HP at Cultural Crossroads

Case study analysis: SHUBHADIP BISWAS Section-A Pgdm 10-12 IILMGSM

HP at Cultural Crossroads
Founded in 1938 in California as an electronic instruments company by Bill Hewlett and David Packard.

The founders.

The product .

The logo then

HP's culture had over the years translated into a consensus-style culture that was proving to be a sharp disadvantage in the fast-growing Internet business era. HP needed a new leader to cope with rapidly changing industry trends. new CEO Carly Fiorina tried to take some drastic steps to improve the financial performance of HP, which proved to be a major departure from HP's long cherished culture.

HP at Cultural Crossroads
 Relevance of this case study:  Importance of Organizational Culture.  Role of flexibility in organization culture.  Empowerment of employees vs leadership execution of power.  Change in organization culture should be a gradual process.  Innovation vs tradition.

Organizational Culture:
 a system of shared values or characteristics held by members of an organization that distinguishes from other organizations.

HP at Cultural Crossroads
TRADITIONAL HPS WAY:
Lifelong employment and employee satisfaction. HP was built as a collaborative culture - not a star system. Relaxed and open culture Open-door policy Management by walking aroundtreating employees as family members Recognizing individual achievements & treating all with trust and respect To achieve common objective through teamwork To encourage flexibility and innovation To conduct business with uncompromising integrity To focus on a high level of achievement and contribution. Management by objective[MBO] Open communication

HP at Cultural Crossroads
The challenges face by hp way:
Retirement of Hewlett followed by Packard External competition intensified Ready availability of managementdrawback--interruption in work culture Traditional culture had translated into a consensus style culture Competitors-----progressive but hp----- stagnant the world had moved beneath HPs feet and there were very few options left. HP departed from its lifelong employment tradition Problem of bureaucracy No sign of innovation Urgency for a new leadership

HP at Cultural Crossroads
CARLY FIORINA WAY:
Implemented several cost cutting mesures Laid off---1700 employees Focus on performance not on team Another lay off of 6000 employees Pay cut Merger------------with compaq No more lifelong employment and employee satisfaction Compensation to improvements in customer aproval rating 360-degree feedback concept Focus on R&D and breakthrough project to increase innovation Bonus based on hp vs competitors performance Tried to change organizational culture too much too fast.

HP at Cultural Crossroads
CARLY FIORINA WAY: Positivity: one great example of true leadership driving a massive culture transformation. Fiorina understood that if HP was to survive in the new internet era, its culture had to be changed. The new HP way would need people to work together, move faster, and be nimble. . It required HP to master the commoditized technology business (which is what the systems business had become) instead of sticking to its old innovation driven engineering business. Focusing on innovation Negativity:-----negative impact on companys performance: No team work No empowerment of employee Star approach Degrading moral value of organization Dissatisfaction within employees Too much competence culture Destroying companys cherished culture Hire & fire policy-Fearful & uncertain working environment

HP at Cultural Crossroads
 Seven primary characteristics capturing Organizational Culture from the perspective of this case:
 Innovation & Risk taking---carlys way  Attention to detail--- hps way  Outcome orientation---hps way and carlys way  People orientation---hps way  Team orientation---hps way  Aggressiveness---carlys way  Stability---hps way

HP at Cultural Crossroads
The HP Way  Collaborative approach-team& people orientation  Performance, People, Values .all are important equally  Egalitarian culture  Lifelong employment The Carly Way  Star approach
 Performance firsteverything else later

 Innovation & risk taking

 No empowerment of employeesdegrading morale  Hire & fire policy  Too much fast and aggressive way.

HP at Cultural Crossroads
CONCLUSION:
There was indeed an urgency of change in traditional Hp s way. Flexibility was required. There was need of a leader who can guide. But . Change is always a gradual process . It is clear that if Carly had not moved as decisively and as quickly as she did then, scenario could be a brighter one for hp. Value of employees is one of the most important factor in organizational culture--- empowerment is required---- no person like to be managed-----they like inclusion which was present in hp s way not in carly s way. Carly stepped down in 2005. Hp continues its journey without Carly