A Report On Ibm – A Pioneer In The World Of Technology

IBM was founded in 1911 by Charles Ranlett Flint after 4 Newyork-based companies united to form a single company named Computing-Tabulating-Recording Company and it was later renamed to IBM. The company’s first large contract was to manufacture tabulating equipment for the tabulation and analysis of US census. The company had a rapid growth and later became a pioneer in providing computer systems for both business and scientific purposes. According to IBM’s annual report for 2019, the total working capital is $718 million, the annual income is $9.43 billion and the total assists amount to $152.18 billion. Nowadays, IBM manufactures and sells computer hardware, middleware and software, and provides hosting and consulting services in fields ranging from mainframe computers to nanotechnology. IBM operates in different fields including internet of things, data analysis, cloud computing and security. The company’s net worth in 2020 amounts to $115 billion making it one of the most successful companies in the 21st century.

In 2020, Arvind Krishna the current CEO of IBM, took decisions that could place him in cell 4 in environmental uncertainty matrix. This cell describes a dynamic complex environment. This was reflected in his decision that he took in January of 2020 to keep investing in IBM’s hybrid cloud business. This is to keep up with the constantly changing and unpredictable nature of the technological environment as well as the varying multitude of components in this environment. Every day, new technologies are introduced to the world and companies like IBM have to keep up with this change to stay relevant in the market. Companies in technological fields such as IBM also have to stay updated on every new component that is introduced to their environment. Since cloud solutions are now in very high demand, Arvind Krishna taking this decision shows his attempts to adapt to the ever-changing ever-growing nature of his environment. As part of Arvind Krishna’s decision, experts have to be hired to work with and develop the cloud business since it’s a relatively new field which requires individuals with a sophisticated level of expertise on the matter. In addition, Arvind Krishna also made decisions regarding the Covid-19 pandemic. He decided to invest in AI-powered services which would help the company in the automation of some of their tasks to help in decreasing costs and becoming more resistant to the current and any future disasters. This reflects how much the technological environment is dynamic and how much it can be affected by disruptions such as the current pandemic so Arvind Krishna always has to be ready for sudden changes in the different components of environment.

IBM aims at continuously aiding communities in need and to help around the globe people with various social initiatives. In 2019, IBM invested $25 million for the development of technology to help saving lives as a part of disaster relief which will be available for everybody to access freely. In 2019, IBM also started developing a non-profit project aiming at fighting the spread of human trafficking worldwide. IBM uses a dark green approach which earned it the 2019 Climate Leadership Award for Excellence in Greenhouse Gas Management Goal Setting. In 2018, IBM started a project aiming to reduce its carbon dioxide emissions and succeeded in reducing it by 32% by the end of 2018 and it continues to decrease to this day. These different initiatives have positive impacts on the company. Nowadays, people are generally more environmentally aware so environmentally friendly companies certainly win the admiration of the market and the consumers. Furthermore, social initiatives play a very important role in improving workplace culture. IBM also takes advantage of the positive marketing experience gained from social initiatives and charity work.

IBM has a strong global presence. It operates in more than 170 countries including USA, Canada, Egypt, Saudi Arabia, Russia, Australia and many others. From my point of view, IBM has a geocentric global attitude. There are almost 400,000 employees working for IBM, approximately 284,000 of them are employed outside the U.S. which is IBM’s home country. IBM disregards structural divisions that enforces unnecessary geographic barriers. IBM abandoned its organizational structure based on geographic location and restructured into industrial groups. IBM’s global market entry mode is strategic alliance. Over the years, IBM has formed strategic alliances with many big companies. IBM has an alliance with Apple Inc. to provide role-based applications and accelerators and together they have already deployed over 400 applications. IBM also has a partnership with Samsung to develop solutions that make use of Samsung’s fit for purpose and 5G-enabled devices and security with IBM’s digital transformation, Hybrid Cloud and AI expertise to drive enterprise innovation.

IBM deploys multiple growth strategies. It implements backwards vertical integration strategy by producing components and software and forward vertical integration by being responsible for sales and customer service. However, the most prominent strategy used by IBM is diversification. To achieve growth, the company acquires smaller companies in other industries which is a form of unrelated diversification. IBM has also acquired Xtify to broaden its portfolio in mobile communications software, which is an example of related diversification. In addition, IBM has acquired Now Factory which helped it make an improvement in mobile analytics market. Moreover, IBM made enormous investments in the cloud computing field by combining with other firms in this area. These are also examples of related diversification. As of 2019, the company’s strengths lie in its strong global presence in various technology fields, its powerful brand name, its enormous and loyal client base and the skill and experience of its employees. The company’s weaknesses lie in its service and software solutions being expensive and that it focuses mainly on large enterprises. The company’s opportunities are that it can grow its services and software divisions and another opportunity lies in the increasing demand in cloud-based solutions. The threats posed to the company are the increasing competition in cloud computing market and the decreasing growth of the economy worldwide.

IBM uses multi-cultural global teams extensively to benefit from the diverse ideas that emerge from global teams and the overall less groupthink. To build effective multi-cultural teams in IBM, people should be chosen according to their talent and skill rather than their ethnicities and cultural background. In addition, the company should do efforts to understand accept cultural differences and attempt to find solutions to problems that may occur because of them. Multi-cultural team members should ,in addition to talent and technical skills, also possess high levels of cultural flexibility and cross-cultural competence so that they will be able to handle interacting with team members from different cultural backgrounds than their own.

To conclude, I believe that IBM has continuously proved itself to be a pioneer in the world of technology. Their performance is constantly on the rise its global presence is getting strong by the day. Their use of strategic alliance as an entry mode to the global market was brilliant and hence, a huge success since it enabled them to grow their brand internationally. They also successfully made use of the diversification strategy to grow even bigger making them now one of the largest companies in the world. Their products are known and praised for their high quality and diversity and they also provide one of the best software services in the world. In addition, I also strongly approve of their organizational culture which encourages innovation as well as dedication.


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16 December 2021
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