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Preface
Trend Micro Inc. is the kind of company I want to work for. I had the opportunity to visit Trend Micro in 1997 for my MIS research paper, and also built part of the customer database for Trend as a MIS specialist in Macro Information Service Corp. in 1998 which is an outsourcing company of Trend Micro.
"Trend's culture and management style is so fascinating and special", that's what I feel while first visiting Trend. Everybody shows his/her energy and spirit; moreover, everybody seems to be very familiar with company's mission, goals, and strategies. Organization structure is so flat that everybody is just like friend to share his experience with others - a pretty young-image company.
3C (Communication, Creative, Change) is the major strategy that Trend keep its long-run competitive advantage. Keep innovating, not only for the product, but also the organization structure and marketing strategy, is why Trend Micro can earn such high revenue ($100 million) with only 550 employees worldwide.
I guess the reason that this time I choose Trend Micro to be the topic for my OT research paper is I want to see if my favorite company still keeps growing and also complete my prior research paper at the same time. I'll play the role as Corporation Vice President of Taiwan.
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Trend Micro Overview
Trend Micro, Inc. was found in 1988 by former Hwelett-Packard engineer Steve Chang, which develops server-based anti-virus software for the enterprise. Within two years, Trend Micro was established as the global virus expert. Trend now boasts a worldwide team of more than 40 virus engineers - the largest team of anti-virus company.
The company's application server and corporate desktop products are certified by the International Computer Security Association to detect 100% of viruses ‘in the wild’ today. The scanning engine that powers these products is at the heart of every Trend virus protection product - from the Internet gateway to the desktop. Trend technology protects more than 14 million users worldwide.
Company growth has been entirely self-financed until December 1996, when Japan's SOFTBANK Corporation, a major infrastructure provider to the global information technology industry, purchased 35 percent of the company. Trend's corporate headquarters is located in Tokyo, Japan, with business units in North and South America, Europe, Asia, and Australia - more than 550 employees working from Trend offices in 14 countries and sales covering 30 countries.
Trend Micro's many important technology "first" include Internet gateway virus protection, the first - and still the only - free online virus scanning service, and the use of intranet technologies to deliver efficient centralized management tools. In addition to the excellent performance of R&D, Trend also engaged in after-sales customer service, including free virus analysis and Q&A, BBS virus code update, free house-call virus checkup, automatic WWW virus code update, and 24 hours FaxBack service. Moreover, the company creates a Virtual Lab, which enables users to test drive Trend products live on the web ("Trend Micro Anti-Virus for the Enterprise, Corporate Overview", 1999).
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Trend Micro's Organization Structure
Trend Micro is a very organic organization and owns the most flexible organization structure. The company tries to change its organization structure every year to fit the outside environment and maintain its competitive advantage. It follows the path of Microsoft, so it's easily for Trend to change its organization structure. Trend is founded in Silicon Valley, California. After Steve Chang moved back to Taiwan, he also moved the corporation headquarter to Taiwan. Until Trend Micro's stock is issued in Tokyo, again Trend moved corporation headquarter to Tokyo, Japan. Is it amazing? The following is the analysis for the structure of Trend Micro: Horizontal Differentiation Trend has 13 divisions worldwide - Taiwan, U.S, Japan, Brazil, Singapore, Hong Kong, Korea, Malaysia, Thailand, Argentina, Germany, Australia, and Mexico. Also, according to the various functions, Trend also creates a functional structure - IS, PMPC, HR/ADM, Technical Support & Service, Trend Sales, Finance, and Test/QA. Vertical Differentiation P.O, C.E.O, C.I.O, C.T.O, C.F.O, E.V.P, and Corp. VP represent the hierarchy of Trend Micro. However, Trend Micro makes its organization as flat as it can; therefore, it gets rid of the middle managers and keeps Trend's employees in small size. That helps the employees in Trend Micro can communicate with each other easily (See Appendix I). Integration 10 minutes love-meeting every morning for Technical Support & Service Department which let everyone can talk about the questions that customers ask, play together, and complain together.
