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- KurzbeschreibungThis assignment with the topic "Dynamic capabilities at International Business Machines (IBM)" starts with an introduction of the company IBM. In the second part the theoretical basis for dynamic capabilities is described. The third part explains the practical execution of the dynamic capabilities within IBM. Finally this assignment draws a conclusion and gives a recommendation for future research.
- AutorAxel Jörn
- VerlagAnchor Academic Publishing
- Seiten44 Seiten
- Gewicht92 g
- LeseprobeText sample:
Chapter 3.3: Cultural change:
In order to be successful a company doesn't only need to have the right strategy but also the corporate culture that matches with the company's strategy. Otherwise the culture would hinder the company's strategy. Former CEO of IBM Louis V. Gerstner, Jr. stated that IBM al-ready had the right strategies; the question though was if the existing culture supports these strategies. As the example of one division that had been competing on technical excellence in stable markets and announced a new growth initiative that placed a premium on initiative and risk taking only to find out that the dominant culture was highly risk averse and thus required a significant shift in the culture of that unit shows, this was not the case within IBM. What IBM needed concerning Gerstner was a cultural change that allowed them to reconfigure themselves and to reallocate resources that they could execute their strategies.
Changing a culture within a company however is not easy. Usually organizations and people are not open for change and willing to do so, especially when it affects them directly. Often it is hard for people to understand why the culture they feel good and comfortable in should be changed, especially when they also had success with it. And even if they know that it must change it might be difficult for them to do it. Thus transformation begins with a sense of crisis or urgency, as Gerstner says. "No institution will go through fundamental change unless it believes it is in deep trouble and needs to do something different to survive." And this is what Gerstner started to do within IBM when he arrived. What helped him in doing this was that he was an outsider and had no emotional attachment yet. The main change in the corporate culture was that teamwork counts more. Before Gerstner's arrival different divisions competed against each other and the entire company was more preoccupied with itself than with its customers. The change was to reward teamwork. Compensations of employees were measured of the performance of the whole company instead of the employee's particular division. Furthermore he wanted his employees to getting things done fast and not to studying things to death nor to chase obsessive perfectionism. This whole process of cultural transformation wouldn't be an easy and fast track, Gerstner estimated it would take five years to turn around IBM's culture; in fact it probably took even longer. To integrate as a team inside the company was the right decision as IBM's success indicates. Now the culture of a common language and a problem solving methodology as manifest in the IBM Business Leadership Model is employed throughout the whole company.
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