Globalization with GIE: The case of IBM

Executive summary

The purpose of this paper is to examine how organizations developed, implemented, and applied GIE to support and sustain the expansion of their market strategies in order to realize the dream of moving from the traditional multinational corporations that focused on centralized markets to the modern concept of globalized markets (Kanter, 2009). In this case, IBM is used as a case study to examine the impact of GIE in enhancing corporation expansion, growth, and development in the 21st century (Kanter, 2009).

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What is GIE?

Traditionally, corporations were choosing to produce goods or services at a location fairly close to the target markets, which was meant to ensure timely delivery of products (Maerk, 2008). Consequently, consumers located in distant areas from the point of production were not well served, which made it difficult for organizations to use the available market opportunities to enhance growth. In addition, it created marginalization of populations located far from the point of manufacture, which was also vice to the social and economic development (Palmisano, 2006). However, towards the end of the 19th century, organizations increasingly saw the need to diversify their markets and break the traditional system (Maerk, 2008).

IBM’S Strategic approach to globalization

By 2000, the technology innovation and development industry were not only competitive but also highly dynamic. In 2003, IBM held a session known as “ValuesJam”, a three-day online discussion that allowed the company to understand what the employees think about the company (Kanter, 2009). It asked the employee community to share with others what they thought the name IBM meant. The purpose was to redefine its corporate values after the session (Kanter, 2009, p. 21). Thus, the company integrated these new values within its GIE. In addition, the behavior attracted talent and skills, which contributed to the rapid growth and development from an American technology developer to a global developer of the best technologies (Kanter, 2009). One of the greatest innovations the company developed was the IBMer.

Noteworthy, developing a transitional workforce blueprint is one of the fundamental requirements for multinational organizations seeking to go global (Kanter, 2009). To solve this problem, IBM decided to use the GIE initiative to achieve a sustainable competitive advantage over its competitors.

What did IBM do to achieve a sustainable competitive advantage using GIE?

The decisions that the company reach to solve the problem of developing a workforce management initiative (WMI) as one of the strategies to have an effective GIE and a blueprint for workforce deployment is a case worth analysis due to its impacts on the corporate growth in a globalized business environment. In contrast to its competitors in the technology development and service industry, IBM was not committed to developing and marketing tangible products such as hardware and software for computers and other products. Instead, IBM was focusing on providing consultation services based on the skills, talent, and knowledge of its employees (Kanter, 2009).

In addition, IBM was the largest provider of these services because its competitors were still small and could only focus on small and isolated market segments. In addition, most competitors did not consider deploying their workforce from one location to many. On the other hand, IBM was seeing the need to organize an effective method and system of allocating human capital to the different market segments throughout the world.

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By 2003, the company had more than 350,000 employees and almost 91,000 contractors (Kanter, 2009, p. 18). In addition, it was experiencing a large rate of job applications, which reached about 40,000 (Kanter, 2009). Thus, the company was supposed to make a timely decision to tap these opportunities before any other competitor realized the situation (Kanter, 2009).

To enhance its GIE, IBM decided to invest a huge sum of capital in its talent management system, with over $100 million used in this strategy (Kanter, 2009, p. 18). The idea was to include information about all the employees available in the workforce supply. It focused on a new idea known as the workforce management initiative (WMI), which aimed at creating a supply chain for the employees to ensure that the processes of deploying, tracking, and managing the workforce were efficient.

The new idea was effective in integrating a supply chain of the human resource and managing talents, which added value to the company’s 21st-century strategy (Kanter, 2009). To achieve this, the company focused on four critical components of the WMI- managing resources, talent, and mobility, managing suppliers and vendor as well as learning.

Moreover, IBM’s WMI was a key aspect of creating a good way for achieving expertise taxonomy. Using both expertise taxonomy and WMI, the company achieved crucial information about the skills, knowledge, roles, and competencies of the workforce. In this way, the company was able to solve some of the problems associated with the presence of huge job roles, duplication of tasks as well as the diversity of job roles with similar responsibilities. Moreover, th4e new system allowed the company to achieve an effective method of communication between the various units and departments. Managers were able to examine the worthiness of contractors applying for projects. In addition, the process of examining the employees to see whether they were available in the labor pool became easier and effective.

