Ibm's Corporate Culture

Topics: IBM, Herman Hollerith, Tabulating machine Pages: 9 (2862 words) Published: November 2, 2008
IBM’s Corporate Culture

Table of Contents
Wake Up Call5
Refocus and Restore6

This is an analysis of the culture at IBM and the impact that it has had on their success. Corporate culture is significant in that it “influences the behavior of everyone within an organization and, if carefully crafted, can have a significant positive effect on organizational success” (Certo and Certo, 2006, p. 423). Louis Gerstner proved this at IBM during his tenure from 1993 to 2002 when he revived IBM by refocusing on their culture. Roots

The International Business Machines (IBM) Corporation can be traced all the way back to the late 19th century. The U.S. population was experiencing explosive growth. The U.S. Census Bureau realized that manual-counting methods could no longer fulfill its constitutional obligations, so they sponsored a contest to find a more efficient way of tabulating census data. The contest was won by Herman Hollerith, the son of a German immigrant and a statistician for the Census Bureau. Hollerith is generally regarded as the father of the modern computer for his invention of a tabulating machine that used electric current to sense and interpret the location of holes in punch cards and keep a running total of the data. With the success of his tabulating machine, Herman Hollerith founded the Tabulating Machine Company in 1896 (Wikipedia - Hollerith, 2006). Fifteen years later, renowned businessman Charles R. Flint brought together Hollerith’s company, along with the International Time Recording Company and the Computing Scale Company to form the Computing-Tabulating-Recording Company (IBM Highlights, 2001, p. 6). Thomas J. Watson, a former executive of the National Cash Register Company, was hired by the board of the Computing-Tabulating-Recording Company to be its General Manager in 1914. Watson felt that the name of his company should reflect the global vision that he had for it, so in 1924 he changed the company’s name to the International Business Machines (IBM) Corporation. Culture

Thomas J. Watson was a natural leader and had a passion for winning in the marketplace, but he also placed a high value on fairness, honesty, integrity, and moral character. Watson firmly believed that in order to be successful, his employees had to be well trained, well dressed, and feel good about themselves and their organization. To help promote an image of success, Watson established a strict dress code and encouraged the writing and singing of songs about IBM’s products and employees (Pugh, 1995, p. 35). Drawing from his personal sales experience, he also implemented a series of effective business tactics such as generous sales incentives, a focus on customer service, and an evangelical fervor for instilling company pride and loyalty in every worker. Many of Watson’s personal failures and successes were incorporated into the attitudes and policies that he instilled throughout the IBM Company. Watson was fired from his first sales job because his horse, buggy, and the sewing machines that he was selling were stolen while he was in a bar celebrating. That incident led to Watson’s ban on alcohol at all IBM functions and meetings. His marketing success and conviction on anti-trust charges (later overturned) while with the National Cash Register Company, led to the formation of a marketing force that was passionate about the IBM company and its products, but fair in all of its dealings with customers. IBM employees were never allowed to disparage a competitor or its products. Thomas Watson’s philosophy can be summed up in what came to be known as the three basic beliefs of IBM (Rogers, 1986, p. 10): 1.The individual must be respected,

2.The customer must be given the best possible...

References: Certo, S. C., & Certo, S. T. (2006) Modern Management. Upper Saddle River, NJ: Pearson Education, Inc.
Deutschman, Alan. (March 2005) Building a better skunk works: in a bold effort to nurture new businesses, IBM is putting its best and brightest in charge of its risky startups. In Fast Company, p. 68(6). Retrieved May 12, 2006, from, InfoTrac Custom Military and Intelligence Database via Thomson Gale:
IBM Highlights, 1885-1969. (2001) Retrieved 12 May 2006, from,
Lessons from ... Who Says Elephants Can 't Dance? (Brief Article). (April 2004) In Fast Company, p. 95(1). Retrieved May 12, 2006, from InfoTrac Custom Military and Intelligence Database via Thomson Gale:
Pugh, Emerson W. (1995) Building IBM: Shaping an Industry and Its Technology. Cambridge, MA: The MIT Press.
Rodgers, B. & Shook, R. (1986) The IBM Way: Insights into the World’s Most Successful Marketing Organization. New York, NY: Harper and Row.
Time. (n.d.) Retrieved 11 May 2006, from,
Wikipedia – Hollerith. (2006) Retrieved 12 May 2006, from,
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