Free Essay On Ibm


IBM's matrix structure worldwide

IBM has applied the same matrix structure worldwide. Matrix structure is formed by two sides: vertical lines and horizontal lines. Vertical lines include S&D (Sales and Distribution), IGF (IBM Global Financing) and Marketing. Horizontal lines include STG (System Technology Group), GTS (Global Technology Service), GBS (Global Business Server), and SWG (Soft Ware Group). On each vertical and horizontal line's point of intersection, Plan-Do-Feedback takes place independently. This is IBM's matrix structure applied worldwide.

In upper level over each nation like Asia-Pacific, IBM has integrated matrix structure of each country in the same zone by combining the same intersection points of each nation in the same zone. In last level over each zone, IBM has integrated worldwide matrix structure of each zone all over the world by combining the same intersection points of each zone globally. With this integrated three-level matrix structure, IBM can control all the global process efficiently. IBM is the first all matrix structure group in the world.

Dynamic IBM

IBM is one of the largest companies in the world, so people can think IBM is stable in terms of almost everything. But this is exactly not right. IBM is really dynamic as it has changed its organizational structure of STG once in every six month. This restructuring even includes executives.

IBM has wanted to change current situation dynamically to optimal one in response to everything including environmental change, new technology and so on. IBM always hungers for something new and has a very strong experimental mind. As a result, in terms of the number of patent, IBM is absolute rank number 1 as it has much more patents than the sum of patents coming from rank number 2 to rank number 10. With this passion for something new and change, there has been lots of the first invention of technology in IBM. For example, IBM developed NANO (element dial) firstly which was technology that made possible for people to write letters with element.

Now, in IBM, there are 72 fellows meaning engineers treated as extreme geniuses by IBM. Out of these fellows, now, there are three Nobel Prize winners. IBM has invested extremely huge amount of money to R&D because it always wants something new and innovative. IBM thinks people are the most important driver to make innovation. With huge investment and human driver concept, IBM now has 3 novelists in R&D.


Horizontal lines of matrix structure in IBM

There are 4 main parts in horizontal lines.

STG (System Technology Group):

This part is for Hardware.

GTS (Global Technology Service):

This part is for Service. There is ST (Service Team) in here.

GBS (Global Business Server):

This part is for Consulting.

SWG (Soft Ware Group):

This part is for Software.

There are a lot of brands in each part, and each brand considers itself only. These 4 parts are very important respectively but STG is the most important part because Hardware is the most basic and fundamental one in IBM. Without this part, IBM can not exist now. And also many people in IBM think we should focus on STG first with same reason.

We analyze STG to certain meaningful level. To analyze the product in detail with specification is meaningless because this paper is not for technological proposal but for international business.

STG (System Technology Group)

In STG, there are 2 main categories, Server and Storage.


There are 3 main servers depending on the level of openness to environment.


Extremely close server to environment. The size is very big and the price is very expensive. Mainframe is 99% utilized, so never-die server. We can say ENIAC as an example. Among the Mainframes, now, Z series are the most popular.

In Mainframe, very huge profit comes from the related software. The point is that IBM is almost the only producer to make software related to Mainframe. The reason of using the word ‘almost' is that recently Korean company, TMAX comes to produce software related to Mainframe. But for IBM, that's not a big deal because the gap is really big.

Qnix server:

This is open to environment, so this can die. Linux can be applied to this Qnix server.

X series:

Very basic one. This is for entry and very open to environment. For producing this, chips manufactured by Intel are used. Many people use this X series in the real world. It has about 30% market share of total server market.


Storage is a product to store the data. We can categorize all the storage brands into high-end, mid-end, and entry. It is meaningless to see all brands in detail because there is almost no big difference among the storage brands.

Vertical lines of matrix structure in IBM

There are 3 main parts in horizontal lines, S&D (Sales and Distribution), IGF (IBM Global Financing) and Marketing.

