Critical Evaluation of Transformational Leadership Theories Based on IBM
Table of Contents
Introduction
Overview of IBM
Leadership and Governance
The Company’s Vision
Leadership Theory
Trait Theory
Behavioural Approach
Skills Approach
Situational Approach
The Fiedler Model and Contingency Theory
Path-Goal Approach
Charismatic Leadership
Transformational Leadership
Transformational Leadership at IBM
Developing Followers
Influencing Followers
Inspiring Motivation
Conclusion
References
Introduction
This essay relates to leadership and transformational theory particularly. It is based on IBM. The key objective is to discuss the application of different leadership theories to a particular company’s management. The paper starts with overview of the company. Then, it considers the general concept of leadership. The next part is devoted to transformational leadership. It is followed by the section that discusses the application o transformational leadership at the company. Finally, conclusion section summarises the key findings from this paper. The essay is based heavily o secondary sources and academic literature, particularly.
Overview of IBM
IBM Corporation is the technological leader of the information technology industry. The company is a diversified global business operating in a number of segments. As mentioned by its official website, IBM is a multinational and multidivisional company with operations spread over the world. This feature affects its organisational structure. According to IBM (2015), the company consists of the following five main segments – global technology services, global business services, software, system hardware and global financing. These divisions contribute more than 99% to total revenue of IBM. The company’s organisational structure can be characterised as divisional. According to Cummings & Worley (2009), this organisational structure involves activities based on the divisions, products, services and geographic segments. This is clearly seen from IBM’s structure. The company belongs to the divisional organisation type, as proposed by Mintzberg (1980). This type is characterised by bureaucratic nature, market grouping, large unit size and limited vertical decentralisation (Mintzberg, 1980). The divisional organisation is also referred to as the market-based structure, as noted by Mintzberg (1980). IBM meets most of the criteria related typical for divisional structure. As mentioned by Cummings & Worley (2009), the key advantages of the divisional organisational structure are departmental cohesion, better diversification, accountability of departmental managers, better response to customer needs and interdepartmental interdependencies. IBM is a global company, so its decision making is partially decentralised. The company has almost 378,000 of employees. IBM is headquartered in Armonk, New York, US.
As reported by IBM (2015), last year the company’s revenue declined to $81,741 million from almost $92.8 billion in 2014. Sales reduction was recorded by all business segments of IBM. The company’s key region is Americas responsible for almost half of its revenue. IBM experienced decline in sales from all geographic areas in 2014. The company’s costs also fell during the last year from $46,386 million to $40,684 million in 2015. However, this was not enough to offset the slump in revenue. Therefore, IBM experienced a decline in gross profit from more than $46 billion …
