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Overview of IBM

Question:

What Is The Issues Concerning The International Business?

Issues exist in every aspect of life and it mainly leads to incur loss and damages negatively. Considering such facet, business organisations around the world faces issues and conflicts that negatively harm their business effectiveness pessimistically. Thereby, in order to ensure organisational effectiveness, the business proceedings need to be enhanced proficiently (Forsgren and Johanson 2014).

The prime aim of this report is draw a critical analysis of the issues those multi-national companies around the world faces in their business proceedings. In addition, post the analysis, effective solutions would be sketched that would assist in overcoming such issues positively.

This report comprises of several critical analysis and recommendations, based on such a rationale conclusion has been described for a better understanding of the study.

International Business Machines (IBM) is a world-famous information technology firm, which exists since 19th century and operating its business in approximately 171 countries around the globe. The IT organisation is onto mass-producing computer hardware, software and middleware for their respective clients from worldwide. Primarily, the organisation initiated its business in 1911 and is been founded by Charles Ranlett Flint. The company has expanded massively since its initiation and remained dedicated as well issues concerning the international businessas effective in providing value productivity.

In addition, IBM has been considered as the world’s largest employer, that comprise of approximately 3,81,000 employees working as a team to accomplish one common organisational goal. The company other than producing hardware, software and middleware, it also provides consultancy services in various domains concerning from information technology to nano-technology as such. It carries the global record of generating the world’s best and finest patents that has given the world new possibilities in life. Chiefly, IBM proudly distinguished themselves from other organisations that are onto similar business of information technology in terms of catering value services to the consumers worldwide. There are end numbers of inventions that IBM has successfully made, yet the renowned inventions include ATM, floppy disks, hard drives, UPC barcode, magnetic stripes card, random access memory (RAM) and the SQL programming language. The company constantly catered innovations since its inception and thrived in delivering quality productivity to the world.

The IT industry giant has predominantly acquired several businesses with an intention to tap a higher market and maximise deliverance of value. IBM’s acquisition comprise of PwC consulting firm, the Weather Company and SPSS. It has expanded its business to higher level and continuously enhancing its business operations in order to ensure effectiveness and proficiency at every level of its business proceedings (Ibm.com 2017). The company has created a mind-set within the consumers that whenever a consumer think of IBM, he/she would think of excellence and worth in products and services.

Key ethical issues facing IBM in international business

IBM being the global leader in providing IT solutions and technological products and services, encounters issue that predominantly hampers its international business operations negatively.  However, issues are common in nature and no organisation in the world is present with absolute no issue in their business operation (Kolk 2016).

Business ethics and corporate social responsibility are the key aspects that every business organisation in the world incorporates in order to ensure organisational effectiveness as well as generating value of business. These two aspects can be defined as the moral values and concern for the society that caters social wellness as well as incur principles within a business conduct that generates a positive outlook for the business organisation (Wild, Wild and Han 2014).  Considering such fact, the global market leader in technology has faced major ethical issue that has affected its business operation globally. It is widely understood fact that MNE’s around the world have large number of employees working in different units and locations with common organisational objective. MNE such as IBM has a diversified employees working together with different set of language, culture, values, beliefs and morals for that matter. In such scenario, employees may or may not adhere to the ethical or corporate social responsibility policies that have been incorporated by the organisation (Cavusgil et al. 2014).   

It has been observed since late 90’s that IBM has been facing ethical issues concerning its business and operation. The unethical proceedings of the organisation have created a massive drop on its corporate reputation and image for that matter. The ethical issues of IBM include:

  • Anti-trust and Monopoly – IBM has been found guilty in exclusive possession or monopolization in the technological and computer industry in terms of trade and proceedings of business that has been considered as illegitimate by a federal district court.
  • Bribery – During 2011, the U.S. Securities and Exchange Commission has charged a lawsuit to IBM in the case of bribery, which has been offered to the South Korean governmental officials to acquire profitable business contracts. Later, IBM has settled down the court case by paying approximately $10 million. Besides that, the U.S. SEC has claimed that the managers at IBM have bribed the officials of South Korea and China about a decade since 1998 until 2009. The bribery that has been made to the officials of both the nation was aimed to win over the contacts of business.
  • Workplace safety – Two employees of IBM has claimed that the company has intentionally exposed them to detrimental and toxic chemical that has happened to cause them fall sick and the company had concealed such information from them. However, IBM has disagreed regarding this matter in court and alleged that the causation has happened due to the preference of employee’s lifestyle such as smoking and drinking (com 2017). 

The above issues are completely unethical in nature and it is of vital significance that such issues need to be identified prior to any damage cause to the organisation. Thereby, identification of such key issues is crucial concerning the damages it may cause to the organisation’s social reputation as well as on image for that matter.

In context to the ethical issue of anti-trust and monopoly, the business conduct on such practices leads to a drastic decline in the efficiency level of its business operations. The business conduct of IBM identified to be very rigid and of monopolistic nature, that creates a sense of conflict and negativity within the mind-sets of employees. It is crucial that the code of conduct must be of ethical in nature and comprise of moral values and social wellness (Tai and Chuang 2014). Supposedly, if the conduct of business is of low ethics and does not include any sort of effectiveness, then it may lead to a massive decline in the organisational effectiveness.  Concerning such aspect, it can be referred to as Consequentialist ethics that are based on the actions of the firm or proceedings of the business primarily.  Such ethics are been determined by the consequences that it faces from the actions that it displays predominantly (Ferrell and Fraedrich 2015).

