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Rich Buchheim, newly appointed director of Intergraph's publishing operations, has wasted little time in making his mark on his division. Just months after taking charge, Buchheim has created a new […]

CATALOG PUBLISHING, like other forms of direct marketing, has experienced dramatic growth in recent years. The use of the computer in all phases of the catalog business has been growing […]

The rise of computer networks in all aspects of corporate America has caused a revolution in the way business is conducted and organizations are structured. Companies and government agencies have been able to reduce costs, disperse employees and create more efficient operations. Giant companies, such as IBM, AT&T and Sprint, are working to implement interconnected LANs on a global scale. Improved communications and instant access to companies has caused customer services to undergo drastic revisions. In some cases, the networks have contributed to faster turnaround time and higher customer satisfaction with how requests are handled. Companies can save money in taxes, overhead costs and revenue collection. However, some employees are suspicious of network benefits, because they no longer have their own work area at the office and, in some cases, networks have led to significant work force reductions.

Nextel Communications Inc has named Wayland R. Hicks as its chief executive and vice chairman to manage the company's rapid expansion. Nextel needed someone with experience in managing large operations as the company continues its drive to accumulate more properties. The company is trying to establish itself as a major national wireless-service provider. It has seven major agreements in the works, including pacts with Motorola Inc and MCI and a proposed acquisition of OneComm Corp. However, Nextel has experienced some obstacles, such as a shortage of new wireless phones for its West Coast operations. Some industry analysts feel that Nextel has needed a deeper management structure and that the addition of Hicks is a well-overdue strategic move.

DEC reports a surprising loss of $183.3 million for its third quarter ended Apr 2, 1994 as compared to $30.1 million the year before. The loss amounts to $1.34 per share from 23 cents per share the previous year. Revenue dropped six percent from $3.45 billion to $3.26 billion, due largely to a decline in service revenue of 11 percent. The unexpected losses caused investors to unload their stock, forcing the price down 20 percent to $23, a drop of $5.875, on Friday Apr 15, 1994. The losses call for a major restructuring of the company, and analysts predict that DEC will lay off between 10,000 and 20,000 workers at charges of $500 million to $1 billion. These layoffs will come in addition to the layoff of 7,000 mostly temporary workers by the end of DEC's fiscal year on Jun 30, 1994.

AT&T will establish various foreign operations, and each will have its own chief executive officer. The telephone company aims to exploit overseas opportunities more effectively. AT&T Chmn and CEO Robert Allen is not satisfied with AT&T's performance in foreign markets, where potential for growth is high. Allen's original goal was to derive half of AT&T's revenues from overseas operations by the year 2000, but he has been forced to modify his hopes, and he now aims for 50 percent a few years later. AT&T has about 54,000 employees working in foreign markets. Previously, most decisions had to be approved in the US, which involved a cumbersome and inefficient process. One CEO, Walter Sousa, has already been named. Sousa will head AT&T's operations in Asia.

BellSouth Corp will take a $1.2 billion pretax charge in 4th qtr 1993 to cover infrastructure upgrades and layoffs. Because of the charge, BellSouth will report its first-ever quarterly loss. The charge will amount to $760 million, or $1.53 a share, after taxes, and an industry observer predicts a net loss of 60 cents a share in the quarter. In 4th qtr 1992, BellSouth reported net income of $353.4 million, or 72 cents a share. About half the company's pretax charge, or $550 million, will be spent on computer systems that will improve BellSouth's services in nine southeastern states. About $380 million will pay for the elimination of an additional 2,200 jobs beyond the 8,000 already planned by the end of 1996. About $310 million will pay for consolidations of field offices and data centers.

AST Research Inc, which recently acquired Tandy Corp's microcomputer operations, will cut its worldwide work force by 3 percent and reorganize manufacturing to strengthen distribution and reduce costs. AST Chmn and CEO Safi Qureshey says the microcomputer business has become fiercely competitive and AST must position itself to maximize growth. When it paid about $175 million for Tandy's microcomputer business, in Jul 1992, AST became the fourth-largest computer manufacturer. Industry observers say AST's restructuring was expected because of the acquisition and is necessary to make good use of both companies' strengths. AST currently employs 6,700 people worldwide, and about 1,050 jobs, or 16 percent, will be eliminated. Those cuts will be offset by about 850 new jobs in Fort Worth, TX, and Limerick, Ireland. AST's stock lost 50 cents on Nov 9, 1993, closing at $21.50.

