Telecommuting at IBM Indiana Essay Example | Topics and Well Written Essays - 1500 words

Telecommuting at IBM Indiana - Essay Example It was in the 19702 that the company enjoyed about 70% of the computer market share. The reputation that the company name was tagged with gave the company trusted reputation. Half of the company’s business volume was spread out worldwide. It was in the mid-1980s, however, that the company started to have problems. The profits of the company had started to plunge down. Analysts concluded that the reasons behind the downfall were not many but were strong enough to shaken an established company. They were: the bureaucratic and slow moving setup of the company, maintenance of old business strategies and reluctance to replace them with newer ones, incorrect assessment of business risks. As said by Ducker (1993), it is a business sin to sacrifice tomorrow’s opportunity on the altar of yesterday. This was precisely the reason why IBM got off-track its road to success. Though IBM did try to cope up with the growing trends of the market by introducing a PC in the market almost o vernight after Apple introduced the first PC in the mid-1970s but they could actually never get out of the MAINFRAME mask that they had put on themselves. Then the time came when IBM was being administered by JOHN AKERS who was a career IBMer in the ear 1985. Since the downfall of the company had already begun several steps were being taken by the administered in order to downsize the company. A summary of the downsizing of the company can be viewed in the attached table. Table 1: The IBM Timeline from 1970 to 1994. YEARS PROGRESS AT IBM. 1970s IBM owns about 70% of the computer market share. 1980s IBM continues to grow but at a slower rate. 1985 Profit margins begin to slip. 1985 – 1993 Downsizing resulted in employee number moving from 405,000 to 300,000. 1987 – 1992 Stocks dropped from $176 to $ 49. 1991-1992 Unprecedented losses. 1994 Employee number decreases to 225,000. The administered however resigned in the year when despite all his efforts the company continu ed to lose stocks and suffered major losses in year 1992.Louis V. Gerstner then replaced the former head of the company. Further downsizing of employees was then consented upon by the management of the company. THE PROPOSAL The establishment of the company’s office in the state of Indiana was an evident example of the problem the company was facing overall. The Indiana office reduced its number of employees to about 30% in the year 1992. The General Manager Operation s for the State of Indiana was foreseeing another cut in the number of employees. This step was extremely unaffordable as any further cut in the number of employees could have resulted in the deletion of key essential employees of the company that were required to run it. This could have put the company into further trouble. An alternative idea was proposed by the then operations manager of IBM Indiana Office in the year 1993. He proposed that instead of reducing the number of personnel working at the organizatio n furthermore the employees should be equipped with technological devices to assist them. This would in turn enable the employees to be able to work from home. The terminology commonly coined for such a task is Telecommuting. TELECOMMUTING While all the other offices of the IBM were trying their hands at downsizing the people at Indiana were eager to try something new. The first person to take up this change was none other than the executive Vice President of the Indiana Operations himself. It was decided that employees who spent more than half of their