Strategic Discussion 5

Strategic Leadership Discussion 5

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Strategic Leadership Discussion 5

An instance in history where a strategic leader used his understanding of rivals’ strengths, weaknesses, and shortcomings to lead his establishment through a massively challenging situation is the decision by Lou Gerstner, the former CEO of IBM back in 2002. This company hired Gerstner to fragment IBM into smaller and nimbler businesses (Pisapia 2006). Even so, Gerstner believed that while customers never wanted to stay locked into one dealer for their technology needs, they desired an integrator who would take all solutions and deliver a functioning solution to them. So, he sustained that the size and reach of IBM made it exceptionally positioned to fulfil this role. This belief drove him towards the decision of keeping IBM together rather than disintegrating it into smaller businesses (Pisapia 2006).

Towards turning IBM around while maintaining the business status of IBM (keeping it together), Gerstner made several strategic decisions. The most important of these decisions was to probe and comprehend the capabilities of competitors or rivals of IBM as regards offering technological solutions. By understanding rivals’ strengths and abilities in this specialty area, Gerstner managed to launch a strategy of designing and offering unique hardware and software solutions that could not be matched by those manufactured by IBM’s competitors (Pisapia 2006). Furthermore, the former CEO managed to successfully scan IBM’s environment for forces and themes and adapt the firm to its external environment. He also compellingly established common aspirations and created a suitable and enabling internal environment that allowed for the attainment of these ambitions (Pisapia 2006). Today, IBM still pursues these aspirations (Bramante, Frank, & Dolan, 2011). Lastly, Gerstner committed the company to open standards where IBM’s products could be used by rivals and vice versa (Pisapia 2006), culminating in great success without disintegrating the enterprise or interfering with IBM’s business size.


Bramante, J., Frank, R., & Dolan, J. (2011). IBM-Delivering performance through continuous transformation. IBM Institute for Business Value.

Pisapia, J. (2006). Mastering change in a globalizing world: New directions in leadership. Faculty of Education, Hong Kong Institute of Educational Research, The Chinese University of Hong Kong.

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