1.1. Introduction to IBM GBS
International Business Machines Corporation (IBM) is an American IT and consulting company headquartered in Armonk, New York. It is one of the leading companies for hardware, software and services in the IT sector as well as one of the biggest consulting companies (Doerner 2007). Furthermore, IBM is the second biggest software maker. Worldwide more than 380,000 people work for IBM, wherefrom about 21,000 in Germany (IBM 2010).
This report focuses on the IBM Branch Global Business Services (GBS), which is the consulting branch of the company. In 2002, IBM acquired PricewaterhouseCooper’s consulting branch and creates IBM GBS (Shankland 2002). About 80,000 consultants work for IBM GBS and cover consulting topics regarding strategy, supply chain management, finance management, customer relations as well as HR. The service and consulting business sums up to half of IBM total turnover (IBM 2010).
The location Dusseldorf, which is focused on in this report, is one of more than 30 locations in Germany. Headquarters are located in Ehningen near Stuttgart, Germany.
1.2. Reasons for Analysing IBM GBS
IBM GBS was chosen for this report as one of us did a six month internship at IBM GBS in 2010. Therefore, we got firsthand experience and inside and contact to other employees for the interview. Furthermore, IBM is a highly interesting company for such a report as it states innovation as one of the three main company missions along with dedication and trust (IBM na). Therefore, it is interesting to see whether this mission statement is only written to attract customers or if it is truly lived by all employees and applied to daily work. Moreover, this report aims to find out if such a big company is still able to encourage creativity and innovation or if bureaucracy hinders it.
2.1. Problem Definition and Objectives
At the beginning of each research process stands the formulation of the problem to be solved and the setting of significant research objectives (Churchill & Brown 2005). Defined problem and objectives form the basis for the whole study because they identify what information is needed and how to achieve it.
The problem has been explained in the introduction: how innovative is the company IBM and how is creativity enhanced? From these two problems the objectives of the report arise:
a) To review the contents of the lecture on innovation and creativity in order to provide significant information and to outline the general framework of this report
b) To achieve in interviews and at the case study of IBM GBS Düsseldorf primary data on the topic
c) To analyze the results on the basis of the theory elaborated in the secondary data to develop a set of conclusions and recommendations for the enhancement of innovation and creativity at IBM
2.2. Research Design
The research design is the framework for the collection and analysis of data. The three basic types of research design are exploratory, descriptive and causal research. Exploratory research is used to discover ideas and insights while descriptive research is concerned with determining the frequency with which a variable occurs or the relationship between two variables. The third type, the causal research is used to determine cause-and-effect relationships (Churchill & Brown 2007). Due to this the exploratory research is applied for the presented report.
The design that is used for this dissertation is the case study design regarding the observation of a single organization. The case study research is “concerned with the complexity and particular nature of the case in question” (Bryman & Bell 2003 ). In general it is a thorough assessment of the setting, in this case the company IBM GBS Düsseldorf. The case study research is usually combined with several qualitative research methods. In this report it is combined with structured interview and a CORE Score.
3. Innovation Findings
To be innovative companies need to provide to appropriate context regarding people and organization as well as innovation strategy. Only when both parts are well balanced company achieves successfully innovation.
3.1.1. People and Organisation
Organisations are improved by new ideas generated from creativity. Therefore, creativity enhances either effectiveness or efficiency in process of constant generation for developing opportunities or addressing problems. Furthermore, it provides more than one solution to any given problem and is a key factor in the innovation process.
Providing the right environment for the employees is the main aspect in supporting the creativity needed for successful innovation at work. According to Antabile companies have to consider three components to enhance creativity and innovation: employee expertise, creative thinking and motivation.
Employee expertise can be provided by employing people with the needed expertise as well as by constantly train employees so they keep up with developments and new knowledge. At IBM the employment process has always been very selective. As one of the leading companies they competed for the best skilled workforce available. Nevertheless, the economic crisis of the last years has negatively affected the amount of new hires. Therefore, the training of the existing workforce has become much more relevant and a lot of different trainings are available to each employee. An online tool keeps track of each employee’s training progress and informs supervisors.
