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Dynamic Capabilities at IBM Essay

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Updated: Aug 7th, 2021


Once leading the market, IBM currently holds an underperforming position in the technological industry. The main reason for the company’s continuous competitive disadvantage lies in the strategic misfit of the business and the inability to adjust previous goals to contemporary issues. In particular, now, little emphasis is put on mainframes and minicomputers produced by fully integrated businesses. Instead, consumers prefer personal computing with an open standard. Nevertheless, the company decided not to change its old objectives to meet new customer needs, remaining as one united organization. While earlier IBM was a leader in solving data-based problems, now the company fails to respond to novel IT challenges when providing sophisticated support.

Current transformations

The three current transformations that IBM is facing include cloud computing, systems of engagement, big data, and analytics. Introducing cloud computing was a logical response to the ongoing trend in the industry to provide convenient network access to shared digital resources instead of owning hardware and software. The main competitor of IBM in cloud computing is Amazon Web Services. The second change was initiated by the company’s objective of helping businesses to transition from enterprise to decentralized systems. As for big data and analytics, IBM is concerned with the issue of acquiring smarter analytics solutions in a number of fields, including finance, law, and medicine. Instead of competitors, the case study identifies partners: Twitter and Apple.

Dynamic capability

A term in organizational behavior, dynamic capability refers to the capacity of the organization to adapt its resource base to meet the needs of the company. Based on IBM’s track record depicted in Exhibit MC7.1, IBM demonstrated the satisfactory ability to recognize and react favorably to changes in the marketplace by rearranging its assets and competencies. In particular, the organization implemented the concept to fuel the strategy process by exploring new technologies and markets, such as pervasive computing. Another example of dynamic capabilities in IBM is the utilization of mature products, for instance, mainframe computers.

In my opinion, IBM has a solid chance of mastering the current three-prolonged tech transformation. However, the company’s success will depend primarily on the business’s ability to react quickly to the arising challenges, capacity to recognize and address existing weaknesses of the company. Another influential factor is IBM’s aptitude for utilizing the emerging trends in the industry to grasp new concepts and opportunities in the field. Such a strategy would be beneficial in rearranging the internal and external competencies of the organization. Consequently, by reconfiguring its resources and implementing dynamic capabilities, as mentioned before, IBM may change its status of an outsider in the market, returning the previous ranking.

Flexible schedules remain one of the most popular trends in the workplace now. For me, IBM’s decision of returning to the old-school “9/5” approach signifies a conservative model of management in the company, wherein leaders are not ready to respond to the needs of a contemporary employee. Therefore, the company’s new policy might bring a series of controversial reactions. On the one hand, working from the office may increase the level of collaboration between employees.

It is also easier to maintain a stable corporate culture, enhanced by high-quality communication inside the team. On the other hand, the prohibition to work flexible hours limits one’s rights to a comfortable environment that fosters innovation and creativity. Furthermore, it creates more pressure on the workers who used to take advantage of their flexible schedule to solve family or health-related issues.

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IvyPanda. "Dynamic Capabilities at IBM." August 7, 2021. https://ivypanda.com/essays/dynamic-capabilities-at-ibm/.


IvyPanda. 2021. "Dynamic Capabilities at IBM." August 7, 2021. https://ivypanda.com/essays/dynamic-capabilities-at-ibm/.


IvyPanda. (2021) 'Dynamic Capabilities at IBM'. 7 August.

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