International Business Machines (IBM) Corporation is a transnational computer conglomerate situated in New York, USA. The corporation was instituted in 1911, where it began as a Computing-Tabulating-Recording (CTR) Company. In 1924, it assumed its present name IBM under the management of Thomas Watson, an influential entrepreneur (Augustyn, 2020). Between the 1910s to the 1960s, the corporation integrated several developments comprising the shifts from the use of punching cards to room-sized computers and then the mainframe CPU systems for large ventures. These machines significantly altered the nature of calculation, accounting, and basic office processes. Further developments were incorporated between the 1970s and 1980s, whereby the IBM product line extended from the manufacture of mainframe computers to mini-computer systems and personal computer systems. The system’s applications broadened from office processes to individual productivity and departmental functions. The introduction of internet services in the 1990s facilitated the advancement of the network computing paradigm. The e-business concept was introduced to illustrate the network computing capabilities in the transformation of core entrepreneurial operations. Currently, IBM is recognized as the largest information technology corporation globally. It operates in more than 160 nations and approximately 60% of the profits are generated from other countries apart from the USA. In 2019, the company had employed an estimated 352000 work personnel worldwide, which was a shift from earlier trends of declining numbers of workers between 2012 and 2018 (“IBM employees 2000-2019 | Statista”, 2020). The firm had been experiencing depreciating revenues. However, it is currently obtaining increased returns.
Organization Mission and Goals
IBM’s company mission is to strive to become the leading manufacturer and developer in the information technologies industry. It intends to translate its improved technologies into value for its consumers by offering the most suitable services. Generally, official goals are derived from a company’s mission statement, while the operative goals constitute the concrete procedures that an organization incorporates to accomplish its vision. The firm’s official goals comprise of increasing consumer satisfaction, to provide the best information technology services and products, and to become the leading provider of information technology services. The firm’s operative goals include designing strategies for supporting and incorporating consumer support channels, developing new advanced technologies and monitoring operational performance within the company, managing the corporation’s financial operations and budget, assessing performance metrics and ensuring conducive workplace environments that foster productive outcomes. The outcome measures consist of the implications of a particular intervention. IBM outcome measures are developments in information systems, introduction of new systems, improved employee performance, enhanced customer satisfaction and improved working environments.
Dominant Company Strategy
IBM’s dominant strategy, according to Porter’s model is the reduced threats of entry. Since the company integrates product differentiation, it attracts more consumers. Its effective promotion and marketing skills further attract additional consumers. Therefore, the threat to entry becomes a weak force. It is difficult for other companies to penetrate through the industry since the government imposes stringent policies before a company is permitted to operate. Further, there are few substitutes of the products which IBM manufactures. The few substitutes are expensive due to their high quality. Nevertheless, IBM products are of quality and they are inexpensive thus consumers are less likely to opt for substitute commodities. The number of competitors in the industry is quite low. This implies that rivalry among existing companies in this particular case is a weak force. IBM is recognized in the information technologies industry and it has been in operation for a longer duration than the rest of the companies within the industry. Therefore, it is likely to retain its consumer base. Consequently, the rivalry among competitors becomes a weak force.
The goal attainment approach will be most suitable for IBM as it will enable the accomplishment of company goals. The main objective of most businesses is to ensure consumer satisfaction and the accumulation of profits. The goals will be classified as either operative or official goals and an evaluation will be performed to determine if each of the goals is achieved. The achievement of objectives will imply that the company is performing efficiently. Indicators that will be assessed in this case will constitute the key stakeholders particularly, the customers and organization partners, and the outputs. An increase in customer satisfaction which will be determined with increasing numbers of consumers or increased consumer loyalty will indicate that the company in performing as required.
