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Pawanpal Singh 2020050399 BUSI 2133 Organization Theory and Design 11/11 22S-C-ON_5A_Z) Professor- Sujatha Selvaraj Case study analysis 1

Table of Contents Introduction ...................................................................................................................................... 3 Change requirement in IBM strategy .............................................................................................. 4 Contribution of IBM’s new organization structure ......................................................................... 5 Organization life cycle ..................................................................................................................... 6 Change management model ............................................................................................................. 7 Overall assessment ........................................................................................................................... 9 Conclusion ....................................................................................................................................... 9 References ...................................................................................................................................... 10 2

Introduction Organizational structure is the foundation of an organization. It is the basic plan or design of an organization that determines how it will function and how its parts will interact. The organizational structure defines the relationships among the different parts of the organization and between the organization and its environment. The organizational structure affects the ability of the organization to implement its change management strategy. The structure provides the foundation for organizing and managing resources, setting goals, and making decisions (Lombardo, 2018). It also determines who is responsible for what within the organization. In this project, some changes will be made in the organizational structure of IBM that is a multinational technology corporation. This project will help to understand the contribution of organizational structure and their impact on IBM’s design and strategy. Moreover, the project will also address the change management project that IBM implemented in early 1990s to transform the company from selling hardware to delivering solutions. 3

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Change requirement in IBM strategy There were several change challenges that were required to support changes in IBM strategy. One challenge was the need for a flatter organizational structure. The change requirements for the IBM project were mainly to shift the focus of the company from hardware to delivering solutions. This change was necessary in order to keep up with the competition and remain relevant in the market. It was also necessary to update the company's image and appeal to a new demographic. With a flatter structure, communication would be more efficient and decisions could be made more quickly. Another challenge was the need to empower employees to make decisions. With more decision-making power at the lower levels of the organization, employees would be more engaged and would be able to take ownership of their work. Finally, the changes in strategy also necessitated changes in technology and business processes. To support the growth in analytics and cloud services, IBM needed to develop new technologies and update its business processes (Gesmin, et. al., 2011). Overall, these changes required a concerted effort from all levels of the organization, including leadership, employees, and management. There were several barriers and change requirements in IBM’s organizational structure that needed to be implemented. The company needed to become more agile and able to quickly adapt to changes in the marketplace. This required a change in the organizational structure to enable more decentralized decision-making and faster execution. The company also needed to focus more on customer needs and less on its own internal goals. This required a change in the organization's culture and management practices. IBM needed to increase its focus on emerging markets. This required a change in the way the company operated, with increased emphasis on collaboration across divisions and more focus on innovation. Overall, IBM needed to make several changes in order to support its new strategy. These included changes in organizational structure, culture, and management practices. Further, the company needed to focus more on customer needs and less on its own internal goals in order to become more agile and responsive to changes in the marketplace (Stewart, 2004). Finally, IBM needed to increase its focus on emerging markets in order to remain competitive. All of these changes required a change in organizational structure. 4

Contribution of IBM’s new organization structure IBM's new organization structure is designed to enable the company to more effectively execute its business strategy. The new structure groups the company's businesses into different segments, each with its own leader and dedicated team. This structure will allow each business to focus on its own strategy and operations, while also benefiting from the company's scale and resources. The new organization structure also allows IBM to better align its resources with customer needs and competitive threats. Overall, this new structure will help IBM more effectively execute its business strategy and enable the company to compete in a increasingly competitive marketplace. IBM’s new organization structure in the early 1990s was a major contributor to the company’s success in transitioning from selling hardware to delivering solutions. The new structure divided the company into business units, which allowed for more specialization and focused attention on specific customer segments. This structure also allowed for more effective coordination and communication between different parts of the company, which was critical in helping IBM transition to a solutions-based business model. IBM's new organization structure enabled the company to more quickly and effectively respond to customer needs and market changes. It divided the company into several business units, each of which is responsible for a specific set of products and services. This structure helped IBM to better focus its resources on key areas of growth and innovation. It also enabled the company to more efficiently develop and market new products and services. The new structure provides IBM with a more nimble and responsive organization that can better compete in the rapidly changing technology marketplace. Overall, the new organization structure enable the company to more efficiently develop and market new products and services (Cortada, 2018). Overall, IBM's new organization structure is a key component of its strategy to become a leading provider of innovative technology solutions. The new organization structure help the company execute its strategy of becoming a cognitive solutions and cloud company. The new structure is based on three core pillars: cognitive solutions, cloud, and analytics. Each of these pillars is supported by a number of business units that are organized around customer needs. This structure will help IBM to better focus its resources on areas where it can make the biggest impact, and to better serve its customers. 5

Cognitive solutions include products such as Watson, which helps businesses learn from data; Cloud includes products such as IBM Bluemix and IBM SaaS platforms; and Analytics covers products like IBM Cognos Insight and IBM Cognos Analytics (Pundir, 2018). The new structure will help IBM to better focus its resources on areas where it can make the biggest impact, and to better serve its customers. For example, the Cognitive Solutions business unit will focus on developing and marketing cognitive solutions products, while the Marketing and Sales business units will focus on selling those products to businesses. The Cloud business unit will work on developing and marketing cloud-based solutions, while the Systems Operations business unit will manage IBM's data centers. Organization life cycle IBM has been in business for over a hundred years and has experienced all different stages of the organization life cycle. In its early years, IBM was a startup company that experienced growth and expansion. As it grew, IBM experienced a maturing stage where it became more bureaucratic and focused on efficiency. In more recent years, IBM has gone through a decline stage as it has been losing market share to competitors. However, IBM is currently in a renewal stage where it is rebranding itself and trying to regain its market share. IBM is expecting to remain in the renewal stage for many years to come. Overall, IBM has experienced a lot of different stages throughout its history and is still going strong today. It is an excellent example of an organization that has successfully navigated through the various stages of the organization life cycle (Madrigal, 2011). In its early years, IBM was focused on producing large-scale mechanical tabulators and punch cards. In the 1950s and 1960s, IBM shifted its focus to producing large-scale mainframe computers. In the 1980s and 1990s, IBM shifted its focus to producing personal computers, software, and services. In the 2000s, IBM shifted its focus to producing cloud computing services and cognitive computing services. In the future, IBM expects to continue shifting its focus towards providing innovative cloud computing services and cognitive computing services. IBM has gone through different stages of the organization life cycle, which can be summarized as follows: 6

