1. In the 1970s and 1980s Palmisano states that IBM was organized as a classic multinational enterprise. What does this mean? Why do you think IBM was organized that way? What were the advantages of this kind of strategic orientation?
2. By the 1990s, the classic multinational strategic orientation was no longer working well for IBM. Why not?
3. What are the strategic advantages of IBM's globally integrated enterprise strategy? What kind of organizational changes do you think had to be made at IBM to make this strategy a reality?
4. According to the strategic choice framework introduced in this chapter, what strategy do you think IBM is pursuing today?
In its infancy, IBM first started to expand internationally and did so in the classic international pattern of may enterprises, undertaking most of its activities at home, and selling its products internationally through overseas sales offices. By the 70s, IBM had moved to a classic multinational enterprise with small branches in major national markets around the world. Today, IBM's CEO, Sam Palmisano, describes their global business model as a "globally integrated enterprise." Such a strategic shift was response to globalization of the world economy, the global nature of IBM customers, and fierce competition from emerging markets. Taking action toward the low cost market, IBM seeks mobile, skilled, and human capital to do business effectively in a wide range of national contexts.