Company Overview
IBM – International Business Machines Corporation is an international US technology company as well as a consultant based firm with the headquarters in Armonk, New York, US (Maney, 2003). According to Maney (2003), its specialties lives within the marketing of both computer software and hardware, computer peripheral, consultation as well as hosting in problem-solving which include social, computers, as well as technological attributes. According to Killen (1988), IBM was initially known as Computing Tabulating Recording Company when it was created in 1911 in Endicott, then a small and quiet village. Killen (1988) expresses that, the name IBM came as a result of the merger between Computer Scale Company, Tabulating Machine Company as well as international time recording company, thus making the name official in the year 1924. Fortune then ranked IBM as the second largest firm internationally IBM as a firm entails over 435,000 behavior in the organization. Therefore, employees and over 12 research labs across the world, and by this, the company has marked a set record as the greatest number of patents, all through 20 years. According to Maney (2003), IBM has been awarded internationally concerning capitalization, revenue, employees, and market assessment. IBM has been recognized by Forbes and fortune 500, Newsweek for the service to its customer and employees assessment. IBM is the company behind globally desired inventions such as the hard disk drive, ATM (automated teller machine), magnetic stripe card, floppy disk, Watson artificial intelligence as well as SQL. The most recent analysis shows that the project was entirely beneficial. The major areas of expenditure for the project were on transport, the acquisition has been the Kenexa and the SPSS in the year 2012 and 2009 respectively (Hoskins, 2005).
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Perlow (2018) illustrates that, in recent decades, with the start of the technical revolution IBM stamped its authority in sectors such as computing, data storage devices, microprocessors, gaming consoles such us x360, Wii, Sony ps3 and Nintendo, and many more such as the hitherto, numerous electronically operating devices, utilize the IBM powered microchips as well as the processors (Perlow, 2018).
Thomas J Watson stands as a significant part of the firm’s foundation that IBM has had (Killen, 1988). Killen (1988) states that he was the CEO from 1914 to 1956. Killen (1988) further says that Watson had an instinctive style of process development which was linked with unifying the organization structure. He died in 1956 and had since been a legend that was honored as remembered amongst the highly influential as well as greatest salesmen in his century.
In 2011 the firm transcended a number of the other key players within that arena as it succeeded Microsoft with a closure value of 214 billion dollars followed by Microsoft at 213.2 billion dollars (Soltis, 2001). According to Soltis (2001), to guarantee its dominance and enhance its quality and quantity in production IBM acquired the Texas memory system. In the year 2017 according to IBM’s financial report, the company posted revenue of 71.9 billion us dollars and an operating pretax income of 12.9 billion us dollars this is a drop from 2011 in which it cut across all the heavyweights in the technology world (Perlow, 2018).
The current CEO is Virginia ‘Ginny’ Rometty she also doubles as the president and the chair of the CEO board of directors the position she assumed in 2012 (Perlow, 2018). Perlow (2018) mentions that she has moved up the latter from holding several positions at the company from being the vice president as well as the primary firm’s executive for IBM’s marketing as well as sales. Perlow (2018) further states that other than that she has been a senior vice president for the company’s international business services. Moreover, she played a prominent role in ensuring the process of integration of price water houses coopers consulting. James Kavanaugh has been the company vice president since his appointment in early 2015. His responsibility is focused on the overall development as well as the creation of an effective and operational business model that enables IBM to adapt to changes in the market (Lombardo, 2017). Martin Schroeter is the Senior Vice President as well as the firm’s chief financial officer from 2014. He is in charge of the overall financial operations management.
Social issues
In the mid-20th century, IBM became the most admired and famous company to work for. According to Soltis (2001), it had a culture of how to treat employees, and in the late 1960s, the company became the epitome of directions for companies to treat employees as well as pondered on their roles within a community. The culture was referred to as “cradle to grave” Which Soltis (2001) vividly illustrates meant that it literally indicated that the company would go an extra mile ensuring the employee is comfortable throughout his life, and by this, they got loyalty in return. They would offer extravagant festivals for employees together with their individual families, golf courses as well as country clubs where employees could play for free (Kessler, 2016).
