Analysis of Key Issues in International Business: IBM Case Study

This report provides a comprehensive analysis of the issues faced by International Business Machines (IBM) in its global operations. It begins with an executive summary and an introduction that highlights the importance of understanding these issues for organizational effectiveness. The report then provides background information on IBM, detailing its history, global presence, and key business areas. The core of the report focuses on the key issues that affect IBM's international business, specifically ethical issues such as anti-trust and monopoly concerns, bribery allegations, and workplace safety issues. The report critically examines how these ethical issues impact IBM's international business operations, including the consequences of unethical conduct on the firm's reputation and operational efficiency. It then explores IBM's efforts to resolve these issues, assessing the effectiveness of its strategies, such as corporate social responsibility initiatives and community engagement. Finally, the report proposes alternative actions that IBM could have undertaken to address the issues more effectively, emphasizing the need for a more robust ethical code of conduct and employee education. The report concludes with a summary of the key findings and recommendations.

Running head: ISSUES IN INTERNATIONAL BUSINESS
Issues in International Business
Name of the Student:
Name of the University:
Author Note:

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Executive summary
The main purpose of developing this report is to create a rationale understanding of the aspects
that are related with the issues concerning the international business. In this report, a critical
analysis has been performed in order to draw a lucid and factual understanding of the various
insights of organisational issues with reference to the international business. This report would
help to acquire significant knowledge and understanding of the facts that are considered as
crucial and essential. The report comprises of several analysis and evaluation, and based on such
findings, a valid conclusion has been drawn to ensure its effectiveness.

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Table of Contents
Introduction......................................................................................................................................3
Background information of the organisation...................................................................................3
Key issues of the firm in global operation.......................................................................................4
Ethical issues affect on the firm’s international business operation................................................6
Firm’s effort in resolving the issues and its effectiveness...............................................................7
Alternative actions that would have undertaken to address the issues............................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
Issues exist in every aspect of life and it mainly leads to incur loss and damages
negatively. Considering such facet, business organisations around the world faces issues and
conflicts that negatively harm their business effectiveness pessimistically. Thereby, in order to
ensure organisational effectiveness, the business proceedings need to be enhanced proficiently
(Forsgren and Johanson 2014).
The prime aim of this report is draw a critical analysis of the issues those multi-national
companies around the world faces in their business proceedings. In addition, post the analysis,
effective solutions would be sketched that would assist in overcoming such issues positively.
This report comprises of several critical analysis and recommendations, based on such a
rationale conclusion has been described for a better understanding of the study.
Background information of the organisation
International Business Machines (IBM) is a world-famous information technology firm,
which exists since 19th century and operating its business in approximately 171 countries around
the globe. The IT organisation is onto mass-producing computer hardware, software and
middleware for their respective clients from worldwide. Primarily, the organisation initiated its
business in 1911 and is been founded by Charles Ranlett Flint. The company has expanded
massively since its initiation and remained dedicated as well as effective in providing value
productivity.
In addition, IBM has been considered as the world’s largest employer, that comprise of
approximately 3,81,000 employees working as a team to accomplish one common organisational

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goal. The company other than producing hardware, software and middleware, it also provides
consultancy services in various domains concerning from information technology to nano-
technology as such. It carries the global record of generating the world’s best and finest patents
that has given the world new possibilities in life. Chiefly, IBM proudly distinguished themselves
from other organisations that are onto similar business of information technology in terms of
catering value services to the consumers worldwide. There are end numbers of inventions that
IBM has successfully made, yet the renowned inventions include ATM, floppy disks, hard
drives, UPC barcode, magnetic stripes card, random access memory (RAM) and the SQL
programming language. The company constantly catered innovations since its inception and
thrived in delivering quality productivity to the world.
The IT industry giant has predominantly acquired several businesses with an intention to
tap a higher market and maximise deliverance of value. IBM’s acquisition comprise of PwC
consulting firm, the Weather Company and SPSS. It has expanded its business to higher level
and continuously enhancing its business operations in order to ensure effectiveness and
proficiency at every level of its business proceedings (Ibm.com 2017). The company has created
a mind-set within the consumers that whenever a consumer think of IBM, he/she would think of
excellence and worth in products and services.
Key issues of the firm in global operation
IBM being the global leader in providing IT solutions and technological products and
services, encounters issue that predominantly hampers its international business operations
negatively. However, issues are common in nature and no organisation in the world is present
with absolute no issue in their business operation (Kolk 2016).

