Case Study Changing Nestle Example | Topics and Well Written Essays - 750 words

Changing Nestle - Case Study Example Efficient CEOs like Helmut Maucher and Brabeck-Letmathe initiated radical changes in the organization. Large-scale and transformational changes are necessary for maintaining organizational survival. Clardy says about the organization change as, â€Å"the field organization change was long equated with organization development (OD), whose proponents were up-front with the bona fides of their approach: full disclosure, informed consent, inclusive participation, and so on.†(Rothwell, Stavros, Sullivan & Sullivan, R. A, 2009, p. 12). The OD includes the dispositions to improve their organizations by applying knowledge from the behavioral sciences—psychology, sociology, cultural anthropology, and other related disciplines. Analyzing the changes taken place in the Nestle shows that the firm had undergone both the first order change and second order change. In a first order change, the firm makes only some changes in terms of transactional and organizational climate. On the ot her hand, Nestle had undergone a second order change in terms of transformational changes. Some of the important organizational changes were as follows. First order changes 1. Nestle started to transfer executives Switzerland to United States. 2. Nestle concentrated on the strengthening and centralization of its IT departments. 3. Started to purchase local subsidiaries in local markets and began to expand globally. Second order changes 1. Nestle completely refurbished the executive board with ten executives replaced (Palmer et al, 2005) 2. Nestle started to diversify its markets through their introduction into cosmetic and pharmaceutical markets. 3. Nestle introduced the acquisition and merger of several companies. The second order change is more evident in the organization. Transformational change had taken place as the organization switched from entrepreneurial to a wider and more professional management. An important transformational change that had taken place in the organizatio n was involvement in other fields of business through product diversification. In the same way, the acquisitions and mergers provided them accelerated growth, and increased popularity and reputation. However, throughout the course of change, the company took extra care in sustaining employees’ loyalty, impression, motivation, self belongingness, and positive behavior, even though the management had applied some ‘mid-management change theory’. As Palmer et al (2005) state, the change occurred in Nestle, emphasized by Peter Brabeck-Lemathe as incremental change. It is based on his leadership mindset, which focuses on substance over style, with strong dedication, and long term approach to growing business. In contradiction to Peter’s concept of incremental change on Nestle’s overall business, the incremental change was not incremental at all. Its market had expanded due to the aggressive acquisition of a number of food industries and due to the automat ion and integration of all its worldwide operation to facilitate better coordination in an aggressive strategic move; and the move had ended in closing 38 factories and cutting $1.6 billion in cost while improving the company’s ability to obtain volume discount, which Peter meant was incremental (‘Peter Brabeck-Letmathe-1944’). The three important lessons coming from the frontline are downsizing through retrenchment and down scoping,

Chemistre HW Essay Example | Topics and Well Written Essays - 250 words - 1

Chemistre HW - Essay Example In the case of ammonia, the amount of hydrogen bonding is limited by the fact that each nitrogen only has one lone pair. In a group of ammonia molecules, there arent enough lone pairs to go around to bond with all the hydrogens available. This is why the boiling point of water is higher than that of ammonia. All known terrestrial life requires water as a solvent. This has led to speculations about whether water is the only liquid capable of maintaining life. The idea that an extraterrestrial life-form might be based on another solvent has gained traction over the years. Ammonia is a classic example. Could life exist on a planet dominated by oceans, lakes, and rivers of ammonia? Ammonia has some problems as a basis for life. The  hydrogen bonds  between ammonia molecules are weaker than those in water; this makes ammonias  heat of vaporization  be less than that of water by half. The surface tension of ammonia reduces  to a third of the water. Ammonia has a lot of the same molecular properties as water that is essential for life on earth. I propose that life may evolve in an ammoniated medium the same way life on Earth grew in a hydrated one. As scientists we are yet to discover ammonia-based life. Therefore we cant discount that ammoniated aliens can or don’t exist. In the absence of absolute evidence, we are tasked to research on this issue more keenly. Even if ammonia-based organisms do not exist by our terrestrial standards, it does not mean that it cannot happen

Global strategic management Research Paper Example | Topics and Well Written Essays - 2500 words

Global strategic management - Research Paper Example rkets as centres for consumerism and innovation, improvement of productivity in the developed market, expansion of global networks, the issue of sustainability and the strengthening of role of state as a business partner (McKinsey, 2014). The purpose of this paper is to describe these forces in details to find their expected outcome on the future of the business. There may be many other forces that can shape the nature of the business and society in the future. However, this paper only limits itself to the five above mentioned forces as they are expected to create maximum impact on the business activities. Global forces have been described as external forces which creates significant which are beyond the control of the business. The global business environment is filled with examples where business enterprises have missed global trends and they have not been able to survive in the long-run. For the last ten years there has been a massive change in the consumer market. The role of the Western economies especially the U.S.A. as a dominant centre for consumerism and innovation has fallen. This has been accompanied by an equivalent rise of the emerging economies as a centre for consumerism. It has been observed that Asian countries especially India, China, Indonesia, Vietnam and Latin American countries like Brazil, Argentina and Chile have made significant progress in terms of overall GDP growth of the country and the overall level of standard of living (Vlad, et al., 2011). The per capita income of the middle-class people have increased considerably in these countries. This in turn have raised the purchasing power of the people and boosted consumerism. In an empirical research that has been done by Kharas and Gertz (2010) that in the decade of 80’s and early 90’s the high income countries of the OECD which had accounted for 80% of the global output and captured majority of the world economic growth rate. It has been estimated that by 2009 the share of the

King Lear Shakespeares Essay Example for Free