Kessler (2016) mentions that this was the period where Thomas Watson was the CEO, and the company had three strong values that they clanged on. But first, he came out with the company motto “THINK” which in it the three values were derived from(Kessler, 2016). Kessler (2016) states that he was vividly passionate about the health care sector. The act of patenting medical innovation across all the levels of the company.
Kessler (2016) points out that, the first value was respect for the individual this policy guaranteed job security as the company never laid-off workers for over seven decades. Kessler (2016) explains that, if the business changes the employees were then forced into adapting to the various changes. According to Soltis (2001), the significant probability of deployment overseas or across the country, landing IBM the nickname amongst employees, “I’ve been moved.” Thomas Watson felt that individuals were more productive when they felt secure about their jobs than when they are not. He felt the level of commitment would rise if people or employees find the company assuring and therefore make a full commitment to them. Maney (2003) mentions that unlike many CEO during this period who were focused on maximizing profit and considering other stakeholders more than the workers Thomas Watson insisted that employees come first before anything else. The second cultural value Watson came with was the best customer service in the world, which focused on ensuring all the employees at all levels work in ensuring they satisfy their customers and lastly excellence. Thus, Watson ensured he had excellent talent, extremely knowledgeable, and innovative staff members who would ensure the company’s long-term success giving the customer the best and successfully achieving the company’s objectives (Kessler, 2016).
Killen (1988) says that it was during the Vietnam War around the 1970s where IBM and other companies began rethinking this model and even opted to build the company where cheaper labor is offered in countries like Mexico. According to Killen (1988), inflation hit the nation terrible that corporate that had started emulating IBM together with IBM itself shifted from focusing on employees to considering profitability and sustainability of their corporate business. At around the 1980s, IBM was running out of cash from the competition from other PC manufacturers, and this led to the hiring of Louis V. Gerstner (Killen,1988).
Therefore, Maney (2003) explains that to get the company back Gerstner had to do away with the values instilled by Watson. In his first speech, he described his strategy as a robust minded market-driven strategy that will guarantee the company performance in the marketplace and shareholder value (Maney, 2003). With this in mind in 1993, IBM laid off over sixty thousand employees.
Current practice
Thomas J Watson’s values were rerouted and changed in 2003 with the current corporate culture being: thinking radically, dedicated to achieving client’s success, innovating to what matters, and finally, personal responsibility as well as trust in all relationships (Lombardo, 2017). Lombardo (2017) states that with the new organizational culture the managers constantly encourage their employees to particularly engage in thoughts that would cause a disruption to the status quo and thus, lead to the technological background. It is based on this radical thinking that IBM system/360 was introduced. Lombardo (2017) expresses that, in regards to dedication to every client’s success, employees are guided to enhance and maintain the significant quality of customer service with aim of addressing technological needs. Innovation that matters culture emphasizes innovation that meets market demand the one that would ensure several benefits for long periods of time to their clients in the sense of presenting solutions to their business issues. And finally, on trust and personal responsibility in all relationships, IBM looks at it as a way of boosting high morale in employees and stronger alliances with business partners (Lombardo, 2017).
Lombardo (2017) points out that, international marketing and could definitely affect the process of marketing adversely. The constraint of language and culture might appear to be more of the same as the original one introduced by Watson. However, according to Lombardo (2017), there is a shift from focusing on employee’s welfare to put more emphasis on innovation, creativity, and customer service
The recent social issue at IBM was the relocation of the employees who worked remotely from home to the offices located in Boston, New York, Atlanta, San Francisco, Raleigh, and Austin(Lombardo,2017). As per Perlow (2018), this decision was made in 2017 by Peluso who is IBM’s chief marketing officer who in her view the company would be more successful when they work together in a conducive creative environment. Lombardo (2017) states that the decision affected over 2600 employees in the marketing department. Lombardo (2017) firmly insists that this particular decision was very devastating to the employees as those who worked in a different location from the five mentioned were given an option of moving or looking for another job.