The creative thinking is another personal skill that can be assessed, for example by doing a CORE score, and therefore should be another criterion in the employment process. Sadly, there is no information available whether this criterion is applied at the IBM employment process or not.
Motivation is what drives people to do what they do and can be differentiated in intrinsic and extrinsic motivation. Extrinsic motivation is triggered from outside the individual for example by rewards or threads. At IBM there is widely spread bonus system based on performance. However, this bonus system only motivates the sales force at it is very difficult for other employees such as marketing or HR to be considered by the system. Therefore, it is not very motivating. Intrinsic motivation comes from within each person. As most of the IBM employees perceive their work itself to be highly challenging their work itself is what motivates them.
Andriopoulos (2001) determines five components of organisational creativity: organisational climate and culture, leadership style, resources and skills as well as structures and systems.
The term organisational climate refers to the overall atmosphere at work. To encourage creativity the mood should be encouraging participation and freedom of expression within a set of guidelines. The atmosphere at IBM GBS provides a lot of different stimuli for the employees as well as a large number of guidelines. Participation is encouraged but nevertheless the set of rules is still dominating the atmosphere.
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Each organization generates its specific culture that dominates the organizational behavior. It is based on the values and norms shared by the employees. The term stands for written and unwritten rules within the company, morals and values, nationality, and the company’s historical background. Bright and Parkin (1997) summed it up with their definition: “This is how we do things around here”. At IBM GBS the individuals have relatively high autonomy in their daily work and therefore feel in control over their work and ideas. This culture is supposed to enhance creativity. Moreover, there is a very open communication throughout all ranks of management and communication is done on a first name basis, which is special among Germans. As there a no set working spaces employees are encouraged to talk to different colleagues every day.
The leadership style gives orientation for employees on how to act based on their supervisors behaviour. Creativity and innovation encouraging leadership style is characterized by listening, trusting and inspiring. Therefore, a good leader is able to communicate well with its employees on a professional as well as social basis. This way, the employee gains trust and feels safe to communicate new ideas and take risks. At IBM GBS each supervisor is trained to behave in this way. Therefore, trust is encouraged among supervisor and subordinates and new ideas are communicated directly.
Resources and Skills
The component resources and skills deals with the workforce itself. On one hand, companies should employ people that provide the necessary skills but are willing to learn and take risk at the same time. On the other hand, employees have to be constantly trained to match new tasks. This was referred to above. The component includes another aspect, the allocation of time and money. At IBM GBS employees have little time to fulfil all their tasks and very little money as budgets are currently cut back due to the economic crisis. A lot of deadlines are given each day and people are easily burned-out with impossible tight deadlines. This makes work uncomfortable.
Structure and Systems
Long-termism is preferable to give long term gains and support creativity. Furthermore, creative companies provide few rules, loose job descriptions and flat hierarchy. The evaluation of employees is fair and considers extrinsic as well as intrinsic factors. On top of this, creative performance is rewarded. At IBM GBS an overall long term view structures work but in day-to-day business the quarterly results play the most important role. As a result, employees lose focus on the long run and mostly consider short term gains. The hierarchy is quiet steep and job descriptions are relatively narrow. Most of the positions are extremely specialized and come with a set of regulations on what is allowed to do. As said before, the reward system is focused on sales staff.
Innovation at IBM
International Business Machines Corporation (IBM) being an Information Technology corporation requires innovate ideas for a number of reasons. Innovation itself according to the definition of the venture is the usage of new ideas and the respective processes as well as the goods and the services required in addition to the organization models and practises in a way that is based on an application of science and technology to come up with new ways of doing things and implementing variations in the expectations (Drucker, 2006). To have all the respective resources left for innovation in International Business Machines Corporation (IBM) is an issue that is handled with the magnitude it deserves by all the parties in the entity for the sake of designing mechanisms that are able to run the venture as it is supposed to be.
