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IBM Company’s Internal Pressures and Challenges


This paper talks about IBM as a company and what its functioning in terms of operations has been like. It particularly focuses upon IBM having issues or facing four key challenges, especially relevant to its marketing function as well as the logistics function. These challenges have been outlined as discussion in this paper thoroughly, while giving adequate reference to management related literature as well. The paper then presents a detailed set of solutions to these challenges to provide relief in this area of operations. These have been mentioned in the form of paragraphs, whereby solutions to the proposed challenges have been outlined. The paper then concludes itself with a summary of the proposed solutions presented to tackle these challenges thoroughly.

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Internal Pressures and Key Challenges

IBM deals with management changing the vision of its supply chain function and wanting to implement a new one in order to re-position itself (the company) as that of a trust-worthy one in the eyes of the consumers. The new vision however met with a lot of resistance from the employees and there were also implementation problems, as many employees are keeping way from aligning their past goals with the new vision. Change management henceforth comes out as one of the major issues in the set of key challenges that IBM has faced or is facing.

First and foremost, spreading across various functions at IBM including that of Marketing, Supply chain and Logistics was the basic change management problem arising out the ISC (Integrated Supply Chain) in 2003. In today’s world of fast moving, quick pacing developments, it is utterly important to realize the presence of a concept known as ‘change’. This can happen through the effective use of time and handling of resources in a way that things are kept up-to-date and in track with worldly changes that can or could affect the business. (Luecke, R., 2003)

IBM deals with management changing the vision of its supply chain function and wanting to implement a new one in order to re-position itself (the company) as that of a trust-worthy one in the eyes of the consumers. The new vision however met a lot of resistance from the employees and there were also implementation problems, as many employees are keeping way from aligning their past goals with the new vision.

Peter Drucker says, ‘the manager has the task of creating a true whole that is larger than the sum of its parts, a productive entity that turns out more than the sum of the resources put into it’. (1954, pp. 341-2).

A manager needs to perform many different roles, Fayol and Mintzberg propose. In line with the work of Mintzberg hence, the three roles of a manager (interpersonal, informational and decisional) with respect to the job roles of the retailers present at the stores were highlighted. Under the chosen ‘interpersonal manager’, retail managers were asked to manage and motivate as leaders, and to serve as figureheads in interactions with the local community and customers effectively. The work of Eisenhardt and Sull (2004) was also applied by outlining ‘interpersonal role’ of a manager with the idea of self-organizing.

Eisenhardt said, for an idea to originate, all systems need self-organization whereby all parts communicate with each other to develop into something that is concerted. Individual behaviour driving towards collective interactions however is not an easy task according to Eisenhardt but leads to high effectiveness. There was also a challenge of dealing with intracultural crisis and conflicts. Condon and Yusef (1975) work pertaining to value orientation is said to be relevant here. It is said that out of the six spheres of self, family, society, human nature, nature and supernatural; when the inner sphere of group membership within ‘society’ is taken, differences can be seen in both the countries that results in again no collaboration.

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Secondly, there was the Strategic marketing issue. Here, logistics when were taken a look at a few challenges propped up. There are a few basic criteria that classify companies according to their temperature gradients and how channel development should take place in the countries the company is located in. Since IBM is located globally in various parts of the world, this pointer is very relevant here. These criteria are:

  • Political stability
  • Market opportunity
  • Economic development
  • Cultural unity
  • Legal barriers
  • Physio-graphic barriers
  • Geo-cultural distance

The United States of America is hence considered a ‘hot country’ that is a term used for a country when it rates high on the first four criteria above and low on the remaining three (ROCW, n.d.). Therefore, strategic marketing for IBM it needs to realize will be a lot different than what it is generally like in other places of the world. Strategic marketing henceforth is a challenge, not necessarily a problem though that needs to be looked into properly and the challenge overcome by IBM when looking at the entire scenario strategically.

The operational changes that companies like IBM have incorporated are great. This is so, because it has invested a lot in its tools and training of staff and human resource, so much so that it’s entire ‘status quo’ has changed into a proper, chained one. In other words, when we compare IBM to its competitors, we see that many new ideas that are developed every year, from which only one best is chosen and implemented.

This it does not because the other ideas were not good enough, rather because it cannot afford to have that much of a change around in its system. (Zimmer, E., 2004) An example of this could be the Workplace Challenge Initiative program at IBM, which was developed after the Integrated Supply Chain (ISC) in 2003. International marketing has also been a key challenge for the global wide company. International marketing is a term, often also exchanged for global marketing whereby marketing knowledge is put into operation in markets outside one’s local markets of a country (Marketing Teacher, n.d.).

