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IBM, a leader in its industry, is the most profitable computer technology company in the world today. The products offered by IBM range from servers to IT consultancy. Globally, IBM has close to 400,000 employees, making it the largest employer in the industry. Though IBM's headquartered Armonk, NY, more than half of its revenues are generated from outside of the United States.
Being a truly global corporation, one of the main trends that can't go unnoticed by IBM is globalization. Globalization has been propelled by the technological advancements in communication. Essentially, the world is becoming a smaller place. This presents IBM new business opportunities, resources, competitions, and growth opportunities. As expansion continues, it is important to maintain consistent management and business practices throughout the global network. IBM must ensure that new practices, domestic and abroad, will comply with ethical and societal standards, and local laws and customs. It is crucial for IBM to identify that their stakeholders extend beyond their shareholders.
The community and environment are some of the IBM's stakeholders. It is IBM's responsibility, as a member of its respective community, to reduce their impact on the environment and its limited amount of resources. This will benefit the local community and present IBM with new business opportunities. IBM is capitalizing on these new opportunities by providing consultancy to clients who wish to become “greener” while developing technologies to assist them in doing so. Development in technology science has allowed IBM to expand their business practices and capitalize on new business. IBM's focus on nano-technology and mobile communications has brought them new opportunities both domestically and internationally.
In order to really capitalize on the new opportunities and support the current businesses, IBM must figure out a way to retain intellectual capital while facing an aging workforce. The change in demographics has presented IBM with the task of passing the knowledge from the older generation of the workforce to the newcomers.
Recent advancements in communication technology have shrunk the scale of the business world, opening up countries once isolated to begin operating competitively in the global market place. These developments have now made it not just appealing, but crucial for the future success of corporations such as IBM be begin operating with a global mindset. Globalization not only gives IBM access to more potential consumers and markets than ever before, but it also allows businesses operating in these burgeoning markets entrance into the global market for the first time ever. So for IBM this trend brings with great potential for growth and expansion throughout the world, but also a treat of increased competition from businesses that have the ability to offer high quality products and services at lower costs due to lower labor and overhead costs.
Before the technology was available for companies operating in lesser-developed countries to compete in the global marketplace, corporations such as IBM were able to dominate due to the fact that these smaller businesses simply did not posses the recourses needed to establish them self. Once new technology greatly lowered the barriers to enter the international markets, IBM has had to reevaluate their business strategies to contend with the new companies whose low labor costs allow them to be competitive without needing the huge infrastructure of the more established corporations. IBM has had to realign their staff to take advantage of the low cost of labor available in the new market places such as Asia and South America. This movement in labor force has caused some unrest among employees IBM who have had their jobs replaced to lower labor costs, making many not too enthusiastic about this trend. While some are hesitant about globalization, it is providing IBM with new levels of integration and efficiency.
The reevaluation of the corporate structure has provided IBM with the ability to coordinate operations worldwide to take advantage of low labor costs while getting more value out of each employee. There is no longer the need for each of IBM's branches throughout the world to be able to operate self-sufficiently. The development of what is referred to as competency centers have allowed for specialized groups of employees to do work internationally with other IBM employees from many different parts of the world instantaneously. Computer specialists in Boulder, Colorado can fix difficult problems or handle excess work in case of an overflow from one of the branches in India or South Africa. Globalization has not just brought more completion, but large opportunity for IBM to offer its services to companies that do not have the resources or capability to operate alone.
IBM is finding new channels of revenue by providing smaller companies around the world with information-technology services. They are currently working with Bhari Airtel, India's largest mobile service provider, by handling the IT and customer service. Just last October IBM signed a $200 million dollar contract with India's Datacom Solutions to provide them with IT infrastructure and other services. Even with some internal anxiety about globalization, IBM has recognized that it is crucial to adapt for future prosperity, and with the proper execution, globalization provides a great opportunities for revenue generation, integration and cost savings.
Governance is a way to enforce consistent management and policies throughout the company. More specifically, Corporate Social Responsibility, or CSR, revolves around the company's loyalty to ethical standards, norms and the law. Many companies adopt CSR to be a key mechanism in their everyday business practices making it part of company culture.
IBM views Corporate Social Responsibility as an important trend because many of their socially responsible business decisions have turned out to be profitable. It is also very important because IBM realizes that their shareholders are not only stakeholders but also customers, employees, business partners and the community. Satisfying the needs of all of these shareholders will ultimately result in higher profitability and a better company culture.
