Why Financial Strength Comes from People. The Case of IBM

This paper shows the means through which, in a permanently evolving environment, characteristic for the knowledge-based economy, an IT company made history. IBM, as the majority of the IT companies during the period from the 1980’s to the present, had its ups and downs, but with the skills of a visionary CEO, it managed to revive. On facing globalization, the multinational company had to focus on the regional development strategies. Also, due to the rapid technology changes, it had to find its core competencies, and efficiently expand them, as part of the company’s strategic business units. The final touch was given by the new, charismatic CEO, who brought a different vision, introducing new business strategies, dramatically changing IBM’s financial performance. In the company’s financial statements, management discussions or reports of independent registered public accounting firms, various approaches can be seen, explaining the financial results. Also, hundreds of papers were published in various journals, using marketing, management or statistical approaches. However, none of these studies uses econometrics approach. Therefore, in order to measure the impact of global strategies, strategic business units and policy change strategies on IBM’s human resource policies, an econometrics model was built. The empirical results show statistically significant differences, making our findings highly relevant.