QUESTION 1
WHY DO LARGE COMPANIES LIKE IBM FIND IT SO DIFFICULT TO CREATE NEW BUSINESSES?
-Large companies generally tend to have been around longer, and have a stronger more mature presence in the business/market that they’re in. This causes strong roots and cultural implications on and within the systems which, as the case states, can also be identified as impediments.
-New business can come across foreign and a bit of a distraction to well established companies. The “if it’s not broken, don’t fix it” mentality can kick in and there’s a higher tendency to reject any new prospects.
-There can also be a lot of complexities within a large organization that make it harder for new ideas to be adopted by the organization. Multiple departments must be able to work in unity. This is harder when there has been a specific way of doing things for a long period of time and systems set in place.
-There tends to be an area of comfort with inherent limits that if a new project doesn’t fall within, doesn’t bode well and by one way or another doesn’t come into fruition.
-Specifically, IBM did find it difficult to nurture new business for the above reasons and more. They didn’t have a formal plan set for business development, and with the sheer size of IBM and the corporate venture fund financing, ideas weren’t as well thought out or solid for them to catch any traction with upper management. This in turn caused interdepartmental conflict causing new businesses to eventually burn out, and eventually be sold. IBM had been a successfully growing company since 1911, with an international presence in the computer industry. They had deep roots in a specific market and to bring forth a new business that targets a different market can be de-prioritized very easily since the focus of upper management and the organization is all on the existing successes and main core competencies.