IBM stands for International Business Machines Corporation founded in 1910 by Thomas J. Watson. It provides information technology product and services worldwide. The headquarters is in Armonk, New York. The 5 segments in which company works in are Global Business Services (GBS), Global Technology Services (GTS), System and Technology, Software and Global Financing (Maltby, 2018). It has 4,00,000 + employees worldwide. The company has agenda to be dedicated to the success of every client, committed to innovation, trust and personal responsibility in relationships. The current CEO, Chairman and President of IBM is Ginny Rometty. She has been working with IBM for more than 35 years. IBM holds the records of maximum number of patents in a business. Under her regime, the big blue has worked mainly on growing businesses like Cloud computing, data analytics, mobility and security. However, like any other business IBM is also struggling to stay relevant in the market. In this report we are going to cover issues related to IBM’s culture, structure and technology. Thus there is need for Organizational Changes.
Organization Behavior is defined as understanding and managing human behavior individually as well as in group that occur within an organization (Shafritz & Jang, 2015). Understanding the concepts of Organization Behavior will help in maintain healthy working environment. There are many concepts which are covered in Organization Behavior like Personality, perception, motivation, structure of organization, leadership, culture, conflict management, change, development etc. (Shaw, 2018). Organization’s culture is defined as values, group norms and beliefs and assumptions prevalent in the organization (Deal & Peterson, 2016). Relevant organization’s culture helps in resolving the differences, reduce risks and overcome barriers. There are main two key element of the organization culture: Visible and invisible elements. Describing these elements in IBM’s context:
Visible elements: These elements can be seen by the outer world like dress code, activities etc. In terms of dress code, IBM follows very professional code of conduct. The executives as well as employees all around the world are supposed to dress in business formal during week days. The company is particular about its presentation. IBM engages itself in large number of activities which includes corporate social responsibility activities, employees learning and skills management, empowering women, LGBT activities etc. This makes Big Blue a very active organization. One particular which is concern of worry is IBM’s bureaucracy and hierarchy. IBM has steep hierarchy constituting multiple layer of management. The agility of the company tends to be compromised when such practices are in place.
Invisible elements: The invisible elements cannot be seen by the people outside the firm or organization. IBM is 108 year old company with a lot of success stories. Some of its executives like J. Watson, Luo Gertsner has made the company globally recognized. Luo Gertsner has helped the company to survive in the toughest time. But this is not true with all the senior management authorities like Sam Palmisano. Under his leadership, the company’s earnings per share doubled, but the company hardly focuses on innovation and customers and client requirement (Tang, J., & Crossan, 2017). IBM conducts many activities which help in training employees like 40 hours mandatory training for employees, portals for certification etc.in order to bring out innovation. But these practices do not lead fruitful result because the management’s communication does not reach to the end of hierarchy in absolute way. The employees do not understand the business perspective of all the training and their importance which makes IBM lethargic. Despite of presence of committed and talented staff, these activities like hierarchy, cost cutting decrease the staff morale. It takes troll in areas like customer delight and innovation. Many of its business segments still follow outdated software packages like Mainframes etc. Also in this era of Agile Model of Software Development Life Cycle, company many times still sticks to Waterfall Model of SDLC. However, the company provides work life balance to its employees. The company believes in devotion to clients, innovation, appropriate environment, building relationships .One of the former CEO Luo Gertsner used to make sure that he personally visits all his clients. The company believes in improving processes. But today due to hierarchy the company is not very efficient in dealing more dynamic and competitive environment. IBM requires more consensual and inclusive decision making process for the social, economic and environmental sectors. It helps in moving focus from single bottom line to the triple bottom line which involves profits, people and planet.
IBM has market culture which is based on achievement of goal. It is completely profit-oriented and target-oriented culture. The goal achievement is the basis of relationship between employees and organization. It is different from entrepreneurial culture which is risk taking and flexible (Beugelsdijk & Hoorn, 2015). Irrespective of one of the agenda of innovation, employees are sometimes forced to be part of ideathon and hackathon. Internal motivation is missing. Employees have standard operating procedure which limits freedom in their activity. It is the duty of the head to partly set a culture. New cultures are needed in an organization based on situation and demand of time. The management should build a culture which is easy to adapt and provide maximum value to all stakeholders. The main reasons for culture change are increasing size of organization, acquisition and mergers etc.
IBM is one of the largest computer services providers. It also offers industry specific consultation. These were acting as cash cow for IBM but it is not true anymore. IBM which was popular for its biggest computer has now difficulties in differentiating itself from its competitors. Customers are not able to see big differentiation among brands. Instead, hardware has become business where IBM started losing money. If companies are not relying on IBM hardware then they are not interested in its software packages as well. They don’t need the programs that go with the hardware. So it has decreased the sale of its traditional offerings by its customers. Also third party service providers are less likely to purchase software from IBM. Instead they rely on buying the inexpensive product or open source computer capabilities. IBM is big player in cloud computing. It means using outside computer networks to execute complex software programs. But Big Blue is facing a lot of competition from rivals such as Microsoft, Google and Amazon. IBM’s market value is very high and according to various analysts bigger is the size of the company, harder is to improve its earnings. Many businesses are reluctant to spend their money on IBM Watson- IBM’s genius supercomputer.
