Question 4 Read the below case study about Control in action: IBM and answer the questions at the end of the case study. Control in action: IBM In 1993, Louis Gerstner undertook the daunting task of turning IBM around when the first-line company was in free fall. IBM lost $17 billion and lost half of its market share. The media was writing obituaries, and competitors mocked the company. IBM has dominated the industry for decades, and almost all companies and government agencies use mainframe systems. By the late 1980s, competitors offered lower-priced mainframe alternatives, and the personal computer market had not yet entered IBM's surge. It only took Gerstner a few months to put IBM on the right track. Gerstner acknowledged that this change depends on a real focus on controlling the business foundations, such as the combined companys 266 accounting systems, 128 CIOs and 339 surveys to measure customer satisfaction. It ends the discussion about breaking down IBM into various small blue forces (IBM is widely known as the "big blue army"), which is the general wisdom on how to use the company's valuable assets. Instead, Gerstner took action to transform the company into an "integrator" that will use its own components as well as those of competitors to build, run, and host systems for customers. Gerstner described IBM at the time as suffering from the "success syndrome," a disease that plagued successful companies for decades. Even if the competitive environment changes and new control measures need to be taken to remain competitive, this prevents them from repeating the things that have made them successful in the past. He restructured the structure of the company to focus on performance. Employees went back to talking to customers and they actually sold products rather than just developing products. Gerstner also changed internal processes. For example, it revised the salary, promotion, and training plan. All these efforts have paid off. From 1993 to 2001, IBM's annual net income increased from a loss of US$8.1 billion to US$7.7 billion; revenue increased from US$62.7 billion to US$85 billion, and its stock price rose from US$14.12 per share to US$120.96. Gerstner said: "It is very, very difficult to change the attitudes and behaviours of thousands of people ... You can't just give a few speeches or write a new creed for the company and then announce that a new culture has taken hold. You can't ask for it., you can't design it. All you can do is create conditions and provide incentives for transformation. Gerstner seems to have done this. After his retirement, he noted that IBM has a wealth of creative talents. Just unleash it. For many years, IBM has helped this pioneer of information technology. Today, you are at the forefront of a global industry that is revolutionizing the way businesses, organizations, and people operate and prosper. 4.2. Describe the management skills possessed by Louis Gerstner (20 marks)