Although computers have been around for decades, only in the 1990s has their full application potential been realized by companies around the world. Leading the way are internationally recognized Information Technology (IT) service firms, including IBM, Electronic Data Systems (EDS), consulting firms such as Andersen Consulting, Computer Sciences, and Cap Gemini. The U.S. Department of Commerce tabulated 1997 sales in the consulting, systems integration, and project management computer services industry at $90 billion.1 A relatively recent but important entrant into this field is Perot Systems, which began in 1988 by Ross Perot. As the sixth largest IT firm in the world, can Perot Systems provide solutions for the elusive goal of fully integrated management systems in large, global organizations?

Ross Perot is one of the true masters of the American economic free enterprise system. Born in Texarkana, Texas on June 27, 1930, he has led a life filled with one significant achievement after another. Having lived his whole childhood in Texarkana, he entered the U.S. Naval Academy in 1949, where he served as class president and battalion commander, an experience that even to this day motivates him to hire many of his top company officers from ex-military personnel. Upon his discharge from the navy, Ross married and began working for IBM’s data processing division as a salesman. In 1962, with $1000, he started a one-man data processing company which he called Electronic Data Systems. Drawing on his experience in the military, in addition to recruiting a large number of ex-military personnel, Perot was able to build his firm into the premier data processing company in the U.S.

In 1984, EDS was sold to General Motors for $2.5 billion. GM wanted to greatly increase its use of technology in its manufacturing process and viewed its EDS purchase as an effective way of meeting this goal. As a result of the purchase, Ross Perot became one of the single largest holders of General Motors and a director in the company. However, Perot had great difficulty adjusting to GM’s bureaucratic, autocratic management style, and he was eventually bought out of GM in 1986. After waiting the required twoyear noncompete period, he started Perot Systems in 1988.2 Interestingly, GM spun EDS off in 1996, as it became obvious that the two entities did not make a good fit. Throughout his career, Ross Perot has always been a model of citizen volunteerism. In 1969, the U.S. government asked him to determine what action could be taken to assist the prisoners-of-war in Southeast Asia. In recognition for his work, he received the Medal for Distinguished Public Service, the highest civilian award presented by the Department of Defense.3 In 1992 and again in 1996, Ross Perot ran for president of the United States representing a new third party, the Reform Party, which he founded as an alternative to the Republican and Democratic parties. Perot’s campaign efforts forced him to step down from daily involvement in Perot Systems. That year, Mort Meyerson, who had helped him build EDS into a world-recognized leader in data processing, stepped in to assume the chief executive officer duties. Although he had worked closely with Perot at EDS, Meyerson did not share Perot’s desire to recreate EDS’s “young, male, military model” corporate climate at Perot Systems.4 He was convinced that times had changed.

Review Questions 

1. Compare Mr. Meyerson’s leadership style versus Mr. Perot’s based on the Michigan and Ohio State behavioral theories of leadership.

2. Utilizing Fiedler’s Contingency Theory of Leadership, explain how either Meyerson’s or Perot’s style might be most appropriate based on specific characteristics of the situation at Perot Systems.

3. Evaluate the situation at Perot Systems from the point of view of the discussion on New Leadership.