Reaction Report of IBM case
1. Description of the Case: New facts and illustrations
- Nobody believed that IBM would face a crisis because it had achieved huge success before 1990. However, the company finally faced difficulties. In order to save the IBM, Gerstner was new in office as a CEO in 1993. He started innovative measures such as decreasing cost, communicating clearly, restructuring organization, and connecting with key customers to solve the problems. In addition, he reorganized as one IBM and created the foundation for growth, and then shift to high growth and the search for “the next big thing”. As a result, shifting its strategy from marketing and selling specific products ...view middle of the document...
But after Gerstner taking charge as new CEO, he began to reorganize the company as one IBM by cutting operation cost, changing corporate culture and redesigning the global process and functions.
2) Can organizational model of three horizontal business units effectively perform as one IBM?
- For organizing growth strategy, IBM categorizes the business unit as H1, H2 and H3. Each business units has their own focus, profit impact and key challenges and need to be controlled to perform as one IBM. Especially, Emerging Business Opportunities (EBOs) of H3 unit can have some chance of risk or conflict. Thus, IBM should organize EBOs to take corporate guidance and oversight while maintaining business unit line manager authority and accountability. And also it is required to ensure cross-business unit cooperation for all related managers and executives.
3) Are there any challenges for the “Next Big Thing” in IBM business strategy?
- IBM has transformed their business strategy into “One IBM” successfully by 2000s, strengthening IBM Global Service. However, more integrated network and cloud computing system of coming 21st century is both challenge and opportunity to IBM. They can show outstanding leadership in global IT consulting service market, dreaming of “Smarter Planet” but at the same time, closer global network and interconnectedness with...