IBM is taking great strides towards being a more socially responsible entity. First of all, they are cracking down on scandalous employees. For example, their senior vice president Robert Moffat was immediately discharged after being discovered for handling some insider trading. Even with the loss of their VP, who had been with IBM for 31 years, many companies believe IBM will remain for the most part unaffected, and will continue to bring innovative products to the market. Secondly, IBM strongly supports the growth and innovation of NGOs, or non-governmental organizations. These organizations will be used to verify ethical business practices and crosschecking potential scandals. IBM wants to instill a global NGO that will regulate working conditions across the globe in hopes of making strides to a more socially responsible business Mecca. Lastly, IBM has been working closely with smaller organizations; consulting them on the ethical practices of Corporate Social Responsibility. For example, IBM has been helping the investment firm, Jantz Morgan become more socially responsible. Their goal is to ensure that all of Jantz Morgan's business practices reflect the values of their founders.
Our recommendation to IBM is to continue their proactive strides to amore socially responsible company. Instead of waiting for problems to happen before they are fixed, IBM prides themselves in their ability to fix potential issues before they actually become issues.
Throughout the recent years, the trend of natural resources is becoming a more and more talked-about topic. It has gained widespread interest and many individuals as well as organizations have done something in response to the trend. Natural resources are becoming increasingly scarce. Everything from oil to water is very fundamental to our everyday life and the health of companies, as well as economies of the world. It is important to recognize our impact on our environment and take action to limit such impact. IBM is extremely dedicated to the ‘green' movement and is aware of the limited natural resources available. They are taking strides in this trend by investing in new technologies that will help manage resource usage and waste output.
In the effort to help other gain awareness of the “green” movement and reduce their impacts on the environment, IBM is providing consultancy to government entities and private and public business to more effectively manage their resource usages and decrease their negative impact on the surrounding environment. Cities such as Dubuque, Iowa, are turning to IBM, seeking cooperation in figuring out ways to manage their resource usages. Their collaboration will allow the cities to more effectively manage their energy usage, water usage, and transportation, which is associated with gas emissions. In addition, IBM also works to provide consultancy to private and public companies. IBM's “Smarter Planet” initiative began in 2009. The Smarter Planet project “cover[s] areas of energy saving and emissions cutting, food safety, environmental protection, transportation, medical services, modern services industry, software services, cloud computing and virtualization,” said Zhang Jiawei of Chinadaily.com.cn. The project involves providing technology and mechanisms to track the factors listed above.
Though IBM's commitment to the “green” movement is to benefit the environment, IBM is also taking advantage of the new business opportunities. According to cnet's Martin LaMonica, “the computing and consulting giant is building up a business to chase ‘green dollars,' or money spent by corporations that are looking to conserve natural resources and reduce waste.” Like many other large consulting companies or tech companies, IBM is capitalizing on these new opportunities. Such business opportunities require large initial investments in new technologies. However, this will not only benefit IBM's bottom line, but also the environment as a whole.
In pursuing these new business opportunities, all functions and value chain of IBM are affected. The new technologies begin with R&D and are implemented with the help of their consulting functions. IBM has instilled the ‘green' values in every aspect of their value chain. This move has hastened their involvement with these new green technologies.
The “green” movement is something that IBM should not overlook, because there are new business opportunities for IBM. However, more importantly, protecting the environment and limited our footprint and impact should be IBM's main goal. That alone will provide IBM will benefits that trump net income. The returns on ‘green' investments are not short-term. It will take many years for IBM to fully develop the new technologies and complete implementation. Therefore, IBM's revenues are not realized immediately. However, IBM's persistence in developing the technology and implementations will be beneficial to the company and its stakeholders, including the environment.
Techno-Science is one of the most important mega-trends not only to IBM, but also to the industry. It encompasses any scientific and technological advances or improvements that affect the company. There are three particular aspects of techno-science that contribute to IBM's technological advancement they are, nano-technology, DNA transistors, and expansion of mobile communications. These three areas focus on new technologies and market opportunities for IBM.
The first technology is Nano-technologies; they are being researched to understand molecules to the smallest level to improve IBM's computing capabilities. In the experimentation IBM scientists used AFMs to measure the charge of atoms. With the AFM they were able to look at an electron cloud to see the atomic backbone of an individual molecule. In these studies breakthroughs will demonstrate how molecules are charged and transmitted. This can furthermore make it possible for scientists to see the molecules, extend human knowledge, and broaden the manufacturing capabilities within the nanometer technologies.
