This is the introductory part of the case study. It precisely presents the challenge that Peter Silvanovich needs to solve. IBM is rolling out a new global application and IBM Canada needs to promptly switch from its locally supported Customer Relationship Management (CRM) software application to the new software application.
After the company made appropriate training for the for implementation of the new global software application, three units in IBM Canada presented their cases against an immediate switchover and requested a delay of between three to six months (Compeau and Mark 1).
Sections Outline
IBM. This section gives the history of IBM right from its incorporation on 1911 in New York. Bulk of this section reviews how the company has evolved from manufacturing computer hardware to being a great information technology solutions firm. With branches in more than 200 countries, the company adopted a decentralized system of operation (Compeau and Mark 2).
IBM Canada Ltd. IBM Canada is a key country unit to IBM. It was established in 1917 and has grown to be significantly strategic to IBMs operations. IBM Canada houses the second largest IBM software laboratory. It also has a state of the art manufacturing unit.
IBMs Global IT Transformation. This section shows how IBM was to go about centralizing some of the functions that were under different country units in a bid to cut down on costs. This was to be accomplished by rolling out common software applications to be used across the globe instead of the different software applications that were being used in each country unit. This transformation led to a consolidation of 155 data centers to five and reduction of 16,000 software applications to 4,700.
The Application Review Process at IBM. In order to ensure that the global application roll out effectively, two review bodies were set up. These were the Investment Review Board (IRB) and Application Review Board (ARB). While the IRB was in charge of rolling out of the global applications, the ARB ensured that the transition from country unit based applications took place effectively to the global based transitions (Compeau and Mark 12).
Global Strategy, Local Implementation. This section examines the challenges which come with rolling out global applications. It is noted that country units have to incur some expenses on these roll outs. The process is not described as an easier one but one that may cost IBM Canada up for US$ 4.6 million in terms of consultants time, costs of launch, and customization costs.
Assessing the Assessment Process. This section examines the limitations that the local software applications are encountering as a result of the global roll out of software applications. The section also expresses concerns on how some of the local software tools were to be funded since the funding allocation had been moved to the IRB. Still concerns are aired in this section in regard to the effectiveness of the adversarial process in funding projects.
Making Decision. This is last section. Silvanovich is supposed to develop a solution to the challenges that confronts him.
Vision, Mission and Value of IBM
IBMs vision and mission are contained within its values. IBM engaged in a re-examination of its core values in 2003. It invited all its employees to make a contribution on ways they thought could make the company efficient. 319,000 employees participated in this exercise through the IBM intranet. The new values formulated are as follows:
Dedication to every clients success (Palmisano 1)
Innovation that matters, for our company and for the world (Palmisano 1)
Trust and personal responsibility in all relationships (Palmisano 1)
Important and Updated Information about IBM
IBM strives to be the leader in the provision of IT solutions. It has been striving to do this by making the world a smarter planet. It is doing this by continuously working to change the paradigm from react to anticipate (IBM 1). This is being done in three ways using analytics in decision making as opposed to instinct, imparting knowledge instead of amassing it, and seeing clients as clients and not as market segments (IBM 1).
According to IBM, use of analytics is very important as it ensures that what is to come is known before it happens. This is significant because it makes it possible to undertake the necessary arrangements. IBM also aims at helping businesses to understand their clients better such that they can give customized services and hence become more competitive in a smart manner (IBM 1).
In order to ensure that the Smarter Planet concept works, IBM has collaborated with more than 600 organizations all over the world to ensure that they apply the concept to their benefit. The areas which this concept has been tried and implemented in include banking, communications, education, electronics, energy and utilities, governments, healthcare, insurance, media & entertainment, oil and gas, retail, and transportation (IBM 1).
SWOT Analysis and SWOT MATRIX
SWOT Analysis
Strength
It is a leading provider of IT solutions because of its system and technology which is of the state of the art.
It has a good internal control system which has so far controlled and managed well its sub units spread out in other countries.
Its recent centralization attempts on some tasks have saved it a lot of money.
Weakness
Its huge size makes it hard to quickly adopt changes.
Big companies often are confronted with diseconomies of scale
Opportunities
It has a wide market presence and therefore assured of quick sales
It has strong talent base which it can use to develop cutting age technologies which will give it a competitive edge against competitors
Due to its talent base, it is assured of long term benefits
Threats
There are a number of IT companies which compete with IBM, for instance Dell, Accenture among others.
A bad world economy will affect the sales of IBM
It has a large employee base which greatly reduces its profits
SWOT Matrix
The SWOT matrix of IBM is as follows:
Helpful to achieving objective
Harmful to achieving objective
Internal Origin (attributes of the system)
It is a leading provider of IT solutions because of its system and technology which is of the state of the art.
It has a good internal control system which has so far controlled and managed well its sub units spread out in other countries.
Its recent centralization attempts of some tasks have saved it a lot of money.
Its huge size makes it hard to quickly adopt changes.
Big companies often are confronted with diseconomies of scale.
External Origin (attributes of environment)
It has a wide market presence and therefore assured of quick sales.
It has strong talent base which it can utilize to develop cutting age technologies which will give it a competitive edge against competitors.
Due to its talent base, it is assured of long term benefits.
There are a number of IT companies which compete with IBM, for instance Dell, Accenture among others.
A bad world economy will affect the sales of IBM.
It has a large employee base which greatly reduces its profits.
IBM Strategy Now and in the Future
IBM has come up with a strategy it calls the Smarter Planet concept. In this concept, the company has been developing smarter IT solutions which are more efficient and specifically aimed at identifying threats and future attacks in time before they strike. The company aims at working closely with its clients in different sectors of the economy to improve on their efficiency by ensuring that their businesses are well monitored.
So far the company has integrated this concept in its risk managements solutions, business resilience solutions and security solutions. IBM believes that this is an era of smartness and therefore the Smart Planet concept is relevant in helping business to lead and win in their respective markets (IBM 1).
Conclusion and Recommendation
IBM is a great company whose talent base can greatly help it to move ahead of its competitors. Its move to centralize some of the tasks to the senior management away from country units has already benefited it. The company needs to make concerted efforts to ensure that it keeps on cutting down costs. It should also channel more resources to IT projects. This will enable it to be always ahead of its competitors as it will be possible for it to develop IT solutions which addresses relevant issues in the market.
Works Cited
Compeau, Deborah and Mark, Ken. IBM Canada Ltd.: Implementing Global Strategy. Ontario: IVEY Publishing, 2010. Print.
The gap between doing and achieving is a major predicament for many players in the corporate world. Most successful leaders believe practical success is closely related to proper administration of modern business entities (Parrino and Kidwell 51).
However, excellent execution of tasks in the workplace does not automatically translate to career recognition or special remuneration. In his writings, Niccolo Machiavelli, one of the most fascinating political theorists of the 16th century, mainly focused on the issue of realizing political success by all means possible. By this, the theorist encouraged sacrificing conventional social morality if that is what is needed to achieve success. As a result, various scholars associate Machiavellis name with deceit, ruthlessness, and manipulation. In spite of these subjective associations, one of his books, The Prince, is still regarded highly by many leaders today. The reason behind this is because some of his philosophies on success and leadership are refreshing and engaging.
In this paper, the author will analyze Machiavellian ideas from the perspective of a modern business organization. To this end, the author will review how International Business Machines (IBM) Corporation utilizes the concepts promoted in the book. The company has embraced a staggered application of the Machiavellian principles. The selective adoption has contributed significantly to the firms success. The discussion in this paper will include the advantages and limitations associated with the application of the philosophies.
Ways through which IBM Subscribes to Machiavellian Philosophy
One of the areas where the Machiavellian ideas are applied in IBM entails the recruitment of new employees. In his book The Prince, Machiavelli stresses on the importance of a prince observing the men around him. A wise leader is the one who surround themselves with people who portray qualities of faithfulness. A similar case is witnessed in IBM. The selection of employees in this company is always a critical subject to the management (Harreld, OReilly and Tushman 32). The reason for this is because the incoming employees, together with the existing lot, are the key drivers of success in the organization. As such, they must remain faithful to the goals and aspirations of the entity.
An analysis of Machiavellis ideas reveals his feelings towards the subject of hiring. According to him, a prince should appoint people who believe in the dignity of the duty and prominence of a leader (Machiavelli and Marriott 20). To this end, a leader should disregard individuals who are driven by money and status. The reason is that such people will quit the organization once they get better offers somewhere else. During recruitment of employees, the management at IBM considers applicants who are primarily devoted to helping the company move forward and thrive in the future. As such, no worker is required to take the corporations integrity and business ethics for granted (Gray and Kinnear 62).
IBM adheres to Machiavelli ideas with respect to leadership. According to the political theorist, a successful leader is one who strives to gain fame by exhibiting traits of greatness and excellence. To accomplish this, the individual must portray competent managerial qualities (Machiavelli and Marriot 30).
Proper and effective administration is achieved in two ways. The first is through the success of the corporation and individual employees. The second is through the formulation of policies that go beyond the term or tenure of the current Chief Executive Officer. The aim is to ensure that the company thrives for generations to come. In line with this, IBM has experienced proper management and leadership since its foundation in 1911. It is noted that Thomas J. Watson, the CEO at the time of inception, played a significant role in crafting the future of the entity. For example, he took the firm to great heights by leading effectively and developing ways of boosting the morale of employees (Long 80). Some of his major strategies included furnishing the companys brand and rewarding employees for exemplary performance.
Ways through which IBM Eschews the Ideas of Machiavelli
In spite of the significant influence of Machiavelli philosophies on modern leadership, not all managers or organizations subscribe to all the ideas. The major reason for this is because some of the philosophies are considered unethical in the modern world. For example, Machiavelli talks of virtue as an aspect needed by a prince to enhance their reputation. In addition, he mentions three qualities that must be exhibited by a leader. To begin with, the manager must be stingy. Generosity should be avoided. In addition, it is better to be feared than to be loved (Machiavelli and Marriott 25). Lastly, one must not be unnecessarily bothered by the morality and ethics behind the means used to acquire power.
Since the founding of the organization, leaders at IBM have attained power largely through the use of the right channels. In addition, they treat their employees with generosity. To this end, they avoid instilling fear among their juniors. They are aware of the fact that fear may breed hatred. For example, the company was one of the first entities to motivate its employees with a wide range of benefits. Such policies included paid vacations and life cover. Rewards programs for employees apply even today. The managers have realized that the acts of stingy and ruthless leaders can make employees leave the organization after a short period (Parrino and Kidwell 75). As a result, the firm will lose as a result of the investment it has made to train and accommodate those employees.