David Packard resigns his post as chairman of HP after co-founding the company with William Hewlett in 1939 and serving as chairman for 54 years. The 81-year-old executive has remained an active member of the board and influenced the shift in management strategy that occurred in 1990; however, neither he nor his 80-year-old partner has served as chief executive officer since 1978, and they do not participate in daily operations. Lewis Platt, president and chief executive officer of HP, is now also serving as chairman. The resignation of Packard is not expected to affect the operation of the Palo Alto, CA, computer company. Packard now holds the title of director emeritus, and he says he will continue to offer advice to the company.

IBM divests itself of real estate and at least one quarter of its office space. The moves are part of an ongoing effort to cut costs and raise cash. In Purchase, NY, IBM has put its 550-employee I.M. Pei building up for sale. Elsewhere, IBM salespeople are sharing desks and making do with file cabinets on wheels. So far, IBM has eliminated 100,000 jobs. Earlier in 1993, the company cut its dividend from $4.84 a year to $2.16. Industry observers say 100,000 more jobs could go this year, and the dividend will probably be cut to about $1 in the fall. IBM says some changes are advantageous. For example, salespeople equipped with portable computers will be in closer contact with customers.

The committee of seven IBM directors searching for a replacement for resigning Chief Executive Officer John F. Akers will also decide what corporate structure can best serve the company. The committee, led by retired Johnson and Johnson Chmn James Burke, has already contacted headhunters and hopes of announcing a choice by mid-Apr 1993 at IBM's annual meeting. None of the committee members has much computer industry experience. Burke strongly favors a decentralized structure. The IBM that his committee will examine has a long history of highly centralized management, broken only recently by the decision to restructure the company into a dozen operating units.

IBM may expand the powers of its board of directors' executive compensation committee, which is composed of outside directors. For example, the group may take responsibility for nominating new directors, which is currently done by a committee of IBM executives. The board will consider plans to alter its structure at a meeting on Jan 26, 1993. The board will also discuss the possibility of cutting IBM's dividend. Industry observers predict the board will cut the $4.84-a-share annual payout by half. IBM's board is responding to pressure from investors. One group, the United Shareholders Association, wants to take power away from IBM Chmn John Akers and create an independent panel to investigate the company's long-term goals. The association also wants the company to adjust executives' salaries according to IBM's stock price.

IBM launches Fireworks Partners, an internal unit that will spend tens of millions of dollars on joint projects developing multimedia products and services with outside companies. IBM plans to announce the new unit's first development pact by the end of Feb 1993. Fireworks Partners will also take over IBM's Kaleida Labs joint venture with Apple and its NBC Desktop News alliance with NuMedia Corp and General Electric Corp's NBC unit. Michael Braun and Bob Carberry will run Fireworks; they will report to Jim Cannavino, the senior vice president in charge of the Personal Systems unit.

IBM's stock falls $4.25 to $51.875 in very heavy composite New York Stock Exchange trading on Dec 16, 1992, as many computer industry professionals and analysts say IBM needs to make more aggressive cost-cutting measures. The day before, IBM said it would take a $6 billion pretax charge to cover the cost of cutting assets of the company's faltering mainframe business and at least 25,000 more jobs from its payroll. But some analysts say the company needs to cut at least 25,000 more jobs from its Byzantine bureaucracy. Gartner Group consultant James Cassell says the prices of IBM mainframes may begin falling by one-quarter per year as the computers become commodity products. Some analysts are slashing their earnings predictions for 1993, and the Duff and Phelps credit rating agency demotes IBM's debt from double-A to double-A minus.

