IBM and Its Corporate Service Corps

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Table of Contents

Recommendation
Conclusion
References

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 corporation’s 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 IBM’s 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, Palmisano’s 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 Palmisano’s 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 Palmisano’s 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, IBM’s 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 IBM’s 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 Palmisano’s 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.

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IBM and Its Corporate Service Corps

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