IBM CASE STUDY.docx

1)What factors led to IBM’s success during the 1960s and 1970s and its problems during the late 1980s and earl 1990s! IBM became the most dominant in the gro"ing I# industr$ % bold in&estment in the first famil of products based on an integrated semiconductor chip and offering interchangeabilit of components caused IBM to set the dominant design for decades to come$ 'urthermore( IBM produced a series series of related I# inno&ations$ o successful "as "as IBM that due to its monopolistic business practices( the * +ustice ,epartment outla"ed monopolies b passing the %nti-#rust %ct$ %ct$ In addition( IBM’s leadership( strateg contributed to its success$ IBM’s deep structural problems re&ealed themsel&es .uic/l$ 'actors that contributed to its problems included Being o&er confident( out of touch "ith its customer( and distracted b internal turf  battles$ #he con&ersion of leasing-oriented business to sales-oriented contributed to the "ea/ening of the IBM$ IBM "as blinded b mainframe thin/ing and missed the 2 mar/$ While re&enues softened IBMs fi3ed costs began to gro"$ 43ecuti&es "ere isolated from gro"ing problems b deep le&els of hierarch$

5) What did erstner erstner do "hen he assumed the role role of 24 in %pril 199! 4&aluate erstner’s approach to crisis management$ o" "ell did he perform as a turnaround manager! What challenges did he face as he attempted to position the the compan for gro"th! erstner’s approach to crisis management "as to put the customer first$ e &isited customers( analsts( and industr e3perts during the first fe" months to get input$ :ather than brea/ up the compan erstner decided to turn it around b going to mar/et as ;one IBM<$ Made senior e3ecuti&es personall responsible for their assigned customer and accountable for an problems that arose$ %dditionall( %dditionall( he hired man e3perts in order to get costs under control( head the th e trouble 2 compan brands( and organi=e internal I# organi=ation$ %lso( %lso( due to the man man  complaints from customers( a customer relationship manager and a dedicated sales and ser&ice team "ere appointed for each /e customer account$ erstner( performed great as a turnaround manager implementing change throughout the compan effecti&el$ IBM’s IBM’s stoc/ price doubled as in&estors &oted "ith confidence co nfidence to fi3 rather than brea/ up and sell IBM$ rofits rose to > billion on re&enues b the ear end of 199?$ erstner faced man challenges to include a group of people in the middle "ho didn’t’ "ant to transition$ Man found it difficult to operate as a team( as a global entit$

%dditionall( IBM emploees focused on selling current products( ser&ing current customers( and e3ecuting current operations "hich did not contribute to the gro"th of ne" businesses$ $ )Wh do large established companies( li/e IBM( find it so difficult to build successful and sustainable ne" businesses! IBM "as complaisant due to its e3cessi&e self-confidence$ @arge @ arge compan’s li/e IBM "ill focus on sustaining profits p rofits and loose touch "ith its customers$ IBM’s emploees "ere focused on fla"less e3ecution and short-term results that intensified under the ruthless cost cutting necessar to sur&i&e$ %lso( "hen competing against large companies it can be difficult to compete against the others( because the are tring to come up "ith ;#he ne3t big< thing too$ ?)4&aluate IBM’s approach to leading mature( high gro"th( and emerging business opportunities$ What are the organi=ation organi=ation design and leadership models re.uired re.uired to manage each tpe of business! o" should a compan li/e IBM Aor %## %##(( for e3ample) manage the inno&ation process! Instead of appling a single approach( IBM "or/ed "ith business leaders to catergori=e IMB’s businesses businesses as 1 Mature Business( 5 :apidl ro"ing Business( an d  4merging Business$ 4ach of theses hori=ons re.uired different leadership and go&ernance( a different approach to defining and e3ecuting strateg( a different "a of organi=ing and managing different tpes of people( culture( and incenti&es( and a different approach to financing$