Management Research Report: IBM
IBM mission and vision statement
Mission statement usually serves to reflect the organization’s identity, values and the core business aims of the firm. Vision statements on the other hand denote the position of the business at a given time in future. The following is the mission statement of IBM:
“At IBM, we strive to lead in the invention, development and manufacture of the industry’s most advanced information technologies, including computer systems, storage systems and microelectronics. We translate these advanced technologies into values for our customers through our professional solutions, services and consulting business worldwide.”
The values of IBM include commitment to the success of every client of IBM, engaging in relevant innovation that matters to both the company and the larger world and trust and personal responsibility in all of the relationship between the members of the organization and its key stakeholders.
Organization of IBM
International Business Machines (IBM) is an American Multinational that is based in Armonk, New York. The firm specializes mainly in technology and consultancy services. The core areas of focus of the IBM include the sale of computer hardware and software and also offer consulting services and infrastructure hosting in diverse fields of technology including mainframes and nanotechnology. The IBM was ranked second as publicly traded company in the category of technology in the globe as of September 2011 (Ed & Suzanne, 2005).
The IBM was established during 1911 by Thomas Watson under the name Computing Tabulating Recording Corporation. It initially comprised of a merger four firms including International Time Recording Company, Computing Scale Corporation, Bundy Manufacturing Company and the Tabulating Machine Company. The brand name IBM was adopted during 1924. Since its inception, IBM has undergone significant organizational restructuring involving the acquisition of companies such as SPSS during 2009 and PwC consulting during 2002. In addition, the IBM has since spin out companies such as Lexmark during 1991 and sold out some of its product lines such as ThinkPad to Lenovo. It can be argued that IBM’s competitiveness is based on constant inventions and organizational changes to adopt strategies that can address the present demands in the competitive technology industry (Ed & Suzanne, 2005).
Organizational culture at IBM
IBM has its operations in at least 160 states across the globe. The IBM does not rely on a uniform organizational culture in all of its subsidiaries; thus is mainly due to the variables affecting regional language and culture and varying national jurisdictions. The organizational culture at IBM head office in the United States will be used to have a solid foundation of the core elements of the company’s organizational culture.
In the competitive technological industry, IBM acknowledges and lays much emphasis on innovation and risk taking. It is arguably evident that innovation has played a significant role in increasing IBM’s competitiveness in the technology marketplace. Despite the high costs of innovation associated with the research and development strategy, this element of its organizational culture has played an integral role in fostering its success since its inception. IBM has large number of patents and inventions under its name including the Automated Teller Machine, Universal Product Code, the magnetic stripe card, relational database, financial swap and the DRAM. In the IBM, mistakes are usually considered as a learning experience (Ed & Suzanne, 2005).
Attention to detail is the second element of the organizational culture at IBM. This means that employees are required to conform to the goals of expert precision, detail and critical analysis. The organizational culture of IBM also lays emphasis on outcome, which mainly entails product delivery at relatively less costs and in a timely manner. Outcome also implies that IBM is more responsive to the demands imposed by its customers. Team work is also a core characteristic of the IBM organizational culture (Ed & Suzanne, 2005). The IBM management focuses on building teamwork at an organizational level and ensuring that the needs of the members of at all levels are met as required. This is also facilitated by building the culture of trust within the organization, through which employees engage in constant discussion with the management with the main objective of establishing professional relationship. Teamwork is also evident across the various functional units in the firm in order to enhance overall organizational efficiency. Workforce diversity is also a key element of the IBM’s organizational culture as evident in their focus on talent irrespective of social factors such as race, religion and ethnicity. IBM relies on workforce diversity to boost innovation and the overall organizational efficiency.
Organizational change is a critical success factor for any organization. The past business environments of yesterday are in no way similar to the present business environments, and so will be the future. This implies that IBM and other organizations are faced with the challenge of ensuring that their change strategies are effective according to the current business requirements and the nature of the business environment. Organizational change can be driven by factors such as the need to have changes in terms of the organizational culture and operational changes (IBM, 2011).