The Importance of Measured Observance and Avoidance of Machiavellian Ideas to IBM
As already indicated above, IBM has adhered to some of the Machiavellian principles that are regarded as progressive and avoided those that are believed to be destructive. As a result of this staggered focus on Machiavelli, the company has achieved significant success and attracted accolades from regulators in the industry. As a result, the corporation continues to abide by those teachings that are beneficial, disregarding those that are full of limitations. The most influential ideas are related to proper administration to ensure great achievement in the business world.
In 2005, IBM was among the top 20 best corporations to work for as a commuter (Harreld et al. 33). The research was conducted by Environmental Protection Agency (EAP). In 2009, the company registered the highest number of patents in the country. The figure stood at approximately 5000. As a result, the corporation managed to set the highest record in history. Consequently, it was able to maintain its edge over major rivals. The closest competitor was Samsung, which had 3,611 grants. At third place was Microsoft with 2,906 (Long 66). The lead was IBMs 17th in a row. The results were announced by IFI Patent Intelligence.
In 2012, the company received another accolade. It was regarded as the second largest company in the country. The clustering was based on the number of employees. On the basis of market capitalization, it was position 4. On the basis of profitability, the company was ranked 9th. It was placed 19th with regards to revenues. It was ranked number 31 globally (Gray and Kinnear 81).
Other success factors resulting from proper use of Machiavellian ideas include being considered the best firm for leaders. It is also regarded as the number one Green Company and second best global brand. It is also one of the most respected companies in the world. In addition, the company was ranked as the 5th most admired corporation in the globe. In terms of innovativeness, it was ranked 18th (Long 70). All these accolades were received in 2011 and 2012.
In 2013, IBM still managed to gather the highest number of patents. The result ensured that it maintained the record for 22 successive years. The companys employees have also received numerous awards. They include a total of five Nobel Prizes and National Medals of Science. Others are ten State Honors of Technology and six Turning Awards. Through effective management, IBMs working periphery saw a positive growth from 16.8% to 24.3%. The increase was between 2004 and 2013. Net profits increased from 9.0% to 16.5% within the same period (Long 89).
How IBM Manifests Machiavellian Philosophies
IBM exhibits Machiavellian principles in diverse ways. The great theorist stressed the need for proper administration. According to him, an individual who does not manage their business appropriately will soon lose all they have acquired (Machiavelli and Marriott 9). In addition, the leader will experience numerous challenges while running the trade. IBM has manifested proper utilization of this philosophy. All the leaders in the organization strive to maintain the companys top position in the market. They know that poor management can result in the companys downfall (Parrino and Kidwell 74). Given the stiff competition in the corporate world, the company cannot afford even a slight drop in this front.
Another manifestation of Machiavellian philosophy is the failure of the company to assist competitors. Machiavelli insists that it is not appropriate to help and collaborate with a foreigner. The reason is because the external agent can sponsor the formulation of plans to overthrow the prince. In IBM, an employee is not allowed to provide assistance to a firm that rivals the entity in terms of market products (Harreld et al. 40). The management argues that such an act may result in conflict of interests. As a result, employees are prohibited from working for a competitor as either a consultant or a member of a board of directors without the CEOs consent.
A wise man is required to follow the path created by great men. In addition, he should emulate those who have achieved supremacy. The aim is to keep up with the excellent work that has already been started. Machiavelli further stresses on the need to act like a clever archer who plans to hit a mark that seems to be out of reach. Knowing the limits of the bow, the archer should take an aim that is much higher than the target (Machiavelli and Marriott 23). The philosophy is manifested in IBM through the inheritance of power. After nearly 40 years as the companys head, Thomas Watson Sr. resigned from office. The position was filled by his son, Thomas Watson Jr. He imitated his fathers great work, managing to alleviate the company to greater heights.
On the inheritance part, IBMs leadership counters Machiavellis argument. According to the theorist, the hard road to the top is usually the most appropriate. Leaders who inherit their success have higher chances of failure compared to those who are self-made and who reach the spot by learning vital life lessons (Machiavelli and Marriot 30). However, as much as Thomas Watson Jr. inherited the position from his father, he never showed signs of weaknesses in his leadership.
Another way through which IBM manifests Machiavellian principles is through innovations. A prince should undertake great projects to boost his reputation. All of IBM CEOs have driven the company to bigger heights by ensuring the corporation keeps up with its great inventions. The organization spends 6% of its annual revenue on research and development (Long 80). Currently, the firms president is Ginni Rometty. She has managed to emulate leaders before her to ensure the company improves its ranking as the most innovative entity in the world. Some of the companys inventions include the Automated Teller Machine (ATM), the hard disk drive, and Watson artificial Intelligence.
Conclusion
In The Prince, Machiavelli explains how to acquire and maintain political power. In spite of the fact that his works date back to half a millennium ago, the philosophies continue to be used in all levels of the modern society. The ideas have been used by numerous leaders in different business organizations. For decades, IBM has thrived by using Machiavellian ideas on success and leadership. Leaders abide by the most important goal put across in The Prince. The entrepreneurs understand that there is minimal variations between impediments and opportunities. As a result, they turn both elements to their advantage. Managers come up with innovative solutions to problems in the corporate world. However, not all principles have been put into practice.
Works Cited
Gray, Colin, and Paul Kinnear. IBM: SPSS Statistics 19 Made Simple, New York: Psychology, 2012. Print.
Harreld, Bruce, Charles OReilly and Michael Tushman. Dynamic Capabilities at IBM: Driving Strategy into Action. California Management Review 49.4 (2007): 21-43. Print.
Long, Steven. International Directory of Company Histories, Detroit, Mich.: St. James, 2014. Print.
Machiavelli, Niccolo, and Kennedy Marriott. The Prince, Waiheke Island: Floating, 2008. Print.
Parrino, Robert, and David Kidwell. Fundamentals of Corporate Finance, Hoboken, NJ: John Wiley & Sons, 2009. Print.
International Business Machines (IBM) is a computer technology company and with an interest in information technology. The company mainly deals in manufacturing of computer hardware, development of software, consultancy and a host of other technology services.
This paper looks at internal IT management solutions at IBM with special interest in Enterprise Resource Planning, Network management, IT strategy and planning among others. Additionally, the paper looks into possible IT solutions regarding the aforementioned areas at IBM.
Supply Chain Management
Supply Chain Management is a concerted effort towards streamlining movement of products and supplies downward and upward in a supply chain. IBM has an Integrated Supply Chain team. An ISC team was formed to oversee matters concerning the supply chain.
Their main function is to identify weaknesses in the supply chain and identify measures that can be taken to improve performance. Since IBM has operations hubs in various parts of the world, ISC ensures that these teams deliver IBMs strategies and shareholder expectations through monitoring and optimizing the supply chain.
The company uses software that tracks inventory movement and manufacturing real-time. It also updates customer information including ordering, market preferences and alerts production departments to ensure that necessary adjustments are made to forecasting to reflect market needs (Davenport & Brooks, 2004).
The flow in the Supply Chain Management is categorized into three major flows depending on the materials in the chain (Davenport & Brooks, 2004). The use of IBM applications is executed in these three flows including the product, information and the flow of finances.
IBM applications in Supply Chain Management are categorized into two main software applications. They include Planning Application Software and the Execution Software. Whereas the Planning Applications are used in the process of identifying best filing methods for various orders, the Execution Applications are used to in the physical tracking of conditions of goods (Davenport & Brooks, 2004).
In addition to the physical tracking, the Execution Application Software also facilitates the proper material and financial management within the chain (Davenport, & Brooks, 2004). It is worth noting that, the two Supply Chain Management (SCM) Software Applications operates with transparency, hence; allow sharing of information both within and outside the enterprise (Davenport & Brooks, 2004).
The use of the IBM applications has facilitated faster and a more cost effective system of not only production of materials, but also the supply of the same materials produced. The cost of transportation, inventory as the flow of information has greatly subsided.
Enterprise Resource Planning
At IBM Enterprise Resource Planning is a direct effort towards increasing business effectiveness, efficiency, and performance. At IBM, various software solutions have been developed to reflect various functions, departments, processes, and decision-making areas.
At a manufacturing plant, the operations manager receives the market information from sales and marketing department that reflects the sale-ability and demand of a certain brand (IBM, 2012). To enable top managers to make strategic decisions, various Decision Support Systems have been incorporated into the ERP systems.
This allows top management to assess entry into new production lines, enhance production of an existing product, or cease production of obsolete brands. It is important to note that storage is too costly for such a firm. Hence, management strives to ensure that market demand and production levels are instantaneously met to reduce holding costs. This increases effectiveness and efficiency of operations, which grows shareholder value (Davenport & Brooks, 2004).
Document Management
As part of a broad document management solution at IBM, the company has developed specific software for managing company documents. The IBM Document Manager seamlessly and intuitively integrates into common office applications and into Microsoft Desktop. Hence, it is possible to use the software in email, and to integrate it with web applications such as Mozilla, Internet Explorer etc.
Additionally, IBM Document Manager easily incorporates functions of common desktop applications such as Microsoft Word, Excel, Power Point, Windows Explorer, and Windows desktop. It also has the ability to use Email solutions such Outlook and Exchange (IBM, 2012). This ensures a broad coverage of all channels that clients may use to channel grievances, requests, orders, invoices etc.
IBM uses this software across all its networks, departments, and clientele. This makes that it integrates into all parts of the supply chain including suppliers. It also ensures that information that needs to be shared across departments is shared easily. For example, an invoice may be shared by purchasing and accounting departments (Horan & Rhodes, 2008).
Network Management
Currently, there is critical need for a good network infrastructure. Technology shifts and dynamics in the competition market necessitate a need for a flexible enterprise network. IBM ensures that its network meets this criterion as it strives to give similar solutions to its clients. With IBMs global presence, it uses virtually all available network management solutions in the business.
This is a concerted effort to ensure that information within the organization is available to the relevant individual at any time anywhere in the world. This is a major challenge because of the emergence of various devices whose compatibility is as diverse as the clientele usage (IBM, 2012). However, IBM has continuously strived to align its network management software to existing protocols and to tweak it to fit popular mobile devices.
This shows that despite the ease of use and huge presence of a multitude of mobile devices such as smart phones and tablets, they involve a long chain of network elements (IBM, 2012). Some of these elements and resources may involve third parties and hence IBM may not conveniently use them. Some of the popular Network Management Solutions and paths IBM uses include Clouds, Virtualization, Voice-Over IPs, Wireless Networks, Video Conferencing, and Big Data solutions (IBM, 2012).
