In 1921 the Computing-Tabulating-Recording Co. changed the company’s name to
International Business Machines Corporation- IBM was born. Under the first president,
Thomas J. Watson Sr., IBM increased significantly its business and reached net earnings of $
2 million in 1924. The driving force of the company’s success has always been an innovative
product, which could make the business life easier. By doing so, electric typewriters have
been introduced in the 1930s and remained the flagship product in the next ten years. After
the World War II IBM kept its innovation focus, as well, producing, for instance, the first data
storage devices (hard disk), which soon became the industry standard. Since the 1960s the
company has switched its strategy more to the mainframe production and developed a product
named “System/360”, a network of small and large computers, which could be used by all
companies regardless of their industry. Because of the emphasis on central computer stations,
IBM received the nickname “Big Blue” during this time. Finally, in the 1981, the first IBM
PC was introduced, which was a breakthrough in the electronics business.
Big Blue was always and continues to be a pioneer in the electronic business and
consequently dominates the market, although competition in this industry became fierce.
Besides, not only IBM’s products have been always innovative but also its management
strategy – the employee focus, the environmental concern, or the philanthropic activities. This
mixture of the achievement and the employee/environment orientation allowed the company
to persist in business for over 80 years.
Table of Contents
1. THE COMPANY
2. THE BACKGROUND
3. IBM’s POLICY
3.1. The maker
3.2.The global corporate culture
3.2.1. The social quality
3.2.2. The environmental quality
3.2.3. The economic quality
4. THE CONCLUSION
Research Objectives and Core Themes
This paper examines the corporate social responsibility (CSR) strategy of IBM, analyzing how the multinational corporation balances profitability with ethical, environmental, and social commitments. The primary research focus is to determine how IBM’s policies contribute to its long-term success and sustainability as a global market leader.
- Evolution of IBM's corporate strategy and internal R&D focus
- Implementation of global corporate culture and social responsibility standards
- Environmental management systems and the impact of ISO 14001 certification
- Economic development through e-business and communication network innovation
- Employee well-being programs and ethical business conduct guidelines
Excerpt from the Book
3.1. The maker
IBM was founded back in 1921 and during the over 75 years of business the company’s strategy has altered several times. However, IBM’s former CEO Lou Gerstner Jr., who adjusted IBM’s policy to the new needs of the 21st century marketplace, has performed the last and possibly most significant strategy change. In the beginning of the 90’s IBM situation was really serious because Big Blue missed to adjust to the new market conditions and the increased demand for small, private computers. The situation was so difficult that some analysts predicted an early bankruptcy of the biggest IT firm. After becoming the CEO in 1993, Lou Gerstner Jr. did not only carry out a substantial organizational restructuring but also prepared the company for the future. This preparation included a strong emphasis on the company’s R&D sector and its social responsibility activities. The former CEO recognized early the needs of a global development: “As a global corporate citizen and leader in information technology, we believe we have a responsibility to apply our resources, our technologies, and most importantly, our minds to help protect our planet and make our world a cleaner, safer, better place.”5 The inclusion of, for instance, environment protection policies going beyond any legal requirement was questioned by the opponents of Lou Gerstner’s strategy due to IBM’s unstable financial situation. Nevertheless, the ethical orientation was in one accord with Thomas J. Watson, Sr. guiding principle that IBM has to be a leader not only on the marketplace but also in ethical aspects.6 Lou Gerstner’s risky investment revealed to be benefiting for the company in the future. Apparently, this development contradicts the statement that an increased social responsibility lowers the profitability ability of a company. Big Blue has been able to respond to the customers’ needs (an environment responsible products) by, for example, an ISO 14001 certification. IBM has turned the environmental liability, which for the most companies is inconvenient, to a competitive advantage.
Summary of Chapters
1. THE COMPANY: This chapter provides a historical overview of IBM's evolution since 1921, highlighting its transition from computing machines to a global leader in information technology and electronics.
2. THE BACKGROUND: This section explores the pressures of globalization on multinational corporations and the emerging public debate surrounding the social responsibility of companies operating in diverse international markets.
3. IBM’s POLICY: This chapter details how IBM embodies a proactive philosophy toward corporate social responsibility while maintaining its focus on profitability.
3.1. The maker: This section analyzes how former CEO Lou Gerstner Jr. restructured the company’s strategy in the 1990s to prioritize R&D and ethical leadership.
3.2.The global corporate culture: This overview defines IBM's commitment to enhancing environmental, economic, and social quality on a worldwide scale.
3.2.1. The social quality: This segment focuses on IBM’s initiatives regarding employee well-being, diversity, equal opportunities, and business ethics.
3.2.2. The environmental quality: This section examines IBM’s environmental management strategies, specifically the adoption of ISO 14001 and efforts to reduce emissions and waste.
3.2.3. The economic quality: This part highlights IBM’s commitment to economic development through e-business solutions and extensive R&D investments.
4. THE CONCLUSION: This final chapter synthesizes IBM's approach, characterizing the company as a positive example of a multinational corporation that treats social responsibility as a constructive value rather than a burden.
Keywords
IBM, Corporate Social Responsibility, CSR, Multinational Companies, MNCs, Globalization, Business Ethics, ISO 14001, Environmental Management, R&D, Employee Well-being, Sustainability, Economic Development, Big Blue, Corporate Strategy.
Frequently Asked Questions
What is the fundamental focus of this document?
The document investigates the corporate social responsibility strategies of IBM and how these ethical policies are integrated into their global business operations.
What are the central themes discussed in the paper?
Central themes include the evolution of IBM's corporate strategy, its proactive approach to social responsibility, environmental impact management, and its emphasis on employee welfare and R&D.
What is the primary objective of this research?
The aim is to analyze whether IBM's commitment to social and environmental responsibility contributes to its long-term success and market dominance.
Which scientific methodology is applied?
The paper utilizes a qualitative analysis based on corporate reports, management literature, and theoretical frameworks such as Carroll’s model of corporate performance.
What topics are covered in the main section of the paper?
The main section covers IBM’s historical context, its policy frameworks, and specific implementations of social, environmental, and economic quality initiatives.
Which keywords best characterize the work?
Key terms include IBM, CSR, Globalization, Business Ethics, Environmental Management, and Sustainable Development.
How did Lou Gerstner Jr. transform IBM's strategy?
He carried out a major organizational restructuring in the 1990s, shifting the company's focus toward R&D and embedding social responsibility as a core ethical mandate.
What role does ISO 14001 play in IBM's policy?
ISO 14001 serves as a cornerstone of IBM's environmental management, providing a unified standard for production across global facilities to ensure ecological responsibility.
How does IBM approach employee well-being?
IBM establishes centralized systems like "The Well-Being Management System" to provide medical, safety, and ergonomic resources, viewing employee contentment as a vital organizational asset.
- Quote paper
- Dr. Aleksander Szymanski (Author), 2003, IBM and the business ethics, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/170150
