Ibm – Strategic Management And Leadership Case Solution
Relationship between Organization, Strategic Management & Leadership
The strategic management and leadership play a crucial role in the overall organizational success, competitive position and financial performance. Recently IBM closed its acquisition deal of Red Hat amounting to $34 billion (Feiner, 2019). The deal is considered to be one of the largest deal by IBM in its history. The company acquired as a result of diverging customers’ demands towards hybrid clouding and the formation of NewCo as an independent company. The company faced its declining revenue growth for three consecutive quarters but it hoped that the formation of NewCo and acquisition of Red Hat would enable the company to meet the changing needs of the customers and it would bring financial stability and competitive health of IBM back.
Though these strategic initiative will enable IBM in becoming a market leader but it requires a huge level of transformation to be followed within the whole organization. The leader has to take strict actions by taking severe risks and measures in motivating the employees.
Challenges for Strategic Leaders & managers - IBM
The pandemic has impacted the overall financial performance of IBM. It is because the company’s revenue declined by 3.4% during the first quarter of 2019. The major reason behind such decline is the pandemic. The customers, especially the small enterprises, have started to save cash rather than spending on solutions provided by IBM. Moreover, another strategic challenge for the leaders and the mangers at IBM is the increasing costs of production. IBM had approximately 3, 52,600 employees as of December 31, 2019 (BusinessToday.In, 2020). But recently, the new CEO i.e. Arvind Krishna has laid off undisclosed number of worker in order to cut the payroll costs. The strict lock-down impositions have started the online and home based work structures to be followed by the organization. Currently, 95% of IBM’s employees are working remotely.
Despite increasing cost structures and declining profitability, the company’s CEO believes that the pandemic has not only created challenges but opportunities too. Krishna revealed that the demand for hybrid clouding has increased tremendously and it represents a $1.2 trillion market (Tsidulko, 2020). Moreover, the CEO said that IBM has been actively engaged in responding the evolving needs of the customers by employing the operations, culture and optimizing the decision-making process.
Arvind Krishna’s Role in Delivering Competitive Advantage
Arvind Krishna has played a significant role in the transformation of the company by delivering the unique solutions, as required by the customers. The pandemic has declined company’s profitability and it has changed the customers demand towards hybrid cloud systems. But, Arvind Krishna, used these challenges as profitable opportunity and acquired the Red Hat at a deal of $34 billion. The company promises to deliver hybrid environments to its customers regardless of their locations. The CEO believes that the acquisition of Red Hat is a key transition strategy in exploiting the trillion dollar market opportunity, arising from hybrid cloud (Miller, 2020). Steps taken by Krishna promise to deliver the required services to the customers and maintaining the competitive advantage of company over different industry players.
Understand Strategic leadership and management in practice in IBM
Performance management as a strategic tool for leaders and managers
For the decade, being one of the leading and valuable technology giant, IBM has been operating yearly based performance review process which includes setting the goals and objectives in the start of the year, an interim review mid-way through the year & then held appraisal meeting in the last month of the year culminating in the single performance score. It provides valuable insights to leaders and managers to assess and evaluate the performance of the employees and design the effective policies in order to rebuild the trust of employees while still retaining the organizational culture. The company dropped the single performance score & replaced it with assessment against criteria including personal responsibility to others, innovation, skills, impact on client’s success and business results.
Moreover, the company successfully build Clear review app which allow IBM to move to the year-round approaches to the performance management with real time feedback and regular check-ins to nurture and improve the skills of employees. In addition, the employees of IBM with having a performance management program are entitled to achieve some objectives such as; setting short term objectives, management feedback on progress of employee every quarter, and judge employees based on five criteria in which the managers or leaders assess whether employees achieves or exceeds expectations in such dimensions. Furthermore, the feedback is one of the most significant components in developing checkpoint system for IBM. By providing the valuable feedback to employees, the managers and leaders attempt to allow employees feel valued and heard (Hearn, 2016). The feedback –driven strategy significantly enabled IBM to remain as agile with their employees and workforce to increase employee engagement and performance by acknowledging results, encouraging efforts as well as enhancing ability. Furthermore, the effective feedback strategy of the company help reduce employee mistakes, increase efficiency and enhance performance within the workplace.
The key performance indicators widely used by firms for measuring the performance of workforce includes employee engagement level, employee advocacy score, 360-degree feedback and so forth.
Equality and diversity challenges presented to strategic leaders and managers
The diversity and inclusion policy of the company aims to create the inclusive work place for the people of any religion, race, culture, gender, age, sexual orientation and physical ability. The diversity policy of the company are strongly focused on effective implementation of equal opportunities for disable people at workplace. The diversity and inclusion provides valuable competitive advantages to the company in terms of improved employee productivity, performance and morale through equitable workplace practices that treat, develop & select people on the basis of the fairness and merit.
The commitment and awareness of employees and managers of IBM to diversity issues has been significantly enhanced. Now older employees are increasingly calling attention to ageism in hiring, development opportunities, promotions and redundancy. The managers and leaders of the company have to responsibility to set the expectations for equity & inclusion (Callaham, 2019). Furthermore, the company is confronted with the issue of improving their hiring as well as recruitment of minorities and women......................
This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.
Related Case Solutions & Analyses:
Akamais Edge (A)
Heavy Metal (A): Baosteel Enters Brazil
Models of Entrepreneurial Acquisition
Developments in Chinas Mobile Handset Industry
Note on Commodity Futures
Green Wood Resources: A Global Sustainable Venture in Making
Jim Sharpe – Final Exam
BACK TO SCHOOL DEVELOPMENT OF OFF-CAMPUS RESEDENTIAL PROJECT:]
ESTIMATING CISOC’S FUTURE CASHFLOWS
TLO DEVELOPERS: STRATEGIC OPTIONS
