Module 3: Discussion

In the 1990s what lifecycle stage was IBM? Please critique what life cycle characteristics (as
discussed in the readings) were present at IBM, and what did IBM do to reset its lifecycle
stage.
Your post should be a minimum of 250 words. It is difficult to write a substantive post in less
than the word minimums. (25 points). Remember this is a mini essay. Please do not quote
directly from the readings but make sure to CITE your information and provide a bibliographic
citation. Please use APA format (see APA Tools and Resources in the menu bar).

When I look at the term life cycle, the root of the word, for me, is cycle. Within a cycle,
there are likely to be changes that occur which can shift the trajectory of one’s path or journey.
In reviewing and analyzing the case study this week on IBM (International Business Machines),
the same could be said in what the company experienced throughout the 1990s. Similarly
speaking, as described in chapter four of our readings this week, IBM had reached peak
maturity level only to decline, which sparked an initiation of re-assessing their strategies and
executions to bring forth a new sense of self to the market. Perhaps the cause of the shift in
IBM’s life cycle in the 1990s can be traced to their newly appointed CEO, Lou Gerstner, in 1993.
As it’s mentioned in our readings from Lusthaus et al., there are four characteristics of
the life cycle – birth, adolescence, adult, old age (Lusthaus, Adrien, Anderson, Carden, Plinio,
Rey de Marulanda, & Smuytylo, 2002). In the case of IBM at the time, the life cycle
characteristics that were present include adult, old age, birth, and adolescence, in that order.
All four characteristics are present because in the 1990s, IBM had experienced what could be
considered to be the peak of their maturity, only to decline thereafter, which forced them to
start anew and roll out a restructured business model, as exemplified by the “IBM Business
Leadership Model” (Harreld, O’Reilly III, & Tushman, 2007). Within this model are two key
determinants, being strategic insight and strategic execution. The proponents that comprise
these two determinants showcase either the model’s performance gap or opportunity gap,
which can dictate the type of market results IBM receives. What IBM did to reset its life cycle
stage was by refocusing their attention to the customer and tending to the customer’s needs.
Maintaining a top rank among their competitors was considered to be secondary as they made
this shift in priority. In reading about IBM’s life cycle, I was immediately impressed by the swift
call to action made by Gerstner and applaud his motivation to create such an impactful
transformation in how they perceived and executed business.

References
Harreld, B. J., O’Reilly III, C. A., & Tushman, M. L. (2007). Dynamic Capabilities at IBM: Driving
Strategy Into Action. Berkeley, California: California Management Review
Lusthaus, C., Adrien, M-H., Anderson, G., Carden, M. H., Pilinio, G., Rey de Marulanda, N., &
Smuutylo, T. (2002). Organizational Assessment: A Framework for Improving
Performance. Ottawa, Canada: International Development Research Centre