Case Study Analysis – Hewlett Packard

The case study analysis titled, “A Deer Caught in the Headlights” at HP the Situation"

Introduction

Hewlett-Packard Company (HP) is suffering underperformance in the computer and printer market, Hewlett-Packard’s Board members decided to employed Carleton (Carly) Fiorina from Lucent Technologies to help them with process changes to Hewlett-Packard organization.

The board member of Hewlett-Packard wanted to bring the fresh air and efficiency idea along with Fiorina to the organization. According to Fiorina’s previous experience at Lucent Technologies, after one month’s observation, she defined the organization’s problems were low productivity, high cost and inefficiency on R&D activities. Hence, she decided that she would implement her successful change process to make change from organizational level as well as the strategic level at Hewlett-Packard. Fiorina decide to centralize the decision making. And made change of the functional department. Shown as the Graphic-1 below.

Graphic-1

Fiorina states that she would be making a plan with a frontend and backend department, which means that the backend of the firm would in charge of manufacturing and distribution of print devices and computers. Although the frontend only focused on marketing and sales. Fiorina specified that the company would reduce the variety of products. She also emphasized the improve of performance should be very clear.

Six years passed, the board required Carleton Fiorina to resign, and she was out from the position at Hewlett-Packard. Nonetheless Fiorina had the ideas that successful operated for her at previous firm, that does not mean that the framework will work under any circumstances. It can consequence an inappropriate result for the firm and resistance of change by the staffs.

Background

The Hewlett Packard Company (HP) is an International Company. The headquarter was set in Palo Alto California. HP is a firm that manufacturing a variety of devices and software to corporate consumers in business and individual users. Hewlett Packard was established by William Redington Hewlett and Dave Packard, in a house’s garage in Palo Alto in 1939, The Company established its reputation as a manufacturer of innovated products back to 40’s. Hewlett-Packard is one of the first companies at Stanford Industry Park. By the 1990s, Hewlett-Packard's business grew steadily and reached a peak. Their main business was the four business of electronic instruments, medical equipment, computers and printers. HP was producing from electronic devices such as oscilloscopes and signal generators to costly medical devices such as nuclear magnetic resonance (MR) machines, HP has excellent representation in quality and technology. In the field of computers, Hewlett-Packard mainly produces minicomputers and PCs. In the area of printers, HP Laser printers and inkjet printers almost monopolize the market. In the nineties of the last century, HP was the most famous company in Silicon Valley and the first choice for many outstanding graduate students. HP’s first corporate client was Walt Disney, which bought eight audio oscillators to use in the making of its full-length animated film Fantasia in1940” (Hall, 2015). 

Key Problems

Previously, HP has been designed the structure including back end ( design, manufacturing, distribution for printers, and computers), and front end (marketing and sales operations, consumers, corporate customers). During the 6 years’ execution, there are many problems in HP’s management. Firstly, the board of director never paid attention to statistical performance evaluation in organization structure, so that the effectiveness of the organization performance can not be estimated objectively and timely, later the execution would face poor quality. Secondly, the engagement in awareness of diagnosis is not enough, then the whole companies’ employees would be reluctant to change the current operation mode, even though it has already been harmful to all the companies. Especially for some senior employees, the enthusiasm towards organization structural revolution would be low. Thirdly, the psychological safety for investigating on employees’ feedback can be lacked, then the employees would hide real opinions, and the revolution would not really get close to their demands. Fourthly, the original plan for organizational adaptation has been targeted as the market threats, after 6 years, the results come out ineffective as it has been planed, thus, the direct responsibility should be owed to the organizational structure’s problems, or management mode problems, that is the sales, costs, employees have not been organized reasonably.

Alternatives

There are some alternatives, which should be related to the basic aspects inside organization. These should be explained according to the organizational theories.

Firstly, the organization structure must be concrete, and solid. It means, apart from any organizational form evolution, the basic structure should be clearly defined, so that the employees would have a sense of positioning. Then, the limited responsibilities would improve activeness, and employee engagement, as well as organizational structure’s stability (Baligh, 2010).

Secondly, the organizational culture should be constantly ascertained. Instead of losing the sense of mission, the transformational leadership should offer orientation, guidance towards the execution with clear and dedicate reinforcement on the meaning, mission, principles, rules, so that these could insert the daily strategic decision making and constant training (Hofstede, 2003).

Thirdly, since the market environment keeps on changing, if HP wants to win over the competitors, the technological change should be revolutionary, owing to the IT industry’s specialty. Then, according to William Bridges transition model, when there are some variations in the organization structure, employees should be communicated with definite and practical instructions with restrictions, and written conventions from the beginning to the end. The neutral zone should be specially paid attention to, because the old patterns, and new approaches’ switch should be coordinated (Heath, 2011).

