Max webbers effect on the IBM corporation

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Currently, society is changing rapidly. This is because technology changes very quickly. In the last couple of decades, computer technology has spread throughout world. Using computers has become a normal activity in the society. Presently, people use computers to do their work, play games, video, movie, among other things. After the introduction of the internet, computer use developed even further. People not only use computers to work and play, they but also use computers to communicate to other people. Examples of this would be instant messaging (MSN, QQ (in China)), e-mail, and online newspapers. Thus, both the computer and the internet are greatly important to people, and will continue to be important. Due to this, many computer companies and internet technology service companies have immerged and developed rapidly.

International Business Machines Corporation (IBM) is one of the many computer companies in the world. IBM may seem like a ordinary company, but it is actually one of the largest companies in the computer industry. International Business Machines Corporation (IBM) is a Utilitarian organization. A utilitarian organization is an organization where their members are paid for their work. "Just about everyone who works for a regular paycheque belongs to utilitarian organization, one that pays people for their effort" (Macionis & Gerber, 2009, p.165). From this definition, utilitarian organizations are focused on paying salaries to employees. If organizations do not generate enough profits, they cannot pay their employees. Although many utilitarian organizations are profitable organizations, not all are necessarily for-profit. For instance, the government is a utilitarian organization that is not for-profit.

International Business Machines Corporation was founded by Thomas J. Watson Sr.. In 1914, Watson joined Computer-Tabulating-Recording Corporation as a general manager, and then, he became the president of this firm after one year. In 1924, Computer-Tabulating-Recording Corporation restructure to a new company. And thus International Business Machines Corporation was created (Watson Research Centre, n.d.). At the beginning, IBM was established in the United State. Managers of this enterprise seizure market focused on the United States. After IBM becomes one of the dominant companies in the American computer industry, the company decided to expand their products and services to the world. Currently, International Business Machines Corporation is a multinational corporation; they provide their products and services area worldwide. IBM products are not limited to only computers, but they also produce computer software and other IT services. In IBM, employees must obey three values. The first one is "dedication to every client's success" (About IBM, n.d.). This value means that customer satisfaction comes first. The second one is "innovation that matters - for our company and for the world" and the third one is "trust and personal responsibility in all relationship" (About IBM, n.d.). The second value means that innovation is imperative, especially in a global industry that changes so much, so fast. Lastly, the third value means, employees must trust their partners, leaders, and managers; also, they need to be responsible for their action. These three values are of the important reasons why IBM has been such a dominant company in the industry from its inception to the present day. International Business Machine Corporation has existed for more than 70 years. It grew up from a native enterprise to a multinational corporation during these years. Its income has also increased significantly. From IBM latest financial report, its revenue reached one hundred and three point six billion dollars, and its net income reached twelve point three billion dollar. Currently, IBM's total assets are one hundred and nine point five billion dollars (About IBM, n.d.). Because IBM is such a large multinational corporation, it is many different Chairmen of the board, CEOs, and managers in different countries. United State is where IBM is headquartered. The chairman and CEO of IBM in United State is Samuel J. Palmisano. As a multinational corporation International Business Machine Corporation, it has three hundred and ninety eight thousand four hundred and fifty five employees in the worldwide (About IBM, n.d.).

After International Business Machine Corporation was created, its managers tried to find an appropriate strategy that suited the environment or situation. In business, firms need to solve many problems when they are operating. If companies do not find an appropriate way to solve these problems, they will fail and may have to move out the market. These problems divide into two parts. One is inside the organization, the other one is outside the organization. Inside the organization, managers need to face the problems that involve people, structure, and strategy. That means managers do not only need to find the appropriate structure and strategy for organization, they but also need to know how to manage people. Outside the organization, managers need to find and understand six focuses. These focuses include Economic forces, political forces, societal forces, competitive forces, technological forces, and global forces (Karakowsky, 2007, pp.6-16). At different times, these six forces often change. Managers need to know and understand these six forces changed, and then they can try to find an appropriate structure and strategy to adapt the new conditions. IBM is a successful enterprise in the world because its managers understand these six forces changed and make appropriate strategies to fit these changed.

Because the managers of IBM found the appropriate strategies at different times, IBM is successful in different environments and consequently expanded. At the beginning, IBM was a mid-size enterprise. Today, IBM is a multinational corporation. This means that its operations are distributed worldwide. When it was a mid-size enterprise, IBM did not have a lot of employees. However, IBM now has more than three hundred thousand employees. Because of the change in situations from when it was a mid-size enterprise to what it is now, the company needed to have a different structure and way to manage people. Currently, IBM's business strategy is more focus on cost and efficiency. Even thought IBM said innovation is very important value, managers of IBM still pay more attention to cost and efficiency. From the industry lifecycle stages, which contain introduction, growth, maturity, and decline, International Business Machine Corporation is in the maturity stage. In maturity stage, organizations are increase moderate, customers are price-conscious and repeat to buy products; products are commoditization, and key objects are cost efficiency and extend lifecycle (Karakowsky, 2007, p.230). Mechanistic structure is one element when an organization is in maturity stage. Mechanistic structure includes narrow division of labor and span of control; also, this kind of structure is high centralization and formalization. In contrast, in order to focus on innovation, IBM's structure had a wide division of labor, decentralized, wide span of control, and low formalization in the past. Thus, that means managers of IBM used more bureaucratic management methods than before.

