Organisational Behavioural Issues: IBM, Inc.

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Synopsis

In an organisational setting, the term organisational behaviour is used to describe the dynamics that exist between individuals and groups in a common workplace in addition to the operational nature of the organizations in question. There are a myriad of factors that come into play whenever people interrelate, intermingle or work together in organisations. These factors account for the organisational behaviour issues which are significant in the day to day running of business organisations. It is also imperative to note that the study of organisational behaviour is growing in importance bearing in mind that contemporary multinational organisations are comprised of employees who have to work as cohesive teams in spite of their distinct cultural values and socio-economic and political backgrounds (Kang & Dickinson, 2003). In this essay, the historical backdrop as well as the pertinent organisational behavioural issues affecting the International Business Machines (IBM Inc.) is explored in detail.

Brief History of IBM

The historical development of IBM can be traced back even before the actual development of computing system was fully on board. It all started as a Tabulating Machine Company. It was incepted by Hollerith Herman towards the close of 19^th century (1896) and its line of specialisation was in the development of machines known as the punched card data (IBM, 2010). However, this was not the first time this technology was being applied. It had earlier been used in 1884. The population Census of 1890 necessitated the demand for tabulating machines and the technology grew by leaps and bounds thereafter. The 1896 punched cards gave the impetus for the generation of machines which would later be referred to as IBM. However, in 1911, the business exchanged hands when Charles Flint bought it at slightly over two million dollars. This enabled the original founder of the company to develop Computing Tabulating Recording Corporation (CRT) which was later incorporated on 16^th June 1911.

A merger of three companies took place whereby Flint as the key investor. His membership lasted until 1930. Elsewhere, the CTR management was taken over by Thomas J. Watson Sr. in 1914 and before the close of 1917; CTR established its presence in Canada with a brand name of International Business Machines Co. Limited which later transformed to IBM Inc. (IBM, 2010)

IBM has grown over the years to emerge as one of the notable market leaders in the manufacturing of software and hardware used in computing systems. It has a global presence as a multinational corporation dealing with all consultations related to Information Technology and latest technology in computers.

IBM values-mission, vision

The IBM Mission Statement states that “At IBM, we strive to lead in the invention, development and manufacture of the industry’s most advanced information technologies…we translate these advanced technologies into value for our customers through our professional solutions…worldwide” (IBM, 2010). Its Vision Statement is “Solutions for Small Planet” (IBM, 2010).

Organisational structure at IBM

In order for an organisation to function well and run smoothly, it has to be subdivided into different parts or sections each of which is allotted its functions and responsibilities. Hence, when departments in an organisation are apportioned different roles to play while at the same time interacting with other departments for smooth running of an organisation, it constitutes organisational structure (Clarke, 1985). The flat and hierarchical (horizontal) organisational structures are the most common used by many organisations.

In a horizontal organisational structure, there is a hierarchy or different levels of authority running from the subordinate to the top most senior management of an organisation. Although work can be distributed quite well with this type of organisational structure, matters related to decision making and efficiency at work may be hampered significantly depending on the leadership or management style in place (Ricketts, 2002).

In a flat organisational structure, there is only one senior manager that every employee reports to. Hence, decision making can be quite prompt. However, the process of delegating duties by the senior manager may be cumbersome because he or she has to handle so much at the same time (Clarke, 1985).

IBM has a global presence in more than 160 countries with its headquarters in Armonk, New York. Samuel J. Palmisano is the President, Chairman as well as the Chief Executive Officer of the Corporation. Since the organisation specializes in offering a wide array of products and services that are related to computer technology, it has a complex organisational structure to facilitate the smooth running of the corporation. Hence, it is not possible for all the approximate 400,000 employees to report to the Chief Executive Officer, necessitating the need for a horizontal or hierarchical organisational structure (Parhizgar, 2002).

The current organisational structure of IBM is composed of five discrete divisions. The first department handles strategy and change in the organisation. It is responsible for developing both the short and long term strategic planning for the corporation so as to realize growth, seize opportunities, strategising change within the organisation as well as maintaining high profile market competition in order for the organisation to remain profitable. The Human Capital Management division deals with all matters related to human resource such as hiring and firing of employees, retrenchment, and capacity building and training among other related duties (Schuler & Jackson, 2007). The third component of the IBM organizational structure is the Customer Relationship Management that handles all customer related queries such as general inquiries and complaints. The Supply Chain department is responsible for the movement and distribution of IBM products and services from manufacturing points to the target market. Finally, the Financial Management division is responsible for all the monetary or financial matters of the corporation (Parhizgar, 2002). Although each area serves a particular purpose, the departments are not perfectly independent. They overlap in terms of operations and hence the need of coordination on a daily basis.