Besides, not only internal but also external integration, Trend builds Internet web site and offers direct connection for all users and business partners. Users can get all the information from web site such as new virus code, products, special events, business partners, press center, etc. Moreover, if users don't have modem, they can call or fax to connect with Trend's customer service representatives or Trend's knowledge warehouse. 3
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As to break the barrier between different department, Trend offers employees the chance of job rotation. Furthermore, Product manager involves project team members (Task Force) from every department and also gives Corp. VPs of Overseas Business Units some suggestions about the marketing strategy of products. All employees can easily contact with Steve Chang, the C.E.O of Trend Micro through e-mail or face-to face (bottom-up conversation). Product Manager, C.E.O, and all top-managers play the integrating role of whole company.
The R&D experts travel around to share and discuss their ideas with other experts, and gather ideas and test results from online customers of Virtual Lab. They also have a regular meeting at R&D lab in Provo, Salt Lake City (near the INTEL and Novell).
Trend eDoctor Lab offers simultaneous 24 hours service in five places - Taiwan, the United States, Germany, Japan, and Philippine. ("About the Trend Micro in Taiwan", 1999).
Electronic integration (e-mail): Everybody in Trend Micro can use e-mail to share their ideas with whole company. Even through Internet, Trend Micro can get the feedback from suppliers, distributors, and customers. For me, it's a causal and convenient way to share my opinions with other members of the company no matter what levels the senders are in. Balancing Centralization and Decentralization Actually, the decisions are made by C.E.O and by top-managers. This is centralization. However, headquarter decentralizes the decisions making for overseas business units to fit the different customer's tastes. Trend makes a big effort to balance these two ways.
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Balancing Standardization and Mutual Adjustment Trend Micro standardizes only the key objectives–long-run competitiveness and 3C strategy–and products, but let the leader of every division can do some changes to achieve the key objectives. The company tries to keep organization as flexible as possible.
Functional Structure See the Appendix I (1999 Trend Micro Organization Chart).
It seems to be the right structure for Trend Micro. It's a functional structure which specializes the functions Trend need. Moreover, every division has its support functions to match domestic needs. The functional structure will create communication problems, measurement problems, location problems, customer problems, and strategic problem. However, till now Trend handles it pretty well. First, Trend Micro minimizes the employee size to prevent organization from being too big or too tall. Second, use outsourcing to avoid location and customer problems. According the first two solutions, the strategic problem hardly happened.
Trend doesn't use product multidivisional structure. I think the reason is that Trend is in a small niche and its products don't have big differences. Therefore, although the company has product manager to deal with different products, Trend doesn't divide it into different divisions by products. How to compose a team and which functions it needs are chosen by Product Managers. In addition, product managers can communicate with each other easily because they are in the same department, but not far away from each other as the different division of multidivisional structure.
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Global Geographic Structure Trend Micro has 13 overseas business units. An organization with a global geographic structure establishes foreign divisions to replicate all its domestic value creation activities in every country or world region in which it operates. To start operations in the foreign country, the parent organization permanently or temporarily transfers executives from headquarter. When a foreign division has been established, the foreign managers are responsible for creating core competences in their locations, and authority is decentralized so that each division can customize products to suit local tastes. As a Corp. VP of Taiwan, I'm really empowered by Trend Micro's headquarter.
Australia & New Zealand
Europe
U.S. & Canada
CEO
Asia & Pacific
Hong Kong/China Japan
Latin America
Korea Malaysia
Argentina Brazil Mexico
Singapore Thailand Taiwan
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Network Structure and Boundaryless Organization Outsourcing is the basic strategy of Trend, including manufacturing, market survey, and part of customer service. That let Trend be able to focus on its professional work. R&D and marketing strategy is the most important part for Trend; therefore, Trend makes big effort to keep every outsourcing-possible value creation activity outside.
Organizational Culture
Trend Micro has a very strong organization culture. Steve Chang, the CEO and president of Trend Micro Inc., who was chosen as one of "The Stars of Asia" for the second consecutive year, has strong charisma and is the center of Trend's culture.
Language Stories Symbols Rites
Artifact
Value Assumption
Assumption: Long-run Competitive Advantage and 3C (Communication, Creative, Change) strategy.
Value: 1. In software industry, no No.2, only No.1 can survive. 2. Customer is the most important thing for Trend Micro. 3. Keep innovating - products, marketing strategy, organization structure, management style, etc. 4. Keep organization as flexible as possible. 5. Maintain effective communication and share experience with each other. 6. No stop finding talent person to work for Trend Micro.
