The IBM Company: Organizational Design

Subject: Organizational Management
Pages: 6
Words: 1758
Reading time:
7 min
Study level: PhD

Job design is a practice of isolating the functions of an organization into various working units and also allocating different tasks to the units created (Daft, Daft & Murphy, 2010). Job designs examine how different tasks in an organization depend on one another, and how they affect the set goals and objectives of an organization. Due to the dynamic business environment, managers have devised measures that help in designing the various job groups of an organization (Daft, Daft & Murphy, 2010). This is done with the aim of enhancing efficiency. The IBM organizational structure was transformed in the 1990s in order to improve efficiency and overall performance of the company.

The current IBM management is composed of a team of well-experienced managers (Meyer, Anzani & Walsh, 2005). These managers are skilled professionals in terms of overall performance and utilizing the best technological platform. The company’s management is designed in such a way that the functions of all the departments are fully integrated. This company is centrally organized in such a way that the functions of different departments in the organization are coordinated from a central point. IBM’s organization’s design is integrated in various ways. Moreover, the organization’s structure ensures that all the departments and their subunits are well known alongside functioning optimally (Meyer, Anzani & Walsh, 2005).

In order to redistribute the functions of the general manager who is also the president of the company, the organization has four vice presidents (VP) namely VP marketing, VP finance, VP human resource, and VP legal. All these VPs report to the overall president of the company (Meyer, Anzani & Walsh, 2005). The VPs work together with the president in managing all the functions of the organization. These VPs do not have specific departments which they manage. However, their functions are executed through the president. This is the top most organ of IBM. Slightly below the president, there are directors who are in charge of four departments. The various departments include hardware product line, software product line, hardware development, and software development. The product line departments work together to ensure the development of and introduction of new products into the market (Meyer, Anzani & Walsh, 2005). The product development departments also make sure that the entire general subsystem is well developed. The two major groups are further linked via a program manager who coordinates the functions of the organization by ensuring that all the processes are well coordinated. The latter also assesses the marketing requirements of the new products under development (Meyer, Anzani & Walsh, 2005). This makes sure that all the requirements necessary for product development and distribution are well coordinated. The company coordinates all its functions and also interlinks them through the system design panel which is headed by a development manager.

This system of job design has revitalized IBM for a long time. The design ensures that individual talents are fully utilized so that high performance can be attained in organization (Hodgetts & Hegar, 2007). This has so far been achieved by the creation of goal-oriented departments. The manner in which IBM has designed its departments enables career development. Both the lower level and top management are closely linked to one another in terms of the daily operations of the organization. On the other hand, the top management has the responsibility of undertaking promotions and demotions based on the individual performance of employees (Hodgetts & Hegar, 2007). The presence of departments that are specialized has boosted the capacity of IBM to obtain, use, and share knowledge efficiently. These departments are well linked based on the current form of organization in the company. This form of organization has enabled free flow of information from one department to another. This system has improved the utilization of knowledge in IBM (Compton, Nankervis & Morrissey, 2009).

It is also vital to note that this design addresses efficiency of the employees (Kleynhans, 2006).The company’s job description is complex and hence requires additional input by the workers. It has put up several managers dealing with the various production units. This is also a known measure that fosters intellectual development and cognitive flexibility (Mathis & Jackson, 2010). It is equally important to assert that the job design is very influential on an employee’s well being. Employees of IBM are not restricted to specific functions. They are expected to coordinate and share information across all the departments. This appears to be an extremely efficient survival mechanism for the employees of IBM (Robbins, 2009). In any case, it has resulted into increased growth and the capacity of IBM’s employees.

Opportunities for individual progression are also major career repercussions in a company’s organizational structure (Griffin & Moorhead, 2011). Studies have shown that there are quite a number of organizational structures that have reduced the number of employees as they move up the hierarchy of the organization structure. Analysis of IBM’s structure revealed the same. However, the rate at which such reductions take place is below the known average (Griffin & Moorhead, 2011). The company has several specialized managers positioned at each level. All these managers report to one another as well as the top management. This system does not observe the traditional chain of command. Employees in each department are expected to monitor their work. They are also supposed to take responsibility while performing various functions in the organization. The vertical commands are greatly minimized; the horizontal discovery options are numerous due the available links and interchanges. This enhances the diversity of the skills of the employees since numerous learning opportunities are available (Smit et al, 2007). The only challenge with this type of structure is the minimal chances for low level employees to become one of the top management.

