Business Case Analysis: Comparing IBM and Cap Gemini's Strategies

This report provides a comprehensive business case analysis of IBM and Cap Gemini, two prominent IT companies. It begins with a company synopsis and then delves into a detailed comparison of their business and governance structures, highlighting the product-type divisional structure of IBM versus the hierarchical structure of Cap Gemini. The report further examines the environmental factors affecting their decisions and performance, including social, cultural, economic, technological, and political influences. It identifies the top three risks faced by each company, such as IT compliance risks for IBM and market risks for Cap Gemini. Finally, the report offers three suggestions for improving business practices, including focusing on employee knowledge development, organizing recreational activities, and implementing a robust performance appraisal system, while also ensuring compliance with rules and regulations. The analysis concludes by summarizing key differences and similarities in their approaches to business and risk management, offering insights into their strategic positioning within the IT industry.

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CAP GEMINI AND IBM: BUISNESS CASE ANALYSIS

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Contents
Introduction...........................................................................................................................................2
Case company synopsis.........................................................................................................................2
IBM and Cap Gemini..............................................................................................................................2
Business and governance structure of the companies......................................................................2
Environmental factors that affect the chosen companies’ decisions and performance....................4
Top three risks faced by the companies............................................................................................5
Three suggestions for the company to improve upon their Business practises.................................6
Conclusion.............................................................................................................................................7
References.............................................................................................................................................8

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Introduction
Every business and organisation works differently that helps in the achievement of the
objectives in the company. The right kind of strategic framework is helpful in getting things
done in an efficient and efficient manner thus resulting in the higher profitability and growth.
In the recent award distribution in the category of the most ethical companies, some of the
major IT companies have come in the category (Basu, 2011). Although the companies have
achieved the good status in the categories but their working style differed with each other
style and structure of workings. The purpose of the essay will be discussing about the
structure and other components of the two companies that are Cap Gemini and IBM. Some of
the key points that will be covered will be various types of risks, structure, and other
important points of both companies.
Case company synopsis
The companies IBM and Cape Gemini are IT companies that have achieved the good
positions in the category of ethical companies. Prior to 2019, the companies have gained the
good positions in the industry in the area of ethics that improved the financial position of the
company in the long run. The IBM is an IT company headquartered in USA while Cap
Gemini is the company of France. Both companies have been good in all the ways thus
resulting in good level of positioning.
IBM and Cap Gemini
Business and governance structure of the companies
The business and governance structure followed by the IBM Company is the product type
divisional structure where the different products departments are formed with different
product heads responsible of the financial position of their department. Beside the product
type divisions, the IBM Company has functional and geographical divisions that result in the
ease of its functioning in all the aspects (Digitizing public services in Europe, 2011). These
different types of divisions are helpful in achieving the clarity in the functions of the
company. In the product type divisions, some of the important products include Global
business services, global financing, Technology services &cloud platform, and systems.

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Every product divisions have its services that are helpful in achieving the goals of the
organisation.
In the function-based segments, many of the important functions are organised in important
segments that eases the functioning of the business. Some of the segments include sales
distribution, research, and development, and supply chain management (Zhang et al., 2015).
In the geographical divisions, the functions of the company are segmented based on various
geographical divisions. These geographical divisions ease the functioning of the company as
the special focus is given to the particular geographical region. The IBM geographical
divisions include Asia pacific, Europe and America (Goh, 2018).
While the IBM follows the product, function, and geography specific organisational structure
that involves high cost, the cap Gemini follows the hierarchical structure where the
organisational directions follows for top to bottom (Hsiao and Wu, 2019). This type of
organisational structure delivers the systematic approach to management in the company
where in the organisational structure the Vice president lies on the top position then principle
and at last, in the hierarchy are the consultant and analyst (JANCIN, 2012). The
organisational hierarchy structure at Cap Gemini involves lower cost as compared to the
organisational structure at IBM.
In the various governance structures of the companies, there is high level of clarity in the
organisational structure in the IBM as compared at cap Gemini due to the involvement of
various other components that breeds clarity in the structure (Turi and Sorooshian, 2019).

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(JANCIN, 2012)
Environmental
factors that affect
the chosen
companies’
decisions and
performance
Various environmental factors
are responsible that influences
the performance and decisions
of the IBM Company that
include social and cultural
environmental, economic,
technological, and political
factors. The social cultural
factors of IBM include increase
in the purchasing power of the
consumers, increase in the usage
of the online services and the
consumers’ awareness regarding
various services in the
organisation. Due to the increase
in the purchasing power of the consumers, the competition for the IBM increased as the
consumers are in the position of purchasing high priced products (Zhang et al., 2015).
Moreover, the ever-evolving technology affects the performance of the company in many
areas. There are other ecological environmental forces that include sustainable objectives
where the focus of the target market goes on more sustainable business practices due to the
increasing awareness of the consumers. In the recent past, various objections were objected
on the sustainability of its operation that affected its performance for nearly a week.
On the other hand, the cap Gemini is also affected by various environmental factors that
include high degree of competition among its competitors. In the area of technology, various

