Ibm Case Study On Diversity

Case | HBS Case Collection | November 2004

IBM's Diversity Strategy: Bridging the Workplace and the Marketplace

by David A. Thomas and Ayesha Kanji

Abstract

Explores how IBM incorporated diversity into its business strategy, making the case that workforce diversity is critical to marketing its products and services to its customers. In the early 1990s, Ted Childs, vice-president of Workforce Diversity, proposed to CEO Lou Gerstner the creation of eight diversity task forces. Delves into the organizational and cultural impediments to starting a diversity task force initiative and how IBM overcame these obstacles to implement an effective diversity strategy. After the task forces were established, they underwent tremendous growth and became global in scope. Childs also faces the challenge of taking a U.S.-based diversity strategy and applying it to IBM's global organization. Teaching Purpose: To demonstrate how a company can implement an effective diversity strategy and integrate it into its overall business strategy.

Keywords: Information Technology; Diversification; Business Strategy; Integration; Global Strategy; Organizations; Markets; Information Technology Industry; United States;

Transcript of Case Study: Diversity as Strategy

Company History 1993 Lou Gerstner, chairman and CEO
Sam Palmisano became CEO in March 2002, as well as chairman in January 2003
Virginia Rometty took over the helm as President and CEO in January 2012 CEO's on Diversity Stakeholders Critical Issues Key Events Managers are held accountable diversity related issues
1995 Gerstner launched a diversity task force initiative which remains in effect today Missing out on money from untapped markets Lack of diversity at the senior level
Lower management and other employees diversified Not reaching all possible markets
Missing out on small businesses (mostly women and minorities) Outcomes Created 8 specific task forces
(Asians, blacks, GLBT, etc…)
Joint perspectives create multiple POVs Top Management Commitment Distributive Justice Procedural Justice Teach employees how to manage diversity Small and medium-sized businesses revenue increase
From $10 Million in 1998 to 100’s of millions in 2003
Global revenues at $25 Billion ($370M in 1998) Challenges Lou Gerstner saw a lack of diversity within his executive team Created 8 specific task forces Women Hispanics White Men Native Americans Disabled Asians Blacks LGBT Questions? The need to understand IBM’s diverse market
Deliberately seeking ways to reach a broader range of customers
2001 IBM began assigning executives to develop relationships with the largest women and minority owned businesses in the US Task force launched on Bastille Day, July 14, 1995
Gerstner signaled diversity as strategic goal
Believed establishing task forces made a powerful impression on employees Embracing differences was a radical departure for IBM
IBM’s previous culture was to be colorblind and ignore differences
Now recognize and embrace differences in order to learn and make improvements Number of female executives worldwide increased 370%
Number of US born ethnic minorities increased by 233%
An increase of 733% for gay, lesbian, bisexual and transgender executives
Executives with disabilities have tripled Email was sent to every US employee detailing the task forces and their missions
Ted Childs, VP of Global Workforce Diversity compiled more than 2,000 responses
As a result task forces focused on
Communications, staffing, employee benefits, workplace flexibility, training and education Eliminate discrimination by embracing differences Case Study: Diversity as Strategy
Anne Duggan
Hipolito Moreno
Kelly Pierce
Donna Skwirut Gerstner and Palmisano shared views
Systematic approach to Managing Diversity
Leadership Commitment
Communication
Recruitment and Retention
Incorporation of Diversity into the Main Work of Organization
Linkage of Diversity to Organizational Outcomes
External Relationships
Diversity is imperative in expanding markets
Identifies diversity as a strategic goal IBM employees
Task Force Members
Customers
Businesses
Suppliers Proposed Alternatives/Solutions New and/or Interesting Development Stockholm, September 20th 2012 - Based on the preferences of over 144,000 career seekers, with a business or engineering background, from the world´s 12 greatest economies , Universum releases the global talent attraction index: “The World’s Most Attractive Employers 2012”. IBM ranked #13 on the Top 25 list for 2012 Best Companies for Multicultural Women [Working Mother] Resistance from all sides Issue of cultural and religious diversity Global challenges In a globalized world with companies in different countries ~ the success of a company depends on its commitment to diversity Managing diversity at IBM as a source of competitive advantage IBM wants to hire more women in India (May 2012) Continue to promote diversity around the world Continue with diversity training and keep open communication with formal follow up

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