IT Planning and Processes
IT planning is critical in ensuring that current IT solutions reflect changing technological and market changes. At IBM, as part of its consultancy business, the company advises clients regarding IT planning. Therefore, it is logical that the company should have high end IT planning.
IBM is quite sensitive to changes in the market that may affect its operations. The company forecasts future trends through a careful analysis of current changes in IT. This way the company anticipates future products and sets up teams to develop them. This includes software and hardware. The company is also a huge fan of reverse engineering which trail blazed its success (Sher & Lee, 2004).
IT Strategy and Planning Methodology
Different methodologies may be adopted to carry out planning and strategy in IT effectively. It is crucial to note that IT is the bedrock of current organizational operations. Hence, a possible failure or fault in IT could have catastrophic ramifications. IBM has adopted a leveraged 6-point IT strategy and planning methodology in its operations. The 6-point methodology is outlined below (Horan & Rhodes, 2008).
Indentify Business Strategy and Capabilities
In this step, IBM defines its overall enterprise strategy. This is the strategy developed by top management. Generally, it outlines future goals, vision, and objectives. In addition to this, IBM divides its operations into units and outlines their strategies, for example, the China Unit. Lastly, the business defines operational capabilities that are prevalent to ensuring the realization of the business strategy (Horan & Rhodes, 2008).
Outline Business Process Framework
In this step, business processes are defined, roles are outlined and business scenarios forethought. All this is done in respect to the business capabilities outlined. Additionally, the business indentifies areas that starkly differentiate it from other players in the same filed (Horan & Rhodes, 2008).
Define Targets and Enabling Applications
In this step, IBM indentifies its main targets and strategies. This way, applications maybe developed to cater for key integration points that the company indentifies. Additionally, IBM indentifies components and services that will define its business.
Indentify Core Data and their Sources
In this step, the business indentifies and clearly outlines the most critical data and the data points. IBM cleans these data points to come up with trusted sources of data. These may be clients, suppliers, consultants, or business analysts. The data aids in ensuring smooth business processes. Additionally, IBM develops standards for which to accept or reject a data point (Horan & Rhodes, 2008).
Directions and Support of Infrastructure
In this step, the company defines IT strategy and necessary infrastructure. IBM also defines the standards for the development of that infrastructure and outlines the services for the infrastructure.
Develop Roadmaps
In this step, IBM defines the timelines for the achievement of the plan. It also defines milestones and relevant targets. It also highlights the critical success factors. Lastly, IBM defines future steps after realization of the plan (Horan & Rhodes, 2008).
References
Davenport, T. H., & Brooks, J. D. (2004). Enterprise Systems and the Supply Chain. Journal of Enterprise Information Management, 17(1): 8-19.
Horan, J. & Rhodes, D. (2008). IBMs Transformation to a Globally Integrated Enterprise. Web.
IBM (2012). IBM Unifies and Optimizes Network Management. Web.
Sher, P. J., & Lee, V. C. (2004). Information Technology as a Facilitator for Enhancing Dynamic Capabilities through Knowledge Management. Information & Management, 41 (8): 933-945.
Entrepreneurs all over the world have celebrated success stories of their firms. Entrepreneurship has defined the 21st century. It has reduced bureaucratic processes and introduced creativity. Therefore, innovation has been responsible for marvellous achievements of the century. Drucker defined innovation as the effort to create purposeful change in an enterprises economic or social potential (Drucker, 2007, p. 2). Still, others view innovation as a process of creating, accepting, and implementing new ideas, services, products, and processes. All these definitions reflect the aim to introduce new ways of production in new products and services for different markets.
Rapid changes in the 21st century have created open-market economies. However, starting a business does not guarantee a success. This is where strengths of technological innovations have transformed entrepreneurship across the globe. We have experienced how innovations have influenced various industries and countries. However, such influences originated from entrepreneurial activities of innovative companies. Entrepreneurship and innovations have become global issues. In this article, we shall look at entrepreneurial activities as drivers of innovations.
Drucker believes that entrepreneurs are innovators (Drucker, 2007). Therefore, innovation has become a fundamental tool for entrepreneurship. However, such generalisation makes it difficult for us to understand innovation. Several firms have focused on innovations, but their results are not impressive (Kelley and Littman, 2002). On the other hand, others have succeeded. In this article, we look at how IBM has used innovation to enhance its position in the global business and transformed other businesses.
IBM
IBM has one of the worlds largest IT research centre with nearly 3,000 engineers and scientist. The company has invested an average of $5 billion annually in its research and development programmes since 1996. As a result, it has more than 40,000 patents. The company has researchers from various disciplines who innovate in various fields like:
Deep computing
E-commerce
Communication technologies
Personal systems
Storage and server devices
In the recent past, IBM introduced On Demand Innovation Services (ODIS). In this case, the company works with its research team and clients in order to solve business issues innovatively.
The company has revolutionised entrepreneurship and innovation for the past 50 years. IBM does not display most of its innovative ideas, but a thorough search reveals innovative processes at IBM (Rao, Wilson and Watkinson, 2009).
People know IBM as the Innovative Company. This is true if we consider various areas the company has conducted research on and produced innovative solutions for businesses across the globe. IBM views innovation as a process that is definable and open to collaboration with both internal and external parties. As a result, the company refers to its innovative team as an ecosystem of innovators.
IBM believes that innovation has significantly changed in the last few decades. In fact, the company notes:
The very nature of innovation has changed in the early days of the 21st century. It is increasingly open, collaborative, multidisciplinary, and global. This shift means that the truly revolutionary innovations of our time the ones that will create new markets, redefine old ones, and maybe even change the world for the better require participation and investment across multiple constituencies (see Rao et al., 2009).
Therefore, it must adopt a different approach to innovation.
IBM has different platforms that reach out to various partners across the world for collaboration in innovative processes. For instance, IBM has a Global Innovation Outlook (GIO) for innovators across the world. This platform enables the company and other partners to extend learning of new ideas for innovative purposes.
GIO relies on the company and other stakeholders through periodic journals, reports, video conferences, and blog contributions, which focus on innovative ideas of the time. It is imperative to note that IBM innovation approach includes several external parties. Consequently, the company has decided to clarify what constitute innovative ideas. The criteria for innovative ideas are:
The idea must be capable of generating substantial revenues from economic activities
The idea must have long-term impacts on society
The idea must be about an area of enterprise that is ready for innovation
IBM notes the gap that exists between a great new idea and developing the idea for success. As a result, IBM has a ThinkPlace, which facilitates the culture of innovation in the company. This site enables innovators to contribute and collaborate on new ideas, add inputs to existing ideas, and look for possible solutions to their cases (Rao, et al., 2009). The company also has an annual innovation jam session. In this case, people have an open forum to engage each other for new ideas from different industries.
IBM has various ranges of activities for supporting such ideas. As a result, the company can widen innovative approaches and extend various ideas into reality. Once the company discovers a new idea, it enacts process for evaluating and commercialising such ideas.
What is Innovation to IBM?
IBM has a clear sense of what it promotes as innovation. The company shows achievements as well as areas for future consideration. The company also acknowledges that innovation has changed. Therefore, it allows its employees from all over 170 countries to bring their unique ideas for consideration. At the same time, IBM also works with various clients when developing new business solutions and models. This is a form of differentiation from competitors. Still, the companys innovation approaches go beyond itself and customer. Therefore, IBM extends innovation to solve different problems in society under an ecosystem of innovators.
IBM also engages in regular developments and improvement of its innovation platforms on the Web. This is significant for growths because innovation is a continuous process and changes within a short time.
IBMs i-team
IBM has effectively developed an innovation team known as i-team or value creation centre. The team includes IBM innovators and business partners, who conduct several workshops in order to discover and initiate innovative solutions for competitive strategies. The team relies on priorities from senior management to define and initiate solutions. After this, it then conducts risk assessments and starts a full business solution development.
IBM uses its specialists with various capabilities for implementing a project throughout its life cycle as its business partners need. I-team is a successful approach because it allows the company to leverage on its innovative experts and enhance clients needs. This strategy enables IBM innovation team to understand the required business solution from a clients perspective because it is a joint innovation. IBM has capabilities of creating virtual teams or physical ones at their innovation centres.
IBM has chances of developing a portfolio for the clients business team to evaluate. In this process, both teams consider the scope and possible impacts of the idea. However, these solutions depend on the clients needs:
Innovations with direct impacts
New capabilities
Cost-cutting solutions
Support after purchase
Need for outsourcing
After decades of applying technologies in its works, IBM has developed a model for innovation that aids in selection, review, and validation of new ideas (IBM, 2013).
The first stage involves attracting new technologies. This process of launching innovative idea involves searching for a suitable idea that can pass all stages of innovation (Christensen, 1997). The company only selects advanced innovative ideas, which must also fit within an existing service or a product (Bessant and Tidd, 2008).
For instance, IBM introduced autonomic computing in order to help businesses improve efficiency without frequent human interventions. Autonomic computing involves various sets of technological applications, systems, and the whole networks. Such innovations enable businesses to be self-managing. The idea of autonomic computing has become pervasive because other software tools from IBM innovative approaches. Consequently, we can see how the search for opportunities for innovation has transformed complicated business processes into practical applications for improving business environments. IBM innovative solutions demonstrate six main ideas.
Cost flexibility; this eliminates the need for fixed costs and allows firms to pay for solutions they need.
Business scalability; the solution must offer flexibility and cost-effective approaches and allow capacities to support growths later.
Market adaptability; the solution should support experimentation and allows for fast adoption.
Context-driven solution; this enables innovations to have user-defined contents and enhance relevance of such products in the market.
Value-driven solution; the solution should drive new values and drive potential new businesses.
Low complexity; the solution should allow for general simplicity and eliminate complexity for users.
Select: What to do and why
Second, IBM develops the business case for innovative ideas. However, the company warns that innovation does not just happen. At the same time, it argues that we cannot merely buy innovation. IBM notes that innovation is a creative process that has unpredictable results. Therefore, it must have the right multidisciplinary teams within a favourable environment.
Before IBM enacts any innovative solution to its clients, it must guide them on selecting the best solutions for their businesses. In the respect, it has three approaches:
The innovation must align with the business strategy of the organisation. In this cases, IT and business people share ideas on the best solution.
IBM also allows clients to determine how new solutions should change their business environment. For instance, such solutions should be able to attract new partners, new customers, market segments, and enhance efficiency.
Innovative team also allows clients to determine where the solution should take the business to within a given time. Therefore, IBM considers rapid changes in the market and helps clients have innovative solutions, which can help them match changes in the market.
