1. Organizational Culture at HP
GROUP – 2
SECTION C

2. 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

3. 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.

4. 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.

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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