King Lear Shakespeares Essay Dylan Thomass Do not go gentle into that good night was influenced by William Butler Yeatss Lapis Lazuli and William Shakespeares King Lear but the villanelle bears a stronger resemblance to Shakespeares play. The attitudes toward how an individual lives in the face of impending death, explored by Thomas, are similarly examined with the portrayal of Gloucester and Lear. Dylan Thomass Do not go gentle into that good night has been noted to bear the influence of and even echo W. B. Yeats, especially Lapis Luzuli, and, secondarily via this poem, Shakespeares King Lear. One scholar notes its Yeatsian overtones (Fraser 51); another judges Thomass villanelle to have much of the concentrated fury of expression which the poetry of the older Yeats contained, but more tenderness and sympathy (Stanford 117), and goes on to say. , citing Lapis Lazuli, that Yeats described the poet as one who knows that `Hamlet and Lear are gay' (118). William York Tindall cites not only Lapis Lazuli but also Yeatss The Choice as sources (204). Another scholar seems to skip over Yeats entirely (though his own phrasing echoes line 1 of Lapis Lazuli), seeing the Grave men/blind tercet (which contains the injunction to be gay) as perhaps invok[ing] the Miltonic (Tindall also mentions Milton 205) and the effect of the phrase be gay as rather hysterical sentimentality (Holbrook, Dissociation 53); of the earlier Wise men/lightning verse, however, he says The images are merely there, histrionically, to bring in the phrase `forked no lightning to give a Lear-like grandeur to the dirge (52). I would like to propose that Do not go gentle into that good night bears a much stronger and more direct connection to Shakespeares play than is suggested by references to Yeats or to Lear-like grandeur. I would like to propose that the attitudes towards deathor, more precisely, the attitudes towards how one lives in the face of impending deaththat Thomas explores in this poemthe implied attitude his speaker attributes to his direct audience, and the one he urges be adopted in its placeare similarly explored in King Lear and dramatized in the characters of Gloucester and Lear. I also propose that the voice we hear in Do not go gentle may not be a directly lyric speaker but an obliquely drawn persona, that of Gloucesters son Edgar. Further, when read in the shadow cast by King Lear, the tone of Thomass poem grows dark indeed. Do not go gentle into that good night is addressed to Thomass father, David John, known as D. J. According to biographer Paul Ferris, D. J. was an unhappy man a man with regrets (27); born with brains and literary talent, his ambition was to be a man of letters, but he was never able to advance beyond being a sardonic provincial schoolmaster in South Wales, feared for his sharp tongue (26-33). After his first serious illness, thoughcancer in 1933A mellowing is said to have been noticeable soon after; his sarcasm was not so sharp; he was a changed man (104). As he grew more chronically ill in the 40s, mostly from heart disease and with one of the complications being trouble with his sight, the mellowing intensified: As Ferris puts it, It must have been [D. J. s] backbone of angry dignity that his son grieved to see breaking long after, when he wrote `Do not go gentle into that good night' (27), and the poem is an exhortation to his father, a plea for him to die with anger, not humility (259). The poem was first published in November, 1951, in Princess Caetanis Botteghe Oscure, on consecutive pages with Lament, a dramatic monologue spoken by an old man on his deathbed who recalls his rollicking youth and middle-age spent in the pursuit (and capture) of wine, women, and song, but who has married at last in order to obtain a caretaker, and must suffer pious comforting in his final, helpless days. (Bibliographic evidence suggests the two were also composed, or at least finalized, more or less simultaneously; Kidder 188.) In the letter to Caetani that contained Do not go gentle, Thomas remarked that this little one might well be printed with [Lament] as a contrast (qtd. in Kidder 188). As Ferris suggests, it would be difficult to over-estimate D. J. s influence on his son: . . . the pattern of [Dylans] life was in some measure a response to D. J. Thomas and his wishes. For the early books that Dylan Thomas read, the rhythms he absorbed, and probably for his obsession with the magic of the poets function, he was indebted to D. J. (283). Prominent among those early books read by Thomas are the works of Shakespeare. In 1948 (and Thomas might have begun his, as usual, protracted drafting and revision of Do not go gentle in 1945, after D. J. suffered a nearly fatal illness; Tindall 204), Thomas wrote a journalist that D. J. s reading aloud of Shakespeare seemed to me, and to nearly every other boy in the school, very grand indeed; all the boys who were with me at school, and who have spoken to me since, agree that it was his reading that made them, for the first time, see that there was, after all, something in Shakespeare and all his poetry. . . (qtd. in Ferris 33; his ellipses). That Thomas was familiar with and admiring of Shakespeare is, of course, no surprise, but his direct linkage of his father with Shakespeare, particularly at this point in time, is interesting, and he demonstrated more than familiarity with King Lear: In 1950, during one of his reading tours in America, he spent an evening with novelist Peter de Vries (who would later use Thomas as the basis for the poet Gowan McGland in Reuben, Reuben) and, among other conversational gambits, declaimed some Lear (de Vries, qtd. in Ferris 233). That he was equally well-immersed in Yeats is verified by the fact that poems by Yeats were among those he performed on his 1950 tour of

SADC: Recent Developments and Achievements :: History

SADC: Recent Developments and Achievements Introduction Regional groupings such as SADC aims to bring neighbouring countries into a league or association or union where they will be able to work together in terms of matters concerning politics, economics and development, the ultimate being regional integration. The concept of regional integration is nothing new. During biblical times the Canaanites comprising of different countries formed a union to deal with the invading band of Israelites from Egypt. The intention of regional integration is to form a centre that will promote the interests of all the member countries - as the old adage says ‘there is strength in numbers’. In Africa, regional integration is necessary considering that the majority of African countries are small, weak and poor. Integrating the countries of Africa will help them in dealing with the issues of globalisation that poses a serious threat poor nations. In international stages such as the United Nations, World Trade Organisation, International Monetary Fund and the World Bank the voices of smaller countries such as Lesotho, Swaziland, Seychelles, Benin, etc are not heard. With regional integration we are assuming that smaller countries such as Swaziland, Lesotho, Botswana can come together and form one community like the SADC. Doing this they can form a collective powerful force that will enable them to deal with such burning issues like eradication of poverty, globalisation and social epidemics like HIV/AIDS. Looking at the cases of Tanzania, Democratic Republic of the Congo (DRC) and Angola can highlight the benefits of regional integration. Tanzanian economy has stagnated since the eighties and failed to develop. It is only now that it is active member of the SADC that its economy is beginning to grow. DRC and Angola that have been ravaged by political shenanigans where warlords and rebels were the order of the day are learning from the other member countries like South Africa, Botswana that are politically stable. Communities such as the SADC have organs of politics and economic developments – organs that deal with the promotion and creation of democratic cultures while on the other hand facilitating economic developments to member countries. SADC’s Decentralised Approach Before 2001 the countries forming the SADC have identified many common challenges. These challenges are divided into sectors and are illustrated in the following diagram. Environment and land managementInland fisheries, forestry and wildlife Tourism Culture, information and sport Marine fisheries and resources Finance and investment Human resources development Industry and trade Employment and labour Food, agriculture and natural resources Water conservation and distribution Transport and communication