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Business ethics and corporate social responsibility are the key aspects that every business
organisation in the world incorporates in order to ensure organisational effectiveness as well as
generating value of business. These two aspects can be defined as the moral values and concern
for the society that caters social wellness as well as incur principles within a business conduct
that generates a positive outlook for the business organisation (Wild, Wild and Han 2014).
Considering such fact, the global market leader in technology has faced major ethical issue that
has affected its business operation globally. It is widely understood fact that MNE’s around the
world have large number of employees working in different units and locations with common
organisational objective. MNE such as IBM has a diversified employees working together with
different set of language, culture, values, beliefs and morals for that matter. In such scenario,
employees may or may not adhere to the ethical or corporate social responsibility policies that
have been incorporated by the organisation (Cavusgil et al. 2014).
It has been observed since late 90’s that IBM has been facing ethical issues concerning its
business and operation. The unethical proceedings of the organisation have created a massive
drop on its corporate reputation and image for that matter. The ethical issues of IBM include:
 Anti-trust and Monopoly – IBM has been found guilty in exclusive possession or
monopolization in the technological and computer industry in terms of trade and proceedings of
business that has been considered as illegitimate by a federal district court.
 Bribery – During 2011, the U.S. Securities and Exchange Commission has
charged a lawsuit to IBM in the case of bribery, which has been offered to the South Korean
governmental officials to acquire profitable business contracts. Later, IBM has settled down the
court case by paying approximately $10 million. Besides that, the U.S. SEC has claimed that the
managers at IBM have bribed the officials of South Korea and China about a decade since 1998

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until 2009. The bribery that has been made to the officials of both the nation was aimed to win
over the contacts of business.
 Workplace safety – Two employees of IBM has claimed that the company has
intentionally exposed them to detrimental and toxic chemical that has happened to cause them
fall sick and the company had concealed such information from them. However, IBM has
disagreed regarding this matter in court and alleged that the causation has happened due to the
preference of employee’s lifestyle such as smoking and drinking (Fortune.com 2017).
The above issues are completely unethical in nature and it is of vital significance that
such issues need to be identified prior to any damage cause to the organisation. Thereby,
identification of such key issues is crucial concerning the damages it may cause to the
organisation’s social reputation as well as on image for that matter.
Ethical issues affect on the firm’s international business operation
In context to the ethical issue of anti-trust and monopoly, the business conduct on such
practices leads to a drastic decline in the efficiency level of its business operations. The business
conduct of IBM identified to be very rigid and of monopolistic nature, that creates a sense of
conflict and negativity within the mind-sets of employees. It is crucial that the code of conduct
must be of ethical in nature and comprise of moral values and social wellness (Tai and Chuang
2014). Supposedly, if the conduct of business is of low ethics and does not include any sort of
effectiveness, then it may lead to a massive decline in the organisational effectiveness.
Concerning such aspect, it can be referred to as Consequentialist ethics that are based on the
actions of the firm or proceedings of the business primarily. Such ethics are been determined by
the consequences that it faces from the actions that it displays predominantly (Ferrell and
Fraedrich 2015).

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Besides that, the scenario of bribery that has been made by IBM to win the contracts has
created a negative effect on both the sides of firm’s social reputation as well as on the nation’s
corruption level. Bribery has been considered as a serious crime in almost every nation and has
been issued by the national security commissions (Paik, Lee and Pak 2017). In such case, if IBM
has been indulged in such illegal affairs then it has flaunted a serious crime of tampering the
national policy by involving and inducing such prohibited crime proactively. In addition, it has
also incurred a heavy loss on the social reputation as well as on the image that it has on the
global prospect (Shaw and Barry 2015). The code of conduct has not been well followed by the
top executives of IBM and which had lead to face such consequences negatively.
Concerning to the workplace safety issue, the claim of firm’s employees in terms of
exposure to harmful chemicals that has made them fall sick has formed a negative perspective
into the mind-sets of every employees working in different locations around the world (Crane
and Matten 2016). The employees of IBM from other locations has viewed such scenario as
matter of low ethics and claimed it as an inappropriate treatment of employees. This in turn has
made the firm to face low-productivity, resignations and a substantial decline in work
commitment for that matter. The business operation has come down drastically and which lead
the organisation to encounter with several challenges (Grace and Cohen 2015).
Firm’s effort in resolving the issues and its effectiveness
IBM has put considerable effort in resolving the issues that has caused tremendous
damage in its global business operations as well as on its social reputation. The firm has applied
some of the strategic approaches that assisted to resolve such issues effectively. IBM has
initiated several corporate social responsibilities with an intention to provide wellness to the