IBM collects several innovative solutions from various sources in a year because of its collaborative approach to innovation. As a result, the company insists that the idea must be an emerging technology solution. The selection process of innovative ideas in technologies must:
Target early entry marketplaces
Introduce new standards or specifications
Must be appealing to end users or early adopters
In this process, the team drops any innovative ideas, which do not meet the above criteria. This implies that IBM rejects several innovative ideas, which may be useful in other fields.
IBM rewards creative and unique ideas. It also manages its portfolio of innovative ideas and prioritises innovation in terms of short-term and long-term benefits.
IBM claims that its innovation processes do not purely take place at the technical level of the organisation, but it focuses on original business ideas. For this reason, IBM conducts most of its innovative ideas with partners and clients (IBM, 2006). This provides a practical evaluation of the process. For instance, in B2B Integration, the company realised that companies suffered losses and experienced inefficiency due to manual processes. Consequently, IBM noticed that B2B Integration could eliminate human errors because it was an automated invention. The idea eliminated human errors that disrupted the supply chain in midsize organisations.
Firms usually have several innovative options to choose from when they tackle their business issues. Midsize firms must consider costs of such solutions. However, it is important for such companies to account for scalability of their choices. The aim should be to choose a solution that solves the companys problems and expandable for future changes.
IBM also notes that successful projects require trusted partners, who are capable of formulating plans for success. At the same time, such partners must understand unique needs and integration requirements of small businesses. In this regard, IBM has recognised that various firms have different sets of challenges. Thus, no single solution can solve their problems. As a result, a strategic approach to B2B integration can solve various issues affecting supply chain processes (IBM, 2012).
Implement: How are we going to make it happen?
The third stage involves surfacing new technologies. IBM selects various technologies for implementation. Before this process, the company displays its new ideas on its various Web platforms. In addition, it also engages in strategic marketing in order to raise awareness regarding new ideas.
This process enables IBM team to forecast demands for such innovations, particularly in situations where markets expect such new solutions. IBM has recognised that growths in businesses have led to high numbers of partnership and associations, as well as customers and suppliers. In this sense, the company recognised that various customers, partners, suppliers, and other associations have different needs from the company (Goffin and Rick, 2010). As a result, business processes increase and become complex. Therefore, B2B Integration is imperative for midsize organisations, which may not have strong supply chain. Such challenges can reveal their weaknesses.
Therefore, IBM seeks to understand the complexity of business-to-business processes before implementing any innovative solution to its partners. Before IBM implemented B2B Integration platform, it conducted a survey in order to determine the market condition. In B2B Integration, IBM found out that many midsize businesses were under pressure due to the lack of business process integration, which led to poor customer, supplier, and trading partner communications (IBM, 2012). It also established that many companies lacked back end systems to link them with their suppliers. This implied that business communications could not flow from suppliers to businesses without human and manual intervention.
At this stage, IBM matches new ideas or technologies with existing opportunities. The selected idea in IBM passes through several stages before implementation. The technology or new idea must be a new service or product for the future market. This process also involves free testing of new developments. Therefore, the company offers free limited trial periods. This period enables customers to evaluate products and send their feedback. Later, interested customers may purchase commercial licenses for such products.
In some instances, IBM places such innovations on open sources for members feedback. At this point, some innovations may not evolve into useful products. However, IBM has an Emerging Business Opportunity (EBO) to ensure that most of its innovative ideas make transitions to the main business solutions. EBO teams usually cooperate with IBMs business groups when developing models and implement projects for flagship customers and other early users.
Capture: How are we going to get benefits from it?
The fourth stage involves getting and measuring real-time evaluation results. This stage provides opportunities for products or service developers, consultants, businesses, administrators, architects and other interested parties to review the suitability of innovations for users (Davila, Epstein and Shelton, 2005). This enables IBM to know developers opinion about the technology and review if the product or service is viable for the market. The company reviews if the product is:
Useful
Able to solve the problem
Requires support after purchase
if the product concept is ahead of the market
The company finds some innovative solutions to be popular than others. Over the years, IBM has noted that clients have positive feedback regarding their innovative solutions. As a result, the company has noted that the main drivers of success were in support from all members of the organisation.
IBMs B2B Integration solution has been effective in enhancing automation within midsize companies. Consequently, such firms can improve their internal processes and extend such advantages to suppliers and customers. Companies that have adopted IBMs B2B Integration have realised significant changes in terms of business results. Such firms have increased productivity, reduced human errors, manual processes, and obtained exceptional firms data on supply chain stages.
IBM noted that midsize firms, which adopted B2B Integrator, had a significant reduction in administrative costs by 30 to 60 percent. It argued that such savings were substantial for midsize companies with limited resources. The innovative solutions were holistic and provided inexpensive solutions to firms supply chain and back end systems. Such innovative solutions should reduce costs and enhance communications with other partners. IBM provides such integrated solutions to help small firms integrate their processes for accuracy and efficiency, and help businesses conduct their transactions in secure platforms.
Conclusion
Innovation has always defined IBMs business strategies because it has become a part of IBMs daily operation. The company believes that the significant part of innovation involves turning concepts and experiments into commercial solutions. IBM has cultivated a culture of innovation its processes. IBM materials show that innovation efforts are results of defined processes, which involve many contributors from the company and outside the firm. This implies that innovation requires insight and careful nurturing.
We have noticed how innovations have transformed the 21st century entrepreneurship. However, we have to note that innovative organisations like IBM have dedicated extensive resources in order to pursue and develop a culture of innovation. As a result, the company has created specific roles for innovators. IBM understands that innovation goes beyond invention and technology usages. As a result, the company enhances innovation with employees discipline in order to support investments, tools, and resources for success.
IBM has also established minimum value criteria for what it considers as innovation in order to eliminate ideas, which do not have economic potential. Such criteria have raised issues about the future market potential and elimination of small ideas, which might have huge potential in other industries or in the future.
IBM believes that innovation has a significant role to play among its current and potential customers. It is also important to note that IBMs innovative solutions go beyond its IT business. For instance, the company works with ecosystem of innovators to explore water and environmental issues in other parts of the globe. This implies that IBM uses innovation for revolution apart from promoting entrepreneurship.
The B2B integrator of IBM shows that the company uses visible and predictable market needs in order to develop new solutions. This shows that innovation may present challenges to many firms because they may not know what market requirements shall be viable in the future. This explains why IBMs approach to innovation is collaborative and involves teamwork.
Recommendations
Innovation should address challenges facing entrepreneurship and society. Therefore, IBM should focus on an ecosystem of innovation, changes in innovation, global issues, and address needs of society and entrepreneurs based on their uniqueness. Most entrepreneurs and societies face various challenges from globe competitions and emerging forms of innovations. These changes show that innovation requires multidisciplinary approach because major changes shall transform society in the next century. Therefore, innovative approaches of firms like IBM will determine the future of society and entrepreneurship.
IBMs approach to innovation aims at solving problems in society among entrepreneurs. However, the company has set high standards when selecting innovative ideas. This tendency eliminates useful ideas, which do not match such standards. Therefore, IBM should review its criteria based on the uniqueness of ideas and areas of interests or geographical locations for such ideas.
IBM must also focus on cost reduction for all its innovative approaches. However, firms find it difficult to save costs and invest in innovation. Effective implementation of an innovative idea requires collaboration across the entire organisation. Therefore, firms must change their approaches in order to develop new solutions for their partners and customers.
References
Bessant, J., and Tidd, J. (2008). Innovation and Entrepreneurship. London: John Wiley & Sons Ltd.
Christensen, C. (1997). The Innovators Dilemma: When New Technologies Cause Great Firms to Fail. Cambridge: Harvard Business School Press.
Davila, T., Epstein, M., and Shelton, R. (2005). Making Innovation Work: How to Manage it, Measure it, and Profit from it. New York: Prentice Hall.
Drucker, P. (2007). Innovation and Entrepreneurship. Oxford: Butterworth-Heinemann.
Goffin, K., and Mitchell, R. (2010). Innovation Management: Strategy and Implementation using the Pentathlon Framework (2nd ed.). London: Palgrave Macmillan.
IBM. (2013). A model for innovation at IBM. Web.
IBM. (2012). B2B Integration: Automation for growth. Web.
IBM. (2006). Innovation Sourcing: Increasing business value within outsourcing relationships. Basingstoke, UK: Marketing and Publishing Services.
Kelley, T., and Littman, J. (2002). The Art Of Innovation: Success Through Innovation. London: Profile Books.
It would be impossible to gauge the success of the Corporate Service Corps without linking it to the ultimate goal of Palmisano, which is summed up in two terms: global integration. Therefore, it is essential to find out what Palmisano meant when he talked about the corporations evolution into something global in scope. First of all, it must be pointed out that globalization and the fact that corporations are doing business on a global scale is nothing new (Crowther & Rayman-Bacchus, 2004). Thus, Palmisano is talking about something else, something that is entirely new, at least to IBM, but it is also something that can be understood as a way to create a competitive advantage. Therefore, as the main guide for discussion, the proponent of this paper had to keep in mind that IBM is always interested in the bottom line, meaning they exist to make a profit.
There is a need to look into the article written by Palmisano in order to fully understand what he said (Palmisano, 2006). In an article of average length, the one he wrote for the Foreign Affairs covered some of the basic ideas about corporations and the way it is evolving in the 21st century. One can read about the ubiquitous Information technology and, of course, the term globalization. It is some form of a repackaging of what many business leaders are already aware of since the emergence of high-speed computing and highly efficient modes of transportation that can allow businesses to be located in China or India while their headquarters are in the U.S. mainland. But Palmisano was probably one of the first to acknowledge that breaking up the mother company into major components and relocating them to many parts of the globe is a major strategy that will create positive results in the future (Palmisano, 2006).
The most revealing statement in the article is the one wherein Palmisano said, The global integration of production cuts costs and taps new sources of skills and knowledge (Palmisano, 2006). This is the heart of the matter, this is the main goal of IBM, and if they can give back to the community while developing their strategies and gathering resources in the process, then they can hit two birds with one stone. In fact, IBM is trying to hit multiple birds with one stone, as will be discussed in the following pages.
The goal of IBM, according to its publicist, can be simplified through the following short statements:
IBM wanted to strengthen its brand;
IBM wanted to increase shareholder value; and
IBM wanted to market itself as a company that people and society could trust (Marquis & Kanter, 2009).