Operations Management Essay

1. How should quality be defined at this restaurant? Outline which quality tools you would use to assess the situation at The Raja’s restaurant. Quality of service is the most important aspect to a customer. The concept of quality can be defined in various ways. By definition â€Å"Quality is consistent conformance to customers’ expectations† (Slack, Chambers and Johnston, 2004). Each customer has expectations of different quality standards and quality service. In The Raja Tandoori restaurant quality has been declining recently. An example of this is patrons have to wait as long as 45 minutes to be seated, in addition to this it can up to 40 minutes more to get a good meal served to the table. The dimensions of service quality are reliability, responsiveness, assurance, empathy and tangible factors (James A. Fitzsimmons et al, 2004). The customer survey results indicate that 87% of customers believe the quality of food at the restaurant is excellent. Also, the dining experience is very good; being represented by 81% of customers. However, 78% of customers have expressed that they found the waiter to be only at satisfactory standards, this is likely to be due by the lack of staff experience. 70% of customer responses showed that they were served within a reasonable time. The 30% could be justified due to the poor quality of ingredients being delivered; restricting the chef in meal preparations. (See appendix 1 for workings). However, there are some good aspects such as the variety of food, waiters are always available and on the look for any requests, there is also the additional service of hot flannels are being brought to refresh diners. Many quality tools can be used to assess the situation at The Raja’s restaurant. Total Quality Management (TQM) is a way to approach â€Å"the organisation of quality improvements† (Slack, Chambers and Johnston, 2004). TQM is a process of involving everyone in an organisation in continuously improving products and processes to achieve on every occasion; quality that satisfies customers needs (John Naylor, 2002). â€Å"It seeks to integrate all organizational functions†¦to focus on meeting customer needs† (http://www.isixsigma.com/library/content/c031008a.asp). TQM was introduced by Feigenbaum (1957) and developed further by Deming, Ishikawa, Taguchi and Crosby. W. Edwards Deming (1950’s) introduced 14 points for quality improvement. He wanted to focus on the product instead of the process. Continuous Improvement (CI) emphasises quality and reduces cost. The Plan-Do-Check-Act (PDCA) cycle (see appendix 2) is important in inspecting quality in one stage of the quality improvement process. The owner of The Raja restaurant can emphasise the importance of quality by having better teamwork skills and more employee involvement that can ultimately lead to a quality service. Kaoru Ishikawa developed quality circles which imply on the importance of group roles in working and learning. Teams of 3-5 members can be set up at the restaurant; their aim is to identify the causes of quality failure. Each team could focus on a certain aspect such as the quality of food or service. To assess problems of quality at the restaurant cause-and-effect diagrams (fishbone diagrams) can be used. This can help find the cause of problems by working backwards to find a possible cause of a quality problem. Below is a cause-effect-diagram for the effect of the poor service at the restaurant. TQM has an emphasis on meeting customer expectations; the Raja restaurant needs to establish this in order for it to be successful. At peak times customer meals should be prepared within the typical time limit of 25 minutes instead of 40 minutes. The variety of food that is made available to customers also needs to be considered, the wider the variety made available may ultimately attract more customers. There have also been delays in clearing tables this ultimately leads to delays in seating people. All these problems result in poor quality of service. The central foundation of the restaurant is based on customers, it is customer based service, hence the importance of improving quality. Errors that emerge from the service of the restaurant lead to inefficiency and this in turn results in poor service to customers. As the cook mainly controls the quality of the food it is essential that all ingredients are available, recently the purchase of ingredients for the restaurant have not been good enough. The lettuce has appeared wilted and the tough chicken has had more meat than bones. This has ultimately led to certain dishes not being made available. It needs to be established that each individual operation contributes to the overall success of the restaurant. Requirements of customers and the restaurant itself need to be defined for example the quality and speed of service and what customer expectations are. Mystery shoppers can be used at peak times to find out exactly how service needs to be improved. Each individual contributes to quality; therefore each person has the ability to improve quality. Members of staff need to be given empowerment to make suggestions. All staff should be involved in the improvement of performance in the restaurant; this can lead to a better team. The benefits of empowerment are: * Better customer service * Satisfied customers * Employees feel more secure about the job * Promotes ‘word-of-mouth’ advertising and customer loyalty The costs of quality are prevention, appraisal, internal and external failure costs (see appendix 3). It is essential to train and develop employee skills to suit the requirements of the restaurant. Identify problems and correct them before they have occurred. Negotiate with suppliers to improve the quality of ingredients. The ultimate goal is to increase quality of service in the restaurant, once this is achieved costs will fall. A quality strategy needs to be implemented into the Raja restaurant to provide long-term goals which are relevant to the restaurants aim. This can be achieved by implementing groups, such as quality circles and setting certain tasks and aims. Training employees is another strategy this could focus on eliminating errors and improving quality. 2. How would you improve the service experience for customers of the Raja? Following the definitions quality is a very important issue that needs to be taken into consideration for every movement that a business does, nevertheless there is also design, layout and production to be considered, is having this in mind that we overlooked at Raja’s situation. To keep up with new business and competitors you need to innovate, differentiate, create something special and unique, a customer that has an experience is likely to return and therefore be loyal to your business as well as recommend it to others. The Raja’s Restaurant needs to be re-modernised, the old wall paper should be scrapped and in its place should be something more welcoming and pleasing, giving the feel of a calm and clean environment. The layout should also be changed making a separate entrance between the dining in customers and those who just want to take the food away, one type of customer should not interfere with the other so a distinction should be made clearly. There is even the possibility of expanding the business and introducing a take-away menu where customers could place orders over the phone and have it delivered to their address that would leave even more space for customers who prefer dining in and would also increase customer numbers. Whilst many customers may enjoy listening to the radio, many others may not, it will be good to have a mixture of music, compiling a good CD collection as well as the traditional radio station, and this is likely to please almost everyone as it gives a feel of a balanced