Case Analysis
In 1993 Lou Gerstner he was an outsider hired as CEO of IBM. His assessment for IBM was an
organization with an obstinate hierarchy, a narrow-minded company full of bureaucracy, insular
environment having enmity.
Another reason was IBM’s complex matrix structure, company had 7 groups and 39 business units
(exhibit1). Large companies like IBM tend to have such complex structures, and each sub-division
has its own process flow. Accomplishing a new business involves provision and cooperation of all
departments, with a proper flow of communication at every level in the company. If every division is
not at same page, new opportunities tend to get fail because of theses insufficient/ lacking method.
Managers viewed new business opportunities as distractors/threats to the core
Series of false starts in R&D department, and noise of missing opportunities.
Potential business gets started but if they fall below natural baseline they must be stopped
