Ibm-Case Analysis
IBM ANALYSIS
PURPOSE
In the following paper I am going to analyze the case about “IBM” and how the company changed its structure in order to develop innovative products and manage successfully its new business as well.
In particular IBM moved from a bureaucratic structure with an inflexible hierarchy to a divisional structure that allowed the company to pursue emerging business opportunities and at the same time continue to develop businesses were mature and well established, and business were on the rise and were having a rapid growth.
DESCRIPTION
-Summary of the case
IBM was founded in 1911 and it was for many years the world’s dominant computer company.
All over years IBM grew constantly but in 1991, for the first time, the company stopped growing and revenues at IBM declined hugely. To solve these problems, the company appointed an outside CEO, Lou Gerstner.
Gerstner initialy focused on cutting expenses ,reorganizing the company, articulating new principles, and stabilizing and redirecting IBM’s core business.
In 1999 IBM, through changes introduced by Gerstner, was on solid financial footing but had not yet solved its growth problem.
Obstacles to the growth of IBM were mainly that the company had still a powerful bureaucracy and highly hierarchy. For this reasons, Gerstner decided that IBM needed of a radical change in the structure, making the company less bureaucratic and able to develop innovative products.
Gerstner decided to change the structure of the company, dividing it into divisions (H1-H2-H3), based on their stages of development.
Division 1 (H1) businesses were mature and well established and accounted for the bulk of profits and cash flow. Division 2 (H2) businesses were on the rise and were experiencing rapid, accelerating growth. Division 3 (H3) businesses were emerging and still developing and were the seeds of the company’s future.
RESEARCH
According to Miller the structure of a firm can be categorized mainly as one of
PURPOSE
In the following paper I am going to analyze the case about “IBM” and how the company changed its structure in order to develop innovative products and manage successfully its new business as well.
In particular IBM moved from a bureaucratic structure with an inflexible hierarchy to a divisional structure that allowed the company to pursue emerging business opportunities and at the same time continue to develop businesses were mature and well established, and business were on the rise and were having a rapid growth.
DESCRIPTION
-Summary of the case
IBM was founded in 1911 and it was for many years the world’s dominant computer company.
All over years IBM grew constantly but in 1991, for the first time, the company stopped growing and revenues at IBM declined hugely. To solve these problems, the company appointed an outside CEO, Lou Gerstner.
Gerstner initialy focused on cutting expenses ,reorganizing the company, articulating new principles, and stabilizing and redirecting IBM’s core business.
In 1999 IBM, through changes introduced by Gerstner, was on solid financial footing but had not yet solved its growth problem.
Obstacles to the growth of IBM were mainly that the company had still a powerful bureaucracy and highly hierarchy. For this reasons, Gerstner decided that IBM needed of a radical change in the structure, making the company less bureaucratic and able to develop innovative products.
Gerstner decided to change the structure of the company, dividing it into divisions (H1-H2-H3), based on their stages of development.
Division 1 (H1) businesses were mature and well established and accounted for the bulk of profits and cash flow. Division 2 (H2) businesses were on the rise and were experiencing rapid, accelerating growth. Division 3 (H3) businesses were emerging and still developing and were the seeds of the company’s future.
RESEARCH
According to Miller the structure of a firm can be categorized mainly as one of