Ibm Human Resources
1. Introduction
IBM is one of the most successful technology and consulting companies in the world. In 2012, its brand name is in second place in international brand equity rankings, just behind Coca Cola. With its 433,362 employees it is operating in 170 countries and able to generate profit of $15.85 billion per year. The company itself has been founded in 1911 trough a merger of three technology companies. In 1924, the company’s name was changed to International Business Machines, abbreviated to IBM. Initially, the company was engaged in tabulating equipment and data management and later on was able built a strong market position in the computer and semiconductor production. The IBM PC, introduced in 1981, was one of the company’s major successes. In the 1990s, however, the enterprise experienced stagnating earnings from its operations and therefore developed a transformation strategy. From 2000 onwards, IBM changed its business model towards technology services and consulting. This shift has enabled IBM to achieve a rise of EPS from $3.32 to $13.44 in 2011. Simultaneously to this strategic shift, IBM has also changed its international structure and moved from a multinational to an integrated enterprise, thereby saving $6 billion.
This paper will analyze the HRM implications of this strategic shift. For this purpose, it will first elaborate on the business model and the strategic focus of the company. Second, it will consider the strategic HRM focus and the general blueprint that IBM has developed for its workforce. Third, it will outline a variety of HRM practices in the fields of knowledge management, compensation and HRM effectiveness.
2. IBM Business Model
2.1 Customer Value Proposition
At the core of its business stands IBM’s desire to help clients to become more innovative, efficient and competitive through the application of business insights and IT solutions (10 K-filing 2011). The company’s regular clientele mainly consists of
IBM is one of the most successful technology and consulting companies in the world. In 2012, its brand name is in second place in international brand equity rankings, just behind Coca Cola. With its 433,362 employees it is operating in 170 countries and able to generate profit of $15.85 billion per year. The company itself has been founded in 1911 trough a merger of three technology companies. In 1924, the company’s name was changed to International Business Machines, abbreviated to IBM. Initially, the company was engaged in tabulating equipment and data management and later on was able built a strong market position in the computer and semiconductor production. The IBM PC, introduced in 1981, was one of the company’s major successes. In the 1990s, however, the enterprise experienced stagnating earnings from its operations and therefore developed a transformation strategy. From 2000 onwards, IBM changed its business model towards technology services and consulting. This shift has enabled IBM to achieve a rise of EPS from $3.32 to $13.44 in 2011. Simultaneously to this strategic shift, IBM has also changed its international structure and moved from a multinational to an integrated enterprise, thereby saving $6 billion.
This paper will analyze the HRM implications of this strategic shift. For this purpose, it will first elaborate on the business model and the strategic focus of the company. Second, it will consider the strategic HRM focus and the general blueprint that IBM has developed for its workforce. Third, it will outline a variety of HRM practices in the fields of knowledge management, compensation and HRM effectiveness.
2. IBM Business Model
2.1 Customer Value Proposition
At the core of its business stands IBM’s desire to help clients to become more innovative, efficient and competitive through the application of business insights and IT solutions (10 K-filing 2011). The company’s regular clientele mainly consists of