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Diversification IBM a Fortune 500 company celebrated its 100th birthday this past June. IBM employs over 400,000 employees and is considered to be a $100 billion dollar or more giant in e-business global marketing technology. With the inception of the computer, IBM’s core business was mainframe computers, which almost bought the company to its knees in bankruptcy. IBM looked at the PC as just a gadget and with any gadget over time would fade into oblivion. IBM would find out the hard way that the PC would rapidly transform the world into the Information Age in the business arena and in that of our personal lives.
IBM quickly moved into software, hardware and other services. IBM has been a Fortune 500 company since the 1970’s, and has survived, whereas over a-third of those in the Fortune 500 during that era have either merged, been acquired, sold in pieces, or just completely disappeared off the face of the earth. IBM launched an extensive e-business marketing campaign using its own initials Internet Business Machines during the 1990’s. IBM informed businesses that the Internet would be the new way to conduct business. By 1997 IBM had well over 10,000 e-business customers.
IBM’s global e-business has expanded to Russia, China, Brazil and India. (Savov, 2011) Abercrombie and Fitch were incorporated in 1904; has an employee base of 9,500 personnel and has a sales estimate of over $1 billion in year 2000. Abercrombie & Fitch was calling itself “The Greatest Sporting Goods Store in the World. ” It boasted the world’s largest and most valuable collection of firearms and the widest assortment of fishing flies obtainable anywhere (15,000 in all) to accompany its array of rods, reels, and other fishing tackle. Riders, dog fanciers, skiers, and archers all found every conceivable type of gear. “Abercrombie & Fitch Co. “) Not willing to adapt and change with the ever changing times, Diversification Abercrombie filed for Chapter 11bankruptcy. That was the old Abercrombie and Fitch. The new Abercrombie and Fitch, affectionately called A, but still retains the original Abercrombie and Fitch name, sells it own private label clothing line to those 30 and under. The majority of A stores are under assumed names such as Gilly Hicks, Abercrombie, and Hollister are located in America’s upscale malls and caters to a variety of age groups. Last year A&F generated over $3. billion in sales a much better outlook than what was seen in 2009. A&F introduced itself to the Asian markets of Japan in 2009. Asia had been on A&F’s radar for many years and it now has stores in China and India; A also has 1000 stores in Canada, and the UK. A clothing line from each of its affiliates can be purchased via e-commerce and through its catalogues. (Carando, 2007) The diversification strategy has worked for IBM. This is October 2011 and there will be a new sheriff in town for IBM by the name of Virginia Rometty in January 2012. (Bradt, 2011) Why has diversification worked for IBM?
Former IBM CEO Lou Gerstner established a diversity initiative that embraces differences instead of ignoring them. IBM worked hard to avoid and eliminate discrimination within it its workforce. IBM truly values and respects diversity among its employees and their business partners. With the implementation of diversity task force IBM created a diverse working environment where those who work for IBM can feel comfortable, perform well and be awarded for their successes. IBM wanted diversity in its workplace to mirror the communities that their employees came from.
IBM has been recognized as being one of the best companies to work with for women of color. How does IBM make this work? IBM has an employee diversity survey that addresses workplace issues, symposiums, conferences and a formal compensation policy for managers all designed with women of color in Diversification mind. IBM’s diversity strategy is not limited to some but to all managers in the IBM workforce. (Shaw, 2008) The diversification strategy for Abercrombie and Fitch has been unsuccessful in past years. Some just don’t get it and some never will.
That is how some in the corporate world looked at Abercrombie and Fitch. A has on several occasions been sued for their lack of diversity within their organizations in the area of discrimination. The first lawsuit in 2001 came about when A failed to hire minorities and women to work during the daytime in their stores. Those who were hired that were women and minorities worked the nightshift which consisted of cleaning the building and were told by store employees to never come to A until after the store was closed. After a thorough investigation conducted by the Los Angeles District Office of the Equal
Employment Opportunity Commission (EEOC), A was found to have thrown away applications that should have been kept on hand for at least a year or more to cover up their hiring practices. (Esemplane, 2008) Another subtle hint of discrimination was that store employees were to only approach those shoppers who fit the A image. The image of A is one who is blonde hair and blue eyed. (Carando, 2007) In 2003 a discrimination law suit reared its head against A, this time in North Carolina. This was a class action lawsuit that consisted of the following discriminatory practices.
The first being no sales floor assignments, unfair promotions, unfair terminations and unfair reduction in hours, all aimed against women and minorities. (Esemplane, 2008) Diversification Abercrombie and Fitch now have three strikes. You would think A would have learned their lesson, but evidently not. In June of this year, another lawsuit in the state of California was filed against A. The suit was filed by an employee of Hollister who was terminated for not removing her religious headdress. This civil rights violation did not occur from employees on the lower level of the workforce, but at the top.
