 2006) with many developers in these other nations insisting that they should be given the opportunity to create these applications, operating systems, and server-based applications entirely in their native nations. Microsoft counters that their quality management of coding in Redmond, Washington is superior (Cusumano, Selby, 1997) and that it is essential for team dynamics that core areas of applications be developed and tested in Redmond. The effects of this from a team dynamics perspective continue to be felt in how global teams are managed and motivated. The fact that the Chinese market is by far the most promising from an operating system standpoint has the 5,000 member development and R&D Center in Beijing (Buderi, 2005) focused on how they can earn credibility and ascend in the Microsoft corporate culture.

In developing high performance teams within high technology companies such as Microsoft, credibility and technical expertise, or expert power, are far more important than position power or legitimate power. The catalyst of what keeps these companies competitive is the extent to which they can continually grow new leaders who have a strong depth of technological ability, yet also have the ability to motivate through example. The globalization aspects of development teams can often fall into the trap of being ethnocentric in nature, with the majority of development going to staff in headquarters. Externally there is the challenge of managing products’ pricing in foreign countries so they are competitive yet also ethically priced and not deliberately low-priced just to gain market share. Microsoft has the many challenges of managing global development teams ethically for their globally based employees while also ensuring their pricing is ethical and not deliberately low to just drive smaller, less financially viable competitors from the market.