Investigation IBM Recent Organizational Strategy Changes (Research Paper Sample)

STRATEGY
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1.0 INTRODUCTION
Strategic change is part of all corporate and business organizations in the current economic environment. Competitiveness, technological development, and changing geopolitics have all forced business organizations to investigate their strategy and revise it accordingly for the sake of sustainable profitability. IBM is one such organization that although having being in existence or more than five decades in a highly dynamic tech industry, has remained relatively unchanged for long. However, the emergence of various competitors in the computing industry forced the management to investigate the prospects of a strategy change.
This paper intends to investigate IBM’s strategic change in detail since it’s realization that the process was not only necessary, but inevitable if the multinational was to survive. Starting off with a literature review of three main theories investigating the state of existing schools of knowledge, the paper intends to create a suitable background from which to understand the need for strategic change among companies. The theories will include innovations strategy, strategies for competitive advantage, and sustainable strategy. Afterwards, the paper will delve into the company using an analytical perspective in terms of its external and internal environments, as well as strategy and change with regards to the corporate objectives enshrined in IBM’s core competencies. Additionally, this analytical process will align itself with the three theoretical schools of thought introduced in the literature review. Finally, the paper will discuss how useful the identified theories would be in executing IBM’s strategic changes before a suitable conclusion.
2.0 LITERATURE REVIEW
2.1 Innovation Strategy
Aaker (2009) reported that unlike most business strategies, innovation strategies present the management of business organizations with challenges in the form of difficulties in predictions touching on time, impact, and steps necessary. Grant (2016) reiterated that the definitions of innovations strategies revolve around one central theme; the guidance of management decisions in adjusting organizational resources in delivering value, to better meet organizational goals, and build optimized competitive advantages in competitive industries or markets (Chaston, 2012). Ideally, the main goal according to this school of thought is management decision that improves business performance.
Another school of thought closely states that innovation strategies are organizational plans aimed at growing the business’s market share through both product and service innovation (Battistella, Biotto, and De Toni, 2012). Because the main objective of any business enterprise is to create value while making profit, this school of thought seems to concentrate a lot more on the market share. Ideally, such a definition and application of innovation strategy would apply to the service market as product-oriented markets cannot afford tunnel vision when it comes to creating value for their customers (JHA, 2015). However, this school of thought still explains the main theme of innovation strategy in the sense of innovation and market share.
Esty and Winston (2009), interested in the developments of innovation strategy and its contributions to organizational sustainability argued that it is investment in technology, research and development in order to boost organizational sustainability as much as satisfying customers. Clearly, the bias in technology as well as research and development points to an application in scientific as well as technology industries (Peng, 2013). However, the emphasis on innovation for customer benefit, as well as organizational development remains a common denominator. Therefore, this third school of thought demonstrates the variations mentioned earlier in terms of innovation strategy as there are differences in execution times, impacts desired, and steps necessary for execution.
Peng (2013), like most scholars, disagrees on the second guideline arguing that businesses in the service industry differ from the goods-oriented ones. However, the majority have agreed that the second guideline towards a successful identification, creation, and implementation of innovation strategy must identify the target firm’s external opportunities and challenges (Johnston and Bate, 2013). The innovation strategy is supposedly a solution for lags in the business firm’s competitive edge meaning that identifying potential opportunities and possible challenges is a helpful step in the right direction.
Additionally, the last guideline in the successful identification, creation, and implementation of an innovation strategy is establishing the business organization’s potential and distinct advantages after the process (Peng, 2013). Many business processes that involve the creation of strategies benefit greatly from investigations into the potential benefits of creating and adopting the said strategies (Whittington, Cailluet, and Yakis‐Douglas, 2011). Innovation strategies are not any different as the management has to inquire about the distinct benefits such individualized strategies accord the enterprise.
2.2 Strategies for Competitive Advantage
Teece (2010) postulated that strategies for competitive advantage comprise the various schools of thought that offer the business organization any form of competitive advantage over its rivals. Whittington, Cailluet, and Yakis‐Douglas (2011) agree that one of the best strategies for competitive advantage can be investigated from the Market-based View. This strategy, according to the said scholars, offers the firms competitive advantage in terms of the characteristics of its end-product relative to the market expectations (Whittington, Cailluet, and Yakis‐Douglas, 2011). Arguably, the firm may be engaged in goods or services that resemble those of its rivals, but how it executes its version in the same market offers it a competitive advantage. Research demonstrates that even the most subtle changes in the offers that firms make in competitive markets can make the difference. Therefore, these changes, and how they are optimized to offer customers the most value constitute such strategies for competitive advantage.
Researchers also identify the possibility of competitive advantage emanating from within the organization’s internal environment (Battistella, Biotto, and De Toni, 2012). They argue that some organizations have an internal business environment that not only favors operations, but also how they are able to offer the most value to their customers. However, the strategic angle comes up in how the same organizations can manipulate these internal environmental advantages and fashion a strategy that offers them more competitive advantage compares to other business entities in the same market or industry (Whittington, Cailluet, and Yakis‐Douglas, 2011). Scholars have exemplified these internal environmental abilities as resources such as manpower and finances or special skills. However, the strategic ability of such internal resources rests on the management’s ability to optimize them for better competitive ability.
While many scholars consider manpower as a potentially strategic tool, some scholars have gone a step further to suggest the existence of similar strategic abilities in special knowledge (Battistella, Biotto, and De Toni, 2012). These researchers have argued that many organizations acquire distinct and measurable competitive advantage based on some degree of knowledge that is not only unique to them, but also restricted in use to their entity (Shim and Lee, 2012). Therefore, Knowledge-based Views demonstrate yet another school of thought in the strategies for competitive advantage arena where unique intellectual property offers its owner with some distinct degree of competitive advantage. Rothaermel (2015) summarized that because of such know-how, the company is not only able to offer the customers better goods and services, it also acquires the ability to surpass its rivals and perform relatively better.
In addition to labor force and knowledge, Rothaermel (2015) identified the presence of another source of strategic advantage in terms of competitiveness. Capabilities differ even in the same industry as demonstrated in the publications of many scholars in the industrial and engineering disciplines. One reason which also offers another strategy for competitive advantage lies in the individual capabilities of the various players in the same field to execute towards customer satisfaction (Whittington, Cailluet, and Yakis‐Douglas, 2011). Scholars argue that no two firms score the same in terms of their capability to make the same product even when supplied with the same material. Therefore, the firm that has better or greater capability not only satisfies its customers better, it acquires a distinct competitive advantage over its rivals.
2.3 Sustainable Strategy
Most schools of thought and research endeavors into the most appropriate business practices in terms of shareholder and stakeholder welfare support sustainable strategy (Peng, 2013). These schools of thought agree that the longevity of businesses is almost as important as the sustenance of profitability and operations. However, in order to initiate sustainable strategy, various considerations must be made for the sake of success within the context of customer welfare.
Teece (2010) suggested that sustainable strategies in the current era of competitiveness, technological advancement, and tough geopolitics have remained unchanged. Many scholars’ investigations of the possibilities of change in philosophy report that sustainable strategy supports the triple bottom practice. This means combinations of the environmental conside...