1. Elizabeth Shubsda January 3, 2011
1.Discuss the dynamic capability approach at IBM. How has this increased innovation and performance
at IBM? How does IBM promote emerging business opprotunities?
Vision as a Dynamic Capability
I believe that IBM under the direction of CEO Samual J Palmisano had is the dynamic capability of
extrodinary vision. He had questions and/or mantra’s similair to Welch’s, which he used to guide the
decisions that the company should go in.
These four questions were:
 “Why would someone spend their money with you – so what is unique about you?
 “Why would someone work for you?”
 “Why would society allow you to operate in their defined geography?”
 “Why would somebody invest their mmmoney with you?” (NYT.com, Even a Giant Can Learn to
Run, S. Lohor, Dec 31, 2011)
With consistant application of these questions, Palmisamo was able to transform a mainly hardware
and PC producing company into a fully inegrated IT software and solution based company.
Divestitures and Acquisitions as a Dynamic Capability
These two capabilities by themselves turned out to be pivitol to the growth and turn around in
profitability from 2003, when Palmisamo took over the company. He took and a hotly internally
debated topic and big risk by divesting IBM of its PC business segment. Not only did he divest it, he
divested it strategically to a Chinese company to enable the Chinese government to expand its
corporations globally, thus enhancing IBM’s stature “in the lucrative Chinese Market”.
International Business Machines Corporation
IBM: NYSE; Technology/IT Services & Consulting
OTHER EXCHANGES: Mexico, London, More »
3. Compare and contrast the organizational designs of Google and Microsoft. Do you think Facebook
will offer a new competative organizational design?
Compare and Contrast the Organizational Designs of Google and Microsoft

2. Element of Design Google – Major Business – On-line search
and organizing information
Microsoft- Major Business – Operating Systems and Software for
PC’s
CEO Co-founder Larry Page
Was in his 20’s when he co- founded the
company, and stepped down as CEO in
favor of a more learned and seasoned
CEO. He has recently re-assumed the
position of CEO.
Prior to Larry Page taking the CEO
position, he and Brin had a very hard time
giving up control of the company to their
newly hired CEO, Eric Schmidt. Decissions
were pften made collectively rather then
by Schmidt, himself.
Steve Ballmer, CEO is still highly influeneced by co-founder Bill
Gates who continues to sit on the Board of Directors. They
appear to have varing veiws as to the direction that the
company should go in, Bill gates believes that Microsoft
(software) is mainly a business to business industry.
While Ballmer believes that they should use their large R&D
deprtment to create innovation that is seamless from home
computing, to moble, to consumer gaming and investments in
the cloud.
Organizatiional
Structure
Six Broad Segments: Search Advertising
– Adwords; Display Advertising – Google
Display Network and Doubleclick
Advertizing; Mobile Advertising - Mobile
specific ad formats; Tools for Publishers –
AdSence and DoubleClick Ad Exchange;
Local – Google Places; Entireprise –
Google Search Appliance and Google Apps
(Google.com)
Five Broad Segments: Client – Windows products; Server and
Tools- Multi-licencing agreements and tools to help increase
efficiencies from a technological perspective;On-line Service
Businesses – Bing, MSN, trainging and cosulting services;
Microsoft Business Division – Microsoft Office Suites;
Entertianment and Devises Division- X-Box, consumer software
selling and mrketing for Windows and Microsoft Office Suites
Missions To organize the world’s information and
make it universally useful. (Google Inc.
Case).
To help people and businesses throughout the world realize
their full potential.
Core Values “1.Put the user first; 2. Do one thing
really, really well; 3.Fast is better then
slow; 4.Democracy on the web works;
5.You don’t need to be at your desk to
need an answer; 6.Do no evil; 7. There is
always more information out there; 8. The
need for information crosses all boarders;
9. You can be serious without a suit; 10.
Great just isn’t good enough.”
(Google.com)
“They value integrity, honesty, openness, personal excellence,
constructive self-criticism, continual self-improvement, and
mutual respect. They are committed to their customers and
partners and have a passion for technology and they hold
themselves accountable to their customers.” (Microsoft.com)
Culture Non-traditional; with many perks such as
snack rooms, recreational facilities, etc.
This free style atmosphere attracks the
highest quality technical talent.
Ambidextrios – Able to maintain its core
competencies, while exploring and
exploting other/new markets and
opportunities.
Non-ambedextroius based on their past performance and
ability to transition to hardware plateforms, other then PC’s.
Their initiatives into mobile platforms have been largely a
failure.
This may change with Ballmer’s vision of “providing an
integrated platform to enable a seamless experience across a
wide range of computing and non-PC devises.”(Biag, EC,
www.usatoday; Gates looks into PC’s future as a career shift
approches; May 28, 2008; page 1).
Global Presence North America, Europe, Latin America,
South Pacific, Asia Pacific, Middle East,
and Africa. (Google.com)
Asia, Europe, Middle East and Africa, North and Central
America, South America, and the South Pacific.
Microsoft appears to have a larger global presence then
Google, interms of offices in foreign nations (Microsoft.com).
R&D Extremely qulified talent; there are
approxamitly 100 applications for an open
Has one of the largest R&D department in the world with top
tallent and ideas from this arena are often stifled. Many top

