Ibm

Thesis

The hierarchical structure theory explains why David Grossman, as well as other mid-level IBM managers, had difficulties obtaining senior-level management attention, thus pushing IBM towards failure and into the “sleeping giant” phase of the organizational life cycle. The “grassroots” initiative supervised by John Patrick, succeeded as it promoted an organic structure, preventing the Vicious Circles of Bureaucracy. Canavino’s management style allowed Patrick to flourish by balancing psychological and sociological empowerment. In addition, treating all levels of employees as information sponges led to normative compliance. Resource dependency theory explains why IBM was able to morph from a sleeping giant, to an industry leader.

Old Big Blue

The company’s large hierarchical structure made it difficult, if not impossible, to understand and manage external issues effectively. Hierarchical structure breeds unbalanced power, effectively leading to corruption within the organization. If we believe balanced power leads to effective communication within an organization, then it is evident why IBM was failing because of the “turf battles” among managers. IBM senior-level management were preserving and/or increasing their power while ignoring lower-level employees (the definition result of corruption). The result of communication lines being damaged was apparent when Grossman (an organization sensor) faced difficulties sharing his knowledge to decision makers. This inability to adapt and respond to the external issues thrust IBM into the “sleeping giant” stage of the organizational life cycle.

Avoiding the Vicious Circles of Bureaucracy

The vicious circles of bureaucracy apparent in IBM (prior to Grossman and Patrick’s achievement) were a culmination of harmful concentrations of power (i.e. unbalanced power and hierarchal structures) thus resulting in pitiful worker performance and sub par company productivity. Patrick’s ability to recognize the detrimental cycles plaguing his employer provide reason for the implementing of organic processes such as Grossman’s project . Communication improved and ideas were adopted as a consequence of the organic structure theory. Balancing power broke-down the oligarchic power (outlined in Michels Iron Law of Oligarchy) concentration, ending the vicious circles of bureaucracy. IBM was then able to make decisions more rapidly, and eventually become the dominant market leader.

Management Style

Management’s adoption of psychological empowerment permitted David Grossman to continue his efforts to develop instruments for IBM, taking actions that would not have traditionally been followed in the previous hierarchal structure.