ORGANIZATIONAL DYNAMICS

Study of

The Big Blue

Group III ANOOP CHAND CHETNA SINGHAL SHUBHAM SAMDANI EASWARAMURTHI P SUTAPA MISHRA VAIBHAV GARG V S R PRAVEEN

International Time Recording

Computer Scale Company

Computer-Tabulating-Recording Company (1911)

IBM Brand Recognition

Fortune Ranked 2nd largest U.S. firm in terms of number of employees. 4th largest in terms of market capitalization. 9th most profitable. 19th largest firm in terms of revenue. 5th most admired company.

Newsweek Ranked 1st Green company worldwide. Vault Ranked 1st in tech consulting for cyber security. 2nd in outsourcing.

ORGANISATIONAL STRUCTURE
CEO (Virginea Rometty) Marketing and Communication CFO (Mark Loughridge)
Investing & Funding CIO

Human Resource Systems & Technology

storage & Networking

Research
CTO

Software and Solution

Software Sales Software Appliances

Business Services
Strategy & Consulting

Legal
Asst Legal & Secretary

Sales & Distribution

Partners and Midmarkets

Application Management

Global Midmarket
Procurement Shared Services

Treasurer

IBM - Globalization
Venturing into International Domain Global Geographic Structure Created Geographic divisions around the world that each had their own administration, manufacturing and service Operations. Competency Centers People with specific skills are grouped together People are drawn from Competency Centers to complete a specific client project.
Global Business Service Segment

36%

43%

21%

USA Asia-Pacific

Europe, Middle East and Africa

IBM Strategy (M & A)

USA
Texas Memory Systems PWC Consulting

ASIA-PACIFIC
Network Solutions Pvt Ltd (India) Outblaze's E-Mail Service Assets (HongKong)

EUROPE, MIDDLE-EAST & AFRICA ILOG (France) Diligent Technologies (Israel)

IBM Strategy & Transformation

Customer Value Strategy

Focus on customer experience and care

Technology Strategy

Dedicated Competency Centre for IT

Organization & People

Emphasize on effective leadership supported by efficient HR and analytics

Finance & Risk

Improve forecasting and predictive capabilities, reduce enterprise risk.

Operations & Supply Chain

interconnect end-to-end supply chain functions for optimized process efficiency

ENVIRONMENTAL SECTOR

ANALYSIS

Competitors

HP, Oracle, Dell, Apple, EMC, Cisco systems, Seagate technology, Acer etc. Sector: technology Industry: diversified computer systems New entrants (low cost rivals) Demand for integrated solutions Semiconductors and other electronic components 90 % spending - with 20 suppliers. Embracing those supplier capabilities (making research and development investments ) Intel to develop microprocessors for its servers; On electronics manufacturing services (EMS) providers Increased & competitive fishing in skilled labour pool Driving up compensation levels, staff turnover, workforce instability Work with industries & education to prepare the future workforce Add long term value to local competitiveness: training! Largest pools of labour are available in and attracted to cities Weak businesses-consumer demand More sophisticated, more educated and more demanding Growing volumes of data Rapidly evolving customer preferences Inflation, increased taxations Inability to transfer funds freely Operating risks Foreign Sovereign Immunities Act Bureaucratic laws

Suppliers

Labour supply

Customers

Legal/politic al

ENVIRONMENTAL SECTOR

ANALYSIS

Technological Unleash business value from new innovative technologies like cloud,
mobile computing Expansion at an unprecedented pace Business transactions automate, accurate, complex Smartphones - conduct transactions anywhere and at anytime Growth of knowledge management

Economical

Rise of the developing and transitional economies major competitors for investment Recession & global market expansion Freer international trade, financial transactions International economic integration Changes in global economic power centres Mobile retail commerce rises Protecting community employment levels against outsourcing Migration of jobs to low-wage countries Attractive working and living standards Internet-enabled communication models are gaining audience, attention and market share at the expense of traditional telecommunication providers

