IBM’s Culture Transformation
There is a multitude of reasons as to why an organization may change their culture. Some catalysts to cultural change could be such things as changes in the economy, external events, internal shortcomings, restructuring of leadership, or growth of technological capabilities. Since IBM was founded in 1911, it has undergone a multitude of cultural changes driven by each one of these factors. The 1990’s included a large cultural shift for this organization driven by a new CEO and new technological capabilities.
Culture Prior to the Change Prior to their cultural change that took place in the early 1990’s, many would have said that IBM was on a fatal downhill slide. At this point they were beginning to become obsolete. IBM at one point was among the leaders within the world for hardware/software development and information technology services, but all divisions within the organization were run independently from one another. They were not a unified enterprise. To solidify this even further, “rather than working together as a team, divisions competed against each other both internally and in the field” (DiCarlo, L., 2002).
Steps to Change On April 1, 1993 Louis V. Gerstner took over as IBM’s chairman and CEO. Gerstner was able to recognize the flaws in IBM’s model to have the company being run as several independent parts from one another. From the beginning he was able to recognize that “IBM was greater than the sum of its parts … and the entire
The modern business culture must, by necessity, be fluid if it is to succeed globally. There is interaction between employees, between stakeholders, and between global environments. In fact, this environment is formed through multiple interactions between the strengths, weaknesses and opportunities presented through the organization's unique culture. Since truly the one constant in business is change, it is how we adapt to such changes; as individuals and part of groups, that helps manifest behaviors as he culture evolves. Indeed, many believe that one of the templates that make up this fluidity is the concept, even more popular in the late 20th and early 21st centuries, of mergers and acquisitions (Horibe, 2001).
In the seven years (since 1994), that Lou Gerstner reigned over IBM, the company’s earnings per
All Organisations posses a distinct form of culture with some having more than a single culture. This culture is usually very difficult to measure, change and most especially change.
With this statement it can be said, that the practices of managing cultures also have changed in this era and that the importance of cultural influences on the organizations are higher than before.
Rhonda I totally agree with you, changing an organization’s culture is difficult and consuming. I work in a Military Service Academy that embraces culture into the fabric of the organization. Therefore, from where I sit change can only occur if you remove an entire generation and start from crash. This approach is of course impractical; no organization will clear out an entire force to start from scratch. Therefore in order for change to become apparent it “sticks when it becomes “the way we do things around here,” when it seeps into the bloodstream of the corporate body. Until new behaviors are rooted in social norms and shared values, they are subject to degradation as soon as the pressure for change is removed.” (Kotter, 2009) One
Within organizations, large and small, there exists a sense of identity among its members that separates it from other organizations. This sense of identity is known as organizational culture. All over, managers seek to influence and change this into something that can be beneficial for the organization. In his article, “The Six Levers for Managing Organizational Culture”, Professor David W. Young defines the different elements that can influence and change the culture within the organization and how the reader can use these “levers” to their advantage. While the author does present a decent explanation for changing the culture of an organization, he leaves many questions unanswered that leaves his argument incomplete.
The process described below has been applied successfully in a number of organizations to bring about culture change (Thornbury, 2003). At a very high level, it consists of three phases:
It is important to change various aspects of organization culture when trying to institute change in organizations (Kavita, 2005). The aspects that such changes should target include the balance of power in the organizations, the organization structure that supports the framework, leadership and management styles. Organizational history is also very critical, especially if it has a progressive track record success. However, if the culture despite the changes remains aligned to the organization goals and mission the employees will adopt it and embrace change.
IBM needs to grow revenue and stay competitive in the dynamically changing computer marketplace of the 1990’s by maintaining technological leadership and accepting the organizational transformation which needs to be undertaken for them to excel. IBM needs to recapture their previously held powerful position in the personal computer and microprocessor markets and regain value in the company which will increase its stock value and competitive advantage in the marketplace.
Culture and the environment affect a business in many ways. Culture is not simply a different language, a different shade of skin, or different styles of food. Culture, and the environment in which you are a part of, affect the running of day to day business operations of all companies’ day in and day out. This paper will assess how Linda Myers, from the article, “The would-be pioneer,” (Green, S., 2011) was affected by the huge culture shock of working for a global conglomerate from Seoul, South Korea. We will discuss what went wrong with Ms. Myers approach to business, Hofstede’s five dimensions of culture as it
When it comes to corporate culture, there would be no better example than Apple Computer as how change can take place based on the leadership of a single individual. This would be no other than Steven Paul Jobs, better known to the world of Steve Jobs. Mr. Jobs was worth slightly over million dollars at the age of 23. By the time he was 24 years old he was worth just over $10 million and by the time he reached the age of 25 was worth well over $100 million dollars. A staggering difference in just a three-year period (Denning, 2011).
Question 1. What competences has IBM had to invest in arising from its transformation from a ‘product-centric’ to a ‘service-centric’ organization?
IBM has weaknesses in the transformation of its business model. It is lack of flexibility in the transition because of its large company
Over the past five years, IBM has quietly transformed itself into a "software, solution and services" company. With the transformation from a hardware vendor to a solution provider, it has entered the area of consulting services.
It has constantly outperformed its competitors and has generated higher returns. IBM should continue to be a leader in differentiation by offering product and services through its constant strive of innovation. It should follow unique practices to maintain a strong culture and positively impact customer experiences. It should be open to change and blend itself to the environment adding its own stroke of colour (introducing new technologies according to the changing