An unbiased look at these three goals will reveal that all of these are interrelated, and the end goal is profit. Still, IBM should be credited for being very smart because the company realized that there are two major roadblocks to achieving all three goals. The first one is the increasing awareness regarding Corporate Social Responsibility (Kotler & Lee, 2005). There are more and more people and influential leaders in the world who believe that a company need not be ruthless in order to succeed. They believe that if the company gives back to the community, it will even become more successful (Domini, 2001). The second roadblock is well-known in business circles and in business schools, and this is the challenge of managing and exploiting limited resources. This can come in many forms, such as having a tight labor market, expensive wages, lack of skilled workers, expensive raw materials, high cost of accessing raw materials, etc.
Having this in mind, the CSC project is a bold and brilliant concept because Palmisano can be closer to his goal of transforming IBM into a globally integrated enterprise. Palmisano and his team had created a system where they can train their top employees in a way that will not only sharpen their skills as employees of IBM but as citizens of the world (Cory, 2001). They will be forced to move into places and locales that they may never dream of going to or may hesitate to enter on their own. Now, these small groups of elite corporate warriors, young men, and women, the cream of the crop at IBM, are empowered with the backing of a giant corporation. It is an all-expense-paid trip but minus the frills. It is some sort of a boot camp, but they are not in training; they are doing hard work and yet doing something that they love because they have the heart of a volunteer.
Litow, Willner, and Thompson were given the authority to spearhead this project, and they have to make accurate assessments with regard to the success of CSC. In order to measure their progress and how they come close to the goal of creating a globally integrated company, they must determine how their volunteers (IBM employees), sent out to developing countries, were able to understand their role as not only change agents but also as instruments to gather information and develop a deep understanding of how emerging economies work. This is a major challenge because Litow, Willner, and Thompson have to include in their future design the need to improve their pre-work strategies. In the initial report, team members are already complaining that they did not have enough time and lack access to resources, which results in a team that is far from being 100% prepared to tackle their task.
Now, Litow, Willner, and Thompson have to improve their training modules or training methodology to prepare the hearts and minds of the volunteers for what they will face up ahead. This is very important because the team will have to succeed at the most fundamental level of their mission. It will be pointed out later that IBM is not creating another peace corps type of organization; they are here not only for corporate social responsibility. They are actually going into these poor countries because they want to increase their revenue (Domini, 2001). But first things first, they had to ensure success, or else there is no justification for continuing sending these teams to Ghana, the Philippines, Vietnam, and other countries in Asia and Africa.
They have to improve the whole process of selecting and training, and then the whole program has to be re-evaluated. Although it was pointed from the very beginning that this project will not be mistaken as a vacation junket, it is still important to provide reasonable accommodations for the team. There are those who were complaining that their progress was hampered by some minor details that were overlooked in the planning stage, such as the type of hotel and even by things that are as mundane as toilet paper.
Now, going back to the crux of the matter, it must be made clear that Palmisano and IBMs corporate leaders, and the team who created CSC, are not merely interested in improving morale; in providing a unique way of training their best employees; and simply to give back to the community. Their goal is a globally integrated enterprise because this is the only way that they can expand to other countries where they are the weakest. Moreover, Palmisanos main objective is not to look good from the point of view of CSR. Based on his article, his actual goal is to find out how to cut production costs and tap new sources of skills and knowledge (Davis, 2003). The CSC program requires minimal tweaking in order to achieve Palmisanos vision of a new IBM.
In order to achieve these grand goals, there is a need to develop a new breed of corporate leaders that can guide IBM into new territories. Furthermore, these leaders are not only enthusiastic about the notion of a globally integrated enterprise but also have the right mindset as to why it is necessary for IBM to create a new culture. One of the key metrics that they should track is to find out how their volunteers are learning to understand the importance of Palmisanos vision. In the post-work phase, IBM executives must insist on finding out how the volunteers were transformed by the experience. For example, if the report is all about the excitement of traveling to an exotic country and the exhilarating feeling of helping the less fortunate, then CSC has failed. This is because corporate social responsibility is just a part of their goals.
The CSC program must also be evaluated not only based on the impact of the first 100 volunteers and how they were able to help non-profit groups and various organizations in developing countries. The program must also be evaluated based on scalability and the risks to the model as it continues to evolve and grow. With regards to scalability, it is easy to see that this project is scalable. This is because IBM had already taken some major steps towards global integration, and therefore the company is already aware that there is a need for more decentralization. In this paradigm, IBMs success is linked to decentralization. It has to be decentralized. Each major component scattered all over the planet must contribute significantly to the growth of the company. Therefore, CSC is scalable, and country managers can develop and deploy their own teams.
The only problem with the idea of scalability is that the CSC program can be out of control one day, and the CEO may have a hard time controlling it to focus on their main goal, which is to penetrate new markets, lower cost and tap new sources of knowledge and skills. This concern must be incorporated into the process of improving CSC. The executives must establish controls and boundaries that they should not cross. As mentioned earlier, this is no Peace Corps volunteer program. This is also not an excuse to have an all-expense-paid vacation to some island country in the Pacific.
Recommendation
There is no need to belabor the fact that IBM is here to make money. The right way to say it is to increase shareholder value. After all, IBM, just like any other global corporation, has to answer to its shareholders. This is the anchor that will prevent the CSC program from being blown to uncharted territories and lose focus. It must be made clear to the executive and to the volunteers who are willing to leave their comfort zone to go into some far-flung jungle in some developing country that they are not sent there to simply help the less fortunate. They are sent there to also gather information. The CSC program has to be fine-tuned to train volunteers to gather pertinent information regarding the creation of a globally integrated enterprise.
For instance, they are not simply sent to the Philippines to empathize with the plight of the poor and the downtrodden. The volunteers must be alert for opportunities and be eager listeners so that they can be able to find out how IBM can be the most dominant service provider in this part of the world. The volunteers must become like an intellectual sponge able to absorb a great deal of information and even knowledge that may be impossible to quantify, such as an insight into the economic and psychological conditions of the people living in developing countries. In this manner, IBM will be able to develop strategies and business initiatives that will capitalize on what was discovered during the volunteer work of CSC.
The CSC program can be further enhanced by improving the post-work phase. After the volunteer work, the team must provide a report that will inform IBM corporate heads on how the company can strategically position itself, the kind of products it should create, the way that it should be marketed, delivered to its target market, and how the businesses processes can be sustained and made more productive. This follows that even in the preparation stage, this kind of skill must already be inculcated into the hearts and minds of the volunteers. This brings the discussion to another related issue, and the CSC program must be careful in the selection process. They were on the right path when they included the criteria for selecting the propensity for volunteerism and that prior experience in volunteer work is a major advantage in the selection process.
By doing so, the CSC program will be sending volunteers that are very eager to immerse themselves in the culture and business environment of the receiving country. There were initial reports that there were some volunteers who did not work hard in the preparatory stage. This suggests that they may be some problems in the selection process. It is possible that in order to fill the quota of teams needed to be sent out, the selection committee was forced to cut corners and chose those who were not ready to do high-quality work for the company.
On the other hand, if the selection process was carefully designed to filter the undesirables, then one possible cause for having unprepared volunteers could be the need to have time off from their main responsibilities in order to focus on the task at hand, in this case, the training needed so that teams can work well in a foreign country. This is a problem that is not easy to resolve because managers and direct supervisors may not be too happy to let their best workers go to a training session that is unrelated to their core business. This could be the time that Palmisano should come in and act as the main motivator so that IBM should wholeheartedly embrace this new endeavor. Palmisano should explain that the CSC program will yield tangible results in the future, but today there is work to be done.
It would be best to select those who have the heart of a volunteer. But this is just part of the requirement because too much enthusiasm for volunteer work may distract the team from their main task, which is to actually scout the land and develop partnerships and establish networks in preparation for IBMs next major move in that region or in that particular country.
Based on initial reports, it seems that there is no need to tweak the leadership and skill-building component of the program. First of all, the volunteers that were sent are already in the top-tier of the company, and they are like elite commandos, proven performers, and therefore it should not come as a surprise that their abilities were enhanced when they took this assignment. What IBM can do is to let those who completed their mission act as mentors for the next batch of volunteers that will be sent out to the field. In this way,, their leadership skills can be further enhanced and, at the same time, increase the efficiency of the pre-work stage of the CSC program.
Conclusion
There is so much work to be done. One of the key metrics is to find out how the volunteers fully understand Palmisanos vision of transforming IBM into a globally integrated enterprise. From the top to the bottom of the company, there must be a single-minded purpose that IBM should evolve or perish. There is no other way to do business in the 21st century but to embrace decentralization as well as relocating key components of the business in order to cut costs and tap into new sources of skills and knowledge. The volunteers who sent into emerging economies are there because probably these countries are not yet saturated with IBM products and services. Therefore, the goal of the CSC program is not only to develop a crop of new leaders who are competent in their jobs, but the program also aims to develop leaders and top-notch workers who think in global terms, able to understand how IBM should position itself in a highly competitive business environment in the 21st century.
References
Kotler, P. & N. Lee. (2005). Corporate Social Responsibility: Doing the Most Good for your Company and your Cause. New Jersey: John Wiley & Sons, Inc.
Crowther, D. & Rayman-Bacchus, L. (2004). Perspective on Corporate Social Responsibility. Burlington, VT: Ashgate Publishing Company.
Cory, J. (2001). Business Ethics: The Ethical Revolution of Minority Shareholders. New York: Kluwer Academic Publishers.
Davis, A. (2003) Everythng You Should Know About Public Relations. UK: Kogan Page.
Domini, A. (2001). Socially Responsible Investing: Making a Difference and Making Money. Chicago, IL: Dearborn Trade Books.
Marquis, C. & R. Kanter. (2009). IBM: The Corporate Service Corps. Harvard Business School.
Palmisano, S. (2006). The Globally Integrated Enterprise. Foreign Affairs.
IBM, one of the key players in the IT industry with global-scale visibility, attempted an overhaul of its diversification strategy in the middle nineties. By that time, the company had a long history of successful instances of equal opportunity promotion. As early as 1899, the company hired women and black individuals as employees, which was almost unheard of at the time. Similarly, the first employment of a person with disability preceded the introduction of Americans with Disabilities Act by more than 70 years.
The streak of efforts aimed at increasing diversity and equality could be traced throughout the companys lifetime and generated significant acclaim. Also, the said actions are credited for generating nationwide responses in the form of greater adoption of diversity strategies among competitors and business entities in unrelated business segments. However, despite the prominent orientation towards diversification and greater opportunities for minorities, the situation in the company remained unsatisfactory.
