IBM (International Business Machines Corporation) aligns its organizational culture with business goals for leadership in the information technology industry. Organizational culture or corporate culture defines the philosophies, principles, and values that influence employee behaviors. Cultural characteristics influence human resource support for IBM’s strategic responses to opportunities and threats in the business environment. The company maximizes the benefits of its organizational culture, such as in using cultural influence to motivate workers, called IBMers, for business growth. This company culture’s emphasis is on growth despite the strong competition determined in the Five Forces analysis of IBM. The company competes with providers of cloud computing, artificial intelligence, software, and hardware, such as Oracle, Hewlett Packard Enterprise, Microsoft, Google (Alphabet), Amazon, and Intel. This condition sheds light about the role of corporate culture in the long-term success of the IT company.
Organizational culture affects decision-making throughout IBM, also known as Big Blue. For example, worker participation in feedback systems for customer service quality depends on the company culture. Also, the corporate culture affects human resource involvement and contributions to IBM’s intellectual property and patent portfolio used as competitive advantages for business leadership in the information technology industry.
IBM’s Organizational Culture Type & Characteristics
IBM has an organizational culture of THINK. Thinking and creating solutions are included in this work culture. In this context, the company relies on thoughts and ideas for developing new information technologies or improving existing ones. The following elements are the most notable in IBM’s organizational culture:
- Radical thinking
- Dedication to every client’s success
- Innovation that matters
- Trust and personal responsibility in all relationships
This organizational culture is based on Thomas J. Watson Sr.’s efforts to integrate the company, which was originally known as the Computing-Tabulating-Recording Company (CTR), formed from the amalgamation of four companies. Watson’s goal was to unify the whole organization and ensure its long-term success. His efforts created the foundation for IBM’s current corporate culture of Think. The cultural characteristics have been formally redefined based on the results of the 2003 ValuesJam, which was the company’s way of establishing key values through the participation of employees.
Radical Thinking. Radical thinking is the primary and most defining characteristic of IBM’s organizational culture. This cultural trait influences the company’s development through its more than 100 years of operations in the information technology industry. IBM managers encourage employees to engage in thinking that has potential to disrupt the status quo and deviate from traditional ways in the business. In this way, the business culture promotes creative and innovative thinking that leads to technological breakthroughs. For example, based on contributions from radical-thinking employees, the company introduced the IBM System/360, which was the first easily upgradable computing system family for customers, especially businesses. The organizational culture encourages technological breakthroughs that reflect IBM’s vision statement and mission statement and the achievement of related goals and objectives for the business.
Dedication to Every Client’s Success. This feature of the organizational culture focuses on clients’ needs and guides employees’ decisions for business development. Also, IBM aims to maintain high-quality customer service to address the needs of the information technology business. The organizational culture indicates the importance of customer relations in determining business success. The concern of customer service quality is a sociocultural factor relevant in the industry, as identified in the PESTEL/PESTLE analysis of IBM. Customers are more likely to develop a favorable perspective of the company, based on product effectiveness and quality of service. Thus, IBM’s corporate culture supports business goals for customer loyalty and for a growing and stable share of the market.
Innovation that Matters – for Our Company and for the World. The emphasis of this feature of the company culture is on addressing market demand through product development, which is one of IBM’s intensive growth strategies applied with generic strategies for competitive advantage. To ensure that innovation matters, this cultural attribute points to excellence as a key success factor in the information technology business. For example, excellent computer systems provide long-term benefit to customers, in terms of solving their business problems. Thus, the organizational culture contributes to the value of the company’s brand, which is one of the business strengths identified in the SWOT analysis of IBM.
Trust and Personal Responsibility in All Relationships. This cultural characteristic promotes trust, personal responsibility, and respect for the individual. These factors affect relationships that involve IBM employees, business partners, suppliers, and others. Through this element of the organizational culture, the company expects benefits to the business. For example, trust and respect lead to positive relationships that support high employee morale and stronger alliances with business partners. In this regard, IBM’s corporate culture contributes to business resilience despite challenges linked to competition in the information technology industry.
Advantages & Disadvantages of IBM’s Corporate Culture
IBM’s organizational culture has the advantage of motivating employees to creatively approach problems and challenges. Creativity, based on radical thinking, is a key success factor in the information technology business. Another advantage of IBM’s work culture is its emphasis on personal responsibility, which increases organizational competence in solving problems at all levels of the business. For example, based on this cultural characteristic, individual employees are encouraged to take responsibility in reasonably addressing solvable problems encountered in their jobs. Thus, IBM’s organizational culture contributes to business growth.
The disadvantage of limited support for business process flexibility is considerable in IBM’s corporate culture. This issue is based on the company’s focus on innovation and excellence. Employees have actual flexibility in their jobs, but this flexibility is not necessarily directly translated to the flexibility of business processes involving employees. Another disadvantage of IBM’s organizational culture is the lack of formal support for self-checking and self-correction of groups and departments in the company. For example, the company does not provide formally established institutional and cultural support for addressing mistakes linked to challenges in the information technology industry. The following actions are applicable in efforts to improve IBM’s corporate culture:
- Implement a cultural trait that increases the flexibility of business processes.
- Integrate self-checking and self-correction into the cultural trait of trust and personal responsibility.
- Chindasombatcharoen, P., Chatjuthamard, P., & Jiraporn, P. (2023). Corporate culture, cultural diversification, and independent directors: Evidence from earnings conference calls. Journal of Behavioral and Experimental Finance, 37, 100773.
- IBM – A Culture of Think.
- IBM – Diversity and Inclusion.
- IBM – Philosophy and Governance.
- International Business Machines Corporation (IBM) – Form 10-K.
- U.S. Department of Commerce – International Trade Administration – Software and Information Technology Industry.
- Zhang, W., Zeng, X., Liang, H., Xue, Y., & Cao, X. (2023). Understanding how organizational culture affects innovation performance: A management context perspective. Sustainability, 15(8), 6644.