The use of computers to do work and communicate is more widely adopted than the past. This situation does not only exist in IBM; it is the worldwide phenomenon. International Business Machine Corporation was founded in 1914. At that time, computer was invented. Because the technology was new, it was not commonly used by ordinary people. People used computers to calculate complex equations and do perform operations that human could not do or was difficult to do in the past. Also, computers were an expensive thing, so most people could not buy it. Although IBM is a computer enterprise, it cannot provide computer to its employees to do their common work. In contrast, computer technology has now been greatly improved. The computer is now a common and important item in our life. Because computer technology has improved, buying a computer is easier and cheaper than the past. People begin to use computer to do many things, such as working, playing, and communicating. In IBM, managers think using computers can increase the workplace efficiency, so they extended the use of computers. Hence, using computers in the workplace is more popular than the past.

In modern times, there are a lot of new enterprises enter in different markets; also, there are many old firms that leave or expand in different markets. Companies enter a market because they want to make profit. After they have enough income, they will expand their capital and make more profit. Max Weber, a sociologist, thinks capitalism is rational because people/businesses operate to maximize profits (Macionis & Gerber, 2009, p.95). In the book of "Max Weber's Economy and Society", the authors said "'Economy action' is a peaceful exercise of and action's control over resources which is in its main impulse oriented towards economic ends"; beside, they think "'rational economic action' requires instrumental rationality in this orientation, that is, deliberate planning" (Roth & Wittich, 1978, p.63). That means "economic action" focus on profit-making and "rational economic action" is obeying this orientation. This theory shows us that Max Weber believes enterprise should pursue the maximum profit because their action is "economic action". Thus, seeking to maximize profit is rational for companies. Weber identifies seven characteristics of rational social organization - "distinctive social institution, large-scale organization, specialized tasks, personal discipline, awareness of time, technical competence, and impersonality" (Macionis & Gerber, 2009, p.97).

From Weber's theories, we know the changes International Business Machine Corporation made were rational. In their structural side, the managers of IBM became more bureaucratic than before. In the past, IBM operated only in the United State; its products and service was focused on American consumers. Slowly, IBM's products and service expanded into international markets. In order to expand the enterprise, the original structure had to change; it did not fit the condition of the firm. Managers of IBM knew the company would fail if they did not change the original structure; the firm would not be successful and would not be profitable in the future. According to Weber's theory, these economic actions and organizations were irrational. Therefore, manager of IBM changed the structure to be more bureaucratic because it can help enterprise make more profit and expand, and therefore more rational. As a multinational corporation, IBM's bureaucratic management is an appropriate structure, because it can help managers to manage people and increase efficiency in people's work. However, bureaucratic management is irrational for employees because it regulate employees' work and their action in working place. Weber thinks bureaucracy treats employees as tools that are used for making profit, rather than treating like them a unique individual (Macionis & Gerber, 2009, p.98).

In addition, International Business Machine Corporation changed the way their employees worked. In the past time, people who work in IBM usually using their hand or typewriter to do their work, such as drawing graphs and writing reports. Their communication was usually through the use of telephones or telegraphs. These ways of working and communication are not efficient. After computer technology had developed and computers were cheaper, in many enterprises, employees began using computers to do their work. IBM is one of these films. IBM, as a computer company, knew the advantages of using computers in the workplace. Even thought managers understood that using computers will increase efficiency, they still did not provide computers to all of their employees because computer technology had not been developed enough at that time and the price of computers were still prohibitively expensive. In contrast, computer is now a common thing in many firms, and efficiency has increase after people adopted the use of computers in their work. This situation obeys the theories of Weber. Using computers to increase work efficiency and lead to more profit than before. Thus, the changing of the workplace was rational. On the other hand, this change is also irrational because it dehumanizes. People have their own personality. This can be represented in their writing. When people handwrite, their writing is different. In contrast however, after people using computer to work, the style of the words may be the same is the same if they are all using the same font. Hence, using computers lead to people losing their individuality.

Presently, many organizations try to maximize efficiency, so they use bureaucracy in many areas. This situation leads to society becoming very efficient because many people seek and need it. However, this idea separates the relationship between people and dehumanizes them. At the present time, people are unconcerned because they seek high efficiency and pay more attention in their own things. Using computers make people contact other people less in a physical world. It is another reason why people are unconcerned in modern time.