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IBM Corporation
A multinational technology company founded in 1911 as the Computing-Tabulating-Recording (CTR) company.
Net Income
The profit of a company after deducting all expenses and taxes.
Sales
The total amount of money generated from selling products or services.
Transformation
A process of making significant changes to improve the performance or success of a company.
Structural Problems
Deep-rooted issues within the organization's framework or systems.
Losses
Negative financial results, indicating that expenses exceed revenue.
CEO
Chief Executive Officer, the highest-ranking executive in a company.
Turnaround
The process of reversing a company's decline and restoring it to profitability.
Profitable
Generating a financial gain or positive net income.
Lou Gerstner
CEO of IBM from 1993 to 2002, credited with leading the company's successful turnaround.
RJR Nabisco
A multinational food and tobacco conglomerate, where Lou Gerstner was previously CEO.
E-Business
Business conducted electronically, typically via the internet.
21st Century
The current century, spanning from 2000 to 2099.
Agile
Able to move quickly and easily, often used to describe highly adaptable companies.
Entrepreneurial
Having the characteristics or mindset of an entrepreneur, such as being innovative and risk-taking.
Information Technology
The use of computers and telecommunications to store, retrieve, transmit, and manipulate data.
Robert D. Austin
One of the professors who prepared the case study on IBM's turnaround.
Richard L. Nolan
One of the professors who prepared the case study on IBM's turnaround.
Computing-Tabulating-Recording (CTR) company
The original name of IBM when it was founded in 1911.
Thomas J. Watson
The president of IBM from 1914 to 1956, known for his leadership and corporate practices.
Thomas Watson, Jr.
The son of Thomas J. Watson and the CEO of IBM from 1956 to 1971.
FORTRAN
One of the first high-level programming languages developed by IBM.
System/360
A family of mainframe computers introduced by IBM in 1964, known for its component interchangeability.
Floppy Disk
A magnetic storage medium used for data storage in early computer systems.
Hard Disk
A non-volatile storage device used to store and retrieve digital information.
Client/Server Model
A distributed computing model where tasks are divided between client devices and server devices.
Mainframe
A large, powerful computer system capable of handling complex tasks and serving multiple users.
Internet
A global network of interconnected computers that enables communication and information sharing.
Worldwide Web
A system of interlinked hypertext documents accessed through the internet.
Netscape Browser
A web browser developed by Netscape Communications Corporation, popular in the early days of the internet.
Java
A programming language commonly used for developing web-based applications.
E-Commerce
The buying and selling of goods and services over the internet.
Returns on sales
Profitability ratio indicating sales efficiency
Assets
Total resources owned by a company
Equity
Value of ownership in a company
Leasing oriented business
Company focused on leasing products
Sales oriented business
Company focused on selling products
One time gains
Non-recurring profits from specific events
RISC processing
Reduced Instruction Set Computing technology
Commercially viable PC
PC with market feasibility
Mainframe sales
Sales of large, powerful computers
Mainframe alternatives
Options to traditional large computers
Exceptional margins
High profit percentages
Interoperate
Ability to work together
Structural efficiency
Optimization of organizational structure
Six-sigma quality
Quality management methodology
Cycle times
Time taken for a process to complete
Voluntary retirement programs
Initiatives allowing employees to retire willingly
Attrition
Natural reduction in workforce
Decentralized authority
Distribution of decision-making power
Etherington
Individual involved in IBM-Canada operations
Mid-range market
Market segment between low and high-end products
VAX-killer
Product designed to compete with VAX machines
Complexity
State of being intricate or complicated
Data centers
Facilities housing computer systems and data
CIOs
Chief Information Officers
Spinning off
Separating a business unit from the parent company
Breakup of the company
Division or dissolution of a corporation
ISSC
Integrated Systems Solution Corporation, later IBM Global Services
Nolan-Norton
Consulting firm that highlighted hardware commoditization and services expansion
Outsourcing deal with Kodak
Major contract won by IBM, signaling growth potential in services
Cost reduction efforts
Initiatives to cut expenses, including job eliminations
Lifetime employment policy
Practice abandoned in 1991 at IBM
Louis V. Gerstner
CEO who joined IBM in 1993, not from within the company
Bureaucracy hindrance
Evolved bureaucracy impeding decision-making at IBM
Pre-meetings
Sessions held before senior management meetings to align positions
New CEO search
Initiated due to poor forecasts in 1992, leading to Gerstner's appointment
Stock plan changes
Implemented by Gerstner to retain key employees through options exchange
Senior executives' papers
Documents requested by Gerstner for insights on IBM's business and turnaround strategies
Collegiality under Gerstner
Emphasized paying for performance over personal relationships
Gerstner's engagement strategy
Requested papers from executives and spent time discussing business with each
Industry leader visits
Part of Gerstner's efforts to understand IBM's business landscape
Gerstner's Approach
Focused on integrating marketing, improving customer relationships, and global solutions
Disconnection between Research and Market
Observed lack of alignment between research efforts and market demands
Sophisticated Marketing Techniques
Advanced marketing strategies lacking in IBM's practices
PR Policy
Missing public relations policy within IBM
Sales-Oriented Company
Company with a strong emphasis on sales as a core strategy
Managing Relationships with Customers
Maintaining and enhancing customer connections and satisfaction
Global Solutions
Integrated solutions across regions and services
Integration Principle
Emphasized merging divisions and operations into one cohesive entity
Cost Reduction Targets
Specific goals to reduce expenses within the company
Line Managers' Accountability
Holding managers responsible for decisions and outcomes
Operation Bear Hug
Initiative where executives personally engaged with customers to retain them
Cost Cutting
Efforts to reduce expenses and streamline operations
Transfer Pricing System
Internal system causing inefficiencies in divisional performance evaluation
Stock Price Increase
Doubled stock price from low point by third quarter of 1993
Organizational Reorganization
Restructuring into a global organization with new executive committees
Corporate Executive Committee (CEC)
Group of senior executives meeting bi-weekly to focus on strategy
Worldwide Management Council (WMC)
Top 35 executives meeting quarterly to discuss global operations
Performance Evaluation System
Introduced system emphasizing execution and utilizing a forced curve
Sales Organization
Structure responsible for selling products and services
Product Knowledge
Understanding of company offerings lacking in sales personnel
Note 
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