Innovation in International Business Machines Corporation (IBM) is influenced by the manufacturer concept. This is a kind of innovation that the organization gets involved in for the sake of having to make a fortune from it (Govindarajan &Trimble, 2010). It is innovating for sale. International Business Machines Corporation (IBM) is a leading supplier of the company software’s and other Information Technology related systems and the facilitation of innovation in the corporation’s area of specialization is aimed at selling the idea for financial gains. A manufacturer gain is one of the factors that do influence innovation in International Business Machines Corporation (IBM).
According to Govindarajan &Trimble, (2010), the end user innovation is as well a factor that does affect innovation in International Business Machines Corporation (IBM).It is a kind of innovation that the corporation invests in for the sake of self benefit. The becoming of traditional embraced systems and software’s obsolete is the factor that does facilitate innovation at the corporation they try to remain relevant to the sector that they are involved in. The International Business Machines Corporation (IBM) often is made to facilitate innovation for the internal economies of it. Innovation is thus caused by the fact the existing systems are not able to satisfy the company needs.
The organization is desperate for creative people and this is the other reason why it encourages personal innovation. It needs people who can see things differently and can as well swiftly size up matters of concern and pitfalls (Lafley & Johnson, 2010). The International Business Machines Corporation (IBM) has targets of growing business even further and it at times requires people who have critical ideas on how to par take a project and make it survive and grow significantly. Thus the need of creativity does drive innovation in the commerce.
The need of availing solutions to the technical problems those are in the corporation as well drives innovation (Lafley & Johnson, 2010). International Business Machines Corporation (IBM) is an IT venture and it requires innovative ideas to offset the technical drawbacks that it is subjected to after a sale of the software for instance or in its development. As a result, the company does encourage innovation within.
People and Organization
This is the pooled acuity of individuals that work with the corporation regarding their working environment. The International Business Machines Corporation (IBM) does give the workers of the entity the required protective devices as well as benefits that enable them to be fully productive achieve self actualization (Epstein, Freer, Robert & Shephered, 2010). The company considers employees as assets and it does respect employee’s dignity as well as the sensitiveness of humanity in addition to the detailed understanding of the realities of business of its workforce and embraces the employee’s optimization and improvement. Further more International Business Machines Corporation (IBM) offers unlock codes to motivation and job royalty by its workers.
International Business Machines Corporation (IBM) does after creation ensure that the organizational attributes that it operates with are able to create a rewards perception and boost collective effort. It encourages socialization and open mindedness in the venture.
International Business Machines Corporation (IBM) embraces the democratic style whereby the employees are encouraged to be part of decision making process. The manager of International Business Machines Corporation (IBM) keeps all of his employees aware of the variaables that are likely to affect them in the place of work and the responsibilities of making decisions are shared as well as the avenues of getting out of a bottleneck between the managers and the subordinates. This approach of the leaders seeking other people’s perception before the making of decisions is what the corporation has majored on to create employee royalty and honesty that has seen the unit prosper well in recent times.
Resources and Skills
International Business Machines Corporation (IBM) utilizes various skills to enable it serve its clients base effectively. The technical skills, communication skill as well as the other relative skills are advocated for to ensure that the output of the corporation is relevant to the needs it is set to satisfy (Hisrich, Peters & Shepherd, 2006). It as well pools all the necessary resources towards the achievement of the goals and needs of the corporate entity. From Hisrich, Peters & Shepherd, (2006), any resources that includes human, technical and support resources are available in plenty in the business to facilitate work performance relative to the other concerns. Resources and skill are thus plenty in International Business Machines Corporation (IBM) and their proper utilization is advocated for to ensure they lead to reasonable and practical returns.