S&D (Sales and Distribution)

S&D is treated as a flower of IBM because it is really important to IBM. IBM's main customer is not a small individual customer but a big company. In S&D, there are 6 sectors categorized by the traits of customers.


school, hospital, government, and somewhere like this


iron industry, building industry, and somewhere like this

Com and Air (Communication and Air):

Gimpo Airport, Incheon Airport, Koreana Air, SKT, KT, LGT, and somewhere like this

General Business:

small products for individual customers

.com (Dot Com):

smaller ones than General Business

BPO (Business Partner Operations):

companies. For these customers, there is Client Team in IBM.

In IBM, there is Account Team which is group among the top managers (representatives) in each brand. This team makes the voice of IBM usually in face-to-face situation.

The most important mission of Account Team is OI (Opportunity Identification). For OI, this team always analyzes the customers, mainly the companies, in 6 sectors. When the team finds some opportunity, it finishes the deal and then offers this opportunity to OO (Opportunity Owner) that is each one in horizontal lines of matrix structure. This means to ask OO to review this opportunity and say what they can do and offer to this opportunity.

In horizontal lines, there are 4 main parts, STG (System Technology Group), GTS (Global Technology Service), GBS (Global Business Server), and SWG (Soft Ware Group). In each part, there are lots of brands, and each brand cares about itself only. In this condition, when Account Team asks 4 main parts in horizontal lines to think about the opportunity, each part sends this to each brand.

In each brand, there is SS (Sales Specialist) who is charged with covering everything about the brand in terms of S&D as SS sometimes identifies opportunity and consults the brand in direct or indirect way. In response to Account Team's offer, each SS gathers opinions of each brand respectively in selfish way to his/her brand. And then these opinions are integrated by CR (Client Representative) who is the chief executive officer in Account Team. We can call CR AR (Account Representative). By integrating the opinions, CR finalizes the mega deal. CR gets incentive for integration and whole sales. CR is influential to the deal directly because CR always makes face-to-face deal with the CEO, CIO, CFO, and someone in this level of IBM's client (customer) companies.

IGF (IBM Global Financing)

IGF does M&A, lease, and BBP (Buy Back Program). M&A and lease are very common concepts. But Buy Back Program is somewhat special. This is for supporting S&D. When Account Team finds opportunity in some company, there can be competitor's products in that company. In this situation, BBP buys all the products of left depreciation for supporting the deal of S&D.


For each brand, there is each brand marketing respectively. In each brand's marketing, there are 3 main parts, OIR (Opportunity Identification Rally), Marketing Campaign Team, Activity Team.

ORI (Opportunity Identification Rally):

This is marketing team that is very close to actual S&D works. This is for supporting sales of S&D.

Marketing Campaign Team:

This team is only for conducting an event like a seminar.

Activity Team:

This team makes some marketing messages and thinks deeply how to conduct these messages with perspective of marketing. And then it conducts the messages.

Internal Departments

In IBM, there are 4 independent departments internally, HR (Human Resource), Finance Team, R&D, and Legal Department.

HR (Human Resource):

This department is charged with employing new and experienced employees, distributing employees to proper parts and training new employees for 6 months. All the process is standardized. IBM is one of the best companies in training in the world.

Finance Team:

This Team is different from IGF. This department is related to the job of CPA. They calculate GP, PTI and something like this. The chief of this department is CFO.

- Pricing Team:

This team is included in Finance Team. They care about only the price of each deal. This team is the only team that can know the margin in terms of GP. For example, assuming that the margin of some product is 5% in terms of GP and in national level, agreement of upper level is needed if the margin is less than 20%, this will be sent to zone level like Asia-Pacific. But if agreement of upper level is needed if the margin is less than 15% in zone level, this will be sent to worldwide level. And then final decision will be made usually in U.S.


There are 2 R&D labs in Korea, Software lab and UCL (Ubiquitous Computing Lab). UCL played a very important role in conducting Songdo Ubiquitous City Project. All the things related to R&D is so confidential that common people can not know about R&D.

Legal Department:

This department is for protecting all the IBM's legal actions. It reviews everything in terms of law. This part is a group of lawyers. Every contract should pass through Legal department. This department also manages the sign up of BCG (Business Conduct Guidance) which is IBM's own conservative international standard.