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1. Early Years (1890-1930): During this period, IBM was focused on producing large-scale mechanical tabulators and punch cards. 2. 1950s and 1960s : During this period, IBM shifted its focus to producing large-scale mainframe computers. 3. 1980s and 1990s : During this period, IBM shifted its focus to producing personal computers, software, and services. 4. 2000s : During this period, IBM shifted its focus to producing cloud computing services and cognitive computing services (Bivins, 2014). 5. Future : In the future, IBM expects to continue shifting its focus towards providing innovative cloud computing services and cognitive computing services. The different stages of the organization life cycle are important to understand because they help explain why IBM has shifted its focus in different ways. For example, during the early years, IBM was focused on producing large-scale mechanical tabulators and punch cards. This allowed the company to become well-known for its products and gain a stronghold in the industry. However, during the 1950s and 1960s, IBM shifted its focus to producing large-scale mainframe computers. This gave IBM an advantage over its competitors, as this type of computer was more powerful and allowed the company to carry out more complex tasks. Furthermore, during the 1980s and 1990s, IBM shifted its focus to producing personal computers. This allowed the company to enter a new market and gain an even greater foothold in the industry. However, in the 2000s, IBM shifted its focus towards providing cloud computing services. This was a strategic decision on IBM's part because this type of service is becoming increasingly popular and allows companies to save money on their infrastructure costs. Finally, in the future, IBM expects to continue shifting its focus towards providing innovative cloud computing services and cognitive computing services. This is because these types of services are becoming increasingly important and will help companies become more efficient and competitive. 7

Change management model The IBM Change Management Model is a process for managing change in an organization. It includes five steps: 1. Establish the need for change 2. Plan the change 3. Implement the change 4. Evaluate the change 5. Sustain the change IBM had undergone a number of changes in recent years, from selling hardware to delivering solutions. The IBM Change Management Model can help manage these changes effectively. 1. Establish the need for change - In order to manage change effectively, IBM first identified why the change is needed. This was done through surveys and interviews with employees and customers. 2. Plan the change - Once IBM understood the need for change, it planned how to implement it. This included developing a timeline, creating a plan of action, and setting goals. 3. Implement the change - Once the plan of action was set, IBM put it into action. This involved training employees on the new procedures, testing the changes, and making any necessary adjustments. 4. Evaluate the change - After the change was implemented and evaluated, IBM decided whether to make further changes or sustain the current status quo (Chou, 2021). 5. Sustain the change - Once IBM decided that a change has been successful, it continued supporting it in order to maintain its effectiveness. This included monitoring results and making adjustments as needed. 8

By following the steps of the IBM Change Management Model, IBM effectively managed changes throughout the organization. This helped to ensure that changes are implemented smoothly and that they continue to be effective over time. Overall assessment IBM has undergone a transformation from a company that primarily sells hardware to one that delivers solutions. This change has been marked by a shift in focus from products to services and a move away from proprietary hardware and software to open standards. IBM has also been aggressive in its acquisition of companies that provide complementary solutions. This change approach has been successful in helping IBM to become the world's largest provider of IT services. While the move away from hardware sales has been met with some resistance, the company appears to be moving in the right direction. Conclusion IBM has undergone a dramatic change in its business model over the past several years. The company has shifted from a focus on hardware sales to delivering solutions to its clients. This change has allowed IBM to remain competitive in the technology industry and has resulted in increased profits. IBM is now able to provide its clients with a comprehensive solution that meets their specific needs. This change has resulted in increased profitability and greater market share for the company. IBM has clearly demonstrated that it is capable of adapting to changing industry conditions and is well on its way to becoming a leading provider of solutions. 9

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References  Bivins, S. S. (2014). A transformational change at IBM. Paper presented at PMI® Global Congress 2014—North America, Phoenix, AZ. Newtown Square, PA: Project Management Institute.  Chou, J. (2021). IBM Change Management Analysis. [Online] jennachou. Available at https://jennachou.com/ibm-change-management-analysis/  Cortada, J. W. (2018). Change and continuity at IBM: Key themes in histories of IBM. Business History Review , 92 (1), 117-148.  Gesmin, S., Henderson, B., Irtiza, S., & Mahfouz, A. Y. (2011). An analysis of historical transformation of an it giant based on sound strategic vision. Communications of the IIMA , 11 (3), 2.  Lombardo, J. (2018). IBM’s Organizational Structure & Product Management. [Online] panmore . Available at http://panmore.com/ibm-organizational-structure-product- management  Madrigal, A. C. (2011). IBM's First 100 Years: A Heavily Illustrated Timeline. [Online] theatlantic. Available at https://www.theatlantic.com/technology/archive/2011/06/ibms- first-100-years-a-heavily-illustrated-timeline/240502/  Pundir, A. S. (2018). Brief History of International Business Machine. [Online] medium. Available at https://medium.com/@singhanusha/brief-history-of-international-business- machine-4889e6875dab  Stewart, T. (2004). Leading change when business is good: an interview with Samuel J. Palmisano. Harvard Business Review , 82 (12), 8. 10

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