3. position.
Listened to by top management.
Actually, each employee is expected to
spend 20% of work time on individual,
enterprenerial type projects.
managers of divisions for mobile communication, seamless
design between mobile and PC plateforms, etc. have left the
company related to frustrations at not being allowed to innovate
and create.
This is now gradually changing with Ballmer as CEO. He seems
to be able to see the consumer’s perspect ive and needs as well
as the business needs.
Core Competencies PageRank
Advertising on a cost per click basis
Surprise/Secretiveness of initiatives to be
launched
Unique cultural and corporate
environment
Android Mobile
R&D – Listened to by upper management
X-Box 360 Gaming system
Mirosoft Office Suite of products
Business to Business market
Windows Opertaing System
Incremental innovation in current systems and markets
R&D as it relates to the Business to Business market; it is too
early to see if it will caputure consumer attention with it’s
immerging opportunites
Imerging
Oportunities
Google +
Cloud technology
Cloud technology incliding Office 365
Windows mobile
Except where noted this chart is paraphrased from the Google, Inc. Case and the Microsoft: Is the Creative Spark Burning Out?
Facebook appears to be a very competive force in the fight for on-line space with the presence and
drive of CEO Mark Zuckerman. He immagins a world of total life transperency on –line, his vision
includes a society that is more excepting of differing life attitudes (ie: such as in pitcure form and/or as
status updates) and behaviors, by being exposed to this as an everyday life occerance via on-line socal
networking. He wants you to tell your friends everything, varying from where you are, to what you are
doing, to where you are going, on an on going daily basis.
We have already talked on the DB about how much personal information interms of users likes and
dislikes, that Facebook poseses, and how it could be a marketer’s and Coorporate America’s dream
data base as to market target advertasing, which would hopefully lead to increased revenue streams
for company’s that advertise on Facebook.
So Facebook is attempting to capitalize on this and inturn take over much of the on-line advertinzing
that is currently a competitive advantage for Google. In turn, Google fights back with multiple trials
and errors into the social networking space to remain king of on-line advertizing. Google is now making
strides into this space with Google +, its first serious threat to Facebook (Facebook vs. Google: The
Battle for the future of the Web, CNN Money, M. Helft, J.Hemple, page 3) and Larry Page and
Zuckerman are really each taking the battle quite seriously.
Google + was designed with many features that people complained about the lack of on Facebook
(such as easy to use privecy settings), Zuckerman is now having his team work around the clock to
improve of Facebook’s current features and maybe even incorporate some new one’s that it’s
competetor has come up with (Facebook vs. Google: the battle for the future of the Web, CNN Money,
M. Helft, J.Hemple, page 3).
As a Generation X user of Facebook, I do not see the value as opposed to Gooogle, in any way, shape or
form and I believe that most in my generation and above would agree. But we are really talking about