Autodesk Inc, the world's sixth largest microcomputer software company, is an unusual company that has been described as a 'theocracy of hackers.' Its reclusive founder, John Walker, who gave up management of the firm in 1986 to resume programming, is as eccentric as his Core members, his elite group of programmers. Walker and Core members are unpredictable, given to outbursts displayed through 'flame mail,' the stinging electronic messages they send one another and other executives. Walker is unconventional, giving outside programmer Michael Riddle an unusually generous $10-million royalty for his AutoCad software which became Autodesk's hit product. Walker, who still holds less than four percent or about 869,000 shares of the company, valued at $30 million, returned to company management in 1992 as technology manager for three months to help select a new CEO. In April 1992, Carol Bartz was named the new chairperson and CEO. Income and sales from 1986 to 1990 did not seem affected by the internal conflicts. They rose about five-fold, although not as good as the earlier years when earnings would sometimes grow ten-fold over a certain period. But in 4th qtr FY 1991, earnings dropped about 25 percent below targets. Autodesk's future seems a bit brighter, with a couple of new products, the Windows version of AutoCad and the scientific software HyperChem, out and 25 more to be released at the end of FY 1992.

IBM announces plans to break up its centralized approach to management and give each of its business units a more autonomous role in management. The move by the large computer maker is seen by industry analysts as a move to remain competitive. IBM does not plan to do the reorganization at a fast pace; rather, it sees its recent moves as steps toward more radical changes. Among the changes include the move to make the data storage and printer units separate entities. Previously, they were part of the mainframe business. IBM Chmn John Akers foresees growth in 1992 and a move towards gaining market share. The company also plans to continue to seek strategic alliances similar to the ones it has made with Apple Computer Inc and Motorola Inc.

IBM unveils its reorganization plans, which includes splitting its mainframe group into three separate units. Data storage for mainframes, minicomputers and microcomputers will constitute a separate line of business, as will printers for mainframes and minicomputers. IBM sold its microcomputer printer business earlier in 1991. The new business units will have greater autonomy in managing manufacturing operations and setting prices. The announcements come only days after Carl Conti, the 54-year-old executive who has run the mainframe operations for six years, announced his retirement. Conti, who is well-regarded, said his retirement has nothing to do with the reorganization plans. Nicholas Donofrio will be in charge of the new mainframe group. IBM stock on the New York Stock Exchange fell to a one-year low on Dec 5, 1991, dropping $1.25 to $90.

Ing. C. Olivetti and Co, the Italian computer company, will reorganize itself, cutting management positions and eliminating duplications, responding to low profits and slowed overall economic conditions. The company already has cut its workforce by 15 percent during the past two years. Olivetti plans a radical reorganization that will consist of three main divisions: Operations, Diversified Activities, and Public Administration. Olivetti Information Services (OIS) will continue to exist alongside the three main divisions. Olivetti hopes to save more than 400 billion lire ($328.4 million) a year as a consequence of the reorganization. The company reports a first-half loss of 73.7 billion lire in 1991, which follows after four years of falling profits.

IBM's recent announcement of plans to decentralize and restructure itself were preceded by an ongoing attempt to re-establish itself as the leader in the microcomputer market. This attempt is not going well. IBM is now engaged in a struggle with Microsoft Corp over operating-system software. Industry observers believe the company that controls operating systems will control applications software as a consequence. IBM is backing its new OS/2 program, but Microsoft is betting on its own Windows graphical user interface, which works with MS-DOS, the operating system already being used on most IBM-compatible microcomputers. Windows is a huge success, with more than seven million copies already sold. OS/2's history, on the other hand, illustrates problems IBM is encountering because of management mistakes in a context of an unwieldy, bureaucratic structure.

IBM's five-person management committee considers ways to make parts of the organization more independent. Company executives envision IBM as a holding company for various computer businesses. Headquarters would not direct activities of subordinate businesses. Rather, decision making would take place within those businesses themselves, and overhead would be reallocated to reflect their independence. Other organizational changes are also being considered, but no decisions about them have yet been made. The year 1991 has not been a good one for IBM: earnings will probably be down more than 60 percent, and the company's stock, which was at $139.75 early in the year, closed at $97.25 on Nov 18, 1991.

Citicorp, one of the largest users of voice and data services, plans a consolidation of its networks. The banking company hopes to save as much as $100 million a year. This project is part of an overall effort to cut costs. Citicorp hopes to cut $1.5 billion a year by 1993. Citicorp has asked that telecommunications service companies submit plans for the project, which will involve more than 100 networks in 92 countries. Many companies that do business internationally, including Visa International, BankAmerica Corp and the Ford Motor Co, are moving to streamline and unify their telecommunications arrangements.