According to the IBM, the major driving factor that compels an organization to change is the need to meet the increasing client demands and to streamline the business processes with the current technological platforms and recent trends in organizational culture. The factors that compel the IBM to adopt a change strategy is the need to intensify employee productivity, the need to reduce the expenses incurred by the business enterprise in order to increase its profitability and most importantly, the business enterprise needs to sustain itself amidst the challenges associated with the dynamic technological advances and the changing business environment.
IBM customers, competitors and its place in the industry
IBM is a leading global company that specialized in offering diverse products and services in the IT industry. Currently, the company has five major business units including Global technology Services< Global Business management, Software, Systems and Technology and Global Financing (Ed & Suzanne, 2005). This implies that IBM has various competitors depending on the business sectors. With regard to the IT industry, Hewlett-Packard is the chief competitor of IBM, which specializes in the development of computer hardware components. Dell is also a major competitor to the IBM. IBM and Dell have different areas of business focus compared to the core areas of IBM. For instance, Dell’s Revenue is mostly derived from Personal Computer and Server hardware, while HP has more diverse products in the PC industry, imaging and printing and the provision of Information Technology Services. Since IBM’s business level strategy depends significantly on the Global Software and Services segments, it faces competition from HP in terms of servers and the provision of information technology services, and competes with Dell in the server hardware and software markets (Ed & Suzanne, 2005). IBM is the global leader in the server hardware, information technology services and software development. In addition, IBM is far ahead of its major competitors such as HP and Dell in terms of profitability; this is mainly because IBM business level strategy lays much focus on the high-end sectors such as software development and IT consultancy and has span out of the PC business, which is the core focus of HP and Dell. This strategy saw the IBM sold its product line associated with the PC business, its ThinkPad to Lenovo. Basically, IBM is far much ahead of its chief competitors in terms of profitability, scale of operations and revenue. IBM business strategy The business model adopted by IBM has two main goals, which includes helping its clients to be successful in the delivery of business value through embracing innovation, business efficiency and competitive advantage by using business insight and IT solutions; and offering long term value to its shareholders (Ed & Suzanne, 2005). This business strategy used by IBM has been developed adjusted over time in the course of its implementation using strategic investments and up to date technologies that have the potential of ensuring profitability in the long term and delivering value to its customers. The IBM’s business level strategy lays emphasis on the realization of high growth and focusing on the high-value segments of the information technology industry. IBM’s business strategy bases on diversification; its global capabilities are diverse including services, hardware components, software applications, and basic research and financing. Flexibility is a core characteristic of IBM’s business strategy, that provides a framework for constant change and rebalancing to meet the dynamic business requirements. In the course of its existence, IBM has tried commoditizing business, used strategic investments and acquisitions to increase its competitive advantage in high-end products and services in the IT industry such as the Service-Oriented Architecture, Cloud Computing and Information on Demand. The business strategy is in line with the organization’s long term financial goals, which in turn enables the firm to adapt to the dynamic business and economic environments (IBM, 2011). Evaluation of any innovative managerial practices at IBM The IBM strategy and change practices integrates the business processes of an organization with technology in attempt facilitate the realization of the business goals and objectives. Its key strategy dimensions include business, operational, organizational change and technological strategies that are tailored to foster organizational innovation and growth. In the context of the IBM, change is required regularly due to the dynamic nature of the market and the ever changing technological advances that compels the organization to match its organizational processes with changing times and the increasing business requirements (IBM, 2011). The IBM significantly relies on three conditions that are currently aimed at making business enterprises effectively execute their business operations. The IBM is of the view that the global arena is developing in terms of instruments that are technologically advanced, which in turn enhances global communication. The IBM perceives the business environment as becoming intelligent, facilitated by sophisticated end user devices and complex communication systems. In attempt to implement change process, IBM perceives that it is imperative for an organization to put into consideration the above factors since the efficiency in the execution of business processes considerably depends on them. The result of the integration of the above three concepts is a combination of the physical and digital infrastructures globally resulting what the IBM terms as smart systems that are based on information technology infrastructures. As the globe continues to become smaller, the business systems continue to become smarter. Change management in current business environment is a challenging task that business enterprises are faced with. Implementation of the change strategy also comes with its challenges. The study by IBM during 2008, known as Making Change Work reported that