The Organizational Management Strategies in IBM - Case Study Example

The Organizational Management Strategies in IBM Introduction Organizational management is the systematic process that involves organizing, planning, controlling, and channelizing the performance of members and resources of the organization to achieve its ultimate objective. Managers are entitled with huge responsibilities of solving problems and making decision for the overall betterment of the organization. As problems associated with the management process tend to change quite frequently, managers cannot follow a routine leadership for all situations. The most efficient approach for an organization is being dependent on skill and experience of man power, organizational process, and most importantly, the organizational culture. A good leader is the one who tends to switch automatically between required styles with accordance to the motivated group members. Planning plays a very significant role in the achievement of organizational goal as a pre-statement of the systematic operational process. Thus, organizational management emphasizes on fine management of the procedures to manufacture and distribute products and services through the systematic implementation of operational process planned, motivation of the workforce and other relevant areas related to the realization of the determined goal. The main motto of organizational management is to make working environment interesting, challenging, motivating and productive on the whole. The structure and pattern of communications within an organization also has an important influence on the correctness of decisions, accelerating the speed, the efficiency of their arrival and upon the overall accuracy. The pattern of communication is decided with respect to the organizational size (Ritson & Marsden, 2003). This paper deals with the downsizing of IBM in its performance over the recent past years. The paper also intends to identify its drawbacks and outcomes related to the organizational management strategies adopted by IBM. Company at a Glance The company, IBM, was established on 16th June, 1911 at New York. Initially it was known as computing-tabulating-recording company (C-T-R). IBM’s value aligns with their services (IBM, 2011). In IBM, employers and employees share a set of values which help them to make decisions and assist the company to flourish. Their set of values includes dedication towards every client leading to overall organizational efficiency. Innovation is one of the main tools of sustainability and success in IBM. IBM deals with different kinds of ventures, from the local to the globally renowned organizations. IBM deals in various fields, such as financial services in the banking industry, financial and insurance markets; social services which includes education, government, healthcare, life sciences and so on. The company also operates in industrial field which involves chemical and petroleum, automotive, aerospace, defense, electronics; and in distribution field such as consumer products, retail, travel, and transportation. Furthermore, IBM is involved with communication industry in terms of telecommunications, media and entertainment, energy and utilities (IBM, 2011). The operation of IBM is to help clients to achieve their objectives by the use of business insight and latest innovated information technology solutions and provide long term value to the shareholders. With the view to support the organizational objectives, the business model of IBM has been innovated and developed over and over with respect to change in demand through strategic investments in technologies and services provided. This tends to obtain the best long-term expansion and productivity prospects of the organization. The company has paid full attention in creating a vision of teamwork, managing changes, innovating technologies, executing major process changes, implementing structures and networks, and launching participatory organizational culture to encourage healthy employees’ relationship, which in turn help the company to achieve its goal. These are the key components of business towards successful operation and sustaining major organizational change. Realizing the need to innovate in order to effectively manage essential organizational changes, leaders must personally plan innovation, establishing conditions that ignite ideas and contribute in the aggregate productivity (IBM, 2011). IBM’s change management services and solutions help the company to manage changes within the organization assuring new programs, behaviors, training the employees, adequate communication, appropriate leadership and improvised culture. IBM is an organization which deals with providing advices on organizational structure designing and other strategic management related issues to its clients, i.e. the local as well as the global companies. The company further deals with ventures and helps those enterprises to relate their organization with new or existing business models and strategies. The company facilitates its clients to maximize effectiveness by redefining work responsibilities and well illustrating their jobs and their relationships with respect to one another. IBM supervises mechanisms, and other organizational fundamentals