HP at Cultural Crossroads
Case study analysis: SHUBHADIP BISWAS Section-A Pgdm 10-12 IILMGSM
HP needed a new leader to cope with rapidly changing industry trends.HP at Cultural Crossroads
• Founded in 1938 in California as an electronic instruments
company by Bill Hewlett and David Packard.
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. which proved to be a major departure from HP's long cherished culture.
The founders……. new CEO Carly Fiorina tried to take some drastic steps to improve the financial performance of HP.
. Change in organization culture should be a gradual process. Organizational Culture:
a system of shared values or characteristics held by
members of an organization that distinguishes from other organizations. Empowerment of employees vs leadership—
execution of power.HP at Cultural Crossroads
Relevance of this case study: Importance of Organizational Culture. Role of flexibility in organization culture. Innovation vs tradition.
not a star system. Management by objective[MBO] Open communication
. Relaxed and open culture Open-door policy Management by walking around—treating 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.HP at Cultural Crossroads
TRADITIONAL HP’S WAY:
Lifelong employment and employee satisfaction. HP was built as a collaborative culture .
stagnant the world had moved beneath HP’s feet and there were very few options left.HP at Cultural Crossroads
The challenges face by hp way:
Retirement of Hewlett followed by Packard External competition intensified Ready availability of management—drawback--interruption in work culture Traditional culture had translated into a consensus style culture Competitors-----progressive but hp----. 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 competitor’s performance Tried to change organizational culture too much too fast.
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.HP at Cultural Crossroads
CARLY FIORINA WAY: Positivity: one great example of true leadership driving a massive culture transformation. move faster. and be nimble. The new HP way would need people to work together. Focusing on innovation Negativity:-----negative impact on company’s performance: No team work No empowerment of employee Star approach Degrading moral value of organization Dissatisfaction within employees Too much competence culture Destroying company’s cherished culture Hire & fire policy-Fearful & uncertain working environment
. . Fiorina understood that if HP was to survive in the new internet era. its culture had to be changed.
HP at Cultural Crossroads
Seven primary characteristics capturing
Organizational Culture from the perspective of this case:
Innovation & Risk taking---carly’s way Attention to detail--.hp’s way Outcome orientation---hp’s way and carly’s way People orientation---hp’s way Team orientation---hp’s way Aggressiveness---carly’s way Stability---hp’s way
all are important equally Egalitarian culture Lifelong employment The Carly Way Star approach
first…everything else later
Innovation & risk
No empowerment of
employees—degrading morale Hire & fire policy Too much fast and aggressive way.HP at Cultural Crossroads
The HP Way Collaborative approach-team& people orientation Performance.
. People. Values ….
scenario could be a brighter one for hp. Carly stepped down in 2005. It is clear that if Carly had not moved as decisively and as quickly as she did then. There was need of a leader who can guide.empowerment is required---. Value of employees is one of the most important factor in organizational culture--.HP at Cultural Crossroads
There was indeed an urgency of change in traditional Hp’s way. Change is always a gradual process . Hp continues its journey without Carly……………
. But……….no person like to be managed-----they like inclusion which was present in hp’s way not in carly’s way. Flexibility was required.