IBM

have a stake in IBM is like having a gold mine. The huge success of the IBM PC shipped companies have high profit soars, and IBM was ranked as the largest company in terms of market share as a company known value.Big Blue, which create jobs round the word, which ultimately workforce swelling 407,000.
decades later, the people who have invested their lives, or their money, in a company they think can never fail to see the long cherished dream went down the drain. company went from 6 billion benefit for reporting a whopping 5 billion lost two years later. IBM shares lost more than 75 billion in value, an amount equal to the gross domestic product of Sweden. everyone associated with the company's immense sufferingMore than 140000 IBM workers lose their jobs. the whole city is emerging as IBM saw their economies disappear. New York Hudson Valley destroyed the middle, and when IBM announced layoffs in 1993, local officials asked that the weapon close to the shopsas IBM stock fell from 175 to the low 40s, as well as retirement hopes of hundreds of thousands of investors, from IBM executives to the small town grandmother who thought she had made the safest investment in the world
When IBM gave a no-layoff policy, employee morale damaged reinforced by a former employee who sells T-shirts with the IBM logo spelling out "I've Misled"after a long career rose to the top of one of the world's biggest compenies, chairman of IBM, John Akers, resigned under heavy pressure, taking with him the other top executives. but more then that tarnished career that day.On same day, the company rocked the financial world by announcing that for the first time in history, that cut its quarterly dividend shares 121-54.
fall of IBM, the computer industry giant for eighty years, is a classic tale of organizational failure. company went from literally being on top of the world for fightingfor life. how did it happen? as importanly, what changes Bhave executive management at IBM implemented to bring new life to the company and regain its status as a leader in the computer industry?

BackgroundIBM grew from conglomerate formed in 1911 which is mainly made scales, coffee grinders, cutting cheese, and hours of time. The so-called "computer-tabulating-recording" component conglomerate growing rapidly, and the change of name to International Business Machines Corporation in 1924 marked a significant shift in focus.for fifty-seven years, until 1971, IBM led by thomas watsons (senior and junior). leaders who follow them are not so strong or visionary as watsons. but they inherited a strong company who clearly dominated the computer market. in the mid-1960s IBM introduced the System/360 family of mainframe computers-six models launched simultaneously, which requires five new factories and create thousands of new jobs. tremendous success, leadership IBM 360 closed in the computer industry. some think it may have another market turning point as well.
bureaucracy run amok
malcolm robinson retired IBM executive. Which rose to a senior post in europe ibm. say "scale [System/360 project] creates complexity in the business who could barely handled it was chaos for a while. making organization should be established to bring things under control and make sure. kind of thing never happens again and damage was was probably what made the bureaucracy to take off .. "Statistics show robinson true. ibm personnel count rose almost 130 percent between 1963 and 1966, while sales rose about 97 percent.many mistakes are made by the executive ibm caused by too many people and too many meetings. decisions must be made quickly in response to changes in the computer market is delayed or ignored because of complicated management system that demands everything be done "by IBM." for one thing, how ibm demanding consensus through meetings, so that every time a member of staff who participated "noncon-curred,'' in the jargon of the company, the decision was referred to another meeting of the IBM choked by bereaucratic culture .. when IBM's new chairman took over after the resignation of John Akers, he said the troubled company, "the bureaucracy run amok."IBM culture led to such things as a dangerous file-silly-but relative of IBM approved for executives joke to tell at lunch or other lectures. but also lead to disaster.
time they are a-changinaround the time IBM introduced a line of over 360 computers in the mid-1960s, bob dylan folk singer's "times they change" was relased. Unfortunately, IBM does not change with time. company staked its claim on a multimillion-dollar mainframe world. The late entry into the market compiter personal, choosing to direct what the leader company in the 1970s thought to preserve a safe course-profit company mainframe.when IBM decided to enter the personal computer game in earnest. victim's death knell has begun to benefit from the mainframe. the values ​​that guided IBM and its mainframe coution leadership, obsessive training employees, rather than focus on the following anticipate customer needs, and guarantee of lifetime employment for workers-did not work whe IBM moved to the fast-paced, constantly changing world, competitive personal computer.
it's not what they do, but what they do not doIBM PC was an instant success for IBM, but the PC has lost the war. it's what the company did, both before and after the introduction of the PC, which ultimately led to his downfall.IBM made the first big mistake was not taking advantage of the new technology the company itself was created in the mid-1970s. compuitng reduce instruction-set (RISC) microprocessors which offered simplified, faster computing, matched with minicomputers are gaining popularity. But new technologies threaten the great advantages of the mainframe business enterprise. decision to develop smaller. cheaper machines with new technology continues to get delayed until the competition goes far in front of IBM at its own game.least damaging future IBM is subsequent failure to capture a larger share of the profits when the PCs have a chance. companies to sign on with microsoft software for PC and Intel microprocessors. IBM may, at the time, has bought all or part of both companies, enabling. big blue to cash in on the huge profits now acquired firms smaller. a few years later, bill gates again driven from IBM to buy about 10 percent of Microsoft, believes it will be benefical for the company itself as well as IBM. Again, IBM refused-a very expensive mistake. If IBM has bought 10 percent of Microsoft, the company will change the current investment of $ 100 million to more than $ 3 billion.Another thing IBM did not perform quickly is accepted that no-layoff policy was simply no longer work in a fast paced world where companywas operation. as one former manajaer put in, the policy of defending "like virginity". rther than admit organizzation needs to be streamlined and cut the workforce, IBM began a few years "reorganization" eliminate the position here, shooting there for employees slightest infraction of rules. companies gradually increase the pressure for workers to receive severance offer. all the time. IBM continues to insist that no one was fired. think some businesses strive to maintain a distinctive piece of IBM culture, employee morale and corporate image severaly damagad by wordplay when IBM finally gave pure no-layout policy
IBM todayin January 1993, John finally announced that he was sleeping under the IBM chairman, a move that many think is long overdue. although Akers is not responsible for any problems at IBM, he failed to solve them.the media attention surrounding his resignation announcement further tarnished the image of IBMIBM Chairman and CEO today, Louis V. Gerstner, Jr. stepped into this mess with a determination to shine up his image and create a culture in which IBM oppotunities waste fewer people, minimize bureaucracy and puts the company well ahead of their separate divisions. in his first year on the job, he revamped financial IBM.Gerstner wanted to make sure the same thing does not happen in the new era of networks. He pulled together the resources of the entire corporate giants and their focus on the goal of bringing all kinds of biometric costomers network computing. In addition, a large blue ironing out the details of a strategic partnership with Intel to penetrate the growing bisiness manage network PCs across corporate America. is a deadly series of hot new products, including a new type of Pcs and intermediate computer mainframe and by tens of thousands of internet supply and network businesses.Gerstner envision a future where large companies will buy computing power and software aplications electiric way they buy services, did not even know or care where the computers are doing the job. width can begin to once again put his vision on top of the world IBM computer? or have a world that has changed dramatically that IBM was never able to catch up? one thing is certain. gerstneris not afraid of changes:. "If an organization does not work with either one way, we will turn on the evening of the 21st century, as Gerstner continue his efforts to lead the transformation of the company of all time, the world will be watching"