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Artifact: 1. Language: Trend is like a family. Everybody only calls each other the English name not Sir or something formal. Causal dress is the norm. Also "3C" and "Tornado Marketing" are the technical language.
2. Story: A lot of awards make the employees, potential employees, and users believe Trend Micro is a company worthy of working for ("Trend Micro-1999 Awards", 1999, "Ten Years Big Events", 1999). For example:
1995 PC-cillin 95PC Computing "Five Star Award" 1996 Fortune magazine "The most cool company in Asia" 1996 Steve Chang, CEO of Trend Micro Singapore "EDN Asia most creative corporation" Award. 1996 InterScan VirusWall defeat McAfee's Webshield, PC Magazine "Editor's Choice" Award. 1997 PC-cillin 97 PC World Best Buy, bits, and byte "Editor's Choice" Award. 1998 ServerProtect Beverly Hills Software Five Palm Award 1999 InterScan VirusWall UK's Network Week Magazine "Editor's Choice"Award. 1999 Enterprose Antivirus Solution Network Magazine "Product of the year".
3. Symbol: Trend Micro changes its trademark for entering Japan's stock market.
4. Rite: Trend holds informal cross-function meeting frequently by CEO or Product Manager; holds a lot of events to introduce its products for inside employees and outside users; offers employees the chances of education-training from Microsoft or other business partners; offers employees the chances of job rotation. These activities can motivate employees and build common norms as well as values in the company.
Organization Environment
Contingency Theory Trend tries to redesign its organization structure to fit with the quick-moving anti-virus industry environment. Comparing the organization chart 1996 and 1999, we can find out Trend integrates the New Product Department and Product Department into one department, PMPC. And upgrade the Test Office to be the Test/QA Department. In 8
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addition, Trend also add a new IS Department to integrate all the data and affairs flowing in and flowing out. The most important thing is that Trend notices the human is the key factor of an organization; therefore, Trend put the position title into the organization chart, such as P.O., C.T.O, C.I.O, C.F.O, E.V.P, and Corp. VP (See Appendix I & II).
As I mentioned above, anti-virus industry is moving rapidly. Almost everyday, dozens of new malicious code will be created; therefore, a successful company should use new technology or even create new technology. Moreover, the new operating system and platform will also affect Trend's strategies and direction. For example, McAfee is the leader in North America; of course, No.2 hardly survived in this industry. Not until Win95 and Internet entered the computer market, Trend didn't have the chance to find a new niche, restructure the organization, and reposition the company. Because the reasons I mentioned above, Trend's organization structure tends to more Organic to response the frequently changing environment. Resource Dependence Theory Because Trend outsource as possible as it can, it needs to mange its relationship with forces well such as suppliers, unions, distributors, and consumer interest groups. Strategy for Managing Symbiotic Resource Interdependencies: Trend Micro's virus protection technology has been chosen by leading enterprise solution providers as a key part of their security offering to their customers. Partners include: Centennial, Check Point, Cisco Systems, Citrix, Compaq, Cornerstone Systems, Inc., Covision, Hewlett-Packard, IBM, ISS, Infonet, ANSA, Lotus, Lucent Technologies, Microsoft, Netscape, Oracle, Phoenix, Sun, Tivoli, Wingra. ("Trend Micro, Anti-Virus, About Trend - Business Partners", 1999) For example: 1. Strategic Alliance: "June 21, 1999, Trend Micro announced it has entered into a strategic alliance with ebetween, a subsidiary of Phoenix Technologies Ltd. (Nasdaq: PTEC). According to the agreement, Trend will supply its Trend ChipAway Virus™ (TCAV) protection product in all PC motherboards supporting Phoenix's Internet ROM extensions. In addtion, ebetween will provide Trend Micro a unique first look
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position on the desktop of millions of new potential Internet users, giving them immediate access to Trend Micro's free on-line virus scanning service, HouseCall™, as well as other products and servies available at the company's award-winning web." ("Trend Micro Anti-Virus Software, News", 1999)
2. Strategy Alliance: "April 6, 1998, Trend Micro will become a member of Check Point Software's OPSEC™ (Open Platform for Secure Enterprise Connectivity) Alliance. As a member of the OPSEC Alliance, Trend Micro will integrate a number of its products - including future version of its InterScan® VirusWall software - with Check Point's offerings." ("Trend Micro Anti-Virus Software, News", 1999)
3. Network: For keeping company professional, outsourcing is the major strategy to achieve this goal. Trend held a lot of shows to attract suppliers and distributors, or chose them from the completed evaluation of business lists. Strategy for Managing Competitive Resource Interdependencies: Strategy Alliance: "Trend Micro and Symantec cooperate to benefit customers on April 8, 1998. Symantec and Trend have agreed to cross-license their respective patents for antivirus applications; this will enable both companies to better serve their respective customer's needs by developing solutions without hindrance of patent infringement. The two companies have also agreed to share virus samples obtained through their research centers around the world." Transaction Cost Theory Because Trend Micro dominates the markets, it has the power to negotiate the price with its environment forces and decrease the environment uncertainty.
