The case of Bridgestone vs. IBM presents an example that displays the importance of communication in cooperation between businesses. In brief, the American subsidiary of Bridgestone requested IBM to develop an extensive business system that will be capable of processing a large volume of orders. Due to several complications, the system developed by IBM was released behind schedule yet way earlier than the last steps of development, which resulted in millions of financial losses and the deterioration of both companies’ images. Analyzing the details of the case provides an understanding of common complications in significant projects and how improper execution of extensive projects can influence the reputation of collaborating companies.
First, in defining what each side could do differently to improve the outcomes, one could notice immediately that both companies had issues hindering their work and left them undiscussed. IBM had trouble working with a project already attempted several times by other vendors, which caused additional obstacles not previously discussed by the management. The obstacles resulted in delays in system release, and due to a lack of understanding in communication, Bridgestone proceeded with the release of the unfinished system. The simplest solution for Bridgestone that could have sufficiently improved the outcomes, in this case, was to postpone the release and give IBM time to finish the system. While delaying the system release could have resulted in additional expenses, the order data could have been saved without any threats to the existing customer base. Moreover, it seems that IBM insisted on running a testing launch of the system. Therefore, the adverse outcomes could have been prevented if Bridgestone did not fail to process the vendor’s request and was not excessively focused on improving the existing system in a short time.
Next, there is a significant difference in the harm that publicity around this project caused to the two companies. On the one hand, Bridgestone lost a substantial portion of customers, business partners, and brand supporters. Moreover, the company seemingly suffered crucial financial damage from unsuccessful system implementation, while the development of the system was out of Bridgestone’s competence. Thus, Bridgestone suffered more losses from the project’s failure than IBM. However, IBM’s image was more harmed by the event’s publicity when Bridgestone filed a suit against IBM. In addition to being charged in breach of contract, Bridgestone company accused IBM of fraud as IBM’s budget for developing the system exceeded Bridgestone’s initial budget. Furthermore, Bridgestone accused IBM of assigning incompetent personnel that lacked the necessary skills and experience to execute the project. Therefore, even though the early launch of the system was Bridgestone’s mistake, IBM’s reputation as a vendor who failed to fulfill its functions was harmed more by the event’s publicity.
Lastly, considering the scale of the conflict between the two companies, it is surprising that both companies came to a mutual decision several years later. One week prior to jury selection in 2018, both companies decided to drop their claims, even though it was unclear whether any “monetary concessions” from the firms took place in the decision (Belden). In addition, both companies filed a motion with prejudice, which means that their decision is permanent and the lawsuit cannot be raised in the future. Therefore, it appears that in accepting their mistakes, the companies approached dealing with the negative consequences of the failed project with a more understanding approach than in the time of the system development.