Stunned by third qtr losses of $70.3 million, Compaq Computer Corp announces changes in its corporate structure and strategic planning. Eckhard Pfeiffer replaces Joseph R. Canion as President and CEO of the company and hopes to boost Compaq's profits by changing the way the company markets, designs, prices and distributes computer products in the 1990s. The company will cut costs, introduce new products more quickly and find more distribution outlets. Compaq will also pursue markets it had previously ignored including the education, home and small business computer markets. In order to meet these goals, the company must obtain better deals from suppliers, close down unnecessary facilities and send some production overseas. The company is considering the development of low-priced machines and the utilization of mail-order marketing, and has signed agreements with two third-party service providers to bolster customer service.

Contemporary companies find is economically reasonable to divide their organizations into parts, placing divisions in locations that are particularly suited to them, and maintaining organization structure via telecommunications. Other advantages of dividing a company into parts can include: tax savings, employee satisfaction, savings on travel costs and even the convenience of a suitable time zone. As telecommunications technologies become increasingly sophisticated, such decentralization becomes easier to accomplish. Some executives and industry observers believe that dispersing operations will not simply be more possible in the future, but will be necessary.

IBM and XyQuest Inc sign an agreement to jointly develop a word processing software package, but the product has been postponed indefinitely. The delay exemplifies how large corporations stifle the creativity of innovative start-ups. XyQuest founder David Erickson developed the XyWrite word processing product in Jun 1982 and decided, together with John Hild, to market it. Erickson was working on XyWrite IV in 1989, but realized that without proper marketing, the product would never become a mainstream success. While XyWrite offered sophisticated features such as automatic footnoting and two on-screen windows, it was difficult to learn and many did not even know it existed. IBM was in need of a word processor to market since its own Display Write 5 was not a strong rival to such products as Microsoft Corp's Word and WordPerfect. The agreement between IBM and XyQuest called for the development of a new program called Signature, to be modeled on XyWrite IV. Signature has undergone a series of delays, and IBM may abandon it entirely.

IBM will disband its microcomputer software unit, scattering the Desktop Software division's several hundred employees to other parts of the company. The products developed there will also go to other parts of IBM or be sold to other companies. The software unit was small and its disappearance will not cause much harm to IBM's business, but the incident is an embarrassment. IBM had hoped to be one of the foremost companies in microcomputer applications, selecting 'best of breed' products from small companies and using its enormous size and marketing power to turn its chosen products into successes. But few products were developed and most of those that were did not do very well. In separate news, IBM France will cut 1,000 more jobs, after already eliminating 1,000 jobs earlier in 1991. IBM has agreed to sell memory chips to an unidentified Asian computer company.

GTE Corp will get out of the lighting business and focus on telecommunications. GTE has not yet decided what it will do with its Electrical Products Group. Divestiture is a possibility. GTE is also considering a joint venture with another lighting company or the Electrical Products Group might be spun off to shareholders. Analysts believe that GTE will probably simply exit the lighting business altogether. According to James L. Johnson, chairman at GTE, his company will will benefit by focusing its attention on the telephone business. Jack B. Grubman, an analyst with PaineWebber Inc agrees, saying that 'lighting has nothing to do with the phone business.'

George L. Bragg is the new vice chairman of Western Digital Corp, maker of computer disk drives. Bragg's appointment is part of the formation of an office of the chairman and is seen as part of a restructuring of the company. The office of the chairman will consist of Bragg and the chairman of Western Digital, Roger Johnson. The two men worked together in a similar effort at Memorex Corp. Western Digital showed a net loss of $134.2 million for fiscal 1991 and an 8.1 percent drop in revenue from 1.07 billion to $986.2 million. The company blames the losses on a global decrease in demand for desktop computers, shipment delays of the new 2.5 inch disk drive and a sharp decline in prices for their products. It is negotiating with its banks to restructure a $206.5 million debt. Some analysts feel that Mr. Bragg may not be the kind of talent the company needs. His expertise is in accounting and the firm lacks a strong engineering department to develop new products.