Although the expansion of the company’s position in foreign markets was one of the main functions and aims of the WMI and GIE, it is worth noting that it was vital in integrating all the corporate functions in order to support each other. This was a component of GIE known as the integrated support function (GISF (Kanter, 2009).

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One of the most significant aspects of IBM’s GIE was its ability to fit in the corporate future, which was largely determined by technological dynamism and the need to increase corporate revenues. In particular, it was evident that the volume of investment on the global scale determined corporations’ future performance in terms of revenue. It was clear that IBM’s revenue was supposed to increase because the largest part of the income was expected to come from foreign nations.

It was clear that the company faced the need to push into the global market using unique strategies in order to avoid competition from other corporations. IBM decided to use its expertise taxonomy to ensure that the development, deployment, and planning of talents as part of the resources was effective and achieved across all the departments, businesses, and geographical regions across the world (Shacklett, 2012).

Moreover, the managers were able to use the new system to identify job skills, job roles as well as create comprehensive and accurate descriptions of what each employee does. Moreover, managers were able to use the system in conducting an in-depth analysis of the employee skills and the positions where each type of skill was needed. In addition, the system provided the company with a capacity to place employees in the right categories such as primary and secondary responsibilities (Shacklett, 2012).

The results of the new system were positive and seen within a short time. For instance, the company was able to cut down the number of job roles from 650 to about 330. Nevertheless, the new idea and the shift from the traditional organizational system to a modern globalized system were facing a number of problems (Shacklett, 2012).

Skills required for global leaders: Deriving from the case of IBM

Corporate leaders must possess the skills of switching the corporate culture in order to fit the needs of the global standards (Molinsky, Davenport, Iyer & Davidson, 2012). For instance, to work with foreign employees and managers, the managers should ensure that they focus on the local culture in a foreign nation (Molinsky, et al., 2012).

Secondly, the leader should possess effective skills in nurturing, managing, and using talents. In fact, it is the role and responsibility of the leader to ensure that the right and most effective methods for determining talents and the position each talent is applied within the company. In addition, it is the role of the leader to ensure that the right talent is obtained from the pool of prospective employees.

Thirdly, the corporate leader should possess effective skills in managing employee information and categorizing each employee based on the skills and talents (Merino, 2013). In fact, employee information is a critical asset for the company. It should be managed most appropriately.

Conclusion

The case study indicates that GIE provided IBM with an opportunity to develop, implement and use effective strategies to focus on the global market. It created WMI and expertise taxonomy, an idea that shows the need to focus on employees as one of the most important aspects of any business.

References

Kanter, R. B. (2009). IBM in the 21st Century: The Coming of the Globally Integrated Enterprise. Harvard Business Review, 12(3), 1-19.

Maerk, H. U. (2008). The globally integrated enterprise and its role in global governance. Corporate Governance, 8(4), 368 – 373

Merino, M. (2013). You Can’t Be a Wimp, Make the Tough Calls. An Interview with Ram Charan. Harvard Business Review, 3, 1-8.

Molinsky, A. L., Davenport, T. H., Iyer, B.M & Davidson, C. (2012). Three Skills Every 21st-Century Manager Needs. Web.

Palmisano, S. J. (2006). The globally integrated enterprise. Foreign Affairs, 85(3), 127.

Shacklett, M. (2012). IBM evolves a globally integrated supply chain. World Trade, WT100, 25(5), 32-35.

Ursah, J. R., & Baines, H. V. (2009). Globalization : Understanding Management, and Effects. New York: Nova Science Publishers.

Appendices

Appendix 1: IBM’s approach to globalization of products

IBM’s approach to globalization of products

IBM’s approach to globalization of products

Appendix 2: Principles of Talent Management at IBM

Principles of Talent Management at IBM

Appendix 3: The trend of projects taken by IBM

The trend of projects taken by IBM

Globalization with GIE: The case of IBM
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