Microsoft’s Organizational Structure

Microsoft’s organizational structure has been described as a divisional, product-type organizational structure based on functional business groups and engineering groups. 

As of the company’s latest restructuring, several changes were announced that would help to align the company to its strategic direction as a productivity and platform company. 

While Microsoft has become more hierarchical as the company has grown, it has managed to maintain its hybrid approach between senior management, functional business groups, and engineering groups. 

Microsoft’s current business groups are divided into nine areas:

• Business Development Group

• Corporate, External, and Legal Affairs

• Corporate Strategy and Planning

• Finance Group

• Global Sales, Marketing, and Operations

• HR Group

• LinkedIn

• Marketing Group

• Worldwide Commercial Business

Its engineering groups are divided into three areas:

• Cloud and AI Group

• Experiences and Devices

• Artificial Intelligence and Research

Microsoft also has two geographical divisions:

• United States

• International

Under the company’s 2015 structure, heads of engineering groups report directly to CEO Satya Nadella. This helps new product development and innovation because it helps new products and services to get to market faster. A clear distinction between engineering and business groups also illustrates Microsoft’s focus on its engineering groups which are responsible for building core products and services.

The way Microsoft’s organizational structure has been designed also means that there’s a wider span of control than what is typically seen at comparable tech giants such as Apple or Facebook (Meta). This means that the company is more centralized, and more subordinates fall under the supervision of individual managers – i.e., those with the most authority – as a result. 

The decision to centralize Microsoft’s decision-making was initially introduced by Bill Gates in a bid to keep output standardized, remove the potential for personal biases, and create a unified company with diversified standards – Nadella’s decision to keep this set up is a sign that that this strategy works well for Microsoft.