Fourthly, apart from total revolution, if HP wants to keep cost effective adjustment with employee engagement, Kotter’s model can be applied. On the basis of the original organization structure, the different layers of managers should be in charge of communication about the consolidation, urgency, coalition, and so on (Kotter, Cohen, 2012). Lewin’s model Unfreeze, Change, and Refreeze work can also be applied (Lewin, 2012). Only then can the employees activeness be taken advantage of. On one hand, they can still be familiar with their previous work tasks, on the other hand, they can also be reminded of adding or changing new work tasks to improve the quality. In this process, the individual’s organizational behavior should be respected, from their attitudes, perspectives, acknowledgement towards company, and working conditions, atmospheres, and so on.

Fifthly, the performance evaluation is essential. Because HP is complex in organization structure, the performance should endure supervision from different directions with statistical data analysis and periodical goal achievement. The performance evaluation should be recorded and shared in groups, so that the transparency would lead to self discipline in execution.

Possible Solutions

According to the alternatives in solving management issues, there are some practical solutions for structural improvement, employee engagement, safety and cultural establishment, and so on.

Firstly, apart from the consultation, the leadership, especially the board of directors has to pay attention to insert organization culture into the current organization structure, as has been planed and executed for almost 6 years. In the specialized organization structure, the leaders, committees, front end, and back end departmental managers, sub managers, should form network with united organization culture, such as a sense of technological revolution, imposition of HP’s brand values such as diligence, intelligence, artificial, or automatic application, with some identifiable stylistic company culture and company mission, then the company values would be inserted through daily management (Hofstede, 2003).

Secondly, on the basis of the two ends’ structure, since HP is a kind of product oriented company, the product line should be optimized, the printer, and computer should form independent product line, because they are in different product life cycle, with different update versions. When these two products are mixed, the departmental relationship would be competitive, however if they are separated from production to marketing, then the risks or conflicts can be largely reduced. However, they can mutually contribute to the company’s strategic development.

Thirdly, the employees’ engagement, sense of belongings, honor, master, should be improved in management with circulation. There are some possible measurements. In the first level, HP can start up the knowledge management so that the employees can be involved in the teamwork, and the productivity would greatly be enhanced because of the spiral learning process inside company. In the second level, they should have performance evaluation in daily, weekly, monthly, seasonal, yearly schedule, only then can the execution of the planned solutions be accurate, and achievable, the limited resources would not be wasted (Gupta, 2012). In the third level, the internal job promotion, career development planning, differentiation in salary making or bonus, dividends, awards offering can help employees to feel one member of the company.

Fourthly, the communication inside organization should have some skills. As is mentioned, the scientific management should be established on clear instruction with information exposure, instruction explanation, statistical task target indication, feedback, supervision, correction, and from the beginning to the end (Heath, 2014). HP should require time, cost targeted task accomplishment report, so that the communication’s ambiguity would be largely reduced. At the same time, periodical group meeting, training would be useful, when there are some revolutionary change, or new technological performance, there should be centralized training for employees to gain the relevant skills timely, and stay qualified.

Fifthly, the organization structure should face cutting down and adaptation, because the employees should not bear the responsibility of strategic fault, when some products face revolution, or market competition, the adjustment in organization structure can be necessary. As a whole company, HP would put yearly focus differently, in the process of adjustment, the employees’ previous performance should be independently scheduled, or tested, and they should be offered with limited responsibility, and encouragement towards feedback offering when there are work shifts.

Sixthly, the employee engagement and safety for employees can be formed out of the tolerance and acceptance, which means diversity culture should be established. Since employees have different background, and vary in age, work experience, cognition prejudice, and many other aspects. The stability and safety can improve company’s productivity, and sustainable development. It should relate to the recruitment principle. From the recruitment, the employees should be fixed with their skills, such as management, sales, technology, product design, promotion, and so on. Then the mistakes would be reduced to a great extent. Later, the periodical communication and performance evaluation would let employees to adapt to their detailed work tasks. Later, the clear career development, stock addition, job promotion would relate their own benefits with HP, the sense of trust and belongings would soon increase. However, the HR department should provide objective economic evaluation towards the employees work quality.

Conclusion

In conclusion, Hewitt-Packard has a solid place in the market. Even though changes in production may cause some turmoil, Hewitt-Packard will reap significant rewards from implementing the change strategy while they experience growth. The organizational diagnosis seems to be necessary, and if board of director and all the employees can be aware of the importance in execution of the new principle with statistical evaluation, the contribution would pay off in quite a short near future. At the same time, the current 6 years’ organization structure would only have to be adjusted slightly according to yearly business plan or product design, the efforts in employee management do not lie in structure change, but in the organization cultural insertion, communication, and quality insurance as well as tolerance in diversity if HP wants to protect the current company scale, or even expand or make revolutions.