Ibm Decades of Transformation Essay

900 Words May 16th, 2012 4 Pages
1) What factors led to IBM’s success during the 1960’s and 1970s and its problems during the late 1980 and early1990s?
IBM’s success in the 1960’s and 1970’s was driven by the vision of CEO Thomas Watson Jr. as evidenced by IBM’s $5 billion development investment into the System/360, “the biggest privately financed commercial project ever”. The System/360, “transformed the industry”, along with IT innovations such as development of the FORTRAN, the hard disk, the floppy disk, IBM supermarket checkout station, and an early version of the automatic teller machine”. Mr. Watson’s vision and or innovation required acquiring talent by making IBM, “the best place to work”. The late 80’s and 90’s became riddled with problems as a result of a
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Under H2 guidelines people needed management skills, motivation to grow and ability to execute both long and short term goals. Individuals in H2 are required to build and leave a legacy. H3 projects were under the CEC in order to monitor EBO development. H3 leaders needed to turn ideas into businesses and manage risk and ambiguity. Leaders under H3 fulfilled intellectual curiosity while providing the opportunity to become H2 business builders. This method of developing innovation has been very effective because it allows employees to develop new ideas for the future and to set benchmarks with timely reviews to determine worthy business opportunities. Evidence for success is exemplified by the fact 15 of the 18 EBOs were successful.
5) What challenges did Palmisano face as he assumed the control of IBM in March 2002? Can a company like IBM be organized for both innovation and efficient operation? What advice would you give Palmisano at the end of the case?
When Palmisano took the reigns of IBM the dot-com bubble burst, the economy was in a recession, and IBM revenues were down $5 billion and still declining. However, by 2003, Mr. Palmisano was able to guide IBM to a revenue increase of 10% and net income increase from $3.6 billion to $7.6 billion. He did this through innovation/vision in purchasing PwC to help customers combine business and technology capabilities. This vision helped IBM revenues increase to $31.9 billion. IBM is an example of

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