The irrational decision to have her hijab removed came from a district manager and a human resources manager. To add to Abercrombie and Fitch’s embarrassment, she was hired with it on. In all 3 of the above mentioned incidents Abercrombie and Fitch settled for$50 million over the accusations. (May, 2011) The success of IBM’s diversity strategy is due to several factors. Firstly, the great demand for top down leadership support for their employees and their business partners. Leadership is usually invisible when it pertains to diversity and other issues that usually do not fall within an executive’s lane.
IBM’s executives had to show their employees that you do matter and are very important to the organization. Sometimes those of us who reach the top can tend to forget where we began when it comes to certain issues and our beliefs are not hand in hand with our behavior. (“IBM at 100,”) Secondly, IBM executives gained new and required knowledge of lessons learned for the organization and themselves, but they ventured in and around the organization to coach, teach and mentor other executives that their beliefs must go hand in hand ith their behavior. Usually once one acquires knowledge about someone or something; there is usually a need to keep it to oneself. (“IBM at 100,”) Diversification Thirdly, IBM’s CEO got actively involved and became role models within the organization. The executives agreed upon former CEO Tom Gerstner’s interest and active involvement in junior executives and senior management that was occupied by female and minority employees. (“IBM at 100,”) Abercrombie and Fitch wanted to represent the “All-American Look. In this day and age the All American look is that of diversity. Remember, America is the melting pot of the world and is as diverse as diverse can get. Having been a successful company for well over 100 years, A&F needs to adapt and overcome with the changes of the world and that can only be done through diverse hiring practices. (Mejia, Balkan & Cardy) A&F had policies in place for diversity, but failed to take them seriously. Training for diversity in the work place was null and void.
A&F failed to have a workforce that resembled the community that their stores were located in. They needed to a hiring strategy. A&F human resource personnel needed to connect with the community via local merchants, churches, institutions of higher learning and even the internet. (Mejia, Balkan & Cardy) A&F did not fall in accordance with the Federal Equal Employment Opportunity Commission (FEEOC) guidelines for diversification in the workplace. Bring in someone with new ideas that would not create a conflict of interest for anyone with the organization.
The goal of these new ideas would be to implement a meritorious plan that would be neutral to one’s age, gender, race and minorities. (Mejia, Balkan & Cardy) Diversification A&F can make their diversification venture successful by doing the following. A&F needs to incorporate diverse strategies into their business strategy and communicate top down the professional “business sense” and leadership commitment to diversity; make training only a part of the overall diversity program; revisit existing policies and programs to ensure they align with and support A&F’s vision for diversity. “How to increase,”) A&F can also venture into a successful diversification strategy by making it inclusive. Don’t make the target of your diversity strategy just for minorities, women, and the disabled. Make it to include all employees throughout the organization. (“How to increase,”) The last thing that Abercrombie and Fitch needs is for the diverse world to view them as being a discriminatory organization. Their customers, employees and business partners need to be reassured that with time and patience they are willing to make necessary and important changes.
These changes must occur in their hiring practices, and are striving to make the organization as diverse as possible and that the changes are permanent and not regress to their old ways, due to temperature rising and being under the microscope. (“How to increase,”) Reference Abercrombie & Fitch Co. (n. d. ) Retrieved (2011 October 26) from http://www. referenceforbusiness. com Bradt, G. (2011, October 28) IBM CEO Virginia Rometty Forbes Magazine, Retrieved (2011 October 28) from http://www. forbes. com Carando G. 2007, February 25) Abercrombie & Fitch Discrimination case study Retrieved (2011 October 28) from http://www. psucomm. com Esemplane, J. (2008). Abercrombie & Fitch settles racial bias case. Cincinnati Herald Retrieved (2011 October 26) from http://www. blackpressusa. com IBM at 100: Valuing diversity (n. d. ) Retrieved (2011 October 25) from http://www. ibm. com Savov V. (2011, January 22). IBM looks back on 100 years of history. Retrieved (2011 October 25) from http://www. engadget. com Shaw, C. S. 2008, August 31) Former IBM Chairman and CEO Lou Gerstner Retrieved (2011 October 24) from http://msb. georgetown. edu May, C. (2011, August 28) Abercrombie & Fitch faces another diversity lawsuit The Daily caller Retrieved (2011 August 29) from http://www. dailycaller. com How to increase workplace diversity Building workplace culture The Wall Street Journal, Retrieved (2011 October 25) from http://www. guide. wsj. com Mejia, L. Balkan, D. V. & Cardy, L. (n. d. ) Diversity management: Workplace diversity. US Labor Review, 24, Retrieved (2011 October 24) from http://www. financialexpress. com