According to Carroll (1994), this is the company who had embraced working remotely for decades and from the early 1980s, IBM had successfully installed several “remote terminals” in a reasonable percentage of their employees’ home. It is noted in 2009 when most people preferred working remotely 40% of the firm’s global employees were already working remotely(Edwards, 2018). By this IBM saved around $100 million annually as working remotely reduced the office space by 78 million square feet. Hoskins (2005) points out that, IBM department of marketing efficiently established small startups without the need to the relocation of their employees to the central working firm’s offices as they were working remotely. Brito (2011) states that from the interviews conducted on employees they expressed dissatisfaction while some were extremely furious and stated that they would look for other jobs. Furthermore, according to Brito (2011), others swore not to contribute to the long-term projects of the company because these changes made them fear that they would lose their jobs shortly.
According to the Gallup poll, an estimated 25% of the nation’s employees work either full time or part-time remotely. Hoskins (2005) expresses that, with technology such as video-conferencing and slack moved to the cloud, remote working has been made easy as the employees still stay in touch. This research further notes that the remote workers put in more hours than the ones working within the offices and hence they are more productive. Furthermore, Perlow (2018) mentions that relocation would also destabilize the families as the employees whose families had settled in the current location and are in school would be forced to change the schools and start afresh in a new city where they were not familiarized.
Kessler (2016) points out that, the current strategy is totally contrary to the company’s founding principal and culture initiated by Thomas Watson. Which looked mostly into employee’s welfare. Drop-in revenue can be associated with many other factors including competition but job security and the level of motivation at work have also played a major role (Edwards, 2018). The loyalty and rapport established by Watson is now a gone case, and this is key to the reduction in productivity of the employees (Edwards, 2018).
Background research and analysis
Even though it has been proven that when employees work together, the rate of innovation increases and hence productivity. IBM could have offered an incentive that would encourage employees to prefer working in the office (Soltis, 2001). Companies like Facebook and Apple make around a million per employee as compared to IBM which the rate is about 0,000 for each employee, and this is according to San Francisco State University Professor of Management who specializes in human resource management, Professor John Sullivan. He goes ahead and states that remote working in the current market is not as productive as it was in the early 80s and 90s. He observed that in the current market the value of innovation trounce any productivity gain and team proximity has a hand In helping to foster better new ideas. According to Edwards (2018), a study conducted by Harvard also found out that there were more impactful papers produced by researchers who worked in proximity. Edwards (2018) further points out that, another report on employee interactions argued that employees who are presented with a range of opportunities, as well as unexpected interactions, perform significantly better. Most of the key technology companies have embraced this idea, for instance, Steve Jobs was obsessed with the creation of unexpected meetings to the extent of proposing that all the bathrooms b on one side of the Pixar office to encourage interactions.
Facebook, on the other hand, gives employees living close to the firm’s headquarters an incentive of a bonus of $10,000 (Edwards, 2018). The famous Tech office perks located in Silicon Valley keep employees in the office by offering a free spread of foodborne disease. Part 9. Washing and drying of hands to reduce microbial contamination. Journal of food and laundry services. Lombardo (2017) mentions that Yahoo is also among the companies that ended working remotely in 2013 when Marissa Mayer made that decision.
These examples show how this company ended the remote working. As per Perlow (2018), it was humanly and the introduction process to change was gradual therefore it faced less resistance. Change and resistance to change in an organization are inevitable according to Kessler (2016), resistance to change is classified into individual and organizational resilience. In the case of IBM, both kinds of resistance must have been witnessed. Kessler (2016) explains that, the individual resistance by the employees who considered the change, from remote to the office, as a habitual threat, economic condition as well as security and organizational resilience resulting from the fear of significantly losing expertise, power, as well as resources control, structural inertia and group inertia. Thus, to overcome the resistance collaboration and teamwork are vital.