Main Structural Approach
IBM Company integrates the vertical structural approach as there are centralized management personnel who have influence over company decisions. At the top of each IBM branch, is the CEO followed by heads of departments, and beneath them are the employees. The management personnel are in charge of the supervision of other employees. They also participate in decision-making processes. This system ensures that decisions are quickly made, and it promotes increased efficiency. Alternatively, the divisional structural design enables the decentralization of management processes since management personnel of particular branches are the ones to make decisions as opposed to relying on top management. Further, the company supports a more transformational leadership style; thus, employees’ views are also considered. Work personnel are allowed to focus on the company objectives.
IBM employs the divisional structural design since it has multiple markets in different regions too achieve thus for better management. Each division is capable of operating as a distinctive unit without having to heavily depend on the top management (Moore, 2009). Each division has its supplies and resources, allowing a more independent method of function. This structure has enabled IBM employees to become aware of the corporate culture and to gain a better understanding of the division’s portfolio. The divisions have allowed teams to focus on particular services and products and to endorse major strategic goals.
Key Elements of The General Environment and The Task Environment
The firm’s general environment is affected by legal, political, environmental, and social factors. IBM competitors comprise of Accenture, Tata consulting services and DXC technologies. Multiple legal issues that affect IBM are associated with computing, mobile technology and software. The government regulations particularly require the company and other IT firms to ensure data privacy for consumers. Security breaches and hacking incidences have recently increased prompting governments to mandate the incorporation of software systems that prevent data interference. The firm has to implement health and safety regulations to ensure that its employees work under safe conditions. The shifting oil prices interfere with the company’s development due to the changes in the value of the currency. Political instability within the countries it operates may result in decreased profits. Its task environment constitutes a brand name that is valued by numerous customers; thus, it is assured of an increasing consumer base. Due to its reputable brand, most consumers are increasingly becoming loyal. The corporation has qualified work personnel who enable the adequate performance of activities (Muzumdar, 2013). The company’s customer services enhance consumer relationships.
Most Effective Approach
Given the nature of the environment, the company should retain the mechanistic approach because so far, its task environment promotes more consumers. Further, the mechanistic approach will ensure that the top management is well-identified. This will enable the identification of measures that should be implemented to minimize external risks. Each stakeholder will continue to have concise roles; thus, they will be aware of the duties they are required to perform. However, it should utilize the organic approach in countries that have political instability. Basically, the company should integrate the organic approach in areas that are likely to have unstable business environments.
Collaborative Network Perspective
IBM forms networks for purposes of enhancing customer support, addressing complex issues, acquiring legitimacy, and for attracting more resources. It incorporates the collaborative-network perspective as it focuses on the behavior and structures of other independent entities so that it can attain compatible goals. For instance, it partners with the US government so as to gain legitimacy, and it collaborates with other similar ventures to enable information exchange. Through the collaboration of networks, the company has been able to expand into new markets and to incorporate further developments.
IBM manufactures computer software and hardware. It integrates the product flexibility concept as its products regularly undergo improvements. The company is experiencing a paradigm shift towards more product flexibility in order to meet client requirements. The firm ensures that it is able to handle increasing product diversity to assert better system performance. Product flexibility has been prioritized ever since the company was established. To illustrate, initially the firm manufactured macro-computers that later developed into mini computers and then designed to personal computers. Further developments such as the incorporation of new technologies including cloud computing and artificial intelligence indicate product flexibility (Quintero et al., 2014). IBM recommends the limitation of batch size not to exceed 5,000 documents at a particular period. When using FileNet Content Platforms such as CEBI, the firm ensures that for each transaction that fails, the entire process has to be redone. By restraining the batch size to 5000, information can quickly be recovered in case of network errors. IBM’s management characteristics encompass goal-orientation since it contains specific objectives that it targets to achieve. Another aspect is group activity whereby the organization integrates teamwork and collaboration as well as leadership to ensure that each stakeholder conducts his or her role effectively (Popp, Milward, MacKean, Casebeer & Lindstrom, 2014). Besides, dynamic function is another management characteristic of the company whereby the management considers factors such as technology, environment, political, legal, and social issues prior to making management decisions. Structural characteristics such as product efficiency and diversification are highly incorporated in the company. IBM ensures product flexibility through the production of new technologies. The diversification of its product is manifested in the extensive range of products it manufactures. The automation of activities is yet another structural characteristic in IBM Company. Several operations integrate the use of machines to execute tasks.