In most cases, the representatives of different minorities were not numerous enough to make a difference. According to the testimony of one of the senior executives, the company meetings were dominated by males to the point where females could be easily spotted among them. While the same situation could be observed among IBMs competitors, it was inconsistent with the reputation of a pioneer in diversity established by the company. The most likely cause of such a situation was the meritocratic approach adopted as the companys primary approach. While it supposedly eliminated biases by prioritizing achievement, it also deprived the employees of individuality and ignored their differences.
In an attempt to mitigate the situation, a diversity-oriented initiative was launched by the company, led by Ted Childs. Several task forces were conceived and created, all of which remain active today (some of them have their names changed). The central goal of the initiative was to bridge the workplace and marketplace in other words, seek ways of reaching out to the diversified markets of the modernity and ensure the recognition of the individual competencies of the employees.
The new approach would eliminate the blindness characteristic for the early history of the company but retain the absence of discrimination through acknowledgment of differences. The missions of the task forces were formulated in part based on the feedback provided by the survey among the employees. The resulting areas of focus included employee beliefs, communication, training and education, workplace flexibility, and staffing policies.
They included the executives from its constituency and were assigned a sponsor whose presence ensured the possibility to overcome the unforeseen barriers. The task forces were launched in 1995 and managed to identify numerous issues that required the attention of senior management.
During the reporting meeting where each of the task forces shared their obtained information and insights, it was decided that the diversity initiative should expand beyond the executive level to provide employees an opportunity to connect and contribute to the cause. As a result, two new formation types were introduced employee network groups and diversity councils. The former took on an encompassing goal of providing the representatives of various minorities with possibilities of communication. The latter served as scaled-down versions of task forces by focusing on the same issues but a different level.
Key Issues
While the launch of task forces and the subsequent formation of diversity councils and employee network groups were considered a definitive success, several issues emerged after the event or remained unresolved despite the efforts made by responsible parties. Most notably, the changes caused by the task force functioning mostly improved the outcomes at the lower levels of the corporate hierarchy, whereas the senior management remained relatively undiversified. Second, the initiative was oriented primarily on the internal affairs of the company and created little to no external effect.
At the same time, the diversifying market presented numerous opportunities that remained unnoticed by IBM. Over time, as the efficiency of its business operation increased and the cultural and political landscape transformed, the company faced new challenges. First, since each task force retained and gradually accumulated its area of responsibilities and gained greater influence, it generated more directives and recommendations which became difficult to follow.
Since all task forces were separate entities and in some cases operated similarly to independent organizations, their initiatives often conflicted with one another. Besides, since by the early 2000s some of them reached a global scale, the number of resources required for the implementation of the proposed initiatives made it impossible to adequately support all suggested directions.
Next, the initial intention of the team responsible for the global diversity strategy was to create an initiative based on the U.S. centered approach. However, the growth exhibited by the company in recent decades, as well as the tremendous effectiveness and persistence demonstrated by the task forces, made it clear that such an approach would be extremely difficult to implement. Specifically, the current distribution of IBMs operations spans over three large areas, each of which experiences a surge in demand for workplace diversity and equality.
Even more importantly, each area has its unique set of cultural, social, and political characteristics that seriously limit the applicability of the chosen strategies in Asia-Pacific, European, and African regions. For example, in comparison to the American region, the European area has a much more diverse political structure since, unlike the former, it consists of numerous countries, some of which employ political systems significantly different from the one used in the U.S. As a result, the relevance of the U.S. centered model will be seriously compromised in these areas without adjustments.
Finally, the cultural backgrounds of certain countries contain various factors that act as barriers to the diversity strategies developed for the American setting. In some counties, the minorities involved in the diversity strategy are regulated on the legal level, such as in Singapore, where homosexuality is forbidden by law. Under such conditions, it would be extremely difficult to implement the activities of the GLBT task force.
Even more importantly, the religious background of many countries presents a significant challenge to the uniform approach taken by Childs and his team. The religious landscape of the Asian and African region is sufficiently difficult from that of the U.S. to render the existing methods irrelevant and, in some cases, inappropriate. Most importantly, unlike the political environment, the cultural and religious spheres are subject to the greater sensitivity of the population and may suffer from inappropriate and poorly planned actions. For example, it is possible to imagine a scenario where the application of the established set of corporate values will be viewed by local representatives as an attempt to impose their domestic values onto the local community.
Finally, several smaller issues can be pointed out, such as the necessity to increase the accessibility of the companys locations and ensure the emergence of a globally inclusive workplace. However, these issues can be viewed as tied to the major problems described above and thus the successful resolution of the former will likely lead to the improvements in the latter.
To sum up, the identified issues are not related to technology and are only partially related to managerial practices. It can be said that they stem primarily from organizational factors. While none of the issues has the potential to influence the companys performance directly, it is possible to suggest significant indirect effects. The steadily improving standards for diversity and equal opportunities worldwide imply the possibility of backlash for organizations that fail to comply. The consequences may include damage to corporate image, compromised reputation, failure to tap into new market segments, loss of existing customer base, and reluctance to cooperate with existing and potential suppliers and business partners.
Alternative Courses of Action
Based on the information above, several courses of action can be suggested to improve the situation. First, it is possible to develop the concept of inclusiveness based on the existing diversity policies by incorporating it into partnership strategies. In other words, it would be necessary to readjust the focus of the company on smaller businesses run by minorities to tap into the segment currently overlooked by large corporate entities.
The second option is the introduction of numerous readjustments to the existing task forces by the demands presented by different geopolitical regions. Such an approach requires sufficient background information to be performed, so numerous inquiries should be conducted before it.
Finally, the company can pursue the initially intended U.S. centered character of the initiative. While on the surface it seems like the least feasible alternative since it does not offer any improvements, a closer inspection reveals several advantages. First, while the incompatibility between the cultural and political landscapes of different regions is presented as a reason for alarm, the actual gap might be not as wide as perceived. In the modern world, the presence of American values has reached an unprecedented degree, and while it merges with the local cultures in each specific case, it can still be recognized.
It is, therefore, possible to assume that the diversity strategies can be applied to more areas than initially asserted without adjustment. While it is hard to deny the factual existence of such settings as that of Singapore, where one of the initiatives is essentially illegal, such situations are uncommon and probably rare. As a result, it is possible that large-scale adjustments are not cost-effective and can be implemented locally on a smaller scale or avoided altogether.
Evaluation
The first approach would be relatively easy to execute since the respective task forces likely possess the information necessary for a successful shift in priorities, and the businesses in question are expected to be highly cooperative because of IBMs desirability as a partner. Besides, the company already had limited experience of organizing such initiative in 1997 which led to the emergence of 53 new partners in a relatively short period.
The familiarity with the strategy allows cutting the costs of the strategy, and the existence of data makes it possible to model the likely outcome of the suggested action. However, it should be acknowledged that this alternative does not constitute a lucrative financial opportunity and may lead to loss of revenues. Small businesses are traditionally avoided by big companies because of the insignificance of the possible profits and lower predictability of risks. Therefore, this alternative can be implemented relatively easily but also is the least certain in terms of possible benefits.
The second course of action is arguably the most promising because it can resolve the fundamental issues of global diversity strategy the cultural, religious, and political differences that restrict the uniform application of the American model across all locations. Therefore, the eventual resolution of related secondary issues (e.g. the creation of a globally inclusive workplace) can be expected over time.
However, such an approach does not contain tools needed to establish partnerships and is much more oriented towards, long-term results rather than immediate and measurable results. Besides, such readjustment would require a tremendous amount of resources. In the current state, the task forces operate with a significant degree of independence, which would make the coordination of readjustment a challenging task. Besides, their complexity has reached a level where it would be very difficult to facilitate and sustain the necessary changes. Finally, without the information at hand, it is hard to evaluate the likely cost-effectiveness of the move until later in the process, which adds to the uncertainty.
The third approach is the least resource-demanding since it does not require the introduction of new actions of any kind. However, it still necessitates preliminary research to ensure that it would not compromise IBMs reputation. Finally, it is risky in the sense that even in a situation where no actual harm will be done by using U.S. centered initiative in an unsuitable setting because it may create a negative reaction from the stakeholders.
Cultural context and recognition of diversity is not only an organizational prerogative it is a norm expected from all major players in the industry. For a company with an established reputation such as IBM, even a minor setback may result in a massive public outcry followed by the impact on business feasibility. Also, such action does not acknowledge the long-term dynamics of the trend. Therefore, its financial benefits are outweighed by the risks that accompany it.
Recommendation
As can be seen from the evaluation above, the first and the third alternatives are more focused on measurable, short-term financial gains while the second one aims at long-term social and cultural benefits without the possibility of definitive measurement. Two factors should thus be acknowledged. First, IBMs history in equal opportunity promotion combined with the increased attention of stakeholders towards diversity issues makes the focus on diversity strategy a practical necessity. Likely, the negligence towards diversification and inclusiveness of the third alternative and lack of long-term planning in the first one will eventually nullify the achieved benefits.
At the same time, the investment in readjustment will open up new business opportunities for the company. Second, the size and scope of IBMs operations make long-term investment both a possibility and necessity. In other words, it would be unwise to choose short-term improvements over the less tangible enhancements if the risks associated with the former are accounted for. Therefore, the investment in the readjustment of respective task forces strategies is both the most promising and least risky alternative.
International Business machines Corporation (IBM), deals with computer technology through manufacturing and selling computer components. All though it has been an information technology company in the USA with its headquarters at Armonk New York.
Due to the current state of competition in the information technology market in the USA, the company has adopted various organizational behavior tools such as motivation, instilling ethics, and emphasizing conflict management between the organization administration and the employees n above managing conflict between the workers. With a high number of employees close to 350,000, the organization has been trying to dominate the market through the use of organizational behavior concept that motivates the employees.
In all cases, organization behavior concepts play an important role in determining the performance health of such entities. Organizational behavior deals with how different behavioral therapies of workers at the workplace. For IBM, this rule is not an exception. Perhaps the outstanding performance with the corporation is deeply rooted in its outstanding behavioral concepts. Throughout its history, it has been known to be a responsible initiator in developing good organizational behavior concepts.
Motivation is a concept that IBM uses to improve its employees interest in the performance of roles and duties within the corporation. It does this through the understanding of the importance. All through the corporation has worked on improving its performance through the use of motivational concepts its workers. It has a labor union that works to fight for the rights of the employees. With this scheme, the employees have been able to enter into different motivational undertakings that seek to promote both the benefits of the workers and the company. Throughout history, the company has had a remarkable relationship with its employees where high staff retention has been seen. Due to its good reputation, there have been very few cases of employees turnover. In 2005, the organization revised its pension scheme to facilitate better pension pay to its workers. Either the company has been voiced it offers very attractive remunerations to its workers which have been an incentive for working harder and therefore improving the productivity of its workforce. Generally, the organizational structure of the company forms a good basis for the motivational structure of the corporation where a cordial relationship between the administration and the workers has been fostered. The program between them and the administration for example in 2003 the company led to provide an integration seminar where workers issues were discussed.