environment. Use the free parking as an advantage and make customers aware of this facility, especially on Fridays and Saturdays nights when high streets are crowded with people going to different places and parking space is limited. The Raja needs concentrate on its service speed, customers don’t like waiting and if the waiting is long they might find it easy going elsewhere, to make sure quality issues are resolved they need to reduce waiting time, focusing especially over weekends when demand is higher. In order to do that waiters should not have to help in the kitchen, fetching food, be involved in any form of food preparation or do any food sequencing for the chef. More kitchen staff needs to be employed, employing more staff will mean higher costs but it will also mean higher turn over of tables. Having more kitchen staff also means you can have more food variety and new dishes can be introduced, a new menu can be designed following seasons variations, this should prevent customers from being bored and keep coming back to try new things. As we expect the number of customers to grow we need to also plan for more waiters to be working on the waiting area, service should always be at high standard and customers should never have to ask for anything. Making sure there is good quality service means people will feel satisfied and return more often. Cost reduction is another important issue, if your ingredients are expensive your food will be expensive and it will attract fewer people, working with a single supplier that can provide good quality ingredients, fresh and reliable goods will automatically reduce cooking time, speeding up the process, also bulk buying is cheaper and a deal can be negotiated for ingredients that are bought more often. Big suppliers can also deliver, that should save even more time so management can focus on planning and improving other things, such as appraising staff and overlooking problems. Proper training should be provided to all members of staff; everyone should comply with the Health Safety Regulations for food and always maintain standards, the working environment should always be clean and well maintain, this will not only make working easier but will also show an improvement on the visual aspect. All staff should be properly dressed for their functions and always make sure they are running their tasks smoothly. Managers should concentrate in individual performances as well as team performances, having a good and healthy work environment will motivate employees and customers will notice it. After introducing this big transformation, if performance is still low promotional schemes can be created to bring customers back, a loyalty card with a discount percentage is likely to attract many people and give them the impression they are getting another advantage here that they can’t have elsewhere.

Ibm Human Resources

1. Introduction IBM is one of the most successful technology and consulting companies in the world. In 2012, its brand name is in second place in international brand equity rankings, just behind Coca Cola. With its 433,362 employees it is operating in 170 countries and able to generate profit of $15. 85 billion per year. The company itself has been founded in 1911 trough a merger of three technology companies. In 1924, the company’s name was changed to International Business Machines, abbreviated to IBM.Initially, the company was engaged in tabulating equipment and data management and later on was able built a strong market position in the computer and semiconductor production. The IBM PC, introduced in 1981, was one of the company’s major successes. In the 1990s, however, the enterprise experienced stagnating earnings from its operations and therefore developed a transformation strategy. From 2000 onwards, IBM changed its business model towards technology services and consulting. This shift has enabled IBM to achieve a rise of EPS from $3. 32 to $13. 44 in 2011.Simultaneously to this strategic shift, IBM has also changed its international structure and moved from a multinational to an integrated enterprise, thereby saving $6 billion. This paper will analyze the HRM implications of this strategic shift. For this purpose, it will first elaborate on the business model and the strategic focus of the company. Second, it will consider the strategic HRM focus and the general blueprint that IBM has developed for its workforce. Third, it will outline a variety of HRM practices in the fields of knowledge management, compensation and HRM effectiveness. . IBM Business Model 2. 1 Customer Value Proposition At the core of its business stands IBM’s desire to help clients to become more innovative, efficient and competitive through the application of business insights and IT solutions (10 K-filing 2011). The company’s regular clientele mainly consi sts of institutions, both in the commercial as well as in the governmental and educational sector. IBM offers hardware, software and service integrated solutions (KM Worlds, 2011) that support the client to deepen the knowledge about his business through the smart use of information technology.This knowledge enhancement creates value by reducing the operational costs and presenting further revenue opportunities for the client on the one hand, and ensuring superior financial results to IBM’s shareholders on the other hand. 2. 2 Key Resources In general, IBM's key resources consist of intangible assets rather than tangible products, processes or manufacturing capabilities. Its human capital pool and research and development capabilities can be considered as the by far most important of these intangible assets.Concerning the human capital pool, IBM employs 433,362 high-skilled people, thereby being the world's second largest employer, behind Wal-Mart Stores (2,200,000) and even before McDonald’s (420,000) and Hewlett-Packard (349,000) (Fortune, 2011). IBM's workforce has steadily increased in recent years with growth rates of 6,8% in 2010 and 1,5% in 2011 and the firm invests heavily in the development and compensation of its workforce. Since 2002, it has paid over $100 billion in non-salary benefits to its employees.However, in the following years, crowd sourcing could lead to IBM drastically downsizing its workforce and utilizing subcontractors for the work currently performed within IBM. Its permanent workforce could shrink by more than 75% of its current state as a result of the HR transformation process. IBM’s second major assets are its R capabilities. Alone since the year 2000, IBM has invested $70 billion into research and development and has created 10 global research labs. These major investments paid off in 47,000 patents that IBM could generate within the last 10 years.Roughly 70% of these patents were issued for IBM's software an d service. For the major pillars of its current 2015 strategy, Business Analytics and Cloud, IBM employs 400 and 1000 researchers respectively. The IBM computer Watson, a learning system generating answers in normal language, is one of the major breakthroughs of IBM's R investments. Further, research and development was conducted in the field of nanotechnology, systems, analytics as well as the cloud. In general, R investments are concentrated around high-value, high-growth opportunities in order to sustain IBM's technology leadership position.Not only enable the R&D invests IBM to accumulate a great amount of knowledge about state-of-the-art technology and define new technology; due to its history, it also holds huge knowledge about storage capacities, computing power and semiconductors, as IBM’s business was formerly centered on computer production. Furthermore, since its foundation in 1911, IBM has created unique relationships with its clients and knowledge of the markets and has therefore gained strength in the field of Sales and Distribution.This strength exhibits all characteristics that a resource needs to provide a sustainable competitive advantage: They are valuable, rare and costly to imitate due to high path dependency. IBM operates in 170 countries with the G7 countries and a number of developed countries as its major markets. IBM’s brand name is also a major asset of the company. In current reports, IBM ranks second just behind Coca Cola and possesses aggregated brand equity of $69. 