IBM International Corporation Follows Its Annual Success, Essay Example
IBM is considerably among the top players in the information technology industries around the globe today. Ranked to be the top-two performer in the international trade, IBM is often hailed to be among the big names making up at least 64% of the overall exchange of trade in the international market. What makes this particular organization so successful that it has already created a trademark that relatively competitive with companies like DELL and HP which are both noted for their competitive stance in the industry? Looking through the annual financial report of the company and the reports that come along with it, the strategic approach that the organization embraces shall be analyzed and rather scrutinized to be able to create a specific picture that defines the success strategies of the organization as a business and as an organization established alongside the desire of serving the needs and the desires of its employees from all over the globe.
Analyzing Management Strategy and Its Compelling Results
Basing from the 2011 Financial Report presentation of IBM located at http://www.ibm.com/annualreport/2011/bin/assets/2011_ibm_financials.pdf, the overall revenue of the business amounted to $106, 916 which is at least 15% higher than that of the $99,000 total revenue of the organization in 2010. This increase in data and sales incentives provides a depictive picture that indicates the established reputation of the company in the industry. Alongside the expansion of the IT industry’s distinctive role in the growth and advancement of the modern society, the production of new gadgets that improve both communication and connection among humans provide a greater arena that the company could explore further for business expansion purposes.
This particular increase in sales provided the company with an increased rate of earnings per share of common stock at $13.06 from $11.52 the previous year. According to the accompanying documentation of the report, this increase in sales has been a drastic effect of the reduced expenses and operating conditions that the company incurred in 2011 than in 2010. One matter to point out to have fueled this lowered rate of expenses is that of the process of outsourcing which the company embraced at the entrance of mid 2010 which took a positive effect on operation during the continuing growth of the company in 2011. Using the Total Global Services operation, the company was able to handle GTS outsourcing, ITS consultation outsourcing and other referential working conditions that have involved remote employment from other countries which made the operation more efficient while lowering down the cost of employee payment and benefits options. Aside from that, IBM was even able to give employment to skilled workers who seem to have lesser chances of being employed in their own country’s effort of creating jobs. Service agreements became popular among the international functioning branches of IBM making it easier for the workers to renew their contract given that they still provide what they are expected to provide for the company.
In this case, the functional operation of the organization depended so much on how the administrators are able to keep the satisfaction of their employees alive hence creating for them a better environment that would make a more responsive condition of working from the people resulting to better products, better distribution approaches and of course better rates of higher sales revenues (Schlesinger, et al, 1999, 132). The administrators of IBM basically understands the importance of making sure that their people are satisfied enough to provide them good service hence receiving positive feedback from clients which is a key to better business function in the future. This is one management strategy that has always accompanied the IBM operation’s success.
True, with IBM’s implemented strategy on effective human resources management, it is able to withstand even the toughest challenges of competition in the market, something that is hard to compel with especially for IT organizations that are currently being challenged by new entrants in the industry as well as the alternative companies that offer the same products they offer at lower prices. Protecting employee loyalty through providing proper motivation to the workers is what makes this organization effective enough in retaining clients’ trust at the same time. With the protection that the administrators are providing their workers with, they are not only assuring for long time camaraderie with their employees but are also giving themselves a chance to explore the possibility of using the capacity of their people to become the primary assets towards their considerable desire to expand and develop more into the next generation of business growth. Allowing for the contention of a great control on how the people of the company would likely respond to their efforts of providing for what the employees need and want all at the same time establishes a strong foundation of camaraderie that makes it easier for both parties to operate alongside each other (Bamberger, et al, 2000, 78). True to its sense, this strategy serves as an established gate towards further chances of expansion along with the trustworthy employees whom the administrators could give their full competence to. There is of course nothing better than establishing an environment that is managed in line with the harmonious relationship that is formed between the business operators and the people working for them. With this, advancement would come easier even in the midst of facing enormous challenges and changes in the industry that the business is enjoined with.
Points of Realized Strategy (Consumer’s View)
From the points of progress that IBM takes into serious consideration, the process of emergent learning strategy plays a great role especially in reaffirming the stance of the business in line with competition and industry challenge. Notably, it is with the strategy of emergent learning that IBM gains ample source of understanding as to what the market wants and demands for within a specific span of time and how they are to respond to future points of demand from the market through foreseeing the trends that the society follows. This strategy allows them to make extensive changes and adjustments into their products hence responding to clientele expectations even before the market asks for the changes they have made. Setting the trend through research application is what makes IBM a considered leader in the IT industry.
