John Autry

OGL 357: Assessment of Organizations

02/05/2021

Module 3: Discussion Board Paper

In the 1990, IBM software company failed to complete their strategy planning and lost
over 65,000 employees at that moment because they were not prepared to work together
constructively as a team and also did not upgrade new products and services. So the stock
price dropped down to lower costs when they did not skyrocket their revenues. Luthaus
demonstrates an example that “this appears to be a stable time in the organization’s life
cycle, there are certain pitfalls. If the organization becomes overly bureaucratic and rigid,
it runs the risk of reducing its ability to respond to the changing needs of its stakeholders.
This may lead to its downfall, or to the perception of those both inside and outside of the
organization that it is failing to live up to its potential” (Luthaus, 2002, p. 90). As a
matter of fact, they do not know how the strategy works for their organization to develop
their products and services in the last 12 or 18 months. Furthermore, they failed to face
their challenges and attempt to make their right decisions to reach consensus. 

Harreld identifies that “IBM has gone from success to failure to success; from a
technology company to a broad-based solutions provider to, perhaps, an exemplar of the
new world of open systems and on-demand capabilities” (Harreld, 2007, p. 21). When
Gerstner took over the job as a CEO, he understood that there was something wrong with
the business model and he was capable of transforming and learning from dynamic
capabilities. Luthaus states that “there is a need for increased strategic thinking, and
longer range planning and management for the organization to handle its successes.
Typically at this stage, there is a need to involve more people in the management of the
organization, as sheer growth and development make it difficult for the leader to juggle
all of the responsibilities” (Luthaus, 2002, p. 89-90). Gerster requested his senior
managers to hold accountable in accomplishing two critical tasks. They were capable of
adapting changes in their competitive environment in order to attract their customers’
needs. It demonstrated that it is the dynamic capabilities which “builds on the notion of
core competencies but focuses on the role of management in building and adapting these
competencies to address rapidly changing environments” Harreld, 2007, p. 24).

Reference:

Lusthaus, C., Adrien, M. H., & Anderson, G. (2002). Organizational Assessment: A

Framework for Improving Performance. Washington, DC, USA: IDRC Books
Harreld, J. B., O’Reilly III, C. A., & Tushman, M. L. (2007) Dynamic Capabilities At
IBM: Driving Strategy Into Action.  California Review Management, Vol. 49, No. 4.
Retrieved from: https://cb.hbsp.harvard.edu/cbmp/content/65297136