As noted earlier, the IBM organizational structure is hierarchical and poses its own challenges to the general administration of the organisation. For instance, decision making processes are definitely long due to the myriad levels of operation ranging from the most junior employees to the top management team. For IBM to expedite its decision making process, it should decentralize the program in the sense that each department in all the countries where IBM operates should be semi-autonomous but largely accountable to the overall authority.

Group dynamics at IBM

The performance of small groups within an organisation is a key ingredient to the overall output of the entire organisation. Hence, the success of any organisation heavily relies on the individual output of small teams that constitute departments or divisions within an organisation (Pareek, 2006). Increased productivity has been directly linked to group efficacy in an organisation. Besides, there are other group dynamics elated to group efficacy that may also contribute positively to the growth of an organisation. Most studies have also revealed that group dynamics derive a lot of benefit from efficacy and the overall effectiveness of a group (Tate, 2009). Although leadership style in an organisation is paramount in driving groups, leadership satisfaction may not necessarily be affected by group efficacy.

One of the most powerful ways through which groups can increase their efficacy and effectiveness in the case of IBM is through team building exercises. It is worth noting that IBM Inc. is a global organisation with a high employee base with diverse values. In order to improve the productivity of IBM, employees working in each of the five organisational areas in IBM should work as a team. It may not be easy to harmonise different groups to work collectively and still appreciate their contribution and usefulness. Therefore, team building exercise is duly necessary to improve the efficacy of teams.

Team building is a very important organizational practice and behaviour that is highly recommended for any organisation seeking to boost its performance (Lee, 2003). The essence behind any team building strategy is that when employees work or pull together towards achieving a common goal, it is more likely that the organisation will realize a much faster growth compared to when they pull in different directions. Hence, the concept of team building can be described as an organizational behaviour and practice that attempts to bring employees together as one cohesive team that works to achieve a common objective or goal.

Through team building exercises, IBM will be in a position to not only advance the leadership skills of its employees, but the morale of its staff will equally be boosted. For example, when employees are taken for an outing in form of a retreat to conduct team building exercises, it will assist in breaking some of the barriers that exist among them. These barriers may be social, political or even personal and can significantly hinder the effectiveness of team work. Hence, team building for the purpose of creating vibrant working groups can indeed assist in identifying barriers that hinder the ability of members to be creative (Lee, 2003).

Moreover, the huge number of employees at IBM can work best if the organisational goals and objectives are clear. In this regard, goal setting theory suggests that employees form all levels of an organisation should participate in the process of goal setting and while they do so, it is upon the senior management o explain to them the importance of setting these goals. In the case of IBM with close to 400,000 employees, there can be a very huge barrier when it comes to goal setting. However, this can be achieved with much ease when employees work as small organized teams pursuing a common goal. Such small harmonized and cohesive teams are capable of giving clear definitions of the expected goals and objectives, set a particular time frame within which to achieve the set goals and objectives and above all, carry out performance appraisal. In addition, procedures and process within the different departments in IBM will be improved considerably owing to the fact that there will be a high level organisation. In a nutshell, effectiveness of each of the five divisions at IBM can only be improved through well defined and constructed groups coined from team building exercises.

Motivation of employees at IBM

IBM has maintained market leadership in the provision of IT consultation services as well as computing technology needs for a wide array of customers. Indeed, it has been ranked by the New York Stock Exchange market (NYSE) as the second well established corporation in terms of market capitalization. Besides, employees at IBM have won impressive awards in the recent past. For instance, National Medals of Technology has been won nine times in addition to Nobel Prizes totalling to five (IBM, 2010). These are recognitions that are not easy to come by unless employees are motivated both intrinsically and extrinsically.

In most cases, psychological desires precede motivation (Clarke, 1985). An employee who is intrinsically motivated does not necessarily require to be impressed by external factors before working smart to improve the productivity of an organisation. However, most employees would appreciate to be externally motivated, either by the style of leadership in place or better working conditions where job satisfaction is not an illusion but reality. It is therefore most important for the management at IBM to devise ways and means of maintain a high level of motivation to employees for sustained productivity.

One away through which IBM can motivate its huge bulk of employees is by enriching their jobs (Bratton and Gold, 2001). The different roles and responsibilities assigned to employees should be designed in a manner that it will provide chances for growth, attaining set goals and recognizing achievements. Job enrichment should also entail greater authority among employees to exercise not just their skills and competences but also the unique talents which each one is endowed with.

