Structural Changes in IBM by Louis

Gerstner

Existing
Structure

Board- 18 members, 5
insiders

HR head

CEO
Managemen Corporate
t Committee Management
Board
Domestic sales head

Internation
al Sales
Head
36 Country
General
Managers
All
departments

United States
Headquarter 8
regional
headquarter
local units

Executive Committee 8
members, board within
board
Technology
Head
24 Business Units large
scale systems division,
semiconductor, application
software etc.

Other central
depts. finance,
legal,
communications
etc.

Departments
marketing (70
different ad
agencies),
accounting, HR, sales,
IT, product lines etc.

*cross unit issues not resolved, no cooperation in business units; confusing performance measurement systems; MC vetted every
major decision - was disbanded; atomization was stopped; separate accounting, fulfilment system for all business units, 128
CIOs in IBM -> 1 CIO

Marketing, HR, Finance

and other central
departments
Customers in to 12
Industry groups,
Organized into 12
global industry
teams

Board 12 members, one

insider
CEO
Worldwide
Corporate Executive
Management
Committee- to solve
Council
cross unit business
11 support functions- 6 core
problem
(Hardware, software, fulfilment,
integrated supply chain, CRM and
services) and 5 internal (HR,
procurement, finance, real estate, IT)

4 dimension matrix geography, product,

customer, solutions

60 brands to 6, 30 research laboratories to 6, Focus on middleware, Changed compensation programme, sold unproductive asset