case study chapter 11

1. GROUP
PROJECT
Lê Thị Ngọc Ánh
Ngô Thế Đạt
Nguyễn Hoàng Hân
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Chapter 11

2. BACKGROUND
IBM- International Business Machines Corporation
- Multinational technology and consulting corporation
- 1911. Founded, Headquarters in New York, U.S.
- 1914. Thomas J. Watson joined (CEO), policies have been changed and
established, leading to becoming famous with the slogan “THINK”.
- 1952. Watson Sr. (Thom’s son) took over.
- Becoming dominant in one of the most notable growth industries of the
century.
- 1980. IBM PC was an immediate sales hit, the company was successful till
1991s.
- From 1995s. IBM got back after a fall, and
- Ranked by fortune as the 4th largest company (employees)

3. QUESTION I.In the 1970s and 1980s Palmisano states that IBM was organized as a classic
multinational enterprise. What does this mean? Why do you think IBM was organized
that way? What were the advantages of this kind of strategic orientation?
A classic multinational enterprise means IBM was operating in
many countries abroad but managed by one host country. However,
the structure seemed as country-by-country operations, working in
isolation.
Organizing as a multinational enterprise gave IBM a chance to
gain advantage from the products and services provided with no
pressure to make a less cost structure, but reducing as many
redundancies as possible.
1

4. BACK GROUNDIn the 1970s and 1980s Palmisano states that IBM was organized as a classic
multinational enterprise. What does this mean? Why do you think IBM was organized
that way? What were the advantages of this kind of strategic orientation?
Advantages
1
No limits to
creating
more jobs
benefits of
economics of
scale
profit for
research and
development
ensuring
standards
Lower average cost
Lower prices for
consumes

5. QUESTION II.
By the 1990s the classic multinational strategic orientation was no longer working well
for IBM. Why not?
Due to the globalization of the world economy, the global life of many IBM regulars, and the
competition from enterprises in emerging marketplaces, such as China also India.
IBM had to transform its tactic again to one that Palmisano entitled as a “globally integrated
activity”.
2

6. QUESTION II.
By the 1990s the classic multinational strategic orientation was no longer working well
for IBM. Why not?
2
MULTINATIONA
L
INTERNATIONAL
GLOBALLY
INTERGRATED

7. QUESTION II.
By the 1990s the classic multinational strategic orientation was no longer working well
for IBM. Why not?
2
MULTINATIONA
L
INTERNATIONAL
GLOBALLY
INTERGRATED

8. QUESTION II.
By the 1990s the classic multinational strategic orientation was no longer working well
for IBM. Why not?
2
MULTINATIONA
L
INTERNATIONAL
GLOBALLY
INTERGRATED

9. QUESTION III.What are the strategic advantages to IBM of its globally integrated
enterprise strategy? What kind of organizational changes do you think had to be
made at IBM to make this strategy a reality?
3
Brazi
l
New
York
IrelandVermont
India
China
semiconductor R&D and
manufacturing operation
Ex & In
Web sites
global
procurement
center
global services
delivery

10. QUESTION III.What are the strategic advantages to IBM of its globally integrated
enterprise strategy? What kind of organizational changes do you think had to be
made at IBM to make this strategy a reality?
3
Brazi
l
New
York
IrelandVermont
India
China
semiconductor R&D and
manufacturing operation
Ex & In
Web sites
global
procurement
center
global services
delivery
national
markets

11. QUESTION III.What are the strategic advantages to IBM of its globally integrated
enterprise strategy? What kind of organizational changes do you think had to be
made at IBM to make this strategy a reality?
3
Brazi
l
New
York
IrelandVermont
India
China
semiconductor R&D and
manufacturing operation
Ex & In
Web sites
global
procurement
center
global services
delivery
national
markets
integrated global
operations

12. QUESTION III.What are the strategic advantages to IBM of its globally integrated
enterprise strategy? What kind of organizational changes do you think had to be
made at IBM to make this strategy a reality?
3
Brazi
l
New
York
IrelandVermont
India
China
semiconductor R&D and
manufacturing operation
Ex & In
Web sites
global
procurement
center
global services
delivery
integrated global
operations
Human Resources
Cheap labor
Managerial changes
Access to more global
market
Liberalizing of trade

13. QUESTION III.What are the strategic advantages to IBM of its globally integrated enterprise strategy?
What kind of organizational changes do you think had to be made at IBM to
make this strategy a reality?
3
integrated global
operations
. Developing the human capital.
. Communicating openly about the strategy so that people can work together to understand
and respond.
. Measuring how it can differentiate itself and act to create competitive advantage.
. Improving the way the organization measured, tracked, deployed and developed the
workforce.
. Finding the right talents for the right positions.

14. QUESTION IV.In terms of the strategic choice framework introduced in this chapter, what strategy do
you think IBM is pursuing today?
- Global integration/ post multinational global corporation.
- Location based on economies and expertise
- Labor – India factors of Endowment (Porters diamond)
- Global supply chain, One business asset
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15. s
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C
T anh k
f r ming!o