IBM was a strong company in the 1970’s but as time went by, the company culture failed to keep up with the time, focusing on consensus decision making. Strong Culture throughout the 1970’s allowed them to be successful, add values in consensus decision making and allows everyone to add input. Eventually they were able to comeback. On the other hand, they failed to keep with the times; company has history of slow confrontation of new technological approaches. And didn’t live up to competitors like Microsoft. In my opinion to what could be changed, is the adaptation to the times, and rewarding self-started employees. The also built a new facility in Africa (Catholic Institution of Eastern Africa) emerging tech “hub”. Sam Palmisano quoted “Means to put others ahead of yourself. A good leader does not live in luxury while his employees and people are suffering in poverty”
1. Palmisano states that in the 1970s and 1980s IBM was organized as a classic multinational enterprise. What does this mean? Who do you think IBM was organized that way? What were the Advantages of this kind of strategic orientation? A classic multinational enterprise means a corporation operating in several countries but manages by one host country. Generally, any company that derives a quarter of its revenue from operations outside of its host country is considered multinational. I believe that IBM was organized as a multinational enterprise because they wanted to capitalize on the products and services provided, without pressure to reduce their cost structure.
2. By the 1990s the classic multinational strategic orientation was no longer working well fro IBM. Why not? The classic multinational plan was no longer working for IBM because the globalization of the world economy, the global nature of numerous IBM customers, and the competition from enterprises in emerging markets, such as China and India.
3. What are the strategic advantages to IBM of its globally integrated enterprise strategy? What kind of organizational changes do you think had to be made at IBM to make this strategy a reality? The advantages IBM has a globally integrated enterprise are work and operations anywhere in the world, an enormous global supply chain, Research and Development carried out in labs around the global.