to make new behavior support strategic changes with positive result (Fortune, 2011). Downsizing, New Product Development, Change Processes, Governmental Actions Including Laws in IBM Downsizing is the way by which corporation makes itself smaller in respect with changed competitive market conditions. Downsizing is also popularly known as reorganizing, reengineering, restructuring or rightsizing. Though downsizing is referred to as a reduction of assets and not cutting off of human resources but most of the American companies adopted it adversely. To be elaborated, instead of reducing the assets of the company, some companies decided upon cutting off of their human resources. Other terms that have been used for the objectivity of downsizing by the organizations with respect to meaningless loss of jobs are restructuring and right sizing. In first IBM report, chief executive of the consulting company, Lou Gerstner stated that, “Shortly after I joined, I set as my highest priority to right size the company as quickly as we could” (Economist, 2011). Now-a-days, IBM takes good care of its human resources. But during the late 1980s and early 1990s, IBM faced downsizing quite intensely. In U.S, it was reported that about 3.5 million workers lost their work in a decade after 1987. The losses had much to do with clearing of the layers of middle managers, a move implemented by increasing competition and the growth of information technology which simultaneously reduced the need for human resources. By 1990s, there was a protest against downsizing in America. Companies became skeptic, about their step whether they have taken a wrong step of downsizing their employees. It is after this incident that many companies including IBM became aware about the significant drawbacks of downsizing. The organization was in shock. The step taken by the company of downsizing turned out to be a real mistake. This decision not only demoralized the employees but also reduced the productivity of the organization. Those who had job options resigned their jobs in IBM, and the company was regularly forced to rehire which had been referred to as a “process of “Binge and Purge”” (Economist, 2011). The short term benefits earned by the company from downsizing would probably be counter-balanced by the long term damage occurred to its loyalty, morale and the productivity of those employees who stayed back. During 1995, around 1000 companies were surveyed by the American Management Association (AMA) regarding the outcomes of downsizing. Only 48% of the surveyed companies claim to earn profit after the implementation of downsizing. Through the survey held, the AMA also discovered that the companies failed to improve the product qualities after the job cuts. Business Week magazine, in its special report about the changing structure of the workplace published in October 1994, stated the adverse effect of downsizing was that it simply resulted in lesser people working much harder. IBM has shown full attention to diversity. IBM set an example of being a good employee. The company hired the first employee with disability in 1914 which was almost 76 years prior to the implementation of Disability Act in the US (Economist, 2011). IBM being a knowledge-based organization faces numerous numbers of obstacles while applying knowledge management programs in terms of lining up knowledge management steps with regard to the strategic objectives of the organization, connecting the knowledge management to individual’s work, putting emphasis on knowledge management and hard work limited within organizational premises (IBM Institute for Knowledge-Based Organizations, 2002). As IBM deals with the promotion of technology, innovation can be regarded as another key performance to be followed by employees of IBM. The company pays full attention on emergence of regulations that require or encourage IT products as well as services to be available to disabled peoples, which is also considered as Corporate Social Responsibility performed by the company. This not only compiles with the legal obligation but also helps the company to established grip in the market. IBM tends to regulate activities that create participative environment with respect to the utilization of IT. IBM also believes that legal regulations should be focused towards the determined objective(s), attainable and standards based to provide common set requirements for all sellers to work efficiently. Innovation and adoption of new technology for better performance of the organization and its contribution towards the productivity is one of the fundamental aspects considered in the strategic management of IBM (IBM, 2011). IBM has contributed a lot in many of the ways for educational purposes. For example, IBM power is used in the Manatee School of Florida for the gradation system. Opus College of Business also incorporated IBM software with their higher education studies (IBM, 2011). Regulations and policies that influence the purchasing power of governments, the largest buyer of IT in US, can be very effective in promoting available IT products. Modification of section 508 of the Rehabilitation Act was considered as a mile stone in 1998 by US government. The law allows US federal agencies to buy IT products that meet