905 billion in 2011. This strong brand equity contributes to the relationship and the trust clients have towards IBM. . 3 Key Processes IBM utilizes the above-mentioned assets to operate in five segments, namely the Global Technology Services (GTS), Global Business Services (GBS), Software, Systems and Technology (ST) and Global Financing (GF). The GTS division deals with providing IT infrastructure services along four major dimensions, namely strategic o utsourcing services, Global Process Services, Integrated Technology Services and Maintenance. These services range from consulting on IT projects to the development of a complete IT infrastructure for a company.Within the GBS division, IBM employs the IBM software in order to consult its clients in strategy, process and technology questions. It entails a broad range of services, from Strategy & Change over Supply Chain Management, Customer Relationship Management to IT-services. By offering such a huge product portfolio, IBM is able to cover the complete value chain of its clients and provide all-integrated services for them. Whereas the former division deals with the applicability of the software, the Software Division itself is devoted to the development and writing of the IBM software.Particularly in this field, IBM employs its complete human capital and R&D capabilities, formerly explained under the key resources. The salient software that enables IBM’s clients to integra te processes, communication and logistics within their companies are Lotus Software, Rational Software, Tivoli Software and Security System Software. The Systems and Technology division takes advantages of IBM’s knowledge about computing power and provides clients with the opportunity to employ huge storage capabilities and computing power. Similarly, it assists clients with the latest semiconductor technology, product and packaging solutions.In contrast to the other four segments, the Global Financing division is not engaged in primary software development and client consulting, but rather acts as IBM’s bank. It offers financial instruments to the firm’s clients to facilitate the purchase and licensing fees for IBM’s products. Besides these segments and on the operations side, IBM uses its R&D capabilities to identify new market trends and continuously innovate. To support innovation, IBM heavily engages in the acquisition of companies that possess uniqu e technological skills. In 2011 alone, the company paid $1. billion for acquisition and plans to expand its acquisition to a total amount of $20 billion by 2015. What can be considered as one of the major efforts of the last year is the vertical and horizontal integration of IBM’s operations. These efforts are part of the enterprise transformation strategy aiming to make IBM the premier globally integrated company. For the vertical integration, the company attempts to control the whole value chain of its product. It has therefore invested in advanced semiconductor manufacturing in Fishkill, New York, and a global delivery centre in Columbia, Missouri.Roughly $35 billion are spent through the supply chain in an effort to procure materials and services globally. For the horizontal integration, IBM currently integrates its nationally fragmented units and has realized gains of $6 billion over the last years through increased productivity. 2. 4 Profit Formula The profit IBM is ext racting from its operations can be considered along three dimensions, namely along the segments, the actual products and the markets. Concerning the segments, Software, although not the biggest revenue driver (23,49% of total revenue), generates $14. 07 billion of profit margin and thereby accounts for 43,68% of the company’s profit. The reason is its high margin of 88,5%. GTS, Systems and Technology and GBS are following with 28,31%, 14,95% and 10,99% respectively. Global Financing falls behind and only constitutes 2,07% of profits. Value is created to the client through hardware/financing, services and Software at IBM. Over the last decade, Hardware/Financing has sharply lost importance and today only accounts for 16% of segment profit ($3. 6 billion) compared to 41% for services ($9. 3 billion) and 44% for software ($10. 0 billion).The traditional G7 countries and other developed countries are still the most important revenue and profit drivers. New growth markets currentl y account for only 22% of geographic revenue. However, the portion is rising and is expected to be 30% by 2015. In terms of overall profit growth, the growth markets ($1. 9 billion) – namely BRIC countries, but also Africa and Latin America – are only close behind the major markets ($2. 2 billion). To sum it up, software sales and licensing as well as operations in the major markets are the greatest profit drivers with the growth markets steadily increasing. . 5 Challenges and Opportunities Before IBM engaged in its transformation in 2000, it had mainly focused on computer and semiconductor production. Business and Technology services only constituted a minor part of the strategy. Since 2000, the company has sharply expanded its technology services and nowadays builds its business model around these services. In 2011, 85% of its pretax income came from software and services compared to 65% in 2000. Especially in recent years, a significant amount of new technologies ha s evolved.Cloud Computing, Information Management Systems and Open Source are only some examples of these new trends. As IBM fundamentally relies on anticipating trends and utilizing newest technology to deliver value to its clients, these trends exposes IBM to unique opportunities and challenges in adopting them. Simultaneously, the major G8 countries, which were and currently are IBM’s main revenue drivers, have stagnated in the last years. In contrast, nearly 40 growing countries grew at double-digit numbers in recent years.These emerging markets will be responsible for 60% of global GDP growth in the upcoming years. But not only do the BRIC countries account for this number, but other emerging markets as well. IBM estimates that 60% of growth markets revenue is earned outside the BRIC countries. As these countries are still at the elementary stage of their technology revolution, they become opportunities for technology companies currently operating in mature markets. 2. 6 Strategy In effort to address these challenges, IBM has developed a four-pillar strategy laid down in its 2015 roadmap.The first three pillars refer to new technology trends that IBM is responding to, namely Cloud Computing, Business Analytics and Smarter Planet. The Cloud refers to IBM’s engagement in creating the enterprise cloud. Only from 2010 to 2011, it has been able to more than triple its cloud revenue. Currently, 1 million enterprise users are active in the cloud, enabling IBM to analyze $100 billion in commerce transaction each year. Similarly, business analytics enable the clients to analyze and mine data and realize relationships concerning their respective customers preference and patients outcome.Almost 9000 consultants are employed by IBM to deliver a revenue increase of 16% from 2010 to 2011. Whereas the former two services are targeted at commercial clients, Smarter Planet enables governmental institutions to operate more efficiently. IBM classifies these se rvices as the â€Å"infusion of digital intelligence into the world’s systems† (annual report IBM, 2011). In 2000 cities, the company is engaged in developing Smarter Law Enforcements, Smarter Water and Sewer Systems and Smarter Transportation, as well as further services.Also in this segment, IBM is reporting a rapid growth of almost 50% compared to 2010. The last pillar of the strategy addresses the emerging markets. In 2012, IBM operates in 170 countries. The emerging countries are becoming increasingly important and currently contribute 22% to its geographic revenue. Until 2015, the company aims to increase this percentage to 30% and has recently invested in 100 of these new markets, among them China, Brazil and Africa. 