Ibm: Challenge to America

1318 words 6 pages
IBM Case Analysis

“What happened to IBM, the symbol of American supremacy?” -Challenge to America video, 1993

Problem Statement

IBM needs to grow revenue and stay competitive in the dynamically changing computer marketplace of the 1990’s by maintaining technological leadership and accepting the organizational transformation which needs to be undertaken for them to excel. IBM needs to recapture their previously held powerful position in the personal computer and microprocessor markets and regain value in the company which will increase its stock value and competitive advantage in the marketplace.

Problem Analysis

In 1993 IBM reported a $5.6bn loss for the fourth quarter of 1992 ending a yearly deficit of $4.97bn; which at
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The first alternative addresses the organizational structure which best responds to the challenges faced while the second alternative attempts to garner IBM’s internal resources and external market connections to better address the complexity of the personal computer environment and thus return IBM to its prior strength.

Alternative A: Organic Structure (internal focus on environmental considerations)

To answer the many external environmental factors affecting IBM’s personal computer business they must raise structural complexity and decentralize decision making through increasing the number of departments and personnel which individually address such boundary spanning environmental points as pricing, customer representation, and new technologies. Human resources must be effectively utilized as key personnel


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