In IBM, operation is not that special. Plants are in U.S, Mexico, China, Europe, and so on. All the operations are based on BCG. All the things are similar to other global companies.

But IBM is very sensitive to manage people because of security problems. And also to minimize the claims from the employees, IBM focuses on human management and it was the first company using the concept of Work & Life Balance.

Recommendation for the future international strategy of IBM

In the past, when internet was on boom, the objective of IBM was e-business and on-demand meaning that IBM will send what customers want. Now, IBM's objective has changed. That is ‘Smarter Planet' which means that IBM wants to change everything over the world.

For changing the world, IBM looks very good. There is almost no problem. But we find some problem for IBM and many managers of IBM agree with that.

IBM is dynamic company so it is sensitive to local changes. But as a global company, IBM has standardized all the process and is going to standardize all the process more in the future. But this will lead to lack of localization. So with standardization, IBM should consider localization also to make optimal point between standardization and localization.

For example, Japan was not included in Asia-Pacific zone because the sales of IBM Japan were 10 times more than that of IBM Korea. It meant Japan was treated as a special nation. IBM Korea contributed only 1% to total IBM's sales while IBM Japan contributed 10% to total IBM's sales. So, IBM gave more local managerial rights to IBM Japan. This action was quite effective.

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The history of computers is short but very complicated. Computers have been through lot of changes throughout the past half-century. They also affect our society in many different ways today. The following paper describes how the computers have changed from 1970 to present.

During 1970, Intel came out with a chip, which was the best selling semiconductor memory chip in the world. The chip was called Intel 1103 and it was first DRAM, dynamic Random Access Memory) chip. D.r. Robet H. Dennard developed it. His team and him had been working on it since 1966.

The engineers needed to build a new type of chip for a calculator in 1971. So, they came out with a chip called Intel 4004. It was the first single chip general-purpose microprocessor built bye Intel. The chip was 4-bit and ran at a rate of 108 kHz and it also contained 2300 transistors. The chip dealt with up to 1 Kb of program memory and up to 4 Kb of data memory.

In the early 70’s lot of new technology was being built. In 1973, IBM came out with the first hard disk drive. The hard disk used two 30 Mb platters. During the next decade, the hard disks were used in primary data storage, than in minicomputers and later in the early 80’s in personal computers. The first personal computer to use a hard disk was IBM PC/XT in 1983. In 1974, Gary Kildall developed CP/M (Control Program for Microcomputers). It was the first operating system to run on machines. CP/M became the permanent operation system for software development on small systems, but later the personal chose not to use CP/M. In 1975, MITS Altair was the first personal computer to get attention by a lot of people. It was made of Intel’s 8-bit 8080 processor. The MITS included 256 bytes of memory, toggle switches and an LED panel.

Apple II was the beginning of the personal computers. Steve Jobs and Steve Wozniak developed the Apple II in 1977. It had a built in keyboard, graphics display and BASIC built in ROM. It was based on the MOS 6502 processor. Apple used MOS Techonology’s 6502 processor in the personal computers. It contained three 8-bit registers and an 8-bit stack pointer. It was one of the first personal computers that were useful to people and a new age of technology.

In 1981, IBM came out with a PC. “The landmark announcement of the IBM PC stunned the computing world,” (Patterson 1). It was the first PC that surprised the world with its features and speed. The IBM PC came with a 64 Kb of RAM, a floppy drive and monochrome graphics, DOS, operating system based on CP/M. The PC was based on Intel’s 8088 processor. It was a 16-bit processor, which contained 8 registers and unique segmented 20-bit memory architecture capable of addressing 1 Mb of memory. It ran at a speed of 4.77 MHz. So the first IBM PC became pretty popular during the early 80’s.

In 1982, a new computer came into the market with new technology and became very popular. “An estimated 22 million units were sold. That’s almost as many as all the Macintosh models put together, and it dwarfs IBM’s top-selling systems,” (Patterson 3). The Commodore had a 64 Kb of RAM and it was also the first personal computer with an audio synthesizer chip. In 1983, it came out with a portable version knows as the SX-64. It was the first color portable computer. It was based on the MOS 6510 and it also had fast color graphics. The Commodore was a cheap computer for the features it had and people all around the world bought it.

