IBM is one of the most well performing companies around the globe. Under the leadership of Mr. Palmisano, the company is determined to evolve from the current state of a multinational organization to a more active position of being a globally integrated enterprise (Kanter, 2009).
Global forces that have driven IBM to be a globally integrated enterprise
One force that is driving IBM towards evolution is the nature of competition that the global market is exhibiting. More companies across the globe are coming up with products similar to those produced by IBM. The implication is that strategies need to be put in place to maintain the market share that IBM currently has. Another force necessitating this evolution is the obsolete nature of the multinational model. Just like other multinational corporations, there is increasing consensus that the multinational model is not as useful as it were before. Negative aspects such as expenses, duplication of work and reducing an organization’s competitiveness are linked to the multinational model (Bucker & Poutsma, 2010).
Another issue is the fact that many countries are favoring locally based companies. Therefore, foreign companies that do not subscribe to local conditions find it difficult to operate. This reduces the competitive ability of the multinational companies, meaning that they cannot meet the increasing demands of their shareholders.
How IBM has adapted this far
IBM has realized the changing market perceptions and has made some efforts to adapt. The first move can be seen through the setting up of the Integration and Values Team (IVT5). This team is responsible for coming up with strategies that can make the company more globally integrated. Besides, the company has heavily invested in facilitating executives conduct one on one meetings with clients. This has improved the connection to the local conditions by the enterprise.
Despite these efforts, the company needs to do more. One area that the company has failed is in lowering its structural center of gravity (Kanter, 2009). Here, the company needs to adopt increased local organization, where executives will move from the headquarters to the countries and locations where business is taking place. Also, the company needs to invest in philanthropic activities, which will help in improving the view of IBM as a local company.
Skills global leaders should have
There are many skills that global leaders need to have. These include being strategic in their thinking, being sharp in decision making and getting the right support systems for the company (Bucker & Poutsma, 2010). A significant aspect of global leaders, however, is the ability to manage diversity. Being able to manage diversity means that a manager successfully anticipates the local perspectives, needs, and threats in the global environment. Besides, the company can attract the cream of human resource in different parts of the world.
Leaders who are effective in managing diversity, ensure that a company’s operations are in line with the culture and values of different countries. Conceptualizing this issue can determine the level of success that an organization achieves. In the Asian culture, for example, people support companies that not only engage I business, but which also foster relationships with the locals (Kanter, 2009).
Recommendations
IBM has made significant efforts to achieving global integration. There are, however, certain aspects that the company can focus on to achieve this goal. The first suggestion involves more diversification of the company’s top management. The executives need to be more localized, as opposed to being located at the headquarters. Additionally, the company needs to improve the ability of the management to deal with global management. Leaders need to be equipped with skills that will help them successfully manage the global environment. Lastly, the company needs to invest in fostering relationships with the local countries. This can be achieved through philanthropic activities and being involved in education activities of the host countries.
References
Bucker, J., & Poutsma, E. (2010). How to assess global management competencies: An . Management Review, 21(3),, 263-291.
Kanter, R. (2009). IBM in the 21st century: The coming of the globally integrated enterprise. Harvard Business School Publishing.
