hp at cultural cross road

HP at Cultural Crossroads

Case study analysis:SHUBHADIP BISWAS

Section-APgdm 10-12

IILMGSM

HP at Cultural Crossroads• Founded in 1938 in California as an electronic

instruments company by Bill Hewlett and David Packard.

The founders……. The product …. The logo then

HP's culture had over the years translated into a consensus-style culture that was proving to be a sharp disadvantage in the fast-growing Internet business era. HP needed a new leader to cope with rapidly changing industry trends.new CEO Carly Fiorina tried to take some drastic steps to improve the financial performance of HP, which proved to be a major departure from HP's long cherished culture.

HP at Cultural CrossroadsRelevance of this case study: Importance of Organizational Culture.Role of flexibility in organization culture.Empowerment of employees vs leadership—

execution of power.Change in organization culture should be a

gradual process.Innovation vs tradition.Organizational Culture: a system of shared values or characteristics held by

members of an organization that distinguishes from other organizations.


TRADITIONAL HP’S WAY:

Lifelong employment and employee satisfaction.HP was built as a collaborative culture - not a star system. Relaxed and open cultureOpen-door policyManagement by walking around—treating employees as family membersRecognizing individual achievements & treating all with trust and respectTo achieve common objective through teamworkTo encourage flexibility and innovationTo conduct business with uncompromising integrityTo focus on a high level of achievement and contribution.Management by objective[MBO]Open communication


The challenges face by hp way:Retirement of Hewlett followed by PackardExternal competition intensifiedReady availability of management—drawback---interruption in work cultureTraditional culture had translated into a consensus style cultureCompetitors-----progressive but hp----- stagnantthe world had moved beneath HP’s feet and there were very few options left.HP departed from its lifelong employment traditionProblem of bureaucracyNo sign of innovationUrgency for a new leadership


CARLY FIORINA WAY:Implemented several cost cutting mesuresLaid off---1700 employeesFocus on performance not on teamAnother lay off of 6000 employeesPay cutMerger------------with compaqNo more lifelong employment and employee satisfactionCompensation to improvements in customer aproval rating360-degree feedback conceptFocus on R&D and breakthrough project to increase innovationBonus based on hp vs competitor’s performanceTried to change organizational culture too much too fast.

HP at Cultural CrossroadsCARLY FIORINA WAY:Positivity:one great example of true leadership driving a massive culture transformation.Fiorina understood that if HP was to survive in the new internet era, its culture had to be changed.The new HP way would need people to work together, move faster, and be nimble.. It required HP to master the commoditized technology business (which is what the systems business had become) instead of sticking to its old innovation driven engineering business.Focusing on innovationNegativity:-----negative impact on company’s performance:No team workNo empowerment of employeeStar approachDegrading moral value of organizationDissatisfaction within employeesToo much competence cultureDestroying company’s cherished cultureHire & fire policy-Fearful & uncertain working environment

HP at Cultural CrossroadsSeven primary characteristics capturing

Organizational Culture from the perspective of this case:

Innovation & Risk taking---carly’s way Attention to detail--- hp’s way Outcome orientation---hp’s way and carly’s way People orientation---hp’s way Team orientation---hp’s way Aggressiveness---carly’s way Stability---hp’s way

HP at Cultural CrossroadsThe HP Way

Collaborative approach-team& people orientation

Performance, People, Values ….all are important equally

Egalitarian cultureLifelong

employment

The Carly WayStar approach Performance first…

everything else later

Innovation & risk taking

No empowerment of employees—degrading morale

Hire & fire policy Too much fast and

aggressive way.

HP at Cultural CrossroadsCONCLUSION:There was indeed an urgency of change in traditional

Hp’s way. Flexibility was required.There was need of a leader who can guide.But………. Change is always a gradual process . It is

clear that if Carly had not moved as decisively and as quickly as she did then, scenario could be a brighter one for hp.

Value of employees is one of the most important factor in organizational culture--- empowerment is required---- no person like to be managed-----they like inclusion which was present in hp’s way not in carly’s way.

Carly stepped down in 2005.Hp continues its journey without Carly……………

hp at cultural cross road

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