Trend Micro also pays a significant attention to minimize the bureaucratic costs. The company has an excellent R&D team to invent new techniques for detecting viruses, and then outsource the manufacturing and part of marketing and customer services. The organization will not grow too big that minimize the bureaucratic costs. Although it's a
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big advantage for Trend, the company hardly learning from the outsourcing parts. Now Trend Micro has many skilled and talent managers to handle the relationships with outside partners, but can't they maintain the quality of top-level managers and always do the right decisions? A very uncertain situation happened. I think that's why Trend Micro has the function of job finders online to pursue potential talents.
International Environment
Customer & Demographic, Cultural, and Social Forces Trend sales over 30 countries. Customers' culture, values, and tastes are different from place to place, culture to culture; therefore, Trend change their product a little bit, such as the color of package, language, and marketing methods. Trend Micro chooses some professional companies to do geographic customer survey. In addition, Trend holds a lot of seminars or shows to attract and to educate customers, even take advantage of these chances to choose their distributors or suppliers. Foreign Competitors & Technological Forces Foreign competitors have some kind of competitive advantage. For example, McAfee owns the No.1 reputation over the world. However, Trend finds a niche " anti-virus" different from McAfee's "security" and also uses different market segment strategy in different countries, such as focus on individual users in Taiwan and enterprise users in Japan. That makes Trend be the No.1 in Asia as well as catch up to or over McAfee in North America. Moreover, Trend set their R&D center in Silicon Valley to get experts and new technologies, and also create a "Virtual Lab" to compete with other foreign competitors.
Trend creates strong entry barriers to prevent competitors from entering its market and maintain its market leadership, such as solid capital, big market share (90% in Japan, 70% in Taiwan), and reputation of name brand.
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Suppliers & Economic Forces Again, Trend outsourcing most part of manufacturing and customer services outside; therefore, Trend can easily obtain the domestic sources. Besides, the company creates their own initial products (programs) with big market share, so it's easily for Trend to negotiate the price with its disk, CD, and packing suppliers. Distributors and marketers In some countries, domestic producers tightly control distribution systems, and that arrangement makes it very hard for foreign companies to sell their product. How to handle the global distribution of its products to attract and retain customer support is also an important issue. Fortunately, Trend is in a very special and boundaryless industry with its domestic manufacturing and marketing, so the products are just like the domestic products. In addition, Trend's products is easy-to-use and one-button process, as well as completed knowledge warehouse for users, so the after-sales customer services is not a difficult part for Trend Micro overseas business units. Government Every country has different laws and customs. Take Mainland China as an example, government has a lot of unwritten regulations; therefore, before entering this market, Trend did a lot of homework to prepare in case being one of the names on black list. Strategy for Managing the International Environment: International Strategy All the products of Trend Micro are the same, but the company allows overseas divisions to adapt products to local preferences slightly. Because the most famous malicious-code spread over the world through Internet or e-mail such as Melissa, CIH, and WORM.EXPLOREZIP, users in different places face the same virus. Some virus only spread in a specific area such as W97M_AUTOEXEC only infects in Chinese version operating system. However, Trend Micro doesn't use the traditional methods to kill the known virus, but uses Rule-based artificial intelligence trap and VICE to detect the penetrating path of unknown virus; therefore, there's no different for slightly-change products ("Trend Micro, Virus Info, Alerts", 1999).
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International Strategy Alliances Microsoft: Trend Micro and Microsoft became Strategy Alliance. Microsoft offered Trend Micro education-training programs.