Motivation by goal setting

IBM Inc. employees can be motivated through a well defined process of setting goals for the organisation. Studies have revealed that people tend to be motivated to work when there are certain goals to be achieved after a given period of time. This type of motivation is well explained by Locke’s goal setting theory (Sinclair-Hunt & Simms, 2005).

At this point, it is undisputed that IBM can attain its short, medium and long term goals once they have been set. Nevertheless, it implies that employees will only be motivated when they are part and parcel of goal setting. Moreover, each group member within wider IBM community should be made to visualize the importance of the goals being set. In most cases, employees will not inject an additional effort if they have no clear idea on how the set goals are going to beneficial, not just to the organisation, they should also derive quantifiable benefits upon achieving the goals (Salaman, Storey & Billsberry, 2005).

IBM is currently working on a myriad of projects that require employees who are motivated, resilient and competent enough. Some of the projects the organisation is working on include IBM Redbooks, alpha works and Open Client Offering. Each of the projects under development has a time frame within which it should be rolled out to the target market. If this target is to be met, employees working on these new technologies should be motivated to input their best skill and effort.

Goal setting as a way of motivating employees comes with its own cost if it is to be successful (Haas & Hayes, 2006). Firstly, there are five core principles which the management at IBM should bear in mind for this theory to be fruitful: the set goals should be clear, challenging, demonstrate high level of task complexity, have a feedback system and also demonstrate commitment.

Management of change at IBM

In order to remain competitive, IBM went through a revitalization process during the mid 90s. The organisation had to change the architecture of its product line owing to subsequent immense losses (Kang & Dickinson, 2003). The department of Strategy and Change had to act fast to revert the corporation into profitability. For instance, an estimated six billion dollars was the total earning of IBM in 1990. The following year, the organization reported a negligible loss while a year late, it made a loss of close to seven billion dollars. The net loss went even higher by one billion dollar the following year (1993) and this called for drastic measures to be put in place (IBM, 2010).

To begin with, the most important component of the organisation’s turnaround was market innovation which aimed at segmenting its already existing markets. It redefined its user preferences and dissatisfaction. Consequently, IBM redesigned its old products and services. On the same note, the corporation adopted an e-business model whereby certain markets especially the corporate sector were the main targets (IBM, 2010).

Besides marketing, IBM also embarked on a multimillion dollar technological innovation. The mainframe was renewed as well as the CMOS processor. These two product lines were outdated and could not meet the changing tastes and preferences of consumers. Even after executing this major marketing and technological change, IBM faced yet another theatrical challenge in 1995 when its high-end products could not meet market dynamics. Better and powerful systems were developed.

Management of change in organisations should be part of strategic planning by managers. In order to manage change well, planning should be done in a thoughtful way (Peper et al. 2005). Furthermore, the implementation process of the proposed changes should be as shrewd as possible and most importantly, those who are to be affected by the changes ought to be consulted or be made integral part of the implementation process (Jones, Conway & Steward, 2001).

When IBM was implementing the second phase of technological change in its product architecture (Mid 90s), all the professionals who were being affected by the change were not just consulted. They were also instrumental in implementing the changes in IBM product architecture.

For IBM to manage organisational changes effectively, it must see into it that the proposed changes are pragmatic and quite reasonable. In addition, the changes should be measurable and achievable as well (Kakabadse, Bank & Vinnicombe, 2004). Although these elements are crucial when managing change at individual level, it should be noted that the best process of change begins with from a personal level, then to working groups which spill its influence to the organisation at large. However, the responsibility of managing change does not lie with employees, the latter are instruments of change, not architects.

IBM leadership styles

The leadership style at IBM is a lot more participatory whereby Samuel J. Palmisano who is the Chief Executive Officer works hand in hand with other immediate executives below him in implementing the policies of the organisation. Leadership in the different departments within IBM is participatory although the overall leader still remains to be accountable on the final decisions made.

All the team members are involved in important processes such as goal setting, the importance of setting the very goals as well as implementation (Storey, 2004). From this standing point, participative leadership style perceives a leader more as a coordinator or facilitator in the management of organisational affairs. The leader does not necessarily assume the role issuing orders, but rather involves the group in each and every undertaking.

IBM should strive to nurture participative style of leadership in its leadership structure (Fletcher, 2004). The main benefit of this type of leadership style is that additional leaders are developed during the process. It prepares leaders in advance and hence, the organisation may not be in need of either outsourcing leaders or embarking on intensive training program for upcoming leaders. This is exactly the same case with IBM. The current CEO and Chairman of the organisation, Samuel J. Palmisano joined the organisation as a salesperson (Kang & Dickinson, 2003). Through the leadership experience gained over the years, he finally managed to rise in ranks to become the top leader of the organisation. He is currently 59 years, just short of one year before attaining the traditional retirement age for CEOs at IBM. However, with the recent reshuffle of the top executives close in rank to him, Palmisano may stay in office a little longer. The reshuffle may as well as a short list of potential candidates to take over from him.