Either the organizational behavior of the company is catchments are where employees develop different personal ethics through which they can improve on their productivity. Through their interaction in various undertakings within the corporation, the workers can develop various professional work ethics, ethos, and codes of conduct at their work. As a psychological rule human behavior normally will undergo various changes through experience with the environment. Due to their daily services delivery to the corporation the worker change their ethics to suit the corporations work environment requirement. Human ethics is modeled through learning. Such learning involves interaction with the work environment. For # IBN ethical issues are chattered by 2003, bill or the company values. Through its meeting worth 52,000 the company was able to sanction a dialogue between it and the workers above the implementation program on work values and ethics the company would adopt. As an activation in this dialogue, workers were to be paid high salaries during the spring.
Conflict management is the IBM most adopted tool for ensuring higher worker productivity hence improving the corporations performance. The organizational behavior environment within IBN is by itself authentic scenery where conflicts resolutions can be addressed. Within the corporation is a structure of persons and the different duties that they should play. Delegations of duties are delegated according to a professional qualification to avoid any conflicts between workers. Either the company has drafted a comprehensive draft that serves as the rules and regulations of workers with it. Different work positions are applied with the performance duties and requirements which helps the supplied with the performance duties and requirements which helps the workers to work cordially with one another. Human resource management is highly developed with an extensive database that monitors the movements of workers. The organizational behavioral pattern of IBM itself serves as a good basis for solving conflicts between the workers with good relations being highly prescribed.
Reference
Jackson, P,(1999) Virtual Working : Social and Organizational; Dynamics. London: Routledge.
Brief Description of Workplace & Effectiveness of Democracy
After more than two decades of a shifting global economy, the emerging consensus is that organizational competitiveness and efficiency to a large extent relies on developing and implementing more flexible and democratic systems of work (Lazes & Savage, 1996). Indeed, many global organizations are paying great attention to a multiplicity of processes aimed at enhancing democratic breakthroughs at the workplace. IBM is one such global organization that has over the years strived to adopt new management tools and techniques rooted in democratic principles. A quick assessment of the corporation reveals that the organization has succeeded in creating a working environment that fully engages employees, not to mention that the workplace is dedicated to employee self-governance, transparency, accountability, due process, freedom, and democratic structuring (Thomas, 2004).
There exist compelling evidence that, in the presence of effective checks and balances, democratizing the workplace is the only way to go in the 21st century to remain competitive and effective (Brian, 2009). IBMs phenomenal growth in the last couple of years bears witness to the fact that democratizing the workplace can be both rewarding and resourceful. Various studies have associated undemocratic organizations with turnover, employee disorientation, and groupthink, while democratic workplaces have been associated with job enrichment, career development, job sharing, creativity, and innovativeness (Lazes & Savage, 1996).
With proper checks and balances, self-consciousness on the part of employees, and self-regulation, democracy can be sustained in the contemporary workplace. Indeed, current trends as demonstrated by the popular media reveal that organizations, public or private, that have embraced the concept of a democratic workplace continue to outperform firms that are tightly controlled by a few individuals at the expense of the majority
Description of Democratic Principles & Issues of Diversity
Employee engagement and employee self-governance, central pillars in democratizing the workplace, relate to perceiving employees as stakeholders and partners in the decision-making process, including allowing them the opportunity to govern their own work schedules provided they deliver and remain productive. In consequence, employees have the freedom and &right to influence the conditions of work as well as the policy of the workplace (Kester & Britwum, 2007, p. 296). No democracy can flourish without the principles of accountability and transparency. Accountability implies that employees and management must be responsible for the decisions and actions they take, while transparency in an organizational setup implies that decisions and actions of management must be open to scrutiny by employees and that employees have a right to access such information (Democracy Web, n.d.).
Workplace diversity describes the broad range of racial, socio-cultural, linguistic, and religious differences that employees bring to an organization (Banks et al., n.d.). In reference to democratic principles, diversity is central to the effectiveness and sustainability of principles such as freedom, accountability, self-governance, and transparency since it is considered to be inclusive of everyone. According to Banks et al (n.d.), diversity promotes democratic principles by creating organizations that fully embrace an overarching set of collective beliefs, ideals, and aspirations to which all employees are committed. Further analyses demonstrate that organizations practicing the mentioned democratic principles and values are more able to secure the liberties that come with workplace diversity.
Consequently, not only does diversity promotes democratic principles in the workplace, it enables employees to experience freedom, justice, peace, and a cordial working relationship (Banks et al, n.d.). These values ingeniously assist in further promoting democratic principles in the workplace, assisting employees to secure and defend their rights.
Reference List
Banks, J.A., Banks, C.A.M., Cortes, C.E., Hahn, C.L., Merryfield, M.M., Moodley, K.A&Parker, W.C. (n.d.). Democracy and diversity: Principles and concepts for educating citizens in a global age. Web.
Democracy Web. (n.d.). Accountability and Transparency: Essential Principles. Web.
Kester, G., & Britwum, A.O. (2007). Trade unions and workplace democracy in Africa. London: Ashgate Publishing Ltd.
Brian, G. (2009). From neo-corporatism to delegative corporatism? Empowerment of NGOs during early democratization. Democratization, 16(5), 898-921.
Lazes, P., & Savage, J. (1996). A union strategy for saving jobs and enhancing workplace democracy. Labor Studies Journal, 21(2), 96-121.
Thomas, D.A. (2004). Diversity as strategy. Harvard Business Review, 82(9), 98-108.
Following the currently competitive business environment, various business organizations are strategizing to acquire others, with an aim of reinforcing their competitive potential. Considering the rapidly rising international marketing, the strategy of acquisition among business organizations seems to facilitate better business performance in them. This is on the basis that, the acquisition strategy among companies brings resource strengths and competitive capabilities together, resulting into strengthened market positions. For instance big companies like IBM and Boeing have acquired Netezza and Maryland-Based Conquest, Inc. respectively; which has made their performance higher through combined strengths and competitive advantages. As it has been observed in these companies, the acquisition strategy has enhanced their being capable to position their target markets strategically, due to combined efforts and resources.
The Acquisition of Netezza by IBM Corporation
As reported by the president of the IBM Corporation, the companys strategy of acquiring Netezza will see the company very high, into future big data. This can be described as the ultimate competitive advantage for the merged companies, since the positioned market is on the internet search engines. It is important to note that, the acquisition would reduce the warehousing prices for data, which makes the merger to have competitive advantage in the market of having cheaper products. Through offering cheaper commodities and services, companies will steer up in terms of their overall performance. Though acquired companies do not have the chances to innovate, the entire strategy can be described as facilitating better and higher performance between the two companies. In this respect therefore, the strategy of acquisition of Netezza by IBM Corporation seems to favor the competency of the tow companies in the currently competitive business environment, especially in the information systems industry.
The Acquisition of Maryland-Based Conquest by Boeing
Being one of the biggest companies in the air-craft manufacturing industry, Boeing has lately finished its acquisition of Maryland-Based Conquest. Having good reputation in the provision of architectural services and software technology solution, the Maryland-Based Conquests acquisition by Boeing provides has facilitated flexibility in the manufacturing of aircrafts. It is important to note that, one of the challenges facing air-craft manufacturing industry is the high costs associated with changes in designs for aircrafts. On this basis, the strategy of acquisition of Maryland-Based Conquest by Boeing makes it easier for changes in aircraft designs by the Boeing Company. Through this strategy of acquisition, Boeing has acquired competitive advantage of being quite flexible in terms of its products, as the Maryland-Based Conquest will provide for ready designs for the aircrafts, with regard to the prevailing market conditions. Certainly, the strategy of acquisition of the Maryland-Based Conquest by Boeing has propelled the tow companies higher in terms of their performance in the complex, and competitive air-craft manufacturing industry.
Conclusion
In summary, the strategy of companies acquiring others has been found to play a very significant role in enhancing competitive advantage between the companies involved. Considering the situation of IBM acquiring Netezza, the ultimate performance of the two companies seems promising, since their merging reduces their production cost, resulting into their products being cheaper. Further, the acquisition of Maryland-Based Conquest by Boeing Company has facilitated flexibility in production of aircrafts, since the Maryland-Based Conquest has provided Boeing Company with premier architectural services. As a result, the two cases of acquisition have been found to enhance resource strengths and competitive capabilities of the companies involved, in the currently competitive business environment.
IBM is the worlds leading producer of computer softwares and hardwares. The company has been in operations for more than a decade. However, given the current economic conditions, it has been imminent that the company comes up with strategies that ensure that it remains sustainable and profitable in the short run and in the long run. To achieve this, it has been essential for the company to focus on and modify its human resource in order to ensure that it global operations are effective and efficient.
Introduction
IBM is an international company that has operations in over 160 countries worldwide. The company has been in operation for over a decade now. In the process of its operations, the company has managed to be a leader in creativity, technological advancement and innovation (Palmisano, 2010).
However, to achieve the current popularity and success that the company is enjoying, IBM has come up with and implemented a number of strategies in its operations. This has ensured that the operations of the company are effective and efficient hence enabling it to achieve its short term and long-term goals and objectives. At the same time, the company has always managed to satisfy the diverse needs of its customers given its wide range of activities in different business segments ranging from computing to consultancy.
However, never have companies and business entities faced challenging situations that at the present moment. The business world is highly dynamic, characterised with demanding customers, increased competition from local and foreign firms, rapid change in technology, increased costs of productions and a global economic crisis (Lesser and Blumberg, 2007).
Therefore, to become sustainable and profitable, it is essential for firms to come up with effective and efficient strategies that will ensure that they will stand at a competitive edge over their rivals in their respective industries.
IBM Business Context
International Business Machine (IBM) is a multinational corporation that deals with the development and manufacture of computer hardware and software (Bartlett and McClean, 2006). IBM also offers consultation services. Other services that the company offers include infrastructure and hosting services (Austin and Nolan, 2010).
The company mainly deals in the building and development of mainframe computers and nanotechnology. This has been the trademark with which IBM has been related with for the last several decades. IBM was founded as Computing Tabulating Recording Company in 1911 (Applegate, 2009). This came about as a result of the amalgamation of three different companies. These were:
Tabulating Machine Company
International Time Recording Company
Computing Scale Promotion
In 1924, the company changed its name to International Business Machines (IBM), a name that it is using up to the present moment. In the course of its operation, IBM has developed a distinct organization culture, which is reflected in its products, services, and operation. It is due to this fact the organization is normally referred to as the Big Blue (Garr, 2009).