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companies have come up who are far better deliver the performance of their services as
compared to other companies (JANCIN, 2012). Apart from the growth in the technology, in
recent years, there has been slow down in the globalization process due to the economic
slowdown. The slowdown in the globalization has affected the performance of the employees
that resulted in lower productivity of the organisation. Moreover, the digitisation has also
affected the operations of the cap Gemini that made the company to accommodate the
changes in the area of the digitisation (Zhang et al., 2015).
The companies like IBM and cap Gemini have influenced the decision-making capabilities of
its top management that affected the performance of the people in the organisation that
affected the productivity and profitability of it.
Top three risks faced by the companies
There are various risks that are faced by the companies that include various problems. Some
of the risks that are included in the IBM Company that is IT compliance risks, Information IT
risks, and Technology risks that affect the working process of the organisation. In recent
times, the risks related to IT compliance have increased due to the increase in the IT
regulations in the countries. Some companies have started maintaining various stringent laws
and regulations that resulted in various issues of non-compliance of IT acts and rules. The
non-compliance of IT rules and regulations resulted in increase in the penalties of the IBM
companies. The company has also faced issues in the area of information IT technology,
many agencies have tried attacking the company where it has robbed off the company with
the confidential information. The technology IT risk involves high exposure to the
interruptions of the various risks of technology.
The Cap Gemini has faced various risks that include market, credit, and operational risks.
The market risks of the company include fluctuations in the demand and supply of the
services of the company where demand of the consumers in IT sector fallen at a very high
rate. The market risks happened due to the arrival of various competitors. The second most
important risks include is of credit management where the cap Gemini scores gone low due to
its decreased earnings. The decreased earnings affected the credit score of the company. The
third most important risk include the operational risks where the operations of the company
got affected and led to the ineffectively in the management of the affairs (Hsiao and Wu,
2019).

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Three suggestions for the company to improve upon their
Business practises
The three suggestions of the company to improve upon their business practices are focusing
on the knowledge development of its employees. The process of developing the knowledge of
the company will improve upon the confidence thus resulting in higher productivity and
profitability in the organisation.
Organizing recreational activities-
Recreational activities improve the motivational level of the employees working in the
organisation. In the recent study, it was found that that IT companies like IBM and Cap
Gemini do not have the facility for the motivational activities where the employees can be
motivated to perform better. The companies must focus on organizing the recreational
activities where the performances of the employees can become better in long run-
Performance appraisal –
The performance appraisal cycle of the IT, companies are usually held quarterly. It is
important to let the employees to know about their performances at least in a month. Such big
companies require the systematic performance appraisal where it becomes easier to track the
performance of the people in the enterprise. The employees become aware of their weak
areas thus making them aware about the changes that they need to bring about in their
performance.
Ensuring the compliance of the rules and regulations-
It becomes essential for the companies to focus on the rules and regulations of the companies
and ensure that they are met well according to the needs of the country. The companies must
state down all the rules and regulations and accordingly ensure to minimize the issues as
much as it could.
Conclusion
The IBM and Cap Gemini were listed as one of the most ethical companies of 2019 due to
their ethical practices followed by them. Although the companies came under the ethical
companies but there are various differences in the structure followed by them as IBM
followed the product division system where as Cap Gemini followed the hierarchy structure.

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The structure helped them in their ways to achieve their stated visions and goals. The
enterprises also different types of risks that affected their performance in many ways that
included the credit management, IT compliance risks, and information risks. It can be
concluded that by incorporating various business practises that include performance
appraisal, conducting recreational activities and ensuring the compliance of various rules and
regulations.

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References
Basu, C. (2011). Interview with: Hemadri Naidu Senior Manager at Cap Gemini
Sogeti. Journal of Information Privacy and Security, 7(4), pp.70-71.
Digitizing public services in Europe. (2011). Brussels: European Commission.
Goh, J. (2018). Improving Performance of Non-Insurance Companies with Insurance
Companies. SSRN Electronic Journal.
Hsiao, Y. and Wu, M. (2019). How organizational structure and strategic alignment influence
new product success. Management Decision.
JANCIN, B. (2012). CAP Guidelines: It's All About Pneumococcus. Hospitalist News, 5(10),
p.26.
Turi, J. and Sorooshian, S. (2019). The impact of organisational structure on organisational
learning. Middle East J. of Management, 6(2), p.204.
Wang, J., Li, C., Han, S., Sarkar, S. and Zhou, X. (2017). Predictive maintenance based on
event-log analysis: A case study. IBM Journal of Research and Development, 61(1),
pp.11:121-11:132.
Zhang, X., Hu, G., Duan, N., Gao, P., Dong, W., Zhu, J. and Chang, R. (2015). LEARNING-
BASED HIGH-THROUGHPUT DISPATCHING FOR TRAJECTORY
STREAMS. Services Transactions on Cloud Computing, 3(1), pp.16-29.