with the terms promoted by the US Access Board. The importance of procurement supplies being in control of government is that it accelerates the market growth in a systematic way through fair competition. The effectiveness of the regulation to improve information technology convenience can be increased by making it synchronized worldwide, representing a constant set of prospect and objectives. If multiple and contradictory regulations are established, it would become technically and economically difficult as well as confusing for sellers and their clients to support the regulation. Thus, it could become a discouragement for IBM to participate in certain markets (IBM, 2011). Spain recently introduced a passage of law with the view to promote care and independence for dependent individuals, including elder people and the people who are disabled, considerably increasing the number of involved cases that the region’s social agency had to consider. IBM was the company that Spain decided to take in consideration to help them with this technology. The law not only introduced new social benefits, but supported the rules with exact eligibility criteria of the senior citizens. But, as data about citizens were kept in different offices, verification of eligibility was often incompatible to overcome the problem. Furthermore, to support new laws and provide services to qualifying citizens without any hassle, the social services agency organized a new department known as Social Service Unified Access System (SAUSS). The work of SAUSS is to act as a single point of contact for needed citizens and also to enable the agency members to manage case progression and resolution constantly across all of their offices. The SAUSS projects involve the implementation of advanced case management strategies by the utilization of IBM software. This helps them to create advanced and systematic process oriented management systems which further deliver benefits, allowing the agency to report by consuming lesser time (IBM, 2011). Conclusion IBM is a knowledge based company. For companies dealing in a similar field like IBM, innovation is a key to sustainability and success in its long run. The company puts much effort on benefitting its users. The company’s strength lies on the generally recognized body of accessible requirements. IBM can be objectively measured. IBM is a globally renowned company, operating the business in different nations. The company has harmonized itself to meet the needs of all economies of different countries. Adoption of downsizing can contribute in short-run of the business, but would surely affect it in the long run. Companies have usually been observed to execute downsizing plans with the purpose of escalating the overall productivity and organizational profitability. However, it is not essential that downsizing will subsequent with the expected outcome. During 1990s, IBM adopted the plan of downsizing which in turn contributed to its short term productivity. However, from a long run perspective of prosperity, the company suffered. For example, in the process of downsizing, motivation of employee gets declined, political obligation is fuelled up that affects the reputation of the company. Downsizing tends towards the violation of psychosomatic agreement among the employers and employees, which in return leads to hampered work commitment affecting the good will of the company at large. Remaining employees were likely to be over burdened by the extra works. Avoiding downsizing is the smart thought for the better and sustainable business growth. IBM has always contributed towards maintaining its international standards. With this concern, IBM participates in the development of global accessibility standards. IBM has always come up with new ideas and technologies. IBM has also committed itself towards an idea of removing technology barriers from people who are victimized with disabilities (IBM, 2011). References Economist, (2011). Downsizing. Retrieved on September 21, 2011 from http://www.economist.com/node/11773794 Fortune, (1990). Ideas about 1990s. Retrieved on September 21, 2011 from http://research.microsoft.com/en-us/um/people/gbell/cgb%20files/downsizing%20of%20ibm%20and%20dec%20fortune%20900326%20ng%20c.pdf IBM Institute for Knowledge-Based Organizations, (2002). Challenges in managing Organizational knowledge. Retrieved on September 21, 2011 from http://www-935.ibm.com/services/hk/igs/pdf/g510-3234-00-esr-managing-organizational-knowledge.pdf IBM, (2011). Castilla y León regional government adapts quickly to new laws. Retrieved on September 21, 2011 from https://www-01.ibm.com/software/success/cssdb.nsf/CS/RSAH-87JKUU?OpenDocument&Site=cmportfolio&cty=en_us IBM, (2011). Laws, standards and regulations. Retrieved on September 21, 2011 from http://www-03.ibm.com/able/laws/index.html IBM, (2011). Success stories. Retrieved on September 21, 2011 from http://www-01.ibm.com/software/success/cssdb.nsf/industryL2VW?OpenView&Count=10&RestrictToCategory=corp_Education&cty=en_us IBM, (2011). Organization change management. Retrieved on September 21, 2011 from http://www-935.ibm.com/services/us/gbs/strategy/organization-change-management.html Ritson. N. & Marsden. A. (2003). Organizational management. Elsevier Science. Read More