In the following paper I am going to analyze the case about “IBM” and how the company changed its structure in order to develop innovative products and manage successfully its new business as well.
In particular IBM moved from a bureaucratic structure with an inflexible hierarchy to a divisional structure that allowed the company to pursue emerging business opportunities and at the same time continue to develop businesses were mature and well established, and business were on the rise and were having a rapid growth.
-Summary of the case
IBM was founded in 1911 and it was for many years the world’s dominant computer company.
All over years IBM grew constantly but in 1991, for the first time, the …show more content…
With the new structure there was the adequate providing of resources. In particular in division H3, through the EBO management system, was ensured that emerging businesses were adequately funded and resourced. On the contrary, with the past structure, the funding process had been a bit of mistery.
Moreover in each division there were a strong and long commitment in the reaching of the target previously established. It was also due to the performance evaluation; in particular with the old structure performance, review process was based on financial metrics; meanwhile with the divisional structure whether specific EBO milestones had been met.
On the other hand the divisional structure, as it has written by Miller, implies often to face the problem of coordination and transition with other divisions. Unfortunately, also IBM with the change in the structure had this problem. In particular each division worked independently from the other one and the coordination and transition from H3 to H2 became a problem within the company. People involved in H3 feared that their innovative products could not well understood from the H2 division and for this reason products would not have had success when they were started to sell in the market. It was necessary to find people in H3 available to recognize the opportunity to move from H3 to H2 and were willing to take