Case | HBS Case Collection | February 2007

IBM Culture in Its Architecture

by A. Eugene Kohn and Kerry Herman

Abstract

In 1992, Lou Gerstner was the CEO of IBM during a period where the firm was losing money and a turnaround was desperately needed. In a bold decision, Gerstner chose to build a new headquarters in Armonk, NY that had strict limits on expandability. His idea was to use the building--with its design and architecture--to change the culture of IBM. Justification to shareholders for a large capital expenditure when the firm was losing $5 billion by year and laying off nearly 25,000 employees was an extreme challenge for Gerstner. However, he was adamant in his vision, and wanted to create a culture with fluid, unobstructed communication between divisions. Gerstner also wanted to eliminate bloated overhangs within the organization on cost, personnel, and physical structure levels. The challenge to the architects was to articulate Gerstner's ideas into form.

Keywords: Design; Leadership; Job Design and Levels; Organizational Structure; Buildings and Facilities; Business Headquarters; Decisions; Organizational Culture; Corporate Strategy; Expansion; Information Technology Industry; New York (state, US);

Citation:

Kohn, A. Eugene, and Kerry Herman. "IBM Culture in Its Architecture." Harvard Business School Case 207-026, February 2007.