Commentary: Last chance to salvage IBM

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Clearly 'something' must be done at IBM. After losing three-quarters of its market value in five years, the bleeding has not stopped: the dollars 5bn loss it posted yesterday for 1992 - the worst in corporate history - included a staggering dollars 11.6bn simply to cover the costs of shrivelling. Firms that IBM once considered suppliers or pesky niche rivals - Microsoft, Intel, Apple - now not only dominate their market specialities but are poised to overtake IBM in market capitalisation.

At other faltering giants in the past year, such as General Motors, American Express, Digital Equipment, Sears and Westinghouse, 'something' has been radical surgery, either in the form of decapitation or general dismembering. At IBM, the prescription emerging among institutions, management gurus, the business press and Wall Street is for both. Long the inspiration behind the management strategies of the day - lifetime employment, business synergy and one-stop shopping, if not diversification and conglomeration - IBM is now to be a guinea pig for the corporate panaceas of the 1990s.

IBM's bureaucracy desperately needs devolution, and its chief executive, John Akers, has been painfully slow in recognising his changed environment. IBM can no longer survive as a single company; its only hope of survival in an industry as fragmented, entrepreneurial and competitive as information technology is as a series of autonomous units.

But none of the prescriptions put forth to date by disappointed shareholders, management theorists or editorial critics offers solutions more promising than Mr Akers' own plan for restructuring the computer giant. Forcing him out now might satisfy Wall Street's near-mystical faith in the power of a new face, but in the long run it will only complicate and delay the task of salvaging value from the remains of the world's largest capital-goods firm.