HP AT CULTURAL CROSSROADS
Introduction to the case
The case is about the changes brought by a newly appointed C.E.O. and the shift it brought in the much cherished culture of HP. HP a well set up and once a market leader, setup by two young graduates of Stanford, Bill Hewlett and David Packard, was facing the problem after the retirement of its founder members and a not so high regime after them. Carly Fiorina was appointed as a new C.E.O in July 1999. Looking at the problems faced by the company due to changing business environment and looking at the potential of the organization, she adopted some aggressive steps towards the organization stabilization and was interpreted to be going way against the Organization culture, known as the “HP way”. The low performance of the organization during her tenure adds up to the apprehensions of people against her. However business experts were divided in views regarding her management style. Some considered it against the core values of the organization while others mentioned that the later success enjoyed by HP was the after effects of her efforts. However Carly was made to step down from her position in 2006 and her stand in still a point of debate for the analyst and the business fraternity.
Q.1 Analyze the evolution of HP’s culture over the years leading to the HP way.
1. Open culture- Both the founder members of the organization believed in open door management techniques. There were many steps taken towards the same, some of them are as follows: * Open cubicle for work force.
* Open gates of Mangers offices, so as to encourage innovations and suggestions. * Discussion of work related and job related problems with seniors. * Encouraging both upward and downward communications.
2. Management by walking around- Packard practiced this technique to mix along with the employees with techniques likes impromptu get-togethers. He believed in the ideology of importance of individual’s motivation for increasing the ability of the employees.
3. Stakeholder benefits- HP gave great importance in managing the stakeholders with fairness and integrating. It always laid stress on recognition of individual importance with respect and trust.
4. Employees motivation techniques- All the employees were participant in the profit sharing programs like stock options and received add on bonuses during high performance of the company.
HP top management believes in the empowerment of the low level employees. This includes assigning competent assignments based on their capabilities added with proper training and support.
Other measures taken were as follows-
* Scholarships for the employees’ children.
* Promotes creativity and initiative.
* Promotion of people within.
* Job enrichment and job enlargement.
5. No layoff policies- The company avoided hire and fire policies even at the time of crisis, the best example of it is during the 1974 US economy crisis and adopting four day work-week policies.
All this and more practices led to the development of the “HP WAY”
Q.2 Discuss the key components of HP’s culture and evaluate its contribution to the company’s success. Key Components of HP’s Culture
Hewlett Packard is legendary for its culture. Headquartered in Palo Alto in California HP is a multinational technology company. As is the case with most entrepreneurial companies, HP’s culture and values have been influenced by the founders. They are expressed in the “HP way,” the company’s philosophy of management.
The HP Way consists of the following components:
The Corporate Objectives
Profit was an integral part of the HP way. All the activities were to meet this end. The founders recognised that any product that HP was to create should have value, so that these products can...
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