All the above points suggest that the IBM needs change in Organization. Organization change is reflected to change in technology, structure or people. An organization change is attributed to two factors i.e. External and Internal Factors (Hayes, 2014). External factors are present outside the firm. These include competition, government rules and regulations etc. Internal factors are the factors that are present inside the organization. In IBM’s case it involves hierarchy, bureaucracy etc. According to Kurt Lewin’s Force field analysis, there are two factors for change in the organization i.e. Driving Force and Restoring Force (Shrivastava & Ramasamy, 2017). Driving force makes change with respect to people, structure and technology. It helps in driving the organization from one culture to other. However, restoring force helps in changing the culture from existing state to previous state. Driving force leads to forward motion whereas restoring force leads to backward motion. IBM needs driving force which helps in further development. It will also help IBM to survive in competitive market. The organization is required to be updated with changes. One important point to consider is that changes should be carefully planned and properly executed. The main agenda is to satisfy the requirements of market, enhances the profitability of organization and promotes employee satisfaction and well-being (Cascio, 2018). So the process of change in the IBM will have following steps:
The Need for Change:
As already discussed there is demand for change due to two types of forces i.e. external and internal. Internal forces in IBM that lead to planned change in an organization include obsolescence of production and services, new strategic direction and new product opportunities. External forces that lead to planned change in IBM include competitors, customers, technology and market force. These forces have pressed the demand for change.
Process of Planned Change
It is necessary to carefully implement any changes in IBM. So once the changes in this regard are planned they can be implemented in three stages (Cameron, E., & Green, 2015):
Unfreezing: Here IBM is going to study whether change is required. It will evaluate the reasons for change necessary and what all changes are needed. It will evaluate the entire situation which the organization thinks for the appropriate change. So at this stage plan and strategy are formulated. In case of IBM the change should be related to reduction in hierarchy which boost employees’ morale and bring innovation. The lean organization will help in reducing cost and help the company concentrating in the customers’ and clients’ requirement accordingly (Williams & Astrachan, 2018). The company should look at the culture and organization structure of other companies like APPLE which define them as biggest Start Up till now. The company needs to let go older technologies like Mainframe and try to focus on machine learning, artificial intelligence and IOT etc. They need to differentiate themselves from the competitors and that can be done only when they provide superior services to clients and customers. It needs their response to the market before any of the customers. This can only be done by change in the organization culture and structure. It also needs transformational leadership.
Changing: This is the execution stage where organization plan and program for the required change. It requires necessary precautions to maintain coordination and cooperation between the management and employees. It is mandatory to avoid disputes or miscommunication. It needs adequate control and supervision. So IBM management needs to discuss the change with all the stakeholders prior implementing it. It will make them feel empowered when they would be present in loop. Every side of the perspective should be discussed with manager. Proper trainings and sessions should be defined to implement the changes Certo, S. C. (2018). One example could be in order to reduce hierarchy employees should be given liberty to contact to higher authorities. Also, in order to increase innovation various strategic games should be included which help them earn blue points. One necessary change is removing bureaucracy by appreciating whistle blowers in intra organization.
Refreezing: In order to bring organizational change, this is the final stage. At this stage, the company tries to evaluate the effectiveness of change. After collecting data and information on change, it interprets whether to replace the change or continue it or it may need some minor changes. The company can evaluate this by taking feedback of employees and customers. IBM can refreeze the change by providing rewards to the employees who act in according to the change. If there is some modification needed than it should come up with the alterations soon. However, the final change should be reinforced in the organization in terms of its practices. It should come up in any type of communications like its mission and vision. It should be in regard to provide sustainable competitive advantage to the company. All the perspectives should be properly monitored.
IBM is one of the most renowned and respected company. The Big Blue is close to many people Worldwide. This 100+ year old company may face thunder but survival is expected out of it. Currently IBM needs to focus on Change. Change in terms of technology, culture and structure.
Change in technology
- Move towards machine learning, IOT etc.
- Follow agile methodology
- Replace mainframe and other outdated platforms with new one.
Change in Structure
- Reduce Hierarchy
- Give decision making rights to employees
- Foster innovation
- Change in rules and regulations
Change in culture
- Remove Bureaucracy
- Give more flexibility
- More opportunities to employees
- Move to flexibility from Standard of Procedures.
Organization behavior helps in understanding various aspect of the organization in which an organization works. It is not easy to manage an organization which has spread worldwide. The rigidity in the organization culture and structure has led it to avoid customers, market opportunities and employees. So it is necessary to implement required organization changes appropriately.
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