3. Strategic International Human Resource ManagementFor some time now, IBM is undergoing a transition from a multinational orientation to a globally integrated organizational structure. In the old model, every country unit followed its own policies, procedures and processes. Thus, high inefficiency and redundancy was present in the organization. In 2003, Randy MacDonald, the senior vice president of human resources at IBM, and Sam Palmisano, IBM’s CEO at the time, recognized the need to shift from a product to a process driven organizational model, and thus become more globally integrated.This shift became necessary because the organization had to react to the increasing globalization of its supply chain. This change in the company’s orientation also implies a change in the importance of the firm’s HR function and the role of strategic international HRM (SIHRM). Taylor, Beechler, and Napier (1996) define SIHRM as â€Å"the general philosophy or approach taken by top management of the MNC in the design of its overall IHRM approach†. Therefore, IBM had to make sure there was a good fit of the firm’s new strategy with its overall goals. Taylor et al. 1996) pointed out the tension that exists in strategic international HRM between the concepts of integration and differentiation. Integration is described as the need for interunit linkages, which implies some form of overall company strategy that unites all individual country units. Differentiation on the other hand is necessary for successfully operating in the local environment, thus it means adapting the product or service to the specific local needs and requirements. Taylor et al. (1996) identified three generic orientations, which they call the adaptive, exportive, and integrative orientations.A company that focuses on the adaptive view is emphasizing the need to differentiate, and therefore tries to adapt to the local environment. There is little or no interunit exchange of ideas on HRM policies and practices, so the units work rather autonomous. The second approach is exportive, which means that the parent company transfers the parent firm’s HRM system to all its affiliates, which leads to high internal consiste ncy. The integrative orientation is a combination of both the adaptive and the exportive view, and thus tries to balance the dual need for integration and differentiation.IBM initially believed that the firm’s HRM practices are context generalizable, and followed a rather exportive orientation in the past. However, the shift from a product to a process view and the increasing need for global integration also required changing the firm’s orientation in order to build an integrative SIHRM model. The new objective of the HR department therefore was to place business functions where they are best located and allocate the right people to the right job at the right time. The program that is supposed to facilitate this process is called the IBM Workforce Management Initiative (WMI).The aim is to build a HR and talent management system that will enable the effective and smooth management of human resources across the various business units (IBM Case Study, 2010). Randy MacDona ld started the HR reorganization process by separating core from noncore, back office tasks (IBM website, 2010). The idea behind this process was to enable HR professionals to focus on core activities that are value adding for the business, such as designing policy and internal business consulting. The noncore administrative services are now being performed by the IBM Managed Business Process Services (MBPS).This centralization helped to create a global system that enables IBM to manage international projects globally and allows the HR department to implement changes throughout the organization much quicker and more homogeneously than it was possible in the past. Nowadays, country and regional HR managers at IBM both work together in order to adapt to local needs, while still keeping it in line with the overall company strategy. On the other hand, administrative roles are standardized and are being done by global employee service centers, which is also more useful for managing inter national assignments and employee records.This way, HR professionals are able to focus on core activities such as talent management and are able to make use of synergies by exchanging ideas on best practices throughout the organization. Farndale et al. (2010) have studied the various structures and roles of HR departments in multinational corporations through the use of case studies on 16 MNCs, amongst which has also been IBM. The researchers describe IBM’s transition from a HQ-dependent to â€Å"a more interdependent transnational orientation† (Farndale et al. , 2010), which is in line with the integrative orientation described by Taylor et al. (1996).Interdependence as a mixed approach is a much more complex relationship than the pure models of independence or dependence on the firm’s headquarter, and therefore formal control mechanisms become less useful. The researchers suggest the use of informal mechanism, for example the creation of a strong company cultu re and company-wide knowledge management. IBM recognized the need for more integration and interdependence, and starts to give more autonomy to local businesses and therefore more possibilities to adapt to local needs. Rather than giving orders that have to be obeyed, the parent company’s HR department develops broader principles.The local units then are able to apply these guidelines, as they deem right. 4. Blueprint Among the several blueprints Baron and Hannan (2002) propose, in the opinion of the authors of this article, IBM used to follow a commitment blueprint until around 2000, primarily because of its focus on attracting people based on their personal belonging and identification with the company. IBM selected people based on values and cultural fit and has been known as a place that was committed to its employees. It has been awarded as one of the best companies for workingwomen and used to have a â€Å"no layoff† policy until the 21st century (Boudreau, 2010) .IBM was able to build a reputation as an employer with enlightened human resource practices and was therefore able to attract talented young people with the right fit between personal and organizational values. The shift from a product based company to a solution based company in the year 2000, however, also forced IBM to change its HRM blueprint to the star blueprint in order to be more in line with the new direction and strategy of the company. Among other things, the proposal to reduce IBM’s workforce by 299,000 workers made clear that a commitment blueprint is not feasible anymore.Even though IBM plans to re-hire those workers as partners, a committed workforce as it used to be cannot be expected in the future. IBM now focuses on attracting the most talented workers with long-term potential, that can be trained and developed to current and future needs (Boudreau, 2010). Moreover, due to IBM’s consultancy work, IBM provides challenging and interesting work for its current and prospective employees. All these findings are in line with the star blueprint proposed by Baron and Hannan (2002).Despite the fact, that changing the blueprint of a company is accompanied by a negative effect on organizational