Essay on Ibm Case Study

893 Words Sep 1st, 2012 4 Pages
IBM’s Decade of Transformation
Assignment Questions
1. What factors led to IBM’s success during the 1960s and 1970s and its problems during the late 1980s and early 1990s?

The factors led to IBM’s success during the 1960s and 1970s including: 1. The launch of System 360 mainframe computer family. It covered a wide range of applications that suited the significant needs of the customer. It was a dominant design in computer industry at that period and was extremely successful in the market. 2. From 1970s to 1980s, IBM kept on introducing a series of IT innovations including hard disk, floppy disk and the IBM PC in the early 1980s. These products fit the customer needs perfectly at that period and soon dominated the market.
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He decided rather than breaking up the company, he could reorganize the company into “One IBM”. He did the following: 1. “Bear hug” key customers and key employees. 2. Form his own executive team with expert from outside. 3. Performed cost control with benchmarking and layoff of employees. 4. Simplified the complex organizational structure. 5. Centralized the IT leadership. 6. Assigned executives to responsible for different functional reengineering project and reported to him directly. 7. Shifted focus from proprietary to open technology, started partnership with best providers in different product categories. 8. Perform outsourcing for some operational tasks. 9. Started the Emerging Business Opportunity (EBOs) when IBM began to achieve financial stability. I think Gerstner was good in crisis management. He could identify the core problem of the crisis and made right decisions to deal with the problem and save the company.

I also think Gerstner did very well as a turnaround manager. Initially, he got no technology background and he was hired to break IBM up for sale. But after he listened to customers and employees, he decided that IBM got its value and started saving IBM.

As Gerstner attempted to position the company for growth, he found that the majority of IBM employees kept focus on selling current products and executing current operations. Also, the current leadership model in IBM was

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