SocioCultural

International

Research collaboration Currency devaluations Constraints on foreign ownership Convenience of doing business in your own language and culture with reduced travel, therefore permitting easy access to a business environment in which you are comfortable Revenue from foreign sales

Internationa l

Customers

Labor Supply
Suppliers

Technological

COMPLEX

SocioCultural

UNSTABLE

Economical Competitors

Legal/Political

HIGH UNCERTAINITY

IBMs Departmental Technology Framework

Structural and Management Characteristics

Organization Stages of development

4.5 4 3.5 3 2.5 2

1.5
1 0.5 0 Entrepreneurial Collectivity Formalisation Elaboration

IBM - Lifecycle
Entrepreneurial Stage (1911 - 1914) -> Formed by merging 2 companies ITRC & CSC. -> CRISIS : Need for leadership(1914-1924) Collectivity Stage

-> Clear direction to company.

-> CRISIS : Need for delegation. Formalization Stage

-> Following open door policy & Employee f/b.

-> CRISIS : Too much of Red Tape Elaboration Stage

-> Introduction of new technologies into the market

-> CRISIS : Need for Revitalization

120000 100000 80000 60000 40000 20000 0

500,000 400,000 300,000 200,000 100,000 0

Number of Employees

Total Revenue (in $m)

1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2011
1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2011

IBM Work Culture

Values
Dedication to every client's success. Trust and personal responsibility in all relationships.

IBM Equal Opportunity Diversity

Flexibility HealthCare Compensation & Recognition

Respects and values diversity among employees. Hiring, Promotion, & Compensation in fair ways. Diversity & Inclusiveness are two sides of the same coin. Diversity initiatives like International Women's Day, People with Disability IT Camp. Focus on work life balance for employees. Consultation with their Manager may agree on a special working hour. Medical & Dental schemes, health screening, Wellness programs. Include your spouse/partner and dependants under your coverage. Attract, retain and motivate top performing employees through compensation. "The Best of IBM," rewards exploration, collaboration and risk-taking employees.

Analysis on how the organizational structure and design is matching with strategy, environment, technology, size/life cycle, culture
Emphasize on leadership and follows hierarchal structure Hiring, Promotion & Compensation in a fair means Strategy Research & Innovation, M&A, Smarter Planet, Business Partnerships, Training & Certification

Culture
Organizational Structure and Design Introducing new technology due to importance given to research division

Environ ment

Size/Life cycle

Technol ogy

Separate divisions for Software Solutions and Services

RECOMMENDATIONS
As the 21st Century unfolds, the number, scale and speed of unexpected market shifts is likely to increase. The question is whether one-shot adaptations to crises that saved IBM in the past will be enough to cope with the future. If IBM wants to have any assurance in surviving for another 100 years, it will be obliged to go beyond one-shot adaptations and make radical changes to its management practices so that it is able to adapt on a continuing basis, not just in times of major crises. Forbes Despite being an authority in the research arena, with the most enviable no. of patents, IBM has not been able to compete effectively with Apple Inc. Relatively a new entrant in this industry, Apple is now worth twice as IBM. We suggest IBM should utilize its strengths and resources at its disposal and come up with more innovative products to directly compete with Apple in the smart devices category. In case they dont want their mastery over the business computing world questioned, they could spawn a sub-brand which marries technical expertise with style and offers the world with best of both worlds.

References
Books: o Understanding the theory and Design of Organization by Richard Daft. o Management today: Principles and practice by Burton Gene & Manab Thakur. Business Magazines: Bloomberg Business Week, Science Direct, Harvard Business Review, Business Standard, Industry Week. Newspaper articles: Times of India, New York Times. E-Journal Databases: Emerald Web: o http://www.ibm.com o http://www.theofficialboard.com/org-chart/ibm o http://www.glassdoor.com/Reviews/IBM-Reviews-E354.htm o http://en.wikipedia.org/wiki/IBM