Number of Employees
As aforementioned, the company has hired approximately 352,000 workers globally. This implies that it is a large-sized organization since the number of employees greatly surpasses 250. The organization is linked to horizontal and vertical complexity and is more decentralized. Its large number of workers asserts that the company facilitates the economies of scales and increased functional capacities to enable product differentiation and execution of complex tasks. Moreover, it receives high returns and has increased market influence. It provides promotions and raises that are significant motivational factors. Nevertheless, the firm experiences increased complexities of cultural and structural concerns due to its extensive business activities (Amah, Daminabo-Weje & Dosunmu, 2013). The problem of control is more of a challenge in this firm since top authorities cannot utilize their personal observation to control. The firm is mechanistic and standardized; therefore, it does not permit the likelihood of innovations.
Organizational Life Cycle
Currently, IBM is at the elaboration stage organizational life cycle since it has reached its maturity state. It already has a formalized communication approach and a regulated environment. Multiple departmental units of the company are involved in decision-making processes. Moreover, it incorporates a high level of operational and strategic planning and has available resources. There is an overall stabilization and an expected range of profits. Though, it is at risk of low inventiveness and stagnation. The need for revitalization is essential for the organization to prevent decline (Popp et al., 2014). It can encourage teamwork and collaboration. The company should also integrate more diversification of its services and products to ensure that there is a consistent demand (Jirásek & Bílek, 2018). Since it is currently situated in 160 nations, it can opt to search for new markets. More leaders can be selected to enable better management. Further, the reorganization of focus should be integrated to decrease bureaucracy. It should also minimize the probability of inefficiencies. IBM aligns its corporate culture with commercial objectives for leadership in the IT industry. Its culture defines the values, standards, and philosophies that influence employee behaviors (Lombardo, 2017).
Since the company’s institution, it has operated under a set of standards articulated by Thomas Watson and has been identified with an influential organizational culture that is dedicated to social responsibility and fairness (Kanter, 2008). Its symbols, ceremonies and rituals support collaboration and the establishment of practices that target the achievement of objectives. The cultural manifestations influence the company’s efforts to react to new threats and prospects in the external environment. The firm has maintained its ethics centered on the commitment to integrity. It focuses on credible inventions, devotion to each consumer’s needs, and accountability in all relationships. The corporate asserts that its values should act as the basis in which decisions are formulated. Its commitment to consumer needs and responsibility in all relationships demonstrates its keen compliance with its beliefs and values.
Organization Code of Ethics
The code of ethics focuses on the integration of market competition strategies, financial integrity, and compliance with trading regulations to ensure optimal performance (“Business Conduct Guidelines”, 2011). In essence, the firm advocates for integrity in all areas, in the market or even the workplace. Consumer support is also prioritized since all its values are centered on enhancing consumer relations and ensuring that their needs are met.
Bribery is a common ethical challenge with the IBM Company. Initially, there were cases whereby IBM employees were reported to have bribed Chinese and South Korean officials with free travel and gifts. IBM’s expenses to South Korean officials summed up to $207000 (Farrel, 2011). This bribery processes had been performed from 1998 to 2003. South Korean officials were seen delivering a bag containing more than $19000 to an administration official. The bribery of Chinese officials was however, more recent, and it employed similar tactics whereby free travel and gifts were offered to win contracts from them.
Amah, E., Daminabo-Weje, M., & Dosunmu, R. (2013). Size and organizational effectiveness: Maintaining a balance. Advances in Management and Applied Economics, 3(5), 115. Business Conduct Guidelines.
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Popp, J., Milward, H. B., MacKean, G., Casebeer, A., & Lindstrom, R. (2014). Inter-organizational networks: a review of the literature to inform practice. IBM Center for the Business of Government.
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