Global marketing differs from international marketing as the former is used by multinational companies to sell goods and services internationally whereas the latter pertains to the knowledge of marketing in general carried out by companies outside one’s country and across national boundaries (Keegen, W, 2007). It might include licensing, franchising, and joint ventures. (Bnet, n.d)

Thirdly, the fact that IBM is a global company facing competition everywhere is another challenge, rather a harsh reality of being located worldwide. In the case of IBM being located in India, there are many burgeoning companies that are fast in growth and efficient in operations, leading to increased competition for the company. A list of such companies would include Tata, Infosys, Accenture, HP and Wipro etc.

To make things even more challenging, IBM would then need to decide what to do to repay shareholders well and then even better as time would progress (Cengage, n.d.). The IT industry is a fast growing industry marked only by technological improvements, and those too so fast that it becomes almost impossible to keep track of. However the more important thing here is to streamline one’s weaknesses and strengths while building upon one’s strengths to erase all weaknesses.

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Therefore, it is highly imperative for IBM to come up with something or some idea almost consistently. This calls for a never ending or perpetual stream of innovations and improvements. This ‘uniqueness’ characteristic is the core of the business that IBM has spread all over the world now. Unless, this issue is taken care of, nothing can be said about the profitability and success of IBM. I believe, henceforth that this issue ranks highest on the list of key challenges that the company, IBM’s senior members or executives face.

Fourthly, IBM facing supply side constraints on the capacity side with less capacity to store and produce and demanding customers would create a huge problem for the company. This would worsen in the face of natural disasters and environmental havocs that would destroy and falter many global supply chains including IBM’s. Service level efficiencies would hence get hampered in functioning and execution (Nagrath, S., n.d.). Burgeoning populations in this world call for an increased demand for companies like Agility, IBM and other logistics, supply chain as well as software and hardware issues.

Other problems would include the globalization issue because of which supply chains have been elongated variedly at IBM. This is another issue as things and systems have become more and more complex. As the size increases, the complexity of the task increases leading to increased management and coordination problems. Further legal compliance standards and strict regulations also put a strain on this supply chain issue. This would lead to the uprisal of further complications, especially more so since the entire globalization issue coupled with international trade issue would come into question. (Nagrath, S., n.d.)


Transformational change is the ability of and the process that leaders use to transform the very nature of an organization in order to help ensure its success in the marketplace. Workplace Challenge Initiative of IBM is hence the topic in point here. The required characteristics of leaders to realize this transformational change include passion, vision, engagement, focus, and communications. These characteristics are critical to engaging the hearts and minds of all employees and aligning them around the needed changes from a business and a personal perspective.

Strategic capability relates to the few critical beliefs, skills, knowledge and processes that create the ability or capability of an organization to continuously act and do what is needed to realize its strategy and succeed in its markets. I believe, executing the new strategy will require that these two factors are made strategic priorities for Intersect. It will be important for it as a company, and each one of the leaders of large organizations, to ensure it has leaders who can lead the transformational change needed to realize the new strategy.

Management can consider new sales and marketing model based on customer intimacy as a strategic capability as a result. There have been various solutions proposed that could have helped in dealing with the communications and resistance to change management issue and resolving it. Taking into account all the factors discussed above it can be said that when peace and conflict resolution in intercultural communication is taken, it has proved to be difficult often times (Blomquist, H., n.d.).

The conflicts get caught in status quo and peace talks resulting into negativity. Positive structures need to be built, through integration of social construction and communication within the similar aspects of culture takes place. A new type of communication needs to be set within the organization so as to recognize each other properly and then move towards formulation of a formal talk-situation. (Blomquist, H., n.d.)

IBM needs to keep making bold decisions in order to strategically align its operations with the competition that it has been facing in contemporary times. IBM is said to invest around $16 billion (US Dollars) in four years on acquiring software companies among many others. This has made it gain edge in the middle ware market. I believe it should continue entering such genres of business related to the software, hardware and now the middle ware industry (Cengage, n.d.).

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Investments in both monetary as well as human resource are both important. Therefore the company should make sure that apart from consistency in monetary investments, investments and additions should also be done in recruiting and retaining human resource. Another important factor is hence also here that of technological resource and building upon intellectual capacities. This pointer about human resource leads us to follow through and focus on the next pointer as yet another recommendation in the form of a solution to IBM.

Another solution for IBM could be to keep working on working collectively rather in silos and develop new software etc. qualitatively. This can be a huge help where the entire dealing the challenge of producing synergies comes into the picture. This means hardware, software and other services would all be collaborated under the name of IBM to help the company produce a huge mark worldwide (Cengage, n.d.).

Working collectively (this will be talked about in more detail later in this paper, with the aid of communication and leadership discussion), forms the core of the kind of business that IBM is in. Therefore, a proper leadership framework with the help of communication and working as a team is absolutely essential for IBM. It can again be very rightly said that once collective work and team effort is made, much can become easy to accomplish as generation of ideas, crossing boundaries etc. can be made more and more productive with the help of positive effects of group think and brainstorming, because each person’s individual capacities can be built upon in a group.