Intel: Trend Micro public Mobile Protect and co-marketing Intel LANDesk VirusProtect. Trend offered Intel the skills of network security and anti-virus technologies in 1994.
Technology and OT
Non-Routine Research & Intensice Techonology According to the theory of Charles Perrow, I think Trend Micro uses Non-Routine Research technology. R&D is the center of this company. For people working at the forefront of technical knowledge, there are no prepackaged solutions to problems. There are few well-defined steps to take to discover a perfect technique for anti-virus. Furthermore, the outside environment will affect Trend's direction. "Steve Chang founded Trend Micro, the leader in centrally managed virus protection, in 1988 in California with the mission of developing anti-virus software for personal computers. As the Internet and networks proliferated, the company's focus evolved to address total network security" ("Trend Micro CEO Steve Change Receives Business Week's Stars of Asia Award", 1999). Since macro virus onslaught began, and since Internet usage started to rise sharply, Data integrity has been placed at significantly greater risk during past two years.
Trend's top management team is another example of a group that uses research technology. The team's job is to chart the future path of the organization and make resource decisions that are likely to ensure its success. They make these decisions in an uncertain context, however, not knowing how successful they will be.
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Trend Micro uses non-routine research method to keep its organization structure more organic to reflect the rapidly changing environment. That also fits to the Intensive technology of Task Interdependence Theory presented by James D. Thompson.
Innovation and Change
Steve Chang, the CEO of Trend Micro, encourages the employees of Trend not to be afraid of failure. That's a very strong innovating culture of Trend Micro.
Restructuring: Trend Micro reduces its level of differentiation by eliminating departments, divisions, or levels in the hierarchy. Compare the Organization chart 1999 and 1996, which I've already analyzed at Contingency Theory of organization environment.
Reengineering: Since Internet became so popular, Trend Micro built a completed customer database and knowledge warehouse on line. The company changed its process of customer service.
Trend outsources customer services. For instance, in Taiwan, Trend Micro has a contract with Macro Information Services, Corp. which helps Trend to handle the memberships, first-round Q&A, and sending DM. Moreover, Trend Micro offers the on-line virus-code update (One-button only), totally different from traditional mailing system. However, Trend still keep the mailing system in case some customers without modem.
Product Innovation As I mentioned above, Trend invented a lot of new product, such as Virus Alert Code, Virus Control System, ChipAway Virus, StationLock, Macro Trap, etc…
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Team and Team leadership Trend Micro uses the idea of Product Manager much earlier than other companies. Also, job rotation helps potential product manager to be familiar with every part of the company, such as what's the company's missions and strategies, who's the biggest competitor, what's the advantages of own products, and whom you'll work with.
Recommendation
1. C.E.O plays a big and too important role for Trend Micro. Steve Chang needs to be travel around the world almost 2/3 of a year to make sure every division is doing well. I recommend Trend should decentralize more power to lower level employees and also create an education program to develop young leaders. 2. Trend tries to minimize the number of employees (only 550 employees over the world), that causes every employee needs to work with fully energy every day and keeps working efficiently and effectively. Because of the reason, Trend wants to keep the employees' age younger. Sometimes, Trend seems to be cool to laid-off an older employee. I suggest Trend Micro should notice the human face issue and offer some welfare program. 3. Trend can use not only the existed e-mail, but also the teleconferencing to reduce the traveling time and costs. Of course, creating a useful MIS and DSS system for integrating the data and information flowing in and out is an important issue, too. 4. Reputation: Trend Micro has a big problem - A lot of people only know its product's name, such as the most famous one, PC-cillin, but not know the company's name. I suggest that Trend should work on marketing its name. 5. In Taiwan, Trend's already the market leader. However, more and more competitors try to get part of the big market. Keep innovating and maintain the customer loyalty is an important issue for me. That's the same for the rest of market leader divisions.
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Conclusion
This paper is totally a different style from the Trend Micro MIS research I've written before. This one is from the OT points of view, the prior one is from MIS and technology points of view.
Seeing Trend Micro's growth and agreed by a lot of professional magazines and organizations, that's a really good feeling for me.
Trend Micro asked me to offer my research paper; therefore, I am looking forward to your suggestions for improvement. Again, Thanks Trend Micro offered me some important information.
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References
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