This is the reason why even though there are other “giants” in the industry, quality and innovation remain to be among the notable characteristics that define IBM alongside with the reputation that it takes care of in the face of competitive international trading system. Relatively, it is with this course that the company continues to embrace the possibilities of development and expected growth through the years of its existence in the field of international market.
Realizing the effects of the efforts of the organization on the part of the consumers could be specifically analyzed from that of the fact that the clients of IBM come out to provide positive feedbacks about the services and products that they receive from the company. Given that these clients come from all over the globe, IBM has become a well-known name in the field of IT industry that cannot be easily removed from the thoughts of the consumers anymore; that even with the entrant of new comers and challengers in the arena of competition, clients know that they can trust what IBM is offering them hence making their loyalty even more established to be connected with IBM alone. In case there are alternatives to what IBM offers, the clients or the market they serve often critique the new products based on the standards established by the company in the first place. This way, IBM still remains the measuring margin that the consumers use to define the new products that they are to accept from possibly new comers in the industry. And if in case those products do not meet the standards established by the company, it is most often than not that the clients stay with what the company offers regardless of the price release offer they define their products with.
True with the established culture of business that IBM applies within its internal relations [with its employees] and its external reputation [with its clients], the company remains as a strong source of competence among its stakeholders as the face the changing tides of international trading systems. Providing a great chance for their employees to grow while responding to their clients’ desires for more efficiently functioning gadgets, IBM makes a great mark in providing the society a vision that their company is indeed an organization that is worthy of trust and reliance which they could always count on when it comes to IT solutions that they need for their personal and business needs.
Reflection and Reactions
New ideas and fresh innovations make up the foundation of IBM’s continued growth. It could be analyzed that with such condition, the company is able to establish a name that even new trend seekers are able to recognize. In a world where electronic gadgets have already become a common “need” among human individuals, innovation becomes a stand point that companies like IBM could strongly depend upon. Their desire of making a name in the industry though is only a part of the process of creating the most creative and responsive system and design that IT could provide in line with the expectations of the public from the products that they release every quarter. Pioneering on IT changes and developments is what makes the strategy of formulating mental frameworks of IBM work successfully for its progress as a unified organization of experts.
The process of strategic development intends to embrace the processes of management which are responsible for informing, supporting as well as shaping strategic decisions in any organization. In business context, strategic formulation is inseparable from implementation and the two form the core of business practices on a continuous basis. Consequently, this makes ongoing development in the organization to be a theme of central focus (Bamberger & Meshoulam, 2000). In line with business creation, it could be realized that IBM has applied such strategies of management in a much effective way that it was able to contemplate the courses of development that it hopes to tread on.
Notably, the society [standing as the clients or the consumers of the company’s products] are able to get the best benefits from what the company has to offer based on how these products meet the standards of their desires and demands. The relative creation of a bridge that would connect the desire of the company to earn from what they are working on and the desire of the consumers to get the best benefits from what they are paying for makes a specific definition on the coexistence of the two parties that bring life to the organization as a business and a social entity that recognizes both its business goals and its corporate responsibilities to the community it serves. Assuming the proper application of the strategies of management, companies like IBM continue to create a trend that would establish a pioneering path not only for their current competitors in the market, but also set a standard for those still aiming to enter the operation of the entire industry in the international trading system.
Bamberger, P. & Meshoulam, I., (2000). Human Resource Strategy:Formulation,Implementation and Impact. CA: SAGE.
Mintzberg, H., Ahlstrand, B. & Lampel J., (1998). “Strategy Safari – A Guided Tour Through The Wilds of Strategic Management” New York: The Free Press.
Financial Highlights: International Business Machines Corporation and Subsidiary Companies. http://www.ibm.com/annualreport/2011/bin/assets/2011_ibm_financials.pdf. (Retrieved on June 11, 2012).
Schlesinger, L. and Heskett, J. (1999). “Customer Satisfaction is rooted in Employee Satisfaction,” Harvard Business Review, November–December.
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