Red, White, and “Big Blue†: IBM and the Business-Government Interface in the United States, 1956–2000

This article describes the evolution of IBM's effort to manage its relationships with the U.S. government from the time that Thomas Watson, Jr. became CEO. While the Watson family controlled the firm, the family members served as the main bridges between IBM and the government. This personalized approach began to give way in the 1960s, as the intensity and scope of pressure from the firm's political environment grew beyond the capability of any individual to handle. During the 1970s and 1980s, IBM constructed a managerial hierarchy, with a newly opened Washington office at its center, which could gather more detailed intelligence and execute more sophisticated political strategies. The firm's crisis in the early 1990s provoked a second major restructuring of the interface, as IBM became more of a Washington “special interest.†Yet, some traces of the Watson imprint remained, even in the Gerstner era. Tracing IBM's evolution helps us to understand better the broader interactions between U.S. firms and their environments in this period. These interactions entailed adaptation by firms to environmental change but also efforts by firms to exert control over external forces, including public policy.