Analyzing IBM's Transformation: A Case Study for UAE Business Context

This case study examines IBM's decade of transformation under Gerstner, focusing on the company's turnaround from near collapse to a successful global business. The primary issues IBM faced included ineffective marketing, management problems, and high costs. Gerstner implemented a transformation strategy involving cost reduction, consolidation, and a shift to participative leadership. The analysis evaluates the applicability of these strategies to today's organizational scenario in the UAE, considering perspectives from various scholars who suggest alternative approaches such as outsourcing and situational leadership. The study concludes by questioning the universal effectiveness of IBM's methods in the contemporary UAE business context, highlighting the need for tailored solutions. Desklib provides access to similar case studies and solved assignments for students.

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Critical justification whether the case study is valid of today’s organizational scenario of UAE
or not
Case Study: Ibm's Decade of Transformation: Turnaround to Growth
This particular case study has provided in-depth understanding on how IBM after
overcoming a revolutionary phase became a successful brand and created their own identity and
image in the domain of global business industry. Amidst numerous turmoil, Gerstner has
implemented transformational strategy and achieved the peak of success. The primary issues that
IBM was facing in order to maintain business sustainability include lack of effective marketing
techniques, management problem and cost problem. Lack of sophisticated marketing techniques
and PR policies affected the organization in creating brand image and brand identity. The
business managers could not maintain effective communication with the stakeholders before
making business strategies. Lack of proper communication has left major negative impact on the
overall reputation of business. IBM had to face immense challenges in maintaining
organizational glory and reputation after facing this kind of management issues. In terms of
needs and demands, IBM has recruited large number of employees within business operations.
As a result, the organization had to invest large amount for paying those resources unnecessarily.
In this particular business situation, Gerstner has decided to implement transformation
strategy to overcome these severe issues. Cost reduction was implemented within business
operations, which reduced the number of resources. In addition, the organization sold non-core
business to reduce cost of investment. The business expert stopped in splitting IBM in different
small companies. One parent group was constituted from the entire operation of business process
was controlled. The business leaders were instructed to follow participative form of leadership

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style instead of using autocratic leadership. As a result, communication gap between the business
managers and employees can be avoided. In addition, the marketing executives of IBM have
invested standard amount of money behind promotional activities to introduce their new agendas
in market.
This study has focused to make detailed overview whether the transformational strategies
implemented by IBM is effective enough in current UAE’s organizational structure or not.
Numerous eminent scholars have evaluated the matter from different point of views. Horst and
Järventie-Thesleff (2016) stated that cost reduction is not the effective solution for overcoming
economic challenges. In order to follow cost reduction strategy IBM had to discharge large
number of existing employees from the operations, which ultimately left negative impact on
employability opportunity. McCleskey (2014) opined that today’s business organization would
like to follow outsourcing method instead with the help of which the entire business process is
controlled on behalf of the third party. As emphasised by Engelen et al. (2015), they are
responsible to deliver the solution within stipulated time and the organization would not have to
invest additional cost for hiring new resources. As per IBMs’ transformation to participative
leadership style, the business experts of today cannot implement democratic leadership style
within operations. Rowold (2014) opined that business managers after communicating with large
number of people become confused in taking effective decision. Today’s organization demands
of using situational leadership policy for controlling organizational crisis.

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Reference List:
Engelen, A., Gupta, V., Strenger, L., & Brettel, M. (2015). Entrepreneurial orientation, firm
performance, and the moderating role of transformational leadership behaviors. Journal
of Management, 41(4), 1069-1097.
Horst, S. O., & Järventie-Thesleff, R. (2016). Finding an emergent way through transformational
change: a narrative approach to strategy. Journal of Media Business Studies, 13(1), 3-21.
McCleskey, J. A. (2014). Situational, transformational, and transactional leadership and
leadership development. Journal of Business Studies Quarterly, 5(4), 117.
Rowold, J. (2014). Instrumental leadership: Extending the transformational-transactional
leadership paradigm. German Journal of Human Resource Management, 28(3), 367-390.