IBM removes a layer in its management structure so that product development, which has been considered to be slow and inefficient, will be speeded and improved. All but one of IBM's product development groups will now report directly to the five-man committee that manages IBM. Previously, product development groups had reported to the general manager of IBM's US operations, who reported, in turn, to the company's management committee. IBM's microcomputer, workstation, and AS/400 minicomputer groups will report to Jack Kuehler, who is IBM's president and is on the management committee. IBM's mainframe, operating-system software, semiconductor and networking groups will report to Terry Lautenbach, who is a senior VP and general manager of IBM's US business, and who is now a member of the management committee.

Hewlett-Packard Co (HP) is turned around and doing well. Only a year ago, the company was in trouble, losing market share. Orders were down in established markets, and the work force was too large, so that profit margins were narrowed. Earnings fell, the company's stock price was down, and morale was poor. After various changes and a major reorganization in Oct 1991, HP CEO John Young has revitalized his company. Excessive layers of management are eliminated and the company is taking a harder line on employee costs. Product development is reorganized under strong management, and computer-product groups are rearranged. According to Young, HP does not want to be caught 'in the big-company mentality,' apparently a reference to IBM and its difficulties. HP's revival comes at a crucial time: a battle is taking shape among manufacturers of microcomputers and workstations.

Apple Computer Inc reports a loss of $53.1 million for the fiscal 3rd qtr ended Jun 28, 1991. The net loss for the quarter was 44 cents a share, compared with /earnings of~ 96 cents a share, or $119.8 million, in the 3rd qtr of 1990. The company posted an after-tax charge of $138.9 million, half of which was for downsizing, including layoffs, in the US and Europe. Apple plans to continue its restructuring until approximately Jul 1991 or Jan 1992. Twenty-nine million dollars is set aside to cover costs associated with a trademark infringement lawsuit brought by the Beatles in connection with Apple's name. According to Daniel Benton, an analyst with Goldman, Sachs & Co, Apple went further with charge-offs than industry observers expected. Analysts thought Apple would only report charges associated with the recent firing of 10 percent of its 15,600 employees. What Apple has done, says Benton, reveals a sense of urgency for the computer maker.

Wang Laboratories Inc plans to reduce its work force by about 20 percent, laying of 3,000-4,000 employees as a result of its recent agreement to sell computers made by IBM. Wang now has about 17,500 workers, down from 31,500 in 1988. Wang expects 'significant restructuring charges' as the company shifts its focus. Work force reductions by themselves could amount to a restructuring charge of as much as $200 million. One industry observer expects Wang to report an operating loss of $100 million, or 60 cents a share, for the 4th qtr, on revenue of about $500 million. In the comparable period a year earlier, the company reported a loss of $496.7 million, or $3.01 a share, with $441.6 million in restructuring charges. Revenue was $652.2 million. Wang's stock closed up 37.5 cents to $3.75 on Friday, Jun 28, 1991.

AT&T names Randall Tobias to supervise the company's overseas businesses. AT&T wants to speed growth in its international operations. The company also will establish an Operations Committee, which will manage AT&T's day-to-day activities. These moves are part of Chmn Robert E. Allen's overall strategy, which aims to transform AT&T into a more aggressive company with a strong presence in international markets. AT&T now derives about 15 percent of its annual $37 billion in revenue from overseas, but AT&T's recent acquisition of NCR Corp will greatly increase international operations because 62 percent of NCR's annual $6 billion in revenue comes from outside the US. According to Randall Tobias himself, overseas markets such as those in Eastern Europe, which are struggling to establish modern communications infrastructures, open up significant opportunities for AT&T.

Microsoft Corp abandons its goal of controlling the printer software market, shutting down its printer-business unit and accepting the resignation of the unit's chief, Cal Bauer. Printer software is a niche market dominated by Adobe Systems Inc, but two years ago, Microsoft set out to challenge Adobe for that market. Adobe's stock collapsed when the giant Microsoft's plans were revealed, but over time the small company proved able to hold its own. Now Microsoft is backing away, planning to concentrate its attentions on enhancing its popular Windows program. According to a spokesperson for Microsoft: 'Just because we're Microsoft, it doesn't mean we win all the time.'