Power, authority and conflict at IBM

Most organisations do not often stick fully to the rules and regulations. As a result, a vacuum is left where power play and conflicts can thrive (McKenna, 2000). Hence, managing organisations in a systematic and well defined way can only be achieved if the dynamics of conflict, authority and power are well understood. The three elements are interdependent and cannot be separated from each other.

First of all, it is necessary to distinguish between power and authority in organisations. They are frequently used interchangeably in spite of the fact that their meanings are completely different (Salaman & Asch, 2003). Authority is legally acquired and its enforcement is done according to the provisions of the organisation. However, power emanates from an individual and has nothing to do with management in organisations. Besides, when authority has been acquired, it harnesses a relationship between the subordinate and senior management staff in an organisation although power is tagged on the understanding of an individual and is quite informal as well. Authority has a close relationship with the structure of an organisation and its scope of application is limited by the policies of the organisation. However, individuals may own unlimited power going beyond boundaries. The recent reshuffle of IBM top executives has in some way concentrated authority and not power to the CEO of the organisation owing to the fact that the most immediate executives have been lowered one level below their original position. This may be seen as a power play that may lead to organizational conflict. Nonetheless, this is not coercive power bearing in mind that the organisation has had a long term experience in the organisation of its leadership structure.

IBM corporate culture

Corporate culture refers to a belief system, a set of attitude that can be shared as well as normalities that are transmitted among the members of an organisation (Robbins, 2009). Through the corporate culture, the acceptable conduct of employees is outlined. When an organizational culture is clear, every member is aware of their roles and responsibilities in addition to what they anticipate from the company. Hence, through the corporate culture, the image of the company can be visualized.

IBM has often been referred to as the Big Blue. Quite a number of theories have been put forward in an attempt to explain how this nickname originated. In one of the theories, it is said that the name was coined by IBM field workers way back in the 60s and towards the advent of the 70s. They referred to the organisation as the Big Blue owing to the colour of its mainframe machine which was initially blue. A loyal client to IBM was also nicknamed “All blue”. The term was later taken up by writers in business. The logo of the company has also been associated with the nickname. In yet another theory, it is believed that the name was created from the fact that although the former employees of the company were required to put on white shirts, most of them however, dressed in blue suits.

In terms of sales, IBM has often been perceived to be well endowed with the culture of selling. Hence, the organisation has a corporate culture which is sales-oriented. No wonder, most of the IBM top executives are recruited from sales team. The incumbent CEO was a salesperson. The organisation has laid a strong corporate culture on the sales of its products and services and consequently increasing its revenue base and market capitalization at the New York Stock Exchange market.

The uniform

During the better part of the 20^th century, the dressing code for IBM employees was composed of a dark suit, a tie and white shirt. The uniform was a formal dress that reflected the commitment of the organisation in providing high quality products and services to its customers. However, the management transformation era at IBM during the 90s witnessed a relaxation of these dressing rules. Lou Gerstner, who was the Chief Executive Officer of IBM at that time successfully, harmonized the dressing codes to be similar to other employees in IT organisations.

IBM values

The company values were rewritten in 2003. It engaged its employees in a three day online discussion by making use of the Jam technology. The eClassifier software was then used to analyse the discussions. As a result of the Jam, IBM received an update of its values based on the views of employees.

Conclusion

In recap, it is imperative to note that the International Business Machines started as a Tabulating Machine Company towards the close of the 19^th century. Its main product line was a punched card that was very instrumental during the 1890 Census. The company has grown by leaps and bounds to emerge as one of the market leaders in the field of computer technology.

The organisational structure of IBM is in form of a hierarchy whereby there are different levels of leadership ranging from the departmental level to the top managers and executives. Samuel J. Palmisano is the Chairman, CEO and also the President of IBM. Besides, the company is subdivided into five main areas to facilitate smooth running of the organisation.

In order to improve its performance, IBM management has to understand the importance of group dynamics such as group efficacy and team building. In addition, employee should be motivated to offer their best skills, competences and talents. Change management is an important aspect of any organisation. During the early to mid 90s, IBM had to reinvent its marketing strategies to meet the needs of consumers. Moreover, its product-line architecture was outdated and consequently called for the need to inject new technologies after going through a series of losses. However, its participatory leadership style has seen the company return to profitability. The company has established a strong corporate culture and brand name improving its performance even further.

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