The Rise and Fall of Ibm

1. IBM as a product centric organization before its near failure was a bloated organization with 400 000 employees heavily invested in low margin, transactional, commodity-based businesses. As technology progressed, the demand for IBM’s inventions began to diminish. The entire organizational structure was also growing redundant, making it more challenging to face off competition from smaller and less diversified competitors. As Louis Gerstner, Jr embarked on turning the entire company around, there needed to be a shift in how the entire organization was originally structured. The key issues to IBM’s diminishment were identified and linked to its excessive costs, losing touch with customers, increasingly decentralized and bureaucratic and a company that had been living with its old strategy far too long. IBM had once been a company that invented technology but the focus had been shifted to how such technology should be applied. It now needed to focus on services given its explosive growth in the recent years then. IBM needed to exit the network hardware, storage and personal computers business and enter the services and software business. As such, staff of the organization had to acquire new skill sets that would make them well versed in product knowledge and expertise. The key focus was for the organization to work together as a team, with speed and focused execution aligned towards their clients. IBM had to move in a new direction by leveraging on its strengths as a provider of solutions to its customers. Being cheaper was also important with the total IBM workforce being trimmed to 220000 in 1994. Originally specializing in hardware, IBM began to provide integrated solutions for customer that involved bundling and customizing solutions of hardware, software and services. These implementations began to turn around IBM’s financial performance before returning to profitability in 1994.

2. Louis Gerstner was one that envisioned IBM’s future and its possible