Contemporary opportunities and problems that confront IBM Company - Essay Example

Contemporary opportunities and problems that confront IBM Company Introduction IBM (International Business Machines Corporation) is an American based multinational cooperation that manufactures computer hardware, software. The giant company also provides services such as infrastructure hosting as well as consulting services in a wide range of areas including the emerging technologies such as nanotechnology. As a business organization, IBM was founded in 1911 through a merger of three companies and has since then grown to become a market leader in the computing industry. For example, IBM was recently ranked to be the largest U.S firm in terms of its market capitalization and number of employees. The company has however undergone a number of organizational changes since its inception and some of these changes have resulted in new challenges while others have been affected in order to keep pace with the changes in the industry (Roy, 1992, p.67). The growth of IBM as a business organization has been faced with both opportunities and problems in the recent past and even today. The company lacks identity the execution clocks in this successful processor by half reduce the cache size by four or eight times which has made the elimination of l3 cache a problem as well as reduced the problem of reduction of instruction execution width to one. This paper critically analyzes the contemporary opportunities and problems that confront IBM Company as well as the potential solutions to some of these challenges. Opportunities for growth Despite numerous challenges such as increased competition from its market rivals, IBM has continued to refocus its business strategies into taking advantages of the numerous opportunities for growth that have been witnessed in the computing industry. According to Richardson and Walker (1998, p.89), some the recent key areas of strategic investments for the company include strategic acquisitions, maintaining leadership in technology as well as developing client and industry specific solutions to its growing customer base. As a market leader, IBM understands that success, profit and continued organizational growth can only be achieved through intelligent and well crafted business strategies. For example, to ensure organizational survival and sustainable growth, the management of the company has always done its best to keep pace with the changes in the markets, technologies, competition and industry through adapting new business models, mergers and acquisitions (Pugh, 2004, p.323). Innovation and emerging technologies are some of the most important opportunities that have catalyzed the transformation of IBM into a giant company and is likely to help it boost its competitive advantage over its rivals. This is particularly attributed to the fact that IBM has its own unique research department that is charged with the responsibility of offering expert analysis, scenario envisioning, business planning, project planning and case development. For example, during the mid 1990s, IBM took advantage of the opportunity that was presented by the internet boom as well as the massive spending on technology that was then created by a need to ready businesses for the new millennium. In the future, technologies such as cloud computing are likely to present IBM with immense opportunities for growth and expansion (Barney, 1991, p.43). Although the company has continued to grow, the pace is slower that the one during the internet boom and IBM is currently searching for “the next big thing”. Another important opportunity for IBM is the emerging markets in the developing countries particularly countries like Brazil, China, India and Africa. With the rapid economic and population growth in the third world countries, the number of new businesses as well as the adoption of new capabilities is likely to attract global players in the computing industry such as IBM. Lastly, IBM also sees significant opportunities in the current and emerging environmental businesses and issues. With the increasing need to improve the energy efficiency of machines, equipments and buildings, IBM is currently developing computerized systems that can analyze the vast data that is often collected by GPS, sensors and RFID systems to help improve energy efficiency. With this kind of environmentally focused business, companies like IBM are posed to exploit huge opportunities for growth and expansion. Recently the company’s growth has been primarily attributed to a number of new inventions in the computing technology and energy industry and some of these little inventions and technological advancements include smart phones and other handled computing devices, cloud computing It is however worth noting that the company is not completely out of the woods. Sales of mainframes depend upon the business cycle in the economically developed world, and economic growth is slowing (Hammer and Champy, 1993, p. 105). IBM continues to face slow going in sales of personal computers and minicomputers. Its new service units have smaller profit margins than those of the hardware businesses that provided profitability in the past. And the company has yet to restore the confidence of its customers and employees that was so badly damaged in the early 1990s.Again that has happened at IBM. A new chairman and top management team are now directing the company toward the latest approach to computing through networks (Pugh, 1995. p.27). IBM is also rolling out new products and services designed for networked systems. As Lou Gerstner, IBM's chief executive officer, recently commented, “We are in the process of completely transforming our business to address the market for networked computer systems.” When the chief executive proposed overhauling the product line to regain technological leadership, it became apparent that despite three or four years of warning signals, many of his subordinates still saw nothing wrong with IBM that an economic rebound wouldn't cure. The problem isn't in the company, they said, and you shouldn't be pressing for extensive changes. Major elements of the company--manufacturing, sales, and engineering--saw inconvenience and threat in his proposals Current management issues In the recent years the IBM Human Resource summit assembled senior executives to evaluate globalization’s impact on the arising HR function to address these issues which normally result into an effective worldwide lower cost through economies of scale; it can as well enable the HR organization to make a larger strategic contribution to the business. There has been a reduced administrative complexity where most companies as a result of mergers acquisition find themselves with a range of legacy HR processes. This has resulted into lack of enforcement in the standard application of HR processes. Standardization of HR processes have faced a lot of confusion in most cases in the Human Resource community where regulation of either real or perceived and data privacy laws in local geographies make it hard to built consistent processes (Lamb, 2004, p.203). To manage talent at global level is also an appealing task because the ability of the IBM to identify and come up with the skills and experience of its current employees proved to be hectic for the organization. The issue of deploying new HR technology was also to be improved so that the organization could be well brought out in terms of cost savings improvement, good decision making and increased employee satisfaction as well. It is however evident that the company has witnessed a number of organizational changes since its inception and some of these changes have resulted in new challenges while others have been affected in order to keep pace with the changes in the computing industry. Many companies within the IBM also failed to build consistency on how the vendors are identified and the contracts are handled so that there could be a significant impact on HR’s ability to manage costs. They as well failed to consider their leverage in negotiating global contracts with a range of outside suppliers which has also been a greater issue being dealt with by this company. Lastly, another issue is of equal recognition of all locations creation where undertaking standardization effort required an organization to segment their regions according to several criteria(Johnson and Whittington, 2008, p. 158). The size of the affected employee population therefore is one of the factors that influence the design of standard HR processes within this organization hence making it difficult to easily determine cost justification. Conclusion In conclusion, the growth of IBM as a business organization has been faced with both opportunities and problems in the recent past and even today. Despite numerous challenges such as increased competition from its market rivals, IBM has continued to refocus its business strategies into taking advantages of the numerous opportunities for growth that have been witnessed in the contemporary computing industry. References Barney, J.1991. Firm Resources and Sustainable Competitive Advantage, Journal of Management, 17(1), 23-46. Hammer, M. & Champy, J. 1993. Reengineering the Corporation. New York: Harper Business punlishers. John H.2011. The Interface: IBM and the Transformation of Corporate Design. New York: Sage publishers. Johnson, G. S. Whittington, R.2008. Exploring Corporate Strategy, 8th Edition. Essex: Prentice Hall. Lamb, R.B. 2004 Competitive strategic management. Englewood Cliffs: Prentice-Hall Publishers. Pugh, E.W. 1995. Building IBM: Shaping and Industry and Its Technology. MIT Press. pp. 24–27. Pugh, E.W. (2004). Memories That Shaped an Industry: Decisions Leading to IBM System/360. MIT. pp. 323.  Richardson, F.L., Walker, C.R.1998. Human Relations in an Expanding Company. Labor and Management Center Yale University. Roy A. B.1992. The Silverlake Project: Transformation at IBM. New York: Oxford University Press. Read More