The management of this company is split into various functioning units that ensure job specialization. This has resulted into increased efficiency within the company. The employees of this company are motivated in variety of ways. The company also embraces job rotation. This is an effective tool that is known to manage cases of boredom and fatigue (Griffin & Moorhead, 2011). It equally increases the skills and flexibility of the employees. The presence of intertwined departments has also made it possible for the latter to be achieved.

The workers of this company are subjected to a broad range of roles and responsibilities. This is one of the factors that rejuvenated employees in this firm largely due to a dynamic working environment. They can receive instructions from any department. Moreover, the design has minimized job specialization and as a result, it has exposed employees to several tasks that compel them to be more productive and creative (Griffin & Moorhead, 2011). Diversifying the tasks performed by an employee does not guarantee improved flexibility or efficiency. This can only be achieved if the tasks increase the employees’ knowledge base. The link between the hardware and the software departments of the IBM has led into the creation of an integrated system. This system is capable of expanding the skills and overall efficiency of employees.

When analyzing IBM Company from a socio-technical approach, we notice that the company’s structure ensure peaceful coexistence between the technological and social aspects of the work environment (Armstrong, 2010). The available communication tens to link all the departments an equally ensures continued communication among the departments. This has led into adequate coordination within the company’s workforce (Armstrong, 2010). It also explains why most employees in this company are relatively satisfied with their individual jobs. The performance of these employees is impressive. IBM is characterized by divisions of the company into smaller working groups that are allowed to share information. These groups have a manager and as such, they are allowed to make their own decisions but share the information with other groups. This has ensured that all the major departments of the company are well represented and given equal opportunities. It has also led into substantial growth due to improved production and marketing strategies. However, analysis of the company from this approach neglects the effects of the company’s culture and individual differences among employees in terms of both behavior and attitudes. Nevertheless, this approach has identified the job satisfaction, motivation, and some work attitudes. The above factors have proven to be of great value in the organization (Armstrong, 2010).

Currently, several developments have cropped up in an attempt of ensuring that the job design offers an efficient work output. Several systems have advanced on the socio-technical systems. Besides, there are those that have come up with new systems of job design. All these variations are targeting the improvement of the efficiency of the work force (Griffin & Moorhead, 2011). Some jobs are poorly controlled but demand a lot from the workforce. Such jobs are stressful to employees. Therefore, development of a system that will ensure efficiency in such jobs is relevant. IBM tried to address this missing link by minimizing job specializations (Daft & Lane, 2009). As a result, interdepartmental communication has been improved by creating a single team that makes complex tasks easy to handle.

IBM’s top management structure is also very effective. This is because of the available channels of communication that are currently centralized. The president receives information from the vice president and the managers. The professional also acts as a pivotal point of communication between the managers and the VPs. This has minimized the degree of control from diverse points. Therefore, coordination and certain decision frameworks can easily be execute (Armstrong, 2010). This has consolidated the working environment of the company by enabling growth due to availability of a wide base of knowledge in the organization.

The use of managers who are semi autonomous but are directly collaborating with the president ensures active participation of the company’s managers in the identification of employees’ needs and talents (Debra & Nelson, 2010). This ensures employees are well rewarded for their achievements. Minimal constrains to flexibility are available in the company’s organization structure.

The IBMs organizational structure seems to be very effective in enhancing mutual benefit of the company and employees (Debra & Nelson, 2010). If the current changes are incorporated properly, efficiency of the company and its employees will be enhanced even further (Zhu & Sheng, 2012). The levels of employee motivations will increase significantly. The use of techniques such as autonomy analysis, behavioral outcome study, context satisfaction and important psychological conditions will diversify the job design and also assist in incorporating entities that promote growth and development. On the same note, it will appreciate the current dynamic status of the work environment (Debra & Nelson, 2010).


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