Case Study

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MGMT 201
Case Study Assignment

Turnaround at IBM – page 124-125

Lou Gerstner was entrusted by IBM to take a faltering business and turn it into the multi-billion dollar corporation that it is today. In the early 1990’s, IBM sales were declining at a rate, which would undoubtedly force the company into bankruptcy. This trend was largely caused by IBM’s lack of diversification and primary focus on building and selling computer systems with an emphasis on mainframes. As new corporations began to flood the market with cheaper versions of IBM’s computers, the Board of Trustees recognized the need to alter their strategic plan to ensure IBM would remain in the forefront of the computer industry (Allen, Attner, & Plunkett, 2013, p. …show more content…

As soon as this new type of “networking” hit the streets, business owners were flocking to IBM to seek answers to their complex business matrices. Alongside the new idea of networking, IBM was able to rely on revenue from service contracts and renewable software licenses (Martha Lagace, 2002).
Gerstner again retrenched IBM by 1995 and refocused a large majority of the company towards the development and support of the Internet. In many ways, Gerstner saw a vision of “e-business” and realized that in order to be successful, IBM needed to lead the industry in research and development towards this new style of operation (Allen, Attner, & Plunkett, 2013, p. 124-125). Business owners wishing to expand their sales in this new marketplace would ultimately look to outsource their efforts to capitalize on this venture and Gerstner wanted IBM to be the go-to source. 2. IBM was one of the first companies to publish a social policy document, “IBM Social Computing Guidelines,” as well as a video. How does the “Add Value” section motivate employees to create thoughtful content?
IBM’s social computing guidelines seem largely based around common business place tactics and strategies for communication. This section of the policy encourages employees to make a connection with their readers when communicating in blogs. In any communication, establishing a connection with the audience will help to gain their attention and

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