Ibm Essay examples

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I. Current Situation (1991-1993)
1. History of IBM:
IBM is a multinational corporation that started its activities in 1911. But its origins can be traced back to 1890, during the height of the Industrial Revolution. It was first known as the Computing-Recording Company, and then in 1924, it took the name of International Business Machines. Nowadays, this multinational company is known as the ¡§Big Blue¡¨
2. Mission statement
IBM main activity is to find solutions to its wide range of clients using advanced information technology. Its clients are individual users, specialized businesses, and institutions such as government, science, defense, and spatial and educational organizations.

To meet and respond to its customers needs, IBM
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7. 1991-1993 CEO Akers undertook a major overhaul of IBM: he believed the problem was high centralization, so he followed a decentralizing strategy that would greatly reduce employee levels. Layoffs were as follows: 1991 20,000, 1992 20,000. Although a $3 billion charge was made against 4th quarter earnings, IBM expected savings of $1 billion in 1992, followed by $2 billion in later years. Restructuring objectives:

a- Accelerate product deliveries. b- To avoid or minimize costly delays and disruptions IBM would have to completely separate its units into distinct independent divisions with greater control over development strategies, including financial independence. IBM HQ would become a holding company with 6 autonomous divisions reporting to senior vice presidents. Divisions are to present annual plans to executive committee, set goals for return on investment, share in profits, issue stocks in some cases. Each individual unit to report its results separately thus allowing managers to gain responsibility for controlling costs and developing competitive product marketing strategies. Emphasis to be placed on return on invested capital. Executive pay to be tied to unit profits c- Encourage 3d party relationships d- Reduce staff. e- Reduce product prices to match competitor prices. For example, IBM's lap top model costs about $2,500

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