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2) What did Gerstner do when he assumed the role of CEO in April 1993? Evaluate
Gerstners approach to crisis management. How well did he perform as a turnaround
manager? What challenges did he face as he attempted to position the company for
growth?
Gerstners approach to crisis management was to put the customer first. He visited
customers, analysts, and industry experts during the first few months to get input. Rather
than break up the company Gerstner decided to turn it around by going to market as one
IBM. Made senior executives personally responsible for their assigned customer and
accountable for any problems that arose. Additionally, he hired many experts in order to
get costs under control, head the trouble PC company brands, and organize internal IT
organization. Also, due to the many complaints from customers, a customer relationship
manager and a dedicated sales and service team were appointed for each key customer
account.
Gerstner, performed great as a turnaround manager implementing change throughout the
company effectively. IBMs stock price doubled as investors voted with confidence to fix
rather than break up and sell IBM. Profits rose to 5 billion on revenues by the year end of
1994.
Gerstner faced many challenges to include a group of people in the middle who didnt
want to transition. Many found it difficult to operate as a team, as a global entity.