Ibm Decades of Transformation

914 Words May 30th, 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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This turnaround came with resistance from managers that, “found the move to “One IBM” especially difficult”. To meet this challenge, Gerstner “traveled to different sites to explain the principles and how to put them into action” and also wrote “Dear Colleague” notes directly to employees. Eventually, if managers did not buy into the program they were let go.
3) Why did large established company, like IBM, find it so difficult to build successful and sustainable new businesses?
The reasons for difficulty in building successful and sustainable new businesses for a company such as IBM are multifaceted. First, revenue may be tied up in high fixed costs with large investments. Second, departments working separately, in some cases with overlapping functions, causes attention to be focused on individual departments not the company as a whole. Finally, the company is focused on the current products, customers and operations.
4) Evaluate IBM’s approach to leading mature, high growth, and emerging business opportunities. What are the organization design and leadership models required managing each type of business? How should a company like IBM manage the innovation process?
Realizing a deficiency in developing new businesses, IBM created a new approach to business development by categorizing IBM’s business’ as H1 (mature), H2 (rapidly growing) and H3 (emerging). H1 required people with industry