How Was the Culture of Ibm at the Time of Lou Gerstner's Arrival Impacting the Organization's Ability to Achieve Outstanding Performance?

How was the culture of IBM at the time of Lou Gerstner's arrival impacting the organization's ability to achieve outstanding performance?

IBM was highly decentralized and its employees internally focused at the time of Gerstner’s arrival. IBM’s culture was very robust that were based on traditional values and beliefs of its founder Thomas Watson. IBM's extraordinary success in the '60s and '70s was built on one of the most dynamic sales cultures and its employees were very good, very relentless, very focused and very individualistic. That kind of individualism and decentralization served IBM well for so many years, but by the 80’s and early 90’s those value systems were no longer tenable. This was eroding IBM’s market share and profitability. IBM’s culture was also very collective and there was little being done to correct under performing employees. In fact, since little was done to motivate these employees out of their safe environment, they were not driven to perform or stay current with the changing markets or technological competitors. Highly decentralized nature of IBM was hampering its ability to serve global customers such as American Express because to these customers it was like dealing with multiple national mini-IBM’s with little capacity to achieve consistent and seamless service. In their pursuit of excellence and coupled with decentralization limited IBM’s capabilities in launching new products to the market and the market research data and reaching the right people at the right time. IBM employees were competing more within themselves than with external competitors. All of these reasons were affecting IBM from reaching the outstanding performance that it once achieved.

How successful will Gerstner’s efforts be? What other steps might he take?

Gerstner’s efforts will be successful if he can change the mindset of employees that customers drive the market and also integrate the various business units of IBM so that he could leverage the competencies of the employees and SBU’s to provide top-to-bottom solutions. Gerstner would have to unfreeze the attitudes of the status quo. But to achieve this Gerstner would