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Gerstner's strategy of global industry segmentation is highly relevant to contemporary issues and debates in business management. It addresses the need for businesses to adapt to the globalized market and break away from traditional geographic-based structures. This strategy allows for a more focused approach to serving customers in different industries, which can lead to improved customer satisfaction and business performance. It also encourages innovation and flexibility within the organization, as resources are reallocated and roles are redefined. However, it's important to note that such a major organizational change can face resistance and take time to implement successfully.
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Gerstner set out to organize IBM instead according to global industry teams. First, they segmented customers into thirteen industry groups. Then, Gerstner reallocated all current customer accounts away from geographic heads and to the global industry heads, ensuring each group had adequate budget and personnel. This did not go over with the "old guard" without a hitch. Many refused to relinquish control and directed their staff to do the same. In all, the geographic reorganization took about three years to implement successfully.
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Learn from one of the best turnaround leaders of our time, Lou Gerstner of IBM. Take a page from Gerstner’s playbook on how to reinvigorate a quickly...
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