most change implementation processes fail due to lack of well laid objectives which represented approximately 80 per cent of the business enterprises. The most successful change projects accounted for only 20 per cent and were strict change objectives, planned budget and other associated constraints (IBM, 2011). Change processes are diverse in nature and can incorporate factors such as technological change, organizational culture changes and changes in the way an organization executes its business process. Before the implementation of a change process, it is imperative to carry out a critical analysis of the current business environment in order to evaluate whether the implementation of change is justified (William, 2003). In the business context of the IBM, change is justified due to the dynamic nature of the computing technologies and therefore, an organizational change is aimed at ensuring the business enterprise remains competitive in the market place. Effective change implementation depends on the effectiveness of the change management strategies that IBM will deploy. Prior to implementation of change, a business enterprise must ensure that there are effective change management strategies in place. Change management strategies serve to combat the challenges associated with the implementation of change in a business enterprise (William, 2003). The second critical process in implementation of change is the outlining of a clearly stated vision for the change process (William, 2003). A clearly articulated vision for change plays a significant role in keeping the change implementation process on track. What this implies is that the key driving factors behind the implementation of the change process are put into consideration. With a clearly outlined vision for change, challenges such as change resistance are easily dealt with. In fact, having a vision for change process is one of the most effective approaches to ensuring change readiness in an organization through outlining of the benefits associated with the adoption of new approaches to leadership and execution of business processes. The vision for change helps the organization to outline its business goals and daily business processes that are significant in determining the success of the organization. A shared vision implies that the organization commitment towards the change is exhibited at all the organizational levels ranging from the top level management to the lower level in house staff. This plays an important role in ensuring that change implementation process is successful. A vision for change is likely to be more effective if it is initiated from the middle and entails the participation of all the members of the business organization at all the levels, including the external stakeholders (Petch, 2009). The actual implementation is the third stage during the implementation of change at the organization. Organizational change is implemented according to the organizational requirements that fostered the change process. Change can be structural, management oriented or even operational oriented depending on the key business functions of the organization. The change strategy adopted by the IBM should such that it provides a favorable business environment that can cultivate the concept of innovation (Fuchs, 2004). It is arguably evident that innovation is one of the key requirements of organizational behavior that a company must adopt. Innovation requires adoption of right structures that incorporate the identification and addressing of the organizational weakness, decision making concerning the direction to implement and finally evaluating the outcome of the innovation and the growth that will be stimulated by the innovation strategies. Change implementation at IBM is not over until the business enterprise adopts effective strategies to manage the transformational period. Transformational period is usually characterized by significant losses in cases where the employees of the organization take more time to adjust to the change implemented at the organization (Ferrel et al., 2008). The effects associated with the transformational period are dependent on the flexibility of the organization. The more a flexible an organization is, the more effective it will be in tackling issues associated with transformational period. Profile of Top leadership at IBM IBM’s top leadership comprises of executive officers and a board of directors. Executive Officers comprise of: i. Samuel Palmisano is the chairman of the board and the president and the CEO of IBM. He has held various leadership positions in the IBM such as the senior vice president for Enterprise Systems and Personal Systems Group. He also played a significant role in the development of IBM global services. ii. Rodney Adkins serves as the senior vice president for the Systems and Technology Group. He is in charge of the daily market place execution and has held numerous management positions in IBM including the Desktop and UNIX systems. iii. Mike Daniels is in charge of global services including outsourcing, consultancy and systems integration, application management and technology services. Mike has served in various management positions including sales and distribution operations of IBM in the US and Canada. References Ed, A., & Suzanne, M. (2005). IBM in Endicott. New York: Arcadia Publishing. Ferrel, O., Fraedrich, J., & Ferrel, L. (2008). Business ethics: Ethical decision making and cases (7th ed.). Boston: Houghton Mifflin Company. Fuchs, S. (2004, March 9). Organizational change in the internet age. Retrieved August 23, 2011, from ibm.com: http://www.ibm.com/developerworks/rational/library/3770.html IBM. (2011). Business Strategy. Retrieved November 2011, 2011, from http://www 935.ibm.com/services/us/gbs/strategy/business-strategy.html Kotler, J. (1996). Leading change. London: Harvard Business School Press. Petch, A. (2009). Managing transitions: support for individuals at key points of change. New York: The Policy Press. William, B. (2003). Managing Transitions: Making the Most of Change. New York: Cambrige.