case study–PaRt a
IBM’s Global Talent Management Strategy:
The Vision of the Globally Integrated Enterprise
By John W. Boudreau, Ph.D.
Author: SHRM project contributor: External contributors: John W. Boudreau, Ph.D. Nancy A. Woolever, SPHR Randy MacDonald Richard Calo Michelle Rzepnicki Katya Scanlan Jihee Lombardi
Copy editing: Design:
© 2010 Society for Human Resource Management. John W. Boudreau, Ph.D. Development of this case was made possible by a grant from the Society for Human Resource Management and the National Academy of Human Resources. Information presented was current as of the time the case was written. Any errors are solely the author’s. Note to Hr faculty and instructors: SHRM cases and modules are intended for use in HR classrooms at universities. Teaching notes are included with each. While our current intent is to make the materials available without charge, we reserve the right to impose charges should we deem it necessary to support the program. However, currently, these resources are available free of charge to all. Please duplicate only the number of copies needed, one for each student in the class. For more information, please contact: SHRM Academic Initiatives 1800 Duke Street, Alexandria, VA 22314, USA Phone: (800) 283-7476 Fax: (703) 535-6432 Web: www.shrm.org/education/hreducation 10-0432-part A
case Study Part a
In early 2003, Randy MacDonald, the senior vice president of human resources for IBM corporation, was in the midst of a 10-city-in-two-weeks business trip that would take him from IBM’s headquarters in Armonk, NY, to several cities in Central and Eastern Europe, Africa, India, China and several spots in Asia. His schedule was a fitting metaphor for IBM’s strategic and human capital challenges. Randy was reviewing his recent meeting with Sam Palmisano, the CEO of IBM. Randy had been the chief HR executive at IBM since 2000, joining when Lou Gerstner was in the middle of his tenure as IBM’s CEO. Lou had been an outsider to IBM, arriving at a time of great turmoil, when the corporation was near bankruptcy, and remaking the organization with an eye toward global consulting services. Sam Palmisano was an IBM insider, a 31-year veteran of the venerable company, who had helped bring Gerstner’s vision to reality and now was building on that legacy of Gerstner. In their meeting, Sam and Randy discussed IBM’s strategic view of the evolution of global markets, IBM’s strategic position as a leader in global transformation and the evolving needs of IBM’s clients. These views later led to an article in Foreign Affairs Magazine in 2006.1 In that article, Sam Palmisano described IBM’s predictions about the evolution of new organizational forms, where the production of goods and services flowed globally to the places where the greatest benefit could be created at the most efficient cost. It was already apparent that supply chains were becoming much more global and transcending organizational boundaries. IBM’s clients were increasingly seeing that same trend in other areas, such as marketing, R&D, sales and engineering. Future organizations (IBM’s clients and those that hoped to serve them profitably) would evolve from the traditional “multinational” approach, which “organized production market by market, within the traditional boundaries of the nation-state.”2 These ideas also recognized that trade and investment flows across national boundaries had liberalized, protectionism was reducing, and technological advances vastly lowered the cost of global communications and business computing, leading to shared business standards throughout much of the world. This changed the idea of what was possible through globalization. As Sam put it in the Foreign Affairs article, “Together, new perceptions of the permissible and the possible have deepened the process of corporate globalization by shifting its focus from products to...