Organizational Challenges Faced by Globally-Integrated Enterprises Essay Example
Organizational Challenges Faced by Globally-Integrated Enterprises Essay Example

Organizational Challenges Faced by Globally-Integrated Enterprises Essay Example

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  • Pages: 5 (1221 words)
  • Published: December 21, 2021
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The modern business environment is characterized by rapid changes that companies must keep up with to survive. The high rate of competition in the business environment requires companies to have business strategies that enhance their competitive advantage. One of the strategies that companies use to gain a competitive advantage in the market is expanding the market to gain a large markets share. This entails expanding their operations to different regions of the world. Although the move is profitable due to increased market share, caution should be taken when making decisions concerning globalization as it has high market risks.

Operating in different regions exposes a company to all types of business risks that may reduce the profitability of worse still, lead to bankruptcy (Ng, Dyne & Ang, 2009). The process of formulating and implementing business strategies that enable such


companies to survive in the global market requires a team of individuals with leadership skills necessary to manage change. IBM is among the companies that are faced with the challenge of operating a globally-integrated enterprise. This paper discusses the challenges that globally-integrated enterprises face in their effort to gain a competitive advantage in the market. It discusses the major challenges that faced IBM as well as the alternate actions that can be used to address the available problems. The paper concludes with highlighting the appropriate recommendations that IBM can use to succeed as a globally-integrated enterprise.

The need for IBM to provide products and values to different parts of the world was the primary driving force for the adoption of the global integration model. The company needed to develop products and services that fulfilled the needs of the customers

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the communities as well as the employees. To do this, the company had to use its available resources to provide quality products for the clients by transferring skills, products and services to where they were demanded. The other global force that motivated IBM to adopt the global integration model was the need to survive the highly competitive technology industry (Kanter 2009). By adopting the model, the company aimed at satisfying the needs of their customers beyond expectations so that they would retain the existing clients as well as attract a larger market share. The other factor was the need by the company to manage change more efficiently. The business environment keeps on changing fast and companies are required to have the capacity to keep up with this pace, failure to which the company’s chances of success reduce due to inefficiency.

Among the factors that have contributed to the success of IBM is the capability of the employees. For an organization to succeed in global integration, it must have leaders whose main focus is innovation. Kanter (2009), states that the main skills that gives the company an upper hand in the highly competitive world include the ability to learn from past experiences, persuasion and collaboration of the company leaders. By learning from past experiences, the company avoids a repeat of previous mistakes. The persuasion skills possessed by the employees ensure that it reaches the target market most effectively. The ability of the employees to collaborate ensures maximum benefits of teamwork.

The adoption of a company culture that respects different cultures has improved the motivation of employees because they are able to deal with the challenges presented by diverse

culture in their line of duty. The ability of the company to meet customer needs effectively has increased the popularity of the company relative to competitors such as Apple. According to Hoekman & Javorcik (2006), the success of a business is mainly determined by its ability to provide customer value in the most effective way.

Major issues faced by IBM

Kanter (2009), cites that the primary issues faced by IBM are concerned with the need to export its products to other parts of the world outside the United States where its mother branch is located. In relation to this, the company faces challenge of stiff competition as it focuses on converting clients to accept its products. By operating in markets outside the United States, the company is exposed to market risks such as political instability in the markets, thus affecting its progress negatively. Cultural difference is also a primary issue facing the company in its operation in other countries as it has a great influence on the perception of the customers about the company. The nature of the products and services provided by the company entails transferring manpower from one region to the other where their skills are required. This may have an adverse impact on the company due to cultural differences that the employees may face.

Alternate course of action

To deal with the stiff competition in the technology industry, it is important for the company to ensure that it satisfies the target market in the most efficient way that exceeds their expectations. To ensure that the company retains its competitive advantage, IBM has developed a culture that focuses its interests on meeting the needs of the customers

in an exceptional way. The company believes in taking the products and services where they are needed instead of focusing on the already satisfied market. Decisions made by the company including product development are guided by customer demands.

The company also has to deal with the external risks in the global market such as political risks, which can only be solved through careful environmental scanning before engaging making a decision to invest in a particular market. The company has adapted to this challenge by investing in research and development initiatives. To ensure that the company’s success is not affected by the cultural differences, it is important to empower the employees with skills and knowledge that will enable them to operate effectively. To adapt to this, IBM has invested in training its manpower about cultural intelligence. This, according to Ng, Dyne & Ang (2009), is the ability to understand different behaviors shown by individuals due to their cultural influence. This helps in overcoming challenges that the employees may face when working in a cultural-diverse environment.


To avoid being overtaken by the competition, IBM needs to ensure that its stakeholders such as the suppliers have the capacity to keep up with its expansion strategies. According to Hoekman & Javorcik (2006), global integration entails making sure that the company offers customer value. This may be achieved through selecting the suppliers carefully. The company may also need to improve its human resources management strategies to equip employees with skills needed to overcome change such as creativity.


Due to the stiff competition in the market, it is crucial for IBM to adopt strategies that will make its global integration model effective. There is

a need to equip the employees with the necessary training to adapt to the ever changing business environment. More attention also needs to be given to the business processes within the company such as management of supply chain to ensure efficiency.


  • Hoekman, B. M., & Javorcik, B. K. S. (Eds.). (2006). Global integration and technology transfer. World Bank Publications.
  • Moss Kanter, R. (2009). IBM in the 21st Century: The Coming of the Globally Integrated Enterprise. HBS Case, (308-105).
  • Ng, K. Y., Van Dyne, L., & Ang, S. (2009). From experience to experiential learning: Cultural intelligence as a learning capability for global leader development. Academy of Management Learning & Education, 8(4), 511-526.
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