Change At Ibm Changed Gerstner 's Outlook On The Success Of A Company Essay

Change At Ibm Changed Gerstner 's Outlook On The Success Of A Company Essay

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Coming to IBM changed Gerstner’s outlook on how important culture factors in to the success of a company. He states “until I came to IBM, I probably would have told you that culture was just one among several important elements in any organization’s makeup and success—along with vision, strategy, marketing, financials, and the like” but later states “I came to see, in my time at IBM, that culture isn’t just one aspect of the game—it is the game” (Gerstner, 2002, pg. 181-2). Cultural change at IBM was going to have to be a long-run initiative.
At organizations there can be either a strong culture or a weak culture (Greenburg, 2013). I believe there was a strong culture at IBM because the culture exerted a major influence on the behavior of IBMers. At IBM, and all other organizations, the role of the organizational culture is to provide a sense of identity, generate commitment to the mission, and clarify and reinforce standards of behavior (Greenburg, 2013). As it was prior to Gerstner, IBM had a strong culture that failed to adequately address the role an organizational culture is supposed to play, as IBM lacked a unified identity and there wasn’t a strong commitment to the mission.
IBM’s Existing Culture
IBM’s existing culture was focused internally and rigidly based on the beliefs of the founder. The existing culture at IBM was consistent with organizational behavior theory which gives two key factors contributing to the emergence of organizational culture: company founders and the experiences with the external environment (Greenburg, 2013, pg. 375-6). The main challenges Gerstner would have to overcome would be changing IBM 's culture to refocus it on customers ' needs rather than computers (Cowan and Nelson, 2010) and replace...

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...orite statements he makes is “[n]o credit can be given for predicting rain—only for building arks” (Gerstner, 2002, pg. 231).
Centralization versus Decentralization
Prior to Gerstner, IBM was very centralized. IBM was modeled the way companies founded in the 1920s were. Alfred P. Sloan, Jr., President of GM in the 1920’s, introduced the concept of a “central office” (Greenburg, 2013). As times changed, however, companies moved “toward decentralizational to promote managerial efficiency and improve employee satisfaction” (Greenburg, 2013, pg. 408). IBM was not taking part in this change, because remember, they were slow to adapt to external market factors. Additionally, there is the concept of departmentalization—a way to structure an organization by function, product, or by function and product (Greenburg, 2013). There was also no clear way IBM was departmentalized.

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