Organizational Behavior report on HP
Hewlett Packard: Changing of the Guards
Hewlett Packard: Changing of the Guards
EXECUTIVE SUMMARY
HP has proven to be a successful company but the recent recession, strong competitors, and expectations of stakeholders for improvement has initiated some problems within the company.
This report examines some leadership issues at HP and proposes solutions for them.
An organization’s leadership plays an important role in defining the ethical values, innovation standards and its culture.
An organization’s culture can become more of a liability when the shared values are not in agreement with the leaders that will further the organization’s effectiveness, especially when they are hired externally and not properly socialized into the organization’s core values. HP experienced similar negative impact with the initiation of external hiring trend for CEOs in 1992.
We suggest the implementation of an “Executive Socialization Plan” to prepare new Chief
Executives for their roles as leaders at HP.
The high turnover rate of leadership at HP due in part to ethical issues was initiated by the 2006 spying scandal and has continued to date. To ease the negative impact of these issues and to prevent them in future the leadership at HP should implement “Values based Decision making model”. Problems surrounding the HP’s creativity emerged with Fiorina’s centralization of the company.
The company has been making efforts to revert back to their creative roots with new products. In order to sustain this momentum and help propel HP back to its success in creativity and innovation we recommend that HP revert to its decentralized structure, making each product line independent and autonomous. HP should also increase its R&D budget in order to keep up with rapidly developing IT industry.
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Hewlett Packard: Changing of the Guards
Table of Contents
Executive Summary
Hewlett Packard: Changing of the Guards
EXECUTIVE SUMMARY
HP has proven to be a successful company but the recent recession, strong competitors, and expectations of stakeholders for improvement has initiated some problems within the company.
This report examines some leadership issues at HP and proposes solutions for them.
An organization’s leadership plays an important role in defining the ethical values, innovation standards and its culture.
An organization’s culture can become more of a liability when the shared values are not in agreement with the leaders that will further the organization’s effectiveness, especially when they are hired externally and not properly socialized into the organization’s core values. HP experienced similar negative impact with the initiation of external hiring trend for CEOs in 1992.
We suggest the implementation of an “Executive Socialization Plan” to prepare new Chief
Executives for their roles as leaders at HP.
The high turnover rate of leadership at HP due in part to ethical issues was initiated by the 2006 spying scandal and has continued to date. To ease the negative impact of these issues and to prevent them in future the leadership at HP should implement “Values based Decision making model”. Problems surrounding the HP’s creativity emerged with Fiorina’s centralization of the company.
The company has been making efforts to revert back to their creative roots with new products. In order to sustain this momentum and help propel HP back to its success in creativity and innovation we recommend that HP revert to its decentralized structure, making each product line independent and autonomous. HP should also increase its R&D budget in order to keep up with rapidly developing IT industry.
i
Hewlett Packard: Changing of the Guards
Table of Contents
Executive Summary
Citations: (Hewlett-Packard, 2010). Since then, the company has created a staggering amount of new products and services that has ultimately led to its expansion and success today passion for its customers, (Hewlett-Packard, 2010). It is these values that have enabled the company to continue to not only thrive in an extremely competitive market, but to drive its brand to one of the most recognizable household names in the world (Hewlett-Packard, 2010). 1999, brought her expertise in marketing and public relations (Hewlett-Packard, 2005). She had an impressive track-record of being a successful leader and manager beforehand projects as the new CEO was facilitating the acquisition of Compaq. She viewed the acquisition of Compaq as a way to give HP the ability to rival IBM in size and revenue (Taylor, 2001). match up (Langton, Robbins, & Judge, 2010). Compaq had previously experienced a bad merger with Digital Equipment Corp and the two companies were never able to successfully merge their individual work cultures (Taylor, 2001). Consequently, when HP acquired Compaq, the organization had to manage the merger of three separate work cultures can blur the lines of authority and make it unclear as to where employees fit in (Langton, Robbins, & Judge, 2010) culture and the company can suffer as a result. Financially, HP’s acquisition of Compaq was unsuccessful and caused HP’s share price to drop drastically (OS News, 2005) 2010). Hurd’s management style was that of aggressive cost-cutting, exemplified by the 15,000 layoffs made shortly after becoming CEO (Gustin, 2010) and steering HP in a more economically beneficial direction. Under his leadership, HP reported a 25% jump in profit (Gustin, 2010) because Hurd’s strategy of improving HP’s financial position largely came from cost cutting and financial discipline (Madden, 2010) unfavourable with many of the company’s personnel and consequently led to a sense of unease and distrust among employees (Thibodeau, 2010) company to survive and grow during the recent recession (Thibodeau, 2010); however, it seems that Hurd did not account for its effects on HP’s core values objective from innovation, as set out by its founders, to one that focused on cost-cutting (Thibodeau, 2010). successful organizational culture (Costa, 1998). discovered to be violating HP’s ethical standard for any short term divisional profits (James Collins, 1994) problems. Specifically, HP’s previous CEO Mark Hurd and members of the Board of Directors have been accused of various issues (Stewart, 2010)