Ibm in the 21st century

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REV: OCTOBER 7, 2009


IBM in the 21st Century: The Coming of the
Globally Integrated Enterprise
“Global integration is the new game. Innovation is the way to win. We must be out there
connecting across the world.” --Sam Palmisano, Chairman and CEO
In April 2008, members of IBM’s fifth Integration and Values Team (IVT5), were close to finishing
theirdeliberations. This high-powered group of high-level executives included country general
managers from India and Brazil as well as vice presidents from businesses and functions, chosen
from a group of about 300 leaders convened by Chairman and CEO Sam Palmisano to view IBM
holistically. Senior VP of Corporate Communications and Marketing, Jon Iwata, and the new head of
Research, John E. Kelly III,were the executive sponsors. IVT5’s focus was on “the global IBMer”
defining and developing leaders for the global economy; making the "globally-integrated enterprise"
relevant to all employees through global citizenship and the IBM values and culture; and ensuring
market access in the form of a level playing field for IBM to compete globally. The scope was all 170
countries in which IBMoperated.i
Team members felt excitement and urgency. Palmisano expected recommendations in late May, as
the next major part of IBM’s transformation to a globally-integrated enterprise. Over its nearly 100
year history, IBM had moved from international (exporting from the U.S.) to multi-national (with
subsidiaries in many countries) to global. Starting with the first IV team in 2002, convened toglobally-integrate the supply chain (e.g., one global instrument for requisitions), teams had identified
ways to integrate manufacturing (e.g., test engineering from anywhere in the world, to analyze and
fix any line in any plant), create an integrated human capital supply chain (e.g., data bases with a
common definition of skills and experience, global recruitment and on-boarding process), andcreate
interconnected global solutions centers serving the world (e.g., centers for ERP (enterprise resource
planning systems in Bangalore, the oil industry in Norway, banking in the U.S. and elsewhere).
Other projects were underway. IBM realized considerable efficiencies from all of them.
IVT5’s mandate was slightly different and more general, yet critical to making the rest of thetransformation work in practice: the people and the culture that would produce many more global
leaders and global citizens. The team faced the usual challenges of change – identifying the most
important needs and barriers, thinking creatively about approaches that would take advantage of
IBM’s strengths while finding new opportunities, setting an inspiring theme that would attract
support. In addition,there was the uneasy fact that globalization was misunderstood in many places,
by the public if not government officials. Outside the U.S., IBM was still a “foreign” company even if
staffed completely with local citizens, although IBM was able to operate as a trusted partner in
________________________________________________________________________________________________________________Professor Rosabeth Moss Kanter prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to
serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
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