GROUP PROJECT

Lê Thị Ngọc Ánh

Ngô Thế Đạt

Nguyễn Hoàng Hân

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BACKGROUNDIBM- International Business Machines Corporation

- Multinational technology and consulting corporation- 1911. Founded, Headquarters in New York, U.S.- 1914. Thomas J. Watson joined (CEO), policies have been changed

and established, leading to becoming famous with the slogan “THINK”.

- 1952. Watson Sr. (Thom’s son) took over.- Becoming dominant in one of the most notable growth industries of

the century.- 1980. IBM PC was an immediate sales hit, the company was

successful till 1991s.- From 1995s. IBM got back after a fall, and - Ranked by fortune as the 4th largest company (employees)

QUESTION I. In the 1970s and 1980s Palmisano states that IBM was organized as a classic multinational enterprise. What does this mean? Why do you think IBM was

organized that way? What were the advantages of this kind of strategic orientation?

A classic multinational enterprise means IBM was operating in many countries abroad but managed by one host country. However, the structure seemed as country-by-country operations, working in isolation.

Organizing as a multinational enterprise gave IBM a chance to gain advantage from the products and services provided with no pressure to make a less cost structure, but reducing as many redundancies as possible.

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BACK GROUND In the 1970s and 1980s Palmisano states that IBM was organized as a classic multinational enterprise. What does this mean? Why do you think IBM was

organized that way? What were the advantages of this kind of strategic orientation?

Advantages

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No limits to creating

more jobs

benefits of economics of

scale

profit for research and development

ensuring standards

Lower average costLower prices for

consumes

QUESTION II. By the 1990s the classic multinational strategic orientation was no longer

working well for IBM. Why not?

Due to the globalization of the world economy, the global life of many IBM regulars, and the competition from enterprises in emerging marketplaces, such as China also India.

IBM had to transform its tactic again to one that Palmisano entitled as a “globally integrated activity”.

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QUESTION II. By the 1990s the classic multinational strategic orientation was no longer

working well for IBM. Why not?

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MULTINATIONALINTERNATIONAL GLOBALLY INTERGRATED

QUESTION II. By the 1990s the classic multinational strategic orientation was no longer

working well for IBM. Why not?

2

MULTINATIONALINTERNATIONAL GLOBALLY INTERGRATED

QUESTION II. By the 1990s the classic multinational strategic orientation was no longer

working well for IBM. Why not?

2

MULTINATIONALINTERNATIONAL GLOBALLY INTERGRATED

QUESTION III. What are the strategic advantages to IBM of its globally integrated enterprise strategy? What kind of organizational changes do you think had

to be made at IBM to make this strategy a reality?

3

Brazil

New York

IrelandVermont

India

China

semiconductor R&D and manufacturing operation

Ex & In Web sites

global procurement center

global services delivery

QUESTION III. What are the strategic advantages to IBM of its globally integrated enterprise strategy? What kind of organizational changes do you think had

to be made at IBM to make this strategy a reality?

3

Brazil

New York

IrelandVermont

India

China

semiconductor R&D and manufacturing operation

Ex & In Web sites

global procurement center

global services delivery

national markets

QUESTION III. What are the strategic advantages to IBM of its globally integrated enterprise strategy? What kind of organizational changes do you think had

to be made at IBM to make this strategy a reality?

3

Brazil

New York

IrelandVermont

India

China

semiconductor R&D and manufacturing operation

Ex & In Web sites

global procurement center

global services delivery

national markets

integrated global operations

QUESTION III. What are the strategic advantages to IBM of its globally integrated enterprise strategy? What kind of organizational changes do you think had

to be made at IBM to make this strategy a reality?

3

Brazil

New York

IrelandVermont

India

China

semiconductor R&D and manufacturing operation

Ex & In Web sites

global procurement center

global services delivery

integrated global operations

Human ResourcesCheap labor

Managerial changes Access to more global

market

Liberalizing of trade

QUESTION III. What are the strategic advantages to IBM of its globally integrated enterprise strategy? What kind of organizational changes do you think had to be

made at IBM to make this strategy a reality?

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integrated global operations

. Developing the human capital.

. Communicating openly about the strategy so that people can work together to understand and respond.. Measuring how it can differentiate itself and act to create competitive advantage.. Improving the way the organization measured, tracked, deployed and developed the workforce.. Finding the right talents for the right positions.

QUESTION IV. In terms of the strategic choice framework introduced in this chapter, what strategy do you think IBM is pursuing today?

- Global integration/ post multinational global corporation.- Location based on economies and expertise- Labor – India factors of Endowment (Porters diamond)- Global supply chain, One business asset

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