Being so successful and a giant global corporate, IBM is seen by many people as a good destination to work for, to settle in, or a dreaming company. It is true that IBM is a healthy growing company and counting one among global corporates and most successful computer manufacturing industry in the world. However, this is not the only truth; each company shares the same experience of sweet and bitterness because recession and recovery have often happened to all companies, no matter a small one or the biggest industry.
Usually, what is going on behind the scene is rarely revealed to the public. Without critical thinking and information gathering, it is quite difficult to know which company used to be in the situation ‘near-death’ or at its fortune. Even it is hard to watch what many companies are going through today’s globalized world. Automakers, the news media, entertainment industry businesses, banks and other financial institutions–they and others are being seriously challenged by market forces, technology shifts and the changing dynamics of a global economy. In fact, some of them are fighting for their very survival. At IBM Company it experienced what that is like. IBM has been there.
Therefore, because IBM has been there in the crisis and able to get out from the severed trap this paper is aiming to uncover this experiential history, particularly both IBM’s happiness and sadness, and intending to share experiences and examples as a reminder how changing times can put company at risk even the most successful ones and also share how a troubled, multi-billion dollar loss company can find their way back and keep its relevancy in today’s global economy.
International Business Machines Corp. (IBM) is an information technology company providing integrated solutions to information technology and knowledge of business processes. IBM was founded by Thomas J. Watson Sr. in early twentieth century and is headquartered in Armonk, New York. Historically, on June 16, 1911, three successful 19th century companies decided to merge, marking the milestone of IBM history - the Tabulating Machine Company, the International Time Recording Company, and the Computing Scale Company of America. They joined together to incorporate and form one prominent company, which was early named: Computing Tabulating Recording Company. In 1924, however, Watson changed the company’s name to International Business Machines Corporation or IBM. From the beginning, IBM defined itself not only by selling products, which ranged from commercial scales to punch card tabulators, but also by its research and development.
IBM began designing and manufacturing calculators in the 1930s, using the technology of their own punch card-processing equipment. Financing by Harvard University, in 1944, IBM together invented the Mark 1 computer , the first machine to compute long calculations automatically. By 1953, IBM was ready to completely produce their own computers, which began with the IBM 701 EDPM, their first commercially successful general-purpose computer. Remarkably, in July 1980, Microsoft altogether joined hand in hand to create an operating system for IBM's new computer for the home consumer releasing on August 12, 1981. The first IBM PC ran on a 4.77 MHz Intel 8088 microprocessor. IBM had now stepped into the home consumer market, setting the shine of computer revolution.
Its history was a combined of great success and upheaval, dramatic loss. If one goes back about a quarter of a century, IBM was at the peak of success. Over the previous two decades it had practically invented general-purpose computing for business. IBM had helped put a man on the moon, won Nobel Prizes etc. Financially, its revenue and market share skyrocketed as customers hungered for its latest products. During the 1980s and early 1990s, however, IBM was thrown into terrible turmoil by back-to-back revolutions. By 1993, the company’s annual net losses reached a record high ever $8 billion. Cost management and streamlining became a chief concern and that IBM considered splitting itself into different independent business divisions in an attempt to recover from troublesome.
Louis V. Gerstner, Jr. arriving as IBM’s CEO on April 1, 1993, despite mounting pressure to slice IBM into separate, independent companies, he decided to keep the company together. He visionarized that one of IBM’s enduring strengths was its ability to provide integrated solutions for customers - someone to represent more than piece parts or components. Splitting the company would have denied a unique IBM advantage.