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 .

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.

The logo then

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 first

everything 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
Hps 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 hps way not in carlys
way.
Carly stepped down in 2005.
Hp continues its journey without Carly