Effective solutions to overcome the ethical issues

Besides that, the scenario of bribery that has been made by IBM to win the contracts has created a negative effect on both the sides of firm’s social reputation as well as on the nation’s corruption level. Bribery has been considered as a serious crime in almost every nation and has been issued by the national security commissions (Paik, Lee and Pak 2017). In such case, if IBM has been indulged in such illegal affairs then it has flaunted a serious crime of tampering the national policy by involving and inducing such prohibited crime proactively. In addition, it has also incurred a heavy loss on the social reputation as well as on the image that it has on the global prospect (Shaw and Barry 2015). The code of conduct has not been well followed by the top executives of IBM and which had lead to face such consequences negatively.

Concerning to the workplace safety issue, the claim of firm’s employees in terms of exposure to harmful chemicals that has made them fall sick has formed a negative perspective into the mind-sets of every employees working in different locations around the world (Crane and Matten 2016). The employees of IBM from other locations has viewed such scenario as matter of low ethics and claimed it as an inappropriate treatment of employees. This in turn has made the firm to face low-productivity, resignations and a substantial decline in work commitment for that matter. The business operation has come down drastically and which lead the organisation to encounter with several challenges (Grace and Cohen 2015).   

IBM has put considerable effort in resolving the issues that has caused tremendous damage in its global business operations as well as on its social reputation. The firm has applied some of the strategic approaches that assisted to resolve such issues effectively. IBM has initiated several corporate social responsibilities with an intention to provide wellness to the society that the firm primarily operate in. The company has endorsed some effective as well as efficient proceedings that have made the organisation to settle down such ethical issues optimistically. Although, the proceedings were complex yet it has assisted proficiently.  This approach has assisted the firm to uplift the social reputation and image that has been dropped down by the ethical issues that it had faced (Michalos 2017).

Firstly, IBM has bestowed $50 million to the grant commissions in order to assist build smarter cities and renovate more than 100 cities around the globe with substantial energy efficiency. Secondly, approximately 3,00,000 of IBM employees has engaged in Centennial Celebration of Service that outcome in 3.5 million hours of service focused predominantly on the society. Thirdly, IBM has set out several high-potential teams to different countries around the world with the purpose of enhancing the communities to create a smarter planet around the world (Ibm.com 2017). Thereby, the approaches of IBM has been effective and proficient in bridging the gap between community and corporate in terms of elevating the repute.  The actions of the firm are been effective enough as it covers every issues that has declined the firm’s operation and thus created a new possibility to enhance its business. In addition, it is a tacit fact providing such service and contribution for the wellness of community is viewed positively by the public as well by the government; thus, generates possibilities to re-position the firm’s repute effectively (Nam  and Weaver 2015).   

IBM's efforts to resolve ethical issues

Concerning to the above actions, there are some alternative actions that would assist in resolving the issues positively. In respect to the ethical issues of the firm, there would be requirement of advancing the code of conduct more rigid and ethical based. Besides that, there is necessity to educate the employees regarding the ethical values and its importance. It is to believe that educating or informing an individual concerning the values and importance would create a mind-set of positivity. In addition, the upshot of any unethical actions is against the regulations of society, which has to be adhering at all times by the employees of all levels. Business conduct is the key aspect of ensuring efficiency; hence, the proceedings need to be enhanced based on the economic and community demands.  

Conclusion

This is to conclude that the ethical issues within an organisation can hamper the international business operations tremendously and which requires effective approaches to resolve such issues positively. It has been understood that necessity of compliance with the code of conduct and business ethics is of utmost importance and require extensive advancements. An organisation must follow an effectual business ethics that are enriched with moral values, which would help to cater reflection of positivity to the entire community around the globe. On the other hand, an organisation must recognise both the results of compliance and defiance of business ethics within the organisation for that matter. Thereby, it has been identified and well perceived that issues in international business is complex in nature and entail an effective approach to reconcile such issue to bring back the position positively.

References  

Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L., 2014. International business. Pearson Australia.

Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.

Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson Education.

Forsgren, M. and Johanson, J., 2014. Managing networks in international business. Routledge.

Fortune.com (2017). U.S. Authorities Drop Investigation of IBM Activities in Poland. [online] Fortune.com. Available at: https://fortune.com/2017/07/27/ibm-poland-investigation/ [Accessed 13 Sep. 2017].

Grace, D. and Cohen, S., 2015. Business ethics.

Ibm.com (2017). IBM About IBM - Australia. [online] Ibm.com. Available at: https://www.ibm.com/ibm/au/en/?lnk=fab [Accessed 13 Sep. 2017].

Ibm.com (2017). IBM Corporate Responsibility. [online] Ibm.com. Available at: https://www.ibm.com/ibm/responsibility/?lnk=fab [Accessed 13 Sep. 2017].

Kolk, A., 2016. The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business, 51(1), pp.23-34.

Michalos, A.C., 2017. Issues for business ethics in the nineties and beyond. In How Good Policies and Business Ethics Enhance Good Quality of Life (pp. 197-212). Springer International Publishing.

Nam, K.A. and Weaver, G., 2015. Major ethical issues in the field of intercultural relations: An exploratory study. International Journal of Intercultural Relations, 48, pp.58-74.

Paik, Y., Lee, J.M. and Pak, Y.S., 2017. Convergence in International Business Ethics? A Comparative Study of Ethical Philosophies, Thinking Style, and Ethical Decision-Making Between US and Korean Managers. Journal of Business Ethics, pp.1-17.

Shaw, W.H. and Barry, V., 2015. Moral issues in business. Cengage Learning.

Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.

Wild, J.J., Wild, K.L. and Han, J.C., 2014. International business. Pearson Education Limite

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