Secondly, IBM is focusing on research and development of biotechnology with DNA transistors. They are building silicon chips with tiny holes capable of pulling and reading DNA strands. This innovation will strongly affect the medical field offering the ability to identify health problems in advanced and prescribe preventative medications based on personal DNA.
A third facet of techno- science that IBM is experimenting with is the expansion of mobile communications. It's said that the vast majority of the world does not have computer access, 83 percent to be exact. Therefore, IBM is investing 100 million dollars in mobile communications, because it is a simple user interfaces with increased consumer advantage in the cost spectrum. Currently mobile phones out number traditional phones offering a vast amount of growth in this spectrum. A pilot company IBM has set up allows small businesses and consumers to share the Internet via their cell phones in India and China. Like Apple, this penetration could offer IBM a sense of rebranding and expansion beyond just the computer association.
As a prominent technological computer focused company IBM is very aware of the techno-science trend as depicted in the three areas of market expansion and experimentation. IBM's R&D function will be most directly affected, because new technologies and research are created through R&D. As the new technologies arrive on the market IBM's other functions will also be affected because they will be a part of IBM's operations. Additionally, they are highly invested in this trend, because constant innovation is important to stay ahead of competition. IBM's penetration in the mobile channel is an appropriate way to set them apart from their competitors. However, it is important for them to continue to pursue new technologies and ideas as well as keep the price low for consumers to be a leader in the industry.
Changing workforce demographics are having a significant effect on organizations across a variety of industries and geographies. While the learning function has considerable opportunities to help companies address issues associated with this shift, it needs to reorient its focus and capabilities. “To help alleviate the challenges of retiring workers and their subsequent replacements, the learning function needs to play a role in particular areas. These areas include: determining critical skills and capabilities, transferring knowledge, and reducing time-to competence for newer employees.”
As a result of a shift in employee demographics, many organizations are looking to solve a number of important learning-related challenges. In some companies, increasing numbers of employees are retiring, and many are leaving with a prolific amount of cognizance that can place the organization at risk. In other instances, the challenges include maintaining a productive workforce when the labor pool is downsizing. Companies all over the world are forced to cope with employee retirements and the difficulty in sourcing new talent.
There are five primary concerns when speaking about the changing workforce demographics. The first being the fact that most companies, and their learning functions, are ill-prepared to adapt to the changing workforce. Transferring knowledge between generations is the second concern. Another concern is that there are clear differences in the learning preferences of workers from different generations. The forth concern is that older workers may find more barriers to participating in learning activities. And the final concern is getting new employees quickly up to speed. Company Executives state that changing workforce demographics represents an important issue; nonetheless, they deem their organizations have done little to address its potential consequences. Only 46 percent of learning executives report their organizations are doing either a “good” or “excellent” job in addressing demographics shifts.
Just over one-quarter of companies have plans in place to address positions that are potentially at risk due to a maturing workforce. All in all, companies are simply unprepared. One of the biggest concerns of learning executives is the ability to preserve critical knowledge before it “walks out the door.” Knowledge transfer issues were the highest rated challenge associated with changing workforce demographics. Some companies, like IBM, are being proactive and are finding ways to approach the issue of transferring the knowledge of maturing workers. In order of its importance to IBM, the following are examples of what is being done: Mentoring, document/knowledge repositories, and mature workers are used to deliver classroom content.
It has become evident that there are barriers that prevent older and younger workers from participating in training. A burden that impacts both groups equally is the lack of time to participating in training activities. Another barrier is the perceived resistance to learning, and whether learning is considered valuable for each group. Quandaries that mature workers face is the perception that training is not viewed as valuable for them.
When we look at other aspects of the demographic shifts, new employees lack basic skills, and need to get rapidly up to speed with company procedures. IBM has established a plan to help cope with this issue. They are having their learning executives work with Human Resources to increase awareness and visibility of changing workforce demographic issues. They are developing a knowledge transfer strategy to address high-value knowledge at risk in the organization. IBM has considered learner preferences as one input into a larger training delivery strategy. They have also identified relevant opportunities for mature workers to take part in learning activities, including non-traditional learning experiences. IBM is especially focusing on reducing the cycle time and increasing the effectiveness of on-boarding and management development efforts.
Since it's founding in the late 1800s, IBM has been weathering different trends in the economy while maintaining its growth and stability. The trends of globalization, governance, natural resources, techno-sci and demography are all crucial trends that will impact IBM's business practices in the future. So far, IBM is well aware of the trends and responding positively. Its effectiveness in responding to these trends has given IBM more business opportunities and a bright future.