IBM STRUCTURE OVERVIEW
IBM’s domestic division, which was led by tom Watson jnr. was responsible for research and development and for financing the operations of the entire global company. By 1950 not only was IBM domestic designing and manufacturing a large number of different models of computer, it was also designing and manufacturing many of the component and peripheral parts used in the computers such as disk drivers ,transistors, printers and file storage and servers. Many of these products were produced throughout the world and distributed by IBM’s international division. The increase in range of IBM’s activities, both domestically and internationally, put considerable strain on IBM’S organization structure which began to cause it many problems. IBM’s was run largely by tom Watson, snr. Until he retired in 1955. Watson oversaw all of IBM’s operations, and a line of top managers was always waiting to see him. No formal organizational chart existed in IBM because Watson believed that people should be interested in all aspects of IBM’s activities rather than focusing on specific jobs. The company had no clear chain of command, no policy of decentralization which gave lower level managers the right to make independent decisions, and no formal planning process or business policies. Knowledge was simply in employees’ heads and strategy emerged gradually over time from discussions and negotiations between Watson and top management team. After tom Watson snr retirement, tom Watson jnr and Al Williams, IBM’s president at this time, decided to construct an organizational chart to see who had reported to Watson and found that 38 to 40 top managers reported directly to him. It was obvious that this highly centralized management style could not contribute if the rapidly growing company was to stay on top of the computer industry. Already unmade decisions were accumulating because managers lacked the authority to make decisions, and now they looked to tom Watson jnr to take the lead. Tom jnr wanted to break with his father centralized, autocratic style of management I order to speed communication and decision making so he and Al William reorganized IBM’s operating structure to decentralize control to managers who were given the responsibility of managing the different functional area of the company. The organizational chart they devised put red LaMotte in charge of sales and R&D and Al Williams in charge of finance, while tom jnr would take control of the company strategy. Unfortunately, this reorganization simply divided the chaos among three instead of one. There were still far too many managers reporting to the three top managers, and they were unable to control IBM’s operations adequately. So in 1956 IBM was reorganized along divisional lines.
IBM Domestic was broken up into five separate divisions:
* The field engineering division, which primarily served commercial customers. * The federal systems division, which primarily served governments customers. * The systems manufacturing division, which manufactured the computers. * The component manufacturing division, which manufactured the components. * And the research division, which performed the basic research and design activities. In each division a general manager was given the responsibility of making decisions for the divisions and developing its strategy. The world trade division would continue to operate separately from IBM Domestic. This multidivisional structure ensured that each general manager had a clearly defined task. At the top of the organization, Tom jnr created a top management team of six people, consisting of himself and the heads of the divisions, to oversee the company’s strategy. Each of the five general managers was responsible for a major part of IBM, and Tom jnr was to oversee the entire company. He claimed that...
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