IBM Case Study

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IBM case study: An analysis of the changes that Palmisano began implementing at IBM in 2005 using the Tushman-O-Reilly Congruence Model According to the Tushman-O-Reilly Congruence Model, for an organization to "successfully transform for the next generation, its four key organizational building blocks of critical tasks, people, organizational structure and culture must be aligned and in congruence" (Fan 2006). This model provided the basis for IBM's radical transformation in 2005 under the helm of CEO Samuel J. Palmisano. The major problem IBM was facing was that the personal computer, the product which had been the company's 'bread and butter' product for so long, no longer had the centrality it did in people's lives, thanks to the rise of tablets and iPhones and competition from lower-cost manufacturers. The computer industry "is growing at just 6% a year" (Beyond blue, 2005, Businessweek). Demand is likely to contract, rather than to expand in the coming decades, particularly amongst households. IBM resolved to shift from a product-based company to a service-based company and to focus on businesses rather than households as its main target demographics. Now, "instead of merely selling and servicing technology, IBM is putting to use the immense resources it has in-house"¦to help companies"¦rethink, remake, and even run their businesses -- everything from accounting and customer service to human resources and procurement" (Beyond blue, 2005, Businessweek). At IBM,

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