Collaboration vs. Competition: The Effect of Culture on Innovation
Kenneth Davis
August 8, 2014
MBA 622 Creativity and Innovation in Business
Professor Cindy Atchley

Collaboration vs. Competition: The Effect of Culture on Innovation
Microsoft, the most dominate software company of the 1990’s, has slowly been eclipsed by companies like Apple and Google. How? What is it that Apple and Google do as businesses that have made them more valuable to both investors and global markets? “Until recently, Microsoft has always been able to attract some of the world’s greatest software minds for most of its history.” (Govindarajan, 2010). The answer lies not with a lack of talent. A significant cause can be found in the differences between their corporate cultures.
For every product category that Microsoft once dominated: music, operating systems, and social media, they have now been surpassed by their rivals. Microsoft Corporation, though still hugely profitable, showing revenues in 2013, of $21.5 billion, is no longer seen as a technology innovator (Microsoft Corporation, 2013). It is rapidly losing relevancy as people look to more innovative companies. Dick Brass, former vice president at Microsoft from 1997 to 2004, in his article “Microsoft’s Creative Destruction,” describes Microsoft’s corporate issues this way, “Unlike other companies, Microsoft never developed a true system for innovation. Some of my former colleagues argue that it actually developed a system to thwart innovation.” (Foley, 2014)
Microsoft was dominant in the technology environment during the time when some of the most innovative and spectacular technology advances took place. They had both better funding and positioning than any other company to be an innovative leader. Yet, because of its corporate culture, Microsoft failed to capitalize on any of these market opportunities.