Conclusion and recommendation
Over the years IBM learned that culture could not only be regarded as a tool of management. They have come to look at it as essential. It is evident that employee makes the better and right decision not influenced by orders from their employer but because they have knowledge on making the better decision. When this culture is nurtured, the organization can be guided through centuries while this culture is preserved.
IBM’s organizational culture s focused on motivating employees to a creative approach to problems and challenges. Radical thinking is feted for creativity and is seen as a critical factor in the information technology business. A good example is based on these cultural characteristics where employees are urged to acknowledge their individual and specific responsibilities rationally tackling solvable issues thus contributing to business growth
On the other hand, it has the shortcoming of significantly limited support for the firm’s flexibility in the business processes in IBM as a firm corporate culture. This issue has its base in innovation and excellence. Employees might be seen to have significant flexibility within their particular jobs however this lack of rigidness does not automatically translate to the flexibility of the various firm’s processes employees are involved in. When observed keenly, it’s evident that IBM culture lacks the official support essential for both self-correction and self-checking of departments and groups in the firm. For instance, IBM does not adequately address mistakes associated with challenges as well as obstacles in the information technology industry because the company does not provide formal support to the teams, groups, and department to tackle such issues
I recommend the following in a way to improve the IBM corporate culture. First of all, would be to increase the flexibility of business processes by implementing a cultural trait. Secondly, it would be significantly favorable if the company assimilated self-correction as well as self-checking within the education and schooling. Schools do bring together individuals from the different socioeconomic and cultural character of trust as well as individual accountability in relationships. Therefore, building strong and loyal relationships particularly between the employers and employees, enable a higher and reliable level of growth for the company as a whole.
References
Brito, M. (2011). IBM Case Study: A lesson in Social Business Transformation. Social Business Blog | Michael Brito.
Carroll, P. (1994). Big blues: The unmaking of IBM. London: Orion.
Edwards, H. (2018). What the US post office really gets from Amazon. Quartz. Retrieved 12 April 2018, from https://qz.com/1247302/what-the-us-post-office-really-gets-from-amazon/http://www.icmrindia.org/courseware/Organizational%20Behavior/OB-DS21.htm
Employee Training Isn’t What It Used To Be. (2015). theatlantic.com. Retrieved 12 April 2018, from http://www.theatlantic.com/sponsored/ibm-transformation/employee-training-isnt-what-it-used-to-be/249/http://www.theatlantic.com/sponsored/ibm-transformation/employee-training-isnt-what-it-used-to-be/249/
Hoskins, J. (2005). IBM on-demand technology for the growing business: Building a flexible infrastructure for today and tomorrow. Gulf Breeze, Fla: Maximum Press.
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Kessler, S. (2016). IBM, a remote-work pioneer, is calling thousands of employees back to the office. Quartz. Retrieved 12 April 2018, from https://qz.com/924167/ibm-remote-work-pioneer-is-calling-thousands-of-employees-back-to-the-office/https://www.marketplace.org/2016/06/08/world/profit-ibm
Killen, M. (1988). IBM, the making of the common view. Boston: Harcourt Brace Jovanovich.
Lombardo, J. (2017). IBM’s Organizational Culture & Radical Thinking – Panmure Institute. Panmure Institute. Retrieved 12 April 2018, from http://panmore.com/ibm-organizational-culture-radical-thinking
Maney, K. (2003). The maverick and his machine: Thomas Watson, Sr., and the making of IBM. New York: J. Wiley & Sons.
Perlow, J. (2018). I used to be with IBM, now I work for Microsoft | ZDNet. ZDNet. Retrieved 12 April 2018, from https://www.zdnet.com/article/i-used-to-be-with-ibm-now-i-work-for-microsoft/https://www.fastcompany.com/40442966/why-ibm-pays-its-employees-to-take-time-off-to-tackle-the-worlds-problems
Soltis, F. G. (2001). Fortress Rochester: The inside story of the IBM iSeries. Loveland, CO: NEWS/400 Books.
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