1. What factors led to IBM’s success during the 1960s and 1970s and its problems during the late 1980s and early 1990s? 3 pts. 2. Q: What did Gerstner do when he assumed the role of CEO in April 1993? A: Gerstner realized that rather than break up the company, he could turn it around by going to market as “one IBM.” To prevent customers from leaving in droves before he completed the turnaround, Gerstner called on each senior executive to go out to a group of customers and “bearhug” them. He made the executives personally responsible for their assigned customer accounts and accountable for any problems that arose. At the same time, he asked each of the executives to write two papers, one on the executive’s business and the other on key issues and recommendations for solving problems and pursuing opportunities.
Q: Evaluate Gerstner’s approach to crisis management. How well did he perform as a turnaround manager? A: I’d have to give credit to Gerstner. He seemed to know where the problems lied within the company and viewed himself from a customer standpoint, rectifying customer concerns but from a corporate head standpoint. Based on the following information, this is how he did it:
“The sales organization, which had been organized by geography and product, was reorganized into global sales teams. In response to numerous customer complaints, a customer relationship manager and a dedicated sales and service team were appointed for each key customer account. These teams were grouped within larger vertical industry teams, and product specialists were assigned to each. The product specialists served as boundary spanners, moving back and forth between focused product groups and key account teams, taking product knowledge to the field and customer input back to the product groups. Product specialists reported to the product organization, but incentives rewarded increased sales of their products through industry sales teams.” It is as if Gerstner knew the...
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