Apart from this IBM could develop and work upon its human resource to improve upon its existing functions. This could happen through formally defining leadership for IBM. Leadership is a process by which a person influences others to accomplish an objective and directs the organization in a way that makes it more cohesive and coherent (Clark, 2008). A true leader not only works on solving the problem, but also thinks beyond the crisis by implementing measures to prevent the problem from happening again (Leadership, n.d.). Therefore I believe a true leader is one who can deal with all set backs and has the ability to sustain blows as a team and as a powerful individual.

Another solution arising from what has been talked about above could be holding training sessions, motivation seminars and effective leader workshops. The two main things about being an effective leader revolve around building trust and confidence level in the subordinates or employees; and effective communication and deliverance of work related messages well (McKee & Boyatzis, 2004). IBM could hence follow the following pointers to solve the current challenges it is facing:

  • Assisting employees in understanding the company’s objectives
  • Helping employees gain knowledge about their roles
  • Having an open environment w.r.t. Information sharing so that employees feel connected with the organization. (Clark, 2008)

Therefore, in line with the above literature, IBM should ensure that sustainability and long-term support is provided to the new system developing under the Integrated Supply Chain Unit (SCU). Proper aligning of individual with organizational goals is the key here. This can only be developed once there is a lot of communication being done inside the company and when there is an open culture where everyone is open to interact with each other individually and in teams as well.

Another very important aspect that can help the company gain an edge over its competitors by controlling the challenges it faces has to do with empowerment of its human resource. The concept of empowerment is deeply rooted in the ‘social action’ ideology of the 1960s and the self-help perspective of the 1970s. Empowerment is basically the giving of power and authority, ‘giving ability to, or enabling’. (Gibson, 1991).

In management practice, empowerment refers to the sharing of rewards, information and power with employees so that they become able to take initiative and improve upon performance as a result. Empowerment makes an employee feel responsible and accountable, as a result motivated to the actions that are done by them (Business Dictionary, n.d.). ‘Empowerment is either a process or an outcome’ (Gibson, C., 1991).

Through empowerment, entities (humans and organizations both) gain authority over what they do. The way in which however this is done varies and is dependant on situational factors. Empowerment needs to be studied as an analysis since it is a traditional concept that needs a lot of attention. It applies to individual demand, but is boosted through collaborative and cooperative efforts. Again, this can be related to the solution, which has proposed in the preceding paragraphs about handling how to tackle the ‘synergies issue’ (Gibson, C., 1991). Empowerment is basically a concept that is a communicational concept since it is a result of communication between individuals. Communication is a huge solution henceforth.

Therefore, after introducing the Integrated Supply Chain in 2003, it was made sure that this was effectively communicated throughout IBM very effectively. This is one solution that is relevant to almost all challenges that the company or any company faces. However mutual efforts are needed for it to work, according to Kieffer (1984). It is said that the different attributes through which empowerment gains attention includes the concept of empowerment being a collaborative process as well as a helping process. (Hawks, J., 1992)

Last but not least, IBM should also ensure that it should keep innovating. It is said that IBM draws fees in terms of licensing from various clients and competitors amounting to around $ 1 billion. This is because these companies and entities make a wide use of IBM’s main frames, conductors, consoles etc. Innovation henceforth is one solution at IBM that should have the highest priority to deal with a lot many challenges that it faces. (Cengage, n.d.)


Blomquist, H. (n.d.) Communicative setting in intracultural negotiations. Web.

BNet (n.d.) Global Marketing. Web.

Business Dictionary (n.d.) Empowerment. Web.

Cengage (n.d.) Case Studies. Web.

Clark D. R. (2008) Concepts of Leadership. Web.

Eisenhardt, K. and Sull, D. (2001) Strategy as simple rules. Harvard Business Review.

Gibson, C. (1991) A concept analysis of empowerment. Journal of Advanced Nursing, I991, 16,354-361.

Hawks, J. (1992) Empowerment in Nursing Education. Journal of Advanced Nursing, 17, 5, 609 – 618.

Kieffer, C. (1984) Citizen Empowerment. Prevention in Human Services. 3:9-36.

Leadership (n.d.) Leadership. Web.

Luecke, R. (2003) Managing Change and Transition. Harvard Business School Press.

Keegen, W. (2007) Global Marketing. Prentice Hall.

Marketing Teacher (n.d.) What is International Marketing. Web.

Nagrath, S. (n.d.) Supple Chain Management. Web.

ROCW (n.d.) Channel Development and Adaptation. Web.

Zimmer, E. (2004) New Product Licensing. Web.

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