Structure and Systems
These are the governing ways of running the corporate (Epstein, Freer, Robert & Shephered, 2010). In International Business Machines Corporation (IBM) they are as shown by the below structures.
Organizational structure at International Business Machines Corporation (IBM) is set on functional grounds as well as on project basis. The senior managers are responsible of allocation resources. On project basis workers do leave their work stations and develop detailed technology on the functional groups.
Systems structure of International Business Machines Corporation (IBM)It is reasonable and realistic for the achievement of goals (Epstein, Freer, Robert & Shephered, 2010).
Both the employer and employee are at their comfort zone in the corporation. This is because each of them scores almost the same figures in many aspects as shown by their core scores charts. These are related to the ability of the venture to make the corporation as realistic as possible.
Team/ Employee Creativity
International Business Machines Corporation (IBM) does encourage teamwork and unity as they execute their roles and responsibilities at work. The workers are given room to develop their own ideologies and implement them to the realization of the efforts they committed into it.
Innovation Strategy and Innovation Process
Degree of Innovation
High levels of innovation and are practiced and encouraged in International Business Machines Corporation (IBM).This is due to the nature of the market that the entity serves and seeks to satisfy. Tastes and preferences are changing due to the increment in roles and the need of solving all the matters in one instance is making it reasonable to support innovation of high degree. Thus, the organization advocates for high levels of innovation to in the areas of work for its Human resources to ensure it shall remain relevant to the market it serves.
Sources of Innovative Opportunity
Innovative opportunities are brought about by the fact that customers or the clients that the corporation serves are not satisfied fully by the systems that the entity sold to them though rare. The need of having better systems that are superior to the existing ones does create the opportunity of innovation as one will be seeking at mending the loop holes that cause dissatisfaction.
Type of Entrepreneurship
International Business Machines Corporation (IBM) does embrace the technical entrepreneurship because it has the characteristics of being product oriented as well as having innovative skills on manufacturing backgrounds (Hisrich, Peters & Shepherd, 2006). It incorporates in it the industrial entrepreneurship as well.
New Product Development/Protection of Products and Brands
International Business Machines Corporation (IBM) does patent all that its employee’s designs to avoid theft of skills and other likely copyrights.
Intrapreneurship at IBM
International Business Machines Corporation (IBM) does boost entrepreneurship in many aspects that are facilitated by the type of business it is involved in as well as the usage of the modernised technology. The entity as well does motivate employees towards entrepreneurship for professional and skills growth.
Looking at International Business Machines Corporation (IBM), the business does accommodate various perspectives on the betterment of its employees working conditions and realization of reasonable returns. The executives of the company do advocate for the adoption of the stipulated work culture and ethics inn bigger extents. The organization brands are as well accruing good values on daily basis due to their ability to satisfy the customer’s needs. Looking at the company recent press releases, I am able to conclude that it is able to achieve al of it short term goals and objectives in addition to the realization of the strategies. It is as well strongly based on financial a perspective which is proven by the sudden growth of the company market structure and ability to deliver more advanced products to the market.
I therefore recommend that International Business Machines Corporation (IBM) continues to produce more clients’ satisfaction based outputs to ensure that they are able to hold on and maintain the market that they are still surviving with.
International Business Machines Corporation (IBM) is a successful business enterprise and this is due to the good leadership of its management team that is facilitated by the adoption of realistic organizational systems such as participative approach and accommodating innovative ideas (Spadaccini, 2007). It has been able to enjoy a reasonable market out of the strategies that were adopted to see it in the positive end.
It would be reasonable if the organization adopts the performance analysis approach to ensure that the employees are evaluated against the optimal performance versus the actual performance to outline the most performing person. The gap analysis should be made to oversee the variations between the business needs and other variables surrounding it as well as job performance against the needs of training the workforce afresh. Individual needs as outlined by the Phillips analysis needs should be satisfied first before the training needs and job related needs and commerce concerns. This will make the workforce to be more productive hence resulting to a better International Business Machines Corporation (IBM).