IBM Announces New Organizations, Operational Changes Under Plan for Increased Autonomy of Business Units

Armonk, N.Y. -- December 5, 1991 -- IBM (NYSE: IBM) Chairman John F. Akers today announced changes that will begin to redefine IBM as an organization of increasingly independent businesses and companies.

The changes include the formation of new business units representing IBM's worldwide storage and printer product lines and certain personnel operations in the U.S. In addition, IBM announced organizational and management system changes involving its personal systems, mid-range, large systems and technology products businesses.

IBM also announced details of new management and measurement systems for all IBM business units. These details were discussed Wednesday at a meeting of IBM's senior management team from throughout the world.

"The new organizations will be on the leading edge of the changes," Akers said, "but the new management and measurement systems will apply to all of IBM's businesses, making each one more autonomous.

"As a result, each business will be increasingly competitive by being more sharply focused and faster paced, with highly skilled employees and a continuing, relentless pursuit of our market-driven quality goals."

New Organizations

IBM today announced the following new companies, business units, and organizational and management system changes:

IBM also announced organizational and management system changes involving its:

IBM also announced the establishment of an executive steering committee to ensure a continued effective working relationship among the various parts of IBM's large systems business, including the Enterprise Systems, Storage Products, Networking Products, Programming Systems and Technology Products lines of business.  The committee will be headed by IBM Senior Vice President Terry R. Lautenbach.

New Management and Measurement Systems

Throughout the company, there will be new management and measurement systems designed to give individual businesses new independence and accountability to optimize their respective markets.  As each market is different, the management and measurement systems applied to the individual businesses will vary.

However, certain principles will apply to all, including individual reporting of financial results from IBM's major businesses, compensation tied more directly to each unit's performance, and operational changes that will inject more market discipline into the relationships between IBM's business units.

The new management and measurement systems also will have specific implications for the marketing and services companies, manufacturing and development businesses, and the IBM Corporation, as follows:

Focused Marketing and Services Companies

"IBM's marketing and services companies increasingly will become service companies in the true sense of the word," Akers said, "creating value for customers through their knowledge and skills, and depending less, over time, on product cycles and hardware volumes for their prosperity."

The marketing and services companies will:

More Autonomous Manufacturing and Development Businesses

"As each manufacturing and development business is different, the degrees of independence will differ," Akers said.  "We expect these more independent businesses will make better investment decisions because they are more agile, faster and closer to the markets they choose to serve."

The manufacturing and development businesses will:

Increased Flexibility for the IBM Corporation

"The IBM Corporation will have increased flexibility to manage the portfolio of businesses and focus on pursuing promising growth markets, investing or divesting to maximize IBM's overall financial results," Akers said.

The IBM Corporation will:

CONTACT: Rob Wilson of IBM, 914-765-6565

Copyright 1991 PR Newswire Association, Inc.