Later in 1984, Apple came out with a new computer called the Macintosh. The Macintosh was sold for $2495. It had 128 Kb of RAM, it also had a 3.5” floppy disk drive, which held more data than the 5.25” disks. Motorola’s 68000 processor powered it. It was a 32-bit processor and it also contained 60,000 transistors and had 16 registers. This computer became popular during the 80’s but Commodore was still dominating during the time.

During the mid 1980’s IBM came out with a new and better computer known as the IBM PC/AT. It had Intel’s fast 80286 processor that ran at 6 MHz, merged with 16-bit busses. The 80286 made the new PC/AT faster than the original PC. It came with a lot more ram 512 or 640 Kb and new floppy disks drives which could hold up to 1.2 Mb.

In the late 80’s Apple came out with a new computer known as the Macintosh II. It was first color computer by Macintosh. The color was 8 bit deep and it was also available in 24-bit. The graphics of the Macintosh II inspired Adobe to make a photo editing software called Photoshop. The Macintosh II had a 14” color monitor. The screen resolution went up to 640 x 480 and it had RAM of 64 Mb. It had a Motorola 68020 processor with 6881 FPU. It was one of the expensive computers of the time; it costs were $5498 for a standard configuration, which included 1 Mb of RAM and a 40 Mb hard disk. The Macintosh II was not a popular computer, customers complained about the price being too high.

After Steve Jobs left Apple he came up with his own computers knows as the NeXT, which was released in 1989. It had a Motorola 68040 processor; 8 Mb of RAM a built in DSP, digital signal processor and the first commercial magneto optical drive, which has 256 Mb capacity. The NeXT had some faults to it. The computer was sold for $10, 000 which was too high. Another fault in the computer was it used Objective C, a mix of C and Smalltalk instead of using C++. So it was so expensive for the consumers to by it and the use of wrong type of language.

In 1993, Intel Pentium Processor began developing and went through the industry faster than any of the previous processors by Intel. In 1994 and 1995, standard configuration of an Pentium processor ran between 60 and 120 MHz, 4-16 Mb of RAM, about 200 Mb of disk space, 8-bit 640 x 480 Super VGA graphics, a 14” color monitor, a CD-ROM drive, and ran under Windows 3.1. The cost of it was from $1800 to $2500 depending on design.

In 1994, Apple introduced a new computer known as the Power Macintosh. The new Power Macintosh 6100 had 60 MHz PowerPC 601 processor. It also included 8 Mb of RAM, 16-bit 640 x 480 graphics, 16-bit stereo, 250 Mb hard disk, a CD-ROM drive and a built in Ethernet. It also came with a 14” color monitor with built in speakers in the monitor. Its total cost of the machine was $2289.

On August 24 1995, Microsoft came out with Windows 95. Which became very popular and it was affordable for many of the families. It had full networking support; it included tolls for accessing the Internet. The operating system was 32-bit, which helped in improving the performance of the computer. Windows 95 were being advertised everywhere. They were being advertised on TV, radio, newspaper, magazines, billboards and many other places. The PC industry became very popular when Windows 95 was releases because it was affordable and easy to use.

In the late 1990’s, the computers became very fast with higher RAM. It was 700 MHz and about 64 MB of RAM. The hard drive space also went up a lot to 15-20 GB. Which was a big improvement from the previous computers. Today the computers are extremely fast. It has reached the speed of 3.0 GHz and hard drive space up to 120 GB on personal computers. They also come with a built in DVD/CD ROM and a CD burner. The prices for all the computers today are really cheap and most of the people can afford it. Almost everyone has a personal computer in their house or their business. Computers run most of the machines being run today. For example, the computers are controlling the touch free car washes, like when to stop a certain thing and when to start it. So the computers are dominating a lot of things these days.

Therefore, computers have changed a lot during the past century. They went from 108 KHz to 3.0 GHz. That is a huge change during the past half century. Computers are going to get really advanced and really fast in the future. It is going to keep growing in the future. So the computers play a huge role today in our society all over the world.

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