Ibm's Organizational Change
In 1990, IBM earned approximately $6 billion, but three years later IBM has exceeded at least $8 billion in losses. IBM realized that it was important to change their market strategy and product line architecture. The most important aspect of IBM’s turnaround was market innovation. Market innovation basically means how the company changed the way it segmented its markets, defined compelling user needs and frustrations, and drove these into new product designs in both hardware and software. So IBM decided to start an e-business with consumers and focus with specific vertical markets, whereas before they had a transaction processing orientation for all large corporate users. Next technological innovation was the second more important change. IBM first wanted to replace its old 31-bit bipolar architecture with 31-bit CMOS designs. These bipolar processors were used for task management, computing, and input/output to storage devices or communication networks. The 31-bit bipolar circuits cost way too much to keep up because they required constant electric charge and extensive cooling. When IBM switch over to the CMOS processor this changed everything and also saved a lot of money. The CMOS processor required much less electricity and cooling. “This reduced significantly the electrical power and physical size requirements of the first generation of IBM’s new mainframes.”(Meyer, 2005) In 1994 the new mainframe architecture was introduced. With just one year into the launch of the new architecture, “IBM assembled the ‘”best and brightest”’ from across the company to develop an even more powerful systems architecture and market strategy, focused expressly on the client server, Web-centric world.”() Senior management put together a team that consisted of mid-level managers with proven records of accomplishment in technology and product line performances. This team was called the ES2000 team. The ES2000 team was in charge of the next generation hardware and open systems software. In just three months the ES2000 team has completed their work and delivered a plan to the senior management in the spring of 1995. Since then IBM had been trying to execute that plan. They first...
References: Chaudron, David PhD. (2003) “Begin at the Beginning in Organizational Change” Retrieved from http://www.organizedchange.com/decide.htm
McNamara, Carter. “Basic Context for Organizational Change” Retrieved from http://managementhelp.org/mgmnt/orgchnge.htm
Meyer, Marc H., Mark Anzani, and George Walsh (2005) "Organizational change for enterprise growth: IBM had to change its organization and development processes to survive the 1990s." Academic OneFile. Retrieved from http://find.galegroup.com.prx-01.lirn.net/gtx/retrieve.do?contentSet=IAC-Documents&resultListType=RESULT_LIST&qrySerId=Locale%28en%2C%2C%29%3AFQE%3D%28KE%2CNone%2C29%29IBM+and+organizational+change%24&sgHitCountType=None&inPS=true&sort=DateDescend&searchType=BasicSearchForm&tabID=T002&prodId=AONE&searchId=R4¤tPosition=3&userGroupName=lirn_main&docId=A138705381&docType=IAC
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