performance (Baron & Hannan, 2002). Earnings per share rose sharply after the change in IBM’s blueprint. Moreover, financial performance and pre tax income increased from 2000 until 2010 (IBM, 2011). All in all, it is reasonable to say that IBM successfully changed its blueprint from commitment to star. 5. Knowledge Management at IBM It becomes obvious from the above discussion that IBM critically relies on its human capital pool and its research and development capabilities.In order to exploit these intangible assets, knowledge management is essential to the company’s success. â€Å"IBM [†¦] requires true enterprise-wide knowledge exchange and collaboration†, as KMWorlds puts it, one of the most advanced evaluators of cor porate knowledge management. In 2005, IBM has been awarded the KMWorld’s reality price for its efforts towards knowledge management since 1994. Parallel to Hansen et al. (2005), IBM’s efforts towards knowledge management will be considered along two lines: within-team networks and intersubsidiary networks.Concerning the first aspect, the company has launched a number of tools and collaboration platforms that enable teams to effectively cooperate and exchange knowledge. Among the most salient of these initiatives are the Collaboration Central, Bluepages and Xtreme leverage. Whereas Collaboration Central is a company-wide portal providing remote teams with currently 50,000 online team rooms to share information and work collaboratively, Xtreme leverage is a tool providing software sellers with access to intellectual capital, expertise locations and community facilities for IBM’s global software brand.Concerning intersubsidiary networks (ISN), KnowledgeView, the wo rldwide asset Reuse Program, Bluepages and Jams are excellent examples of IBM’s knowledge management. To provide a summary of these tools, KnowledgeView is a knowledge-sharing centre targeting Business Consulting Services and enables exchange of information and experience among all consulting units. In contrast to the general nature of the information, specific business success stories are entered into the worldwide asset Reuse Program and are accessible to all employees.Bluepages offer an opportunity to search for personal profiles throughout the company supporting the employees to find a group of experts to work on a specific business solution. Lastly, Jams aggregates information on specific business topics. Besides these major initiatives, IBM has heavily invested into wikis, called QED wiki, and Dogear, a social bookmarking system. All these ISNs increase the â€Å"knowledge sought† (Hansen et al. , 2005) by employees at IBM.Similarly, the opportunity not only to e xchange explicit, but also tacit knowledge through personal meetings enabled by Bluepages sharply decreased knowledge transfer costs (Hansen et al. ). To coordinate all these networks, the enterprise has established â€Å"IBM collaboration and knowledge†. This department led by Karen Ughetta consists of 10 employees continuously aiming to find new ways, in which knowledge can be transferred within the company. Collins et al. (2006) argue that such efforts improve the social climate of a company and via increased knowledge exchange and collaboration lead to superior financial results.These argumentations seem appropriate when considering IBM. Only to provide some examples, the Worldwide Asset Reuse Program has led to $81 million in cost savings and a $63 million increase in asset revenue as well as a $2. 6 billion increase in service revenue. Xtreme leverage has enabled employees to reduce the finding time for experts from 1 week to 8 hours and therefore opportunity cost savin gs of $50 million. And KnowledgeViews lead to the faster exchange of knowledge and consequently saved $42 million in opportunity costs. 6. Actions and Interest AlignmentThe concept of action alignment is defined as the alignment of employee actions with the objectives of a firm’s strategy. Aligned actions therefore, are not part of the routine job, but rather the ability and capability to understand the big picture of the company and its environment and contributing to the attainment of firm goals (Colvin & Boswell, 2007). To achieve action alignment, employees need to have the awareness of the firm's strategic objectives and a shared mindset towards it. According to Colvin and Boswell (2007), specific strategies need specific employee capabilities.IBM tries to achieve this by either hiring the right employees through assessment centers, talent forums or firm acquisitions or by training and developing existing employees to obtain the capabilities needed to attain IBM’s strategic goals. At IBM China, for example, training and development consists of cross-cultural mentoring programs, individual development programs and management training. Moreover, IBM makes use of several online training programs, including a global campus, which gives employees the opportunity to choose among different online classes.In the year 2008, IBM spent about $1700 per employee to ensure that workers have all required capabilities (IBM. com, 2012). In addition to capabilities, employees also need to have the opportunity to apply their knowledge and capabilities (Colvin & Boswell, 2007). IBM achieves this by empowering employees and giving them a say with regard to value formulation and feedback rounds. The â€Å"Your IBM† program is aimed at new employees and tries to spread the history, values and goals of IBM in order to create a shared mindset among all employees, ensuring that every employee has the opportunity to contribute to the firms well-being (IBM. om, 2012). However, without interest alignment, action alignment, in form of capabilities and opportunities, will not realize its full potential. Colvin and Boswell (2007) define interest alignment as the set of extrinsic and intrinsic benefits that employees derive from their work and employment. Extrinsic benefits mainly consist of compensation, but also include employment security and opportunities for career advancement. Intrinsic benefits, on the other hand, include the employee’s belief in the organization’s strategy it is seeking to achieve.By reason of IBM’s 100th anniversary, IBM recently issued a one-time equity grant to nearly 400,000 non-managerial employees to recognize the commitment of its workforce and therefore increase the extrinsic benefits of its employees (IBM. com, 2012). IBM also uses profit sharing and pays bonuses to non-managerial employees. Software engineers and IT specialists derive around 3% of their total salary from profit sharing and bonuses. On the contrary, jobs like computer programmers and computer system analysts do not derive any compensation in form of profit sharing or bonuses except the one-time equity grant mentioned earlier.All those compensation packages are in line with the reasoning of Colvin and Boswell (2007) about how to align employees’ interest with the organization. In addition to compensation, employment security is also part of the extrinsic benefits. Peacock (2010) notes that IBM wants to reduce its workforce from around 399,000 permanent employees to 100,000 by 2017 to complete their HR transformation. This move is grounded on IBM’s overall transformation from a product-based firm to a solution-based firm, which requires more global flexibility (Boudreau, 2010).Even tough, IBM would re-hire the 299,000 workers as contractors, this still does not assure the same employment security as permanent employment. In this regard, IBM is not in line with the reasoning of Colvin and B oswell (2007) and would to some extent decrease the extrinsic benefits to employees. Contrary to that, Noe et al. (2010) state that employees these days know that companies cannot provide the same employment security they used to provide. Employees rather desire employability, i. e. they want the company to provide training and