Global Issues in Business Ibm Essay

829 Words Oct 9th, 2012 4 Pages
Homework Week 5
Jose Vasquez
DeVry University

BUSN-427 Global Issues in Business
Professor Rasiah
10/4/12

Homework Week 5
International Business Machines (IBM) first step to expand was internationally which was done by the classical international pattern. The classic international pattern was simply enterprises doing activities at and selling product overseas through sale offices. When Palmisano joined IBM in 1972, it had already moved away from the international approach and was practicing the multinational enterprise. The multinational enterprise in this case was small IBM’s across major national markets across the globe. IBM had to change its strategy again to one that Palmisano called a “globally integrated enterprise”. What
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The next move for IBM was to develop human capital in the enterprise. 1. Palmisano states that in the 1970s and 1980s IBM was organized as classic multinational enterprises. What does this mean? Why do you think IBM was organized that way? What were the advantages of this kind of strategic orientation?
The classic multinational enterprises encompassed several IBM’s located across major national markets. During that time it was difficult to incorporate globalization due to strong barriers to trade across the border and national difference in business practices which is why IBM was organized that way. The strategic orientation that IBM practiced during the 1970s and 1980s is called localization. The advantage of localization is: materials are close by, the amount of skilled labor is high, employment opportunities, and economy gains. First world countries most likely have an abundant amount of skilled labor which offers a wide range. Materials don’t have to travel a large distance. 2. By the 1990s the classic multinational strategic orientation was no longer working well for IBM. Why not?
In the case of IBM there were three events that made IBM change its strategy. The first was that the globalization of the world economy. This event was felt by every organization so if IBM wanted to survive it also had to adopt this strategy. The second event was the result of many customers of IBM that were transitioning to global integration
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