Organizational Culture at HP

GROUP – 2

SECTION C

HP – An Overview

Established in 1938 in a garage by William Hewlett and David Packard

Incorporated in 1947

World’s second largest computer supplier by 1997 ($42 billion)

Personal computers

Enterprise servers

Storage devices

Printers

HP Way

Values and Principles to guide HP (1956)

Recognize that profit is the best measure of a company’s contribution to society and the ultimate source of corporate strength;

Continually improve the value of the products and services offered to customers;

Seek new opportunities for growth but focus efforts on fields in which the company can make a contribution;

Provide employment opportunities that include the chance to share in the company’s success;

Maintain an organizational environment that fosters individual motivation, initiative and creativity;

Demonstrate good citizenship by making contributions to the community;

Emphasize growth as a requirement for survival.

Leadership Change Highlights

(1964)

Dave Packard was elected CEO and chairman of the board

Bill Hewlett assumed the position of president

(1999)

Carleton S. Fiorina replaced President and CEO

First outsider to take charge of the 62-year-old company.

Changes led by Fiorina

Revitalizing the company and kick-starting growth

Overhauling the company’s structure, consolidating operating units, and shearing away layers of bureaucracy.

A new marketing campaign featuring a simplified “hp” logo that dropped the founders’ names

Meeting growth targets proved difficult

HP forced to cut jobs, employees asked to take unpaid leave

Plans to acquire Compaq

Impact of Compaq/HP merger

Top management views merger as a way to differentiate the new company and avoid price wars

Investors and Employees skeptical of the deal

Merger likely to create a behemoth to hinder rapid growth

Difficulty of blending two organizations’ resources and culture

A full-service technology firm from selling PCs to setting up complex networks

Resistance to change of HP way

Way forward

Four major operating groups: services,

imaging and printing,

access devices,

information technology infrastructure

a full-service technology firm capable of integrating hardware and software into solutions

Employee reductions likely

Fiorina would be chairman and CEO of the new HP with Michael Capellas as President

Changes made: Front Back Organizational Structure:

80 autonomous product focused divisions into

• 2 front-end Sales & Mktg. division

• 2 back-end R&D and Manufacturing division

Objective:

• Achieving the SOLUTIONS perspective (rather than product focus)

• Easier for the customer to buy

Computers, Software and printers integrated into Seamless solutions to problems

Pros & Cons- Divisional Structure at HP PROS:

Entrepreneurial culture

New Product Development a strength

Profit & Loss accountability

CONS:

Strategic Decision making difficult

Poor integration among HP product offerings Ex. Incompatibility of HP inkjet & laser software

Customer dissatisfaction

Earlier Culture defining parameters

Consistent Investment – Self finance own growth

Technical Innovation

High commitment culture

Pragmatic & Cautious approach

Change for the worse ?

Management Credibility

Respect

Fairness

Best places to work in