Lou Gerstner's IBM
1. What struggles does Lou Gerstner face in his plan to make
IBM network-centric? Consider internal and external impediments. In order to make Lou Gerstner’s plan effective he had to make many changes with in the IBM company. Gerstner set up a team with Jerry York and Richard Thoman along board.
Some changes that were made with in IBM were, a cut back on employment, reduced expenses, and a stronger customer service. Gerstner and his new team based their plans on computer networks and the products needed to help IBM reach their future goals for the company. Some struggles Gerstner faced would be, the cut back in employment, I think this would have hurt his plan because I would have slowed down the production of the IBM products also high costs with no revenue would hurt his plan until he could work and fix the problems. Another problem Gerstner was faced with would be the process of getting lost customers back to buy IBM products. 2. Must IBM’s basic corporate culture change in order to meet Gerstner’s goal? Explain.
I think that IBM’s corporate culture would have changed because IBM is following a new structure in order to achieve
Gerstner’s goals.. Since employment would be cut back that means that the workers that did stay would have longer hours
. Another thing that would change would be the quality and advancement of the products, since the expense cost would be cut down , the quality of the products would decrease. Being the expense cost declined the would be no room for advancing the products and keeping up with the competitors.
3. What strengths does IBM possess that make Gerstner’s plan achievable? How do Gerstner’s strategies incorporate those strengths? IBM is a well known name and it’s been around for a long time. I would buy a product from a company who has a good reputation rather then from a brand new company I’ve
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The customers would find it difficult to deal with different divisions of IBM. · IBM also did not appreciate that software was becoming more important than hardware in the light of the IT revolution. Louis Gerstner took over as CEO in 1993. The major policy initiatives that he launched included a decision not to split up the company but to make it even more closely linked, concentrate on networking and minimizing bureaucracy. Under his leadership, IBM's earnings showed a remarkable turnaround in the next two years after registering a huge loss in 1993.
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