development to help ensure that they can find other employment opportunities in case of lay-offs.IBM training and development practices are consistent with the concept of employability and it can be assumed that although IBM cannot ensure employment security, the training they offer gives their employees the security of employability. On top of compensation and employability, IBM offers wide arrays of medical benefits to its employees. These practices not only increase the extrinsic benefits, but also increase the intrinsic benefits in form of lifting IBM’s image. Colvin and Boswell (2007) state that intrinsic benefits increase when employees perceive that the organization has an image, which reflects their own personal social identity.By promoting education in weak communities, by being environmental friendly and by offering health care plans to its employees, IBM does lots of things to ensure that its image is consistent with the social identity of its employees (IBM Corporate Responsibility Summary, 2010). All in all, based on the evidence in the discussion above, it is reasonable to assume that action alignment and interest alignment between IBM and its employees is rather high. The preceding discussion mainly describes the alignment between IBM and its non-executive employees.In the proceeding section, this paper now analyses the compensation package of IBM’s executives with the help of Stroh et al. ’s (1996) determinants of variable pay. Stroh et al. found that managers in highly programmable jobs will receive a lower proportion of their compensation in the form of variable pay than managers in less programmab le jobs, whereas managers in highly turbulent organizations will receive a higher proportion of their compensation in the firm of variable pay than managers in more stable organizations.Moreover, there is evidence that managers in organizations with human resource policies that encourage long-term relationships will receive a smaller proportion of their salary in form of variable pay than managers in organizations without such policies. In the case of IBM, one can say that due to nearly 100 acquisitions made by IBM (IBM. com, 2012) and the turbulent environment IBM is operating in, organizational turbulence is rather high.Managers’ task programmability can be regarded as low since IBM offers most of its solution in form of consultancy. Lastly, based on the fact that IBM wants to be more flexible and therefore needs to cut its workforce by 299,000 workers, it is reasonable to assume that IBM human resource policies do not encourage long-term relationships. Taken everything tog ether, one would expect a large proportion of total managerial compensation to be variable in form of bonuses, profit sharing and stock-grants.Appendix 1 shows that in 2011, IBM’s CEO and Chairman Palmisano received 92% of his total compensation in form of variable pay (29% annual incentives and 63% performance share) and IBM’s Vice Presidents received 87% of their total compensation in form of variable pay (20% annual incentives and 67% performance share). Overall, this is consistent with the findings of Stroh et al. (1996). 7. The use of HR Measures and Indicators It is important for HR departments to track how effectively and efficiently their practices and programs have been implemented throughout the organization.This helps them to justify their existence, since â€Å"HR departments are increasingly expected to operate as a business within a business† (Ulrich, Younger, & Brockbank, 2008). By measuring the impact of HR practices, the firm is also able to rec ognize deficits and counteract them. The shift within the HR profession towards a focus on strategic HR also implies the assumption that certain HR practices have an influence on overall firm performance (Huselid, Yackson, & Schuler, 1997), and therefore might even be a source of competitive advantage to the firm. Ulrich et al. 2008) recommend to not only base the evaluation on traditional measures such as the cost and benefits of certain activities, but instead to judge the performance of the HR activities based on the impact they have on overall firm strategy. In recent years IBM has undergone a transformation from a traditional multinational enterprise to a more flexible and global structure, which IBM calls a globally integrated enterprise (GIE). The company therefore needs to develop a diverse workforce with a global mindset, which is supported by common corporate values.For a GIE to be successful it is necessary to have a collaborative environment that takes multiple diverse v iews into account, as well as a less hierarchical and more flexible organizational structure. IBM does this by employing employees at all career stages and let them participate in the decision making process. An example of this employee involvement was a global online â€Å"jam†, where the employees themselves discussed about the company culture and developed specific corporate values (IBM, 2010) as well as skills required to work successfully in a GIE.The HR team should identify some measures to determine the success of the implementation of this new corporate identity. It is important to assess the skill development and improvements in relevant employee competencies over time and measure improvements in employee satisfaction, which could be done through frequent and extensive employee feedback. The HR department also recognized that in order to put these new global skills and views into action, employees needed â€Å"exposure to a wider range of global experiences† ( IBM, 2010). This would be especially valuable if it happens earlier in the careers.IBM developed a global mobility and international assignment framework, which offers specific programs and online tools to facilitate this globalization process. In order to assess the impact of this new framework, IBM should track the number of participants in these global experience projects, the number of available places for such projects, and the retention rate of former expatriates. Corporate HR departments frequently face the threat of the not-invented-here syndrome, as local units might feel overwhelmed by orders from outside.In order to prevent this reluctance, the HR department at IBM has created an integrative approach that fits to the strategic HRM perspective the company has taken on in recent years. The HR department takes all sorts of sources into account, such as corporate HR professionals, regional managers and general staff members. 8. Conclusion In recent years IBM recognized the ne ed to shift from a product view to a process oriented view, which includes a focus on providing services and solutions. This shift was necessary due to the increasing globalization and the stagnating computer market.The shift in IBM’s business view also required a change in IBM’s perception of its HR department. It is not longer seen as a mere department that supports business by executing traditional HR tasks such as selection, training, and reward, but has become a strategic part of the company. IBM has moved from an international organizational structure to a globally integrated company, and the HR department successfully developed a framework that facilitates the collaboration of corporate as well as regional and country-based HR teams, in order to guarantee a consistent company culture and create a globally integrated enterprise.This point of view is also reflected by IBM’s change from a commitment to a star blueprint. IBM now provides interesting and chall enging work for its employees and is more focused on selecting talented employees with a long-term potential than on employees with the best values and cultural fit. IBM’s HR department should make use of specific measures to track the effects that its operations have and justify any efforts with regard to creating a integrative, global workforce for the company in the future.