4. the future and Geration Y and under just does not seem to be able to live without this social
networking vehical. I believe the propossed valuation as an IPO of $100,000,000,000, as you reported
in your slides is rediculous, but I am not a financial anayalist by any means. So yes, certainly Facebook
can offer a competative design, if not, Google would not be playing so hard at reaching into the social
networking space.
4. How is Jeff Immelt using imagination break throughs and reverse innovation to change the design of
GE and ensure future performance?
As Immelt was taking the reigns of GE from Welch, he realized that the stratagies which Welch had
used to bring GE to greatness would not work in the present social and economic enviromnent. This
was a new age were 9/11, the sub-prime mortgage burst, and the financial industry as a whole were
crumbling and the country and the ecomony, suffered.
Whelch had accomplished much of GE’s growth through its finacial and lending business units. So as
Immelt took the reign’s the huge growth that GE had seen in the preceeding years were in significant
peral. In actuallity, according to the New Your Times there was “perhaps no company outside of the
banking sector, hit as hard by the finacial crises as GE, certainly none that seemed healthy before the
economic tailspin. Its big finance arm, GE Capital, long a cash machine that bolstered the mothership’s
line, became the albatross, threatening to pull down the entire entirprize. GE cut its dividends for the
first time since the Great Depression, lost its tripple A credit rating and hastily arranged a $3 billion
investment from the billionaire Warren E. Buffet(NYT GE Goes with what it knows making stuff, Dec 4
2010 Steve Lohr p 1).
So Immelt went to work with re-designing the struture of GE, to put less emphasis on its GE Capital
branch, with significant efforts to divest the company of its houseing lending arm, which Mr. Immelt
has commented on as “Every segment at GE Capital was profitable with the exception of commercial
real estate, which continues to opperate in a difficult environment”(NYT by DealBook, Edited by
Andrew Rice Sorken; Commercial and NBC Universal Weigh Doem GE, Jan 22, 2010), be that as it may,
there were no buyers with the sub-prime mortgage and banking economic issues. Additionally, NBC
Universal was also weighing GE down, in which Immelt divested 51% of the division to Comcast, retaing
a 49% stake in the company (This is NBCUniversal, © 2011 NBCUniversal, Inc. All rights reserved,
http://www.nbcuni.com/corporate/about-us/).
With these changes, he desided to take the company in a different direction, focasing more on R&D,
innovation, reverse innovation, partnerships with enterprenerials and manufacturing.
Immelt Invests Heavily Into R&D
Within months of Immelt becoming CEO, he started to poor money into R&D, issuing $100 million to
upgrade a R&D facility in Nishayuna, NY. Not only did this enhance labatories, but it also “created an
environment where business managers and technologists could meet to discuss priorities…..and spar
with the marketing guys.”(GE’s Growth Stratagy: The Immelt Innitiative; Havard Business School;
Christopher A. Bartlett, Nov 3 2006, pp3-4) lending to the picture that we have obtained through our
readings and discussions of the ambidextrois CEO.

5. Immelt’s dedication to supporting R&D continues as he relies more on physical products and
manufacturing and less on “financial engineering” (NYT GE Goes with what it knows making stuff, Dec 4
2010 Steve Lohr;p 1).
Ecomagination Breakthrough’s
The ecomanigaton project was started about six years ago, looking for a competive edge in the
greening of America, GE was able to create one brand that simotaniously helped the environment, the
consumer and GE by improving operations, cutting energy costs by $150 million and encouraging
innovative and creative solutions by leveraging both internal and external resources. (HBR GE’s Eco-
Innovation Platform, Andrew Winston, October 26, 2011).
Immelt then went one step further with The Ecoimagination Challenge, which is a program that brings
external enterpereneral ideas together with the power and capital that a large company such as GE
possesses. This program does not only benefit the enterpreneral by bridging “the Valley of Death”
(GE’s Eco-Innovation Breakthroughs, HBR, Andrew Winston, 2011; p 1) that the enterprenerials often
enounter when relying soley on Venture Capitalist funding (which can be a variable and undependable
source of startup funds), but it also benefits GE by bring a host of new ideas into the organization that
they can capitalize on by investing and partnering with these enterprenerials; in manufacturing
segments where they hold a competitve advantage, such as power generation, aviation, rail, and
health care equiptment. Expanding GE’s product offerings and creating growth.
Reverse Innovation
For me, Immelt really took on reverse innovation and leveraged it as a brilliant idea/strategy, it
especially resonates with me as a health care worker. Reverse innovation is the opposite of
glocalization (the development of products in the company’s country of origin, often rich and
industrialized, with subsquent world wide distribution), with reverse innovation the health care
machine is deveopled in and for the specific needs of the emerging economies such as India and China,
which lowers it’s cost, increases accessablity, and is reduced in quality from an industrilized country’s
standards, but a vast improvement in quality to the emerging ecomonomic countries.(How GE Is
Disrupting Itself, HBR, J Immelt, V Godvindarajan, and C Trimble, Oct 2009, p 1).
Reverse innovation as it is used at GE not only benefits the company but it solves real world problems
that brings affordable and exessable healthcare machines into regions of the world that would
otherwise not have accesses to these types of solutions. These significantly reduced priced and
reduced technoligical devises can then in turn be used for underserved and poorer areas of America
and Europe.
Obviosly, GE is a fore profit organization and is not re-designing its thinking for purely altruistic
reasons. They are making money with their reverse innnovation initiative, as indicated by the launch
of their portable untra-sound machines, where as after the six year mark of its introduction, they were
a $278 million global product line (How GE Is Disrupting Itself, HBR, J Immelt, V Godvindarajan, and C
Trimble, Oct 2009, p 1)., with significant growth expectections. Additionally, GE needed to be pro-
active and disruptive in the competive landscape. If reverse innovations were not deployeed, potential

6. competitiors in these emerging ecomonmies themselves, such as Mindrey, Sulizon, Goldwin, and Haier,
(How GE Is Disrupting Itself, HBR, J Immelt, V Godvindarajan, and C Trimble, Oct 2009, p 1)., would
have developed similar solutions, by introducing reverse innovation first to the ecomonies, GE created
a competive advantage.