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society that the firm primarily operate in. The company has endorsed some effective as well as
efficient proceedings that have made the organisation to settle down such ethical issues
optimistically. Although, the proceedings were complex yet it has assisted proficiently. This
approach has assisted the firm to uplift the social reputation and image that has been dropped
down by the ethical issues that it had faced (Michalos 2017).
Firstly, IBM has bestowed $50 million to the grant commissions in order to assist build
smarter cities and renovate more than 100 cities around the globe with substantial energy
efficiency. Secondly, approximately 3,00,000 of IBM employees has engaged in Centennial
Celebration of Service that outcome in 3.5 million hours of service focused predominantly on the
society. Thirdly, IBM has set out several high-potential teams to different countries around the
world with the purpose of enhancing the communities to create a smarter planet around the world
(Ibm.com 2017). Thereby, the approaches of IBM has been effective and proficient in bridging
the gap between community and corporate in terms of elevating the repute. The actions of the
firm are been effective enough as it covers every issues that has declined the firm’s operation and
thus created a new possibility to enhance its business. In addition, it is a tacit fact providing such
service and contribution for the wellness of community is viewed positively by the public as well
by the government; thus, generates possibilities to re-position the firm’s repute effectively (Nam
and Weaver 2015).
Alternative actions that would have undertaken to address the issues
Concerning to the above actions, there are some alternative actions that would assist in
resolving the issues positively. In respect to the ethical issues of the firm, there would be
requirement of advancing the code of conduct more rigid and ethical based. Besides that, there is

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necessity to educate the employees regarding the ethical values and its importance. It is to
believe that educating or informing an individual concerning the values and importance would
create a mind-set of positivity. In addition, the upshot of any unethical actions is against the
regulations of society, which has to be adhering at all times by the employees of all levels.
Business conduct is the key aspect of ensuring efficiency; hence, the proceedings need to be
enhanced based on the economic and community demands.
Conclusion
This is to conclude that the ethical issues within an organisation can hamper the
international business operations tremendously and which requires effective approaches to
resolve such issues positively. It has been understood that necessity of compliance with the code
of conduct and business ethics is of utmost importance and require extensive advancements. An
organisation must follow an effectual business ethics that are enriched with moral values, which
would help to cater reflection of positivity to the entire community around the globe. On the
other hand, an organisation must recognise both the results of compliance and defiance of
business ethics within the organisation for that matter. Thereby, it has been identified and well
perceived that issues in international business is complex in nature and entail an effective
approach to reconcile such issue to bring back the position positively.

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References
Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L.,
2014. International business. Pearson Australia.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson
Education.
Forsgren, M. and Johanson, J., 2014. Managing networks in international business. Routledge.
Fortune.com (2017). U.S. Authorities Drop Investigation of IBM Activities in Poland. [online]
Fortune.com. Available at: http://fortune.com/2017/07/27/ibm-poland-investigation/ [Accessed
13 Sep. 2017].
Grace, D. and Cohen, S., 2015. Business ethics.
Ibm.com (2017). IBM About IBM - Australia. [online] Ibm.com. Available at:
https://www.ibm.com/ibm/au/en/?lnk=fab [Accessed 13 Sep. 2017].
Ibm.com (2017). IBM Corporate Responsibility. [online] Ibm.com. Available at:
https://www.ibm.com/ibm/responsibility/?lnk=fab [Accessed 13 Sep. 2017].
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1), pp.23-34.

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Michalos, A.C., 2017. Issues for business ethics in the nineties and beyond. In How Good
Policies and Business Ethics Enhance Good Quality of Life (pp. 197-212). Springer International
Publishing.
Nam, K.A. and Weaver, G., 2015. Major ethical issues in the field of intercultural relations: An
exploratory study. International Journal of Intercultural Relations, 48, pp.58-74.
Paik, Y., Lee, J.M. and Pak, Y.S., 2017. Convergence in International Business Ethics? A
Comparative Study of Ethical Philosophies, Thinking Style, and Ethical Decision-Making
Between US and Korean Managers. Journal of Business Ethics, pp.1-17.
Shaw, W.H. and Barry, V., 2015. Moral issues in business. Cengage Learning.
Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.
Wild, J.J., Wild, K.L. and Han, J.C., 2014. International business. Pearson Education Limited.