In the 2010/2011 financial year, IBM had a total revenue turnover of $106,916 million and a net revenue of $15,885 million. Still in the same year, the company had a market capital of $232,891 million and a return on investment of $31,065 million (Maney, 2003).
It is due to this fact that Fortune Magazine ranked IBM as the second largest company in the United States in terms of the size of its workforce. This is because the company had 433,362 employees and fourth in terms of market capitalization. The same magazine ranked IBM as the 19th most profitable company in the United States in terms of revenue earned (Hemp and Stewart, 2011).
Given its long period of operations and its magnitude, it is inevitable for such a company to avoid challenges (Daniels, 2009). However, the company has always come up with quick, effective, efficient and responsive measures to ensure that it stands at a competitive advantage over its rivals within the technology industry and to be sustainable and profitable in the short run and in the long run. One of the measures that IBM has been using to stand at a competitive edge is mergers and acquisition.
In 2009, IBM acquired SPSS (Boudreau, 2010). IBM had acquired PwC in 2002. In 2005, IBM sold Lenovo and ThinkPad. To facilitate its operations, the company has an effective and efficient organization structure and culture that aims at ensuring that it achieves its vision, mission goals, and objectives.
Competitive Advantage
Technology is evolving at a very fast rate (Cascio, 2010). As a result of technological advancements, firms have expanded their operations into overseas markets to expand their market share and increase their profitability. This has increased the level of competition in almost each and every economic segment.
At the same time, the needs, preferences, and expectations of consumers all over the globe are changing at a tremendous rate. This has put a lot of pressure to multinational firms such as IBM in the process of trying to keep up with the pace of these changes and advancements in addition to achieving their short term and long-term goals and objectives.
To stand on a competitive edge, Randy MacDonald, IBMs the Human Resource Vice President in 2003 realised that it is essential for the firm to come up with strategies that will enable the firm to overcome the human capital challenges that it was facing (Dowing, 2005). Together with the then CEO of the company, Sam Palmisano, they realised that the global market was evolving at an alarming rate.
It was thus essential for IBM to modify its operations to ensure that the firm is capable of meeting the market needs and demands. To explain the best means through which the organization can achieve this, Sam came up with a new term, Globally Integrated Enterprise (GIE) (Cappelli, 2008). He stated that businesses should soon start to operate on a global level. It was thus essential for IBM transform its operations to reflect to these trends before their clients adopt GIE.
To achieve this, IBM needed to modify most of its operations. This included its supply chain, its IT systems and networks, marketing strategies, and its product development processes. However, from a careful analysis, it is evident that all these operations rely on one main factor; the human capital of the company and the challenges that its human resource management was facing. For efficiency, IBM had to improve its operations on a national level, then to a multinational level and finally integrate it globally.
However, IBM is operational in more than 160 countries worldwide thus implementing these changes in each and every brand will result in redundancy, duplication of efforts, and inefficient utilization of resources. Therefore, to optimize its operations, Sam and Randy saw that it was wise to optimize IBMs operations on strategic locations in the globe and to integrate its operations horizontally and globally (Robson, 2009).
These changes have been effective since they have improved the level of operations of the organization as a result of the company conducting the correct tasks at the right places at the right time with the best personnel.
International Human Resource Management (IHRM)
IBM is a multinational corporation. It is operational in all the continents of the world. Thus, in the course of its operations, the company normally meets with customers and clients who come from different cultures and backgrounds. In most cases, the expectations, tastes, and preferences of these people will normally vary.
In the course of operations of an organization, it is evident that talent and human capital are vital to its long run success (Wright, 2009). IBM is one of the few companies that have realised this and to have a competitive edge over their rivals, the company has developed a strong team that not only comes up with effective and efficient products and services to its clients but they also possess the expertise and deliver practical solutions to their clients.
To achieve this advantage, IBM has come up with strategic measures that impart necessary knowledge and skills to its vast workforce. Motivation and strategic deployment have also been put in place. These are but some of the human resource management strategies that have been put in place to ensure that the talent of its workforce is natured and developed.
However, to ensure that IBMs operations are effective in the different regions of the globe, the company has adopted the IHRM strategy. IHRM can be defined as a management strategy that focuses on a wide array of functions, processes and activities that operates on more than one nation (Antony, 2008). It is the strategy that is used in the management of human resources at a global level (Smith, 2008). The following approaches can be used with regards to IHRM:
Ethnocentric approach Home country approach
Polycentric approach Local approach
Regiocentric approach Regional approach
Geocentric approach Global approach
With respect to this, a firm has the option of recruiting the following kinds of employees:
Parent country nationals (PCNs)
Host country nationals (HCNs)
Third country nationals (HCNs)
IBM has been using the IHRM concept due to its global operations. To ensure that its operations are effective and efficient, the company has adopted the geocentric approach (Weatherly, 2005). Here, the most qualified personnel are chosen to hold specific positions within the organization.
However, due to the fact that different clients from different regions have different needs, IBM has come up with a concept of deploying HCNs on subsidiary offices while PCNs and TCNs are located at the headquarters (Boudreau and Ramstad, 2007). This ensured that the products and services offered by the company meets the expectations, needs and preferences of their clients from different regions in the world.
IBM has also appreciated the ideology of corporate social responsibility (CSR). The main aim of IBM is to make the world a better place through technology and innovation. Thus, to achieve this, IBM is always involved in programs that aim at improving communities. IBM has been investing in local secondary schools to improve the quality of education and creating technological awareness and e learning. In addition, the company has been offering over 3,500 internship positions annually to nature and develop the talent of the youths.
IBM is also gender sensitive and ensures that women are part of its workforce. As of 2011, 18% of its workforce comprised of women (Cummings, 2009). This figure is expected to increase in the coming years. Finally, IBM has been facilitating a number of projects and has facilitated open door policies to ensure that the views and ideas of its employees and stakeholders are adhered to and implemented in order to ensure that the company has a competitive edge over its rivals and is sustainable in the short run and in the long run.
Global Talent Management Challenges
As it has been depicted, operating on a global level brings about global challenges on the human resource department of IBM. One of the main challenges that IBM has been facing is its constant expansion (Harvey, 2010). IBM has been expanding into new territories in order to increase its influence in the technological industry as well as expanding its market share. However, in this process, the company has to adhere to the requirements, culture, and norms of the new environment.
To ensure that the company overcomes this issue, IBM has been striving to achieve employee loyalty. It is due to this fact that the company has incorporated HCNs in its operations especially at the local level. These individuals have a better understanding of the indigenous people hence they play an essential role in in-depth relationship building with local clients (Weiss, 2012).
These employees normally undergo rigorous training and adopt the experiences of the old work force to ensure that they perform their roles and duties as per the expectation of the corporation. In addition, there are learning, motivation and development avenues that ensure that all IBM employees develop the necessary knowledge and skills that are required to ensure that IBM stands at a competitive edge over its rivals.
It is with regards to this that IBM has also adopted Schulers et al strategic HRM model (Schuler et al, 2008). By adopting this model, IBM considers exogenous and endogenous factors while developing strategic multinational corporation models. Industry and national characteristics are examples of exogenous factors while the structure of international operations, the organization structure, competitive strategies, and the international management experience are some of the endogenous factors.
The fact that IBM has a clear understanding of its internal and external operating environment has always played a critical role in ensuring that it formulates effective and efficient strategies that enable it to be sustainable both in the short run and in the long run (Cunneen, 2008).
Once knowledge about the internal and environment is available, IBM normally develops inter-unit links and comes up with international operations strategies that will ensure that its operations are effective and efficient both locally and globally (Mullins, 2005). To achieve this, IBM formulates strategic IHRM functions and policies. Some of the functions include:
Market orientation
Resource allocation
Selection of strategic locations for global operations
On the other hand, some of the policies that the company formulates may focus on:
Staffing (PCNs, HCNs, and TCNs)
Flexibility of operations
Compensation policies
Research and development plans
After the development and implementation of these policies and strategies, the overall results that IBM enjoys are cost reductions, presence of effective and efficient operations, local, regional and global sensitivity and the development of learning and transfer strategies that improve the knowledge and skills of its employees worldwide (Seleshi, 2010).
Human Resource Planning
The strategies that have been mentioned above cannot be successful without careful HR planning. In this process, IBM normally balances between labour demand and labour supply (Bradford, 2011). The following table shows some of the considerations that are put in mind at this stage (Davis, 2012).
An understanding of these factors makes it easier for the human resource department to analyze the impacts of the business on its operations and workforce. At the same time, a clear understanding of labour demand and supply is always arrived at. This increases the efficiency of talent location and re-location improving the management of employee cost.
However, for the HR to be effective in its operations, it has incorporated all of the Torringtons 7Cs. IBM has a strong organizational culture that is based on teamwork and respect among employees and focuses on satisfying its clients (Dow, 2010).
The company uses cosmopolitan techniques to control its international operations and compensates its employees who work overseas. IBM is a competent organization comprising of qualified employees in diversified fields. These employees coordinate together through teamwork that is based on effective communication and consultations when in doubt.
Organizational Capabilities
Organization capability refers to the ability of a firm to undertake a particular activity (Stacey, 2007). IBM has a vast workforce that is highly qualified, motivated, and dedicated to their work and satisfying their clients. Due to this fact, the organization has become a leader in creativity and innovation standing at a competitive edge over its rivals (Mullins, 2005).
IBM is competent in understanding the needs and expectations of its clients from all around the globe. Through this, IBM has developed core competent strategies that have enabled the organizations operations to be effective and efficient. This has made the organization to be sustainable in the short run and in the long run.
Conclusion and Recommendations
The market, needs, and desires of customers are changing at a high rate. Therefore, for IBM to ensure that it stands at a competitive edge over its rivals, it has come up with a number of policies and strategies that mainly rely on human capital and resource management. IBM has thus come up with Globally Integrated Enterprise (GIE), a strategy that has transformed its HR department to meet the global needs and desires of its clients. The strategy has been successful and has ensured that IBM remains a leader in the technology industry.
However, to sustain its operations in the long run, IBM needs to incorporate more HCNs in its operations as one of its CSR strategies. The company also needs to come up with means through which it can identify and develop talent within and outside its organization in order to maintain its role as a leader in the technology industry. Therefore, there is still need to further improve its IHRM in order to carter for its global operations in order for the organization to be effective and efficient.
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