Welcome to the real world of organizational theory. IBM's fate illustrates the shift from organization theory in action. IBM manager who is very involved in organization theory every day of their lives working, but they were never aware of it. company managers do not fully understand how the organization relates to the environment or how shouldd internal functions. familiarity with current theory can help organizations analyze and diagnose IBM manager what happened to the company and changes neede to turn the company around. organization theory givea us the tools to explain what happened to IBM. organization theory also helps us understand what might happen in the future, so that we can more effectively manage our organization.
Organization Theory In ActiontopicsEach topic will be covered in this book is described in the IBM case. Consider, for example, IBM's failure to respond to or control elements such as customers, suppliers, and competitors in a fast paced environment externally, inability to coordinate the department and an efficient control system design promoted, slow decision making, such as delaying action to explore the potential of technology, handling problems large size, the absence of disorder strength, and outdated corporate culture that stifle innovation and change. This is a subject with which the theory of organization concered. Organizational structure and strategy to revitalize the giant
Of course, the theory of organization does not limit ed to IBM every organization, every manager in every organization, involved in organization theory, john sholville food, sausage maker sheboygan, wisconsin,, it turns out the family business having trouble being a fast growing dynamic company with a team reorganization administered alone, hewleft-packard company-which suffers from the same problem as some of IBM in 1980-went through a reorganization, a very big success, using concepts based on the theory of organization, by the mid-1990s, HP is one company with a PC the fastest growth in the computer industry, Eastman kodak com [pany is undergoing structural transformation is similar, as leaders struggled to transform an organization characterized by a rigid bureaucracy, management hesitated, and demoralized workers into one characterized by teamwork, customer focus, and willingness to take risks.draw lessons from organizational theory organizations and makes lessons available to students and managers. ibm reduction is an important story because it shows that, even large successful organization vulnerable, that the lessons learned are not automatic, and organizational decision makers are only as strong as them. Johnsonville food story. hewlettpackard, eastman kodak, and IBM also illustrates that organizations are not static: they constantly adapt to changes in the external environment. These days, many companies are facing the need to transform themselves into organizations dramatically different bacause of new challenges in the environment.