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 The First 40 Years of Business (1939-1979)
The HP Way
The HP is shaped by corporate objectives in its profit, customers, fields of
interests, growth, people, management, and citizenship.
Business Strategy
HP's products in its first thirty years consisted mainly of electronic test and
measurement instruments for engineers and scientists. The company then
expanded into computers, calculators, medical electronic equipment,
instrumentation for chemical analysis, and solid-state components.
Business Policies
HP's policy of self-financing its growth resulted in minimal long-term debt.
HP's self-financing policy was intended to support its human resource
philosophy and policies, particularly employment security.
Work Systems
Work systems in HP is run with management by objectives and
commitment to teamwork.
Communications
HP used a variety of techniques to encourage an ongoing dialogue with its
employees. Almost all individual offices had no doors. Work areas were
usually wide-open spaces with rows of open carrels.
Promotion and Reward System
Employees referred to career paths at HP as "the career maze." This
phrase acknowledged the normalcy of cross-functional and cross-
divisional promotions and lateral moves, based on performance and
potential, that often occurred over the course of a career.
Employee Selection and Socialization
During the first half of the 1970s, rapid growth and hiring led to formal
training in thevalues and practices of HP. It became more difficult to pass
the culture on by example and word-of-mouth. This led to a course called
"Working at HP" and later "Managing at HP" for new managers
The turmoil in the 1980s During this period, HP was facing difficult situation in their
business, their main business problem were languishing
in stock price and employee profit sharing was decline.

Internal Strategy + External Strategy = Result

Downsizing Acquisition
Redeployment Employee
Satisfaction
Outsourcing Decreasing
consolidation

As they had to changing their business strategy, Both internal and external strategies regarding Human
Resources were implemented with main objectives to avoiding layoffs and implementing retrenchment.
As result, its employee satisfaction was declined
 ORGANIZATION OF HP
Ø A highly decentralized organizational structure as their
strategy.
Ø Product division’s GMs were authorized to make decisions
for their business.
Ø The divisions are small and well defined to maintain a
working atmosphere that encourages solving problems as
close as possible to the level where they occur.
Ø One division consists of 6 basic functions of R&D,
manufacturing, marketing, QA, finance, and personnel.
Ø Underperformance from GMs was not tolerated (they will
be transferred rather than being fired).
Ø Coordination of division activities was the responsibility of
10 product groups (each one accountable for overall
operations and financial performance).
Ø Strong and relatively autonomous divisions resulted in the
moderate size & influence of the corporate staff.
Ø Many divisions shared functions (being integrated) due to
consolidation.
Ø Computer Systems Organization (CSO) consolidated
manufacturing and other activities to achieve coordination &
cost efficiency, but still maintained a decentralized product
marketing focus to remain responsive to customers.
Ø HP’s 4 business organizations (Test & Measurement,
Computer Systems, Computer Products, Measurement
Systems) operated more autonomously over the years, but
were still in dire need of more cooperation & coordination.
Ø H P ’s f u t u r e l a i d i n i n t e g r a t i n g t h e d i v e r s e b u s i n e s s
organizations.
 THE CHANGE OF CULTURE IN HP
Once a decision made,
Do consensus decision making
everyone must support
whether he/she agree or not
Have less time and more
Have less pressure in the job pressure because of more job
to do
In the break time, employee will
gather around and talk with one to
another when donuts and coffee
serve
Each division will reviewed
individually by Bill Hewlett and
Dave Packard
Employee can’t take breaks
during the day because of the
tight schedule
Division review in the group
because CEO can not make a
time to review division
THE CHALLENGES THAT HP FACE

Revitalizing the HP C o n v i n c e t h e Great pressure from The problem of cultural

methodology means organization to be the new market and geographical
changing the mindset consistent with the requirements and diversity in adjusting
of the organization way HP is implemented. increasingly fierce to the number of new
regarding the HP competition. employees and new
methodology. supervisors.
Could the feeling of many
employees that the “HP Way is
dead” be reversed and how?
It could be reserved. Since the change occurred at HP, employees
were emotionally s haken. Therefore, t he company s hould
immediately take action by surveying the employees to find out what

QUESTION 1
is their personal needs, issues and goals for the HP’s company. From
that survey the company probably can recognize what is the problem
for each employees. The company should create comfortable
atmosphere to support diversity of their employees in work
environment.

In particular, what should be HP’s policy

with respect to employment security,
which many perceived to have been
abandoned in the 1980s.
HP’s policy should be secure the employees. As long as the employees
are eligible to the company, adhere to the highest standards of business
ethics and must understand that anything less is totally unacceptable the
employees will not be fired.
 C o u l d t h e H P Wa y b e a p p l i e d i n d e v e l o p i n g
countries with very different traditions and cultures?
Yes they could, but in one condition…be FIT!

F
Flexibility in terms adjusting local culture, but still has to be
aligned with HP Way as core value. Conducting
comprehensive initial research for local country culture is had
to be conducted before entering new market.

QUESTION 2
I
Integrating the the new culture practices into existence
ones, such as integrated MBWA into a country with little open
communication culture as executives had to seen by
themselves regarding control mechanism

T
Trust that HP Way could be flexible enough to be integrating with
the new culture. At this moment, HP Had been passed their “hard
time” during 80s and Law Platt is progressing something new into
the HP Way in positive way, so the momentum is just right to
entering worldwide market
 How much autonomy should HP allow its 4 major
businesses in shaping their strategies, policies,
and management practices?

Each major business should be given chances to improve themselves

independently (because they are the ones who know about the SWOT that

QUESTION 3 they have/are facing currently), but only for things that will not directly
affect the company’s overall goals if there is a flaw in the process.
Because the 4 major businesses are linked to each other, then they need
to maintain the good relationship/coordination that has been built over the
years. If one business is given too much autonomy thus making major
changes in various aspects, then there is a risk that it can disturb the good
flow of its business process.
COULD HP AVOID THE FAILURE
THAT FOLLOWED SUCCESS IN
MANY HIGH-TECH COMPANIES?

QUESTION 4
HP has a belief that the company's fundamental strength lies in its
people. In the "The HP Way" brochure (Exhibit 2), each point explains
how HP is helping people to grow and participate in the company's
success. HP provides job security, provides a safe and pleasant work
environment, recognizes the achievements of their individuals, values
their diversity, and helps them to be more creative. For this reason, in
avoiding failures as many companies do, HP can use "people" to be
the company's strength in dealing with these problems. Because in
the current era, employee development is needed to support the
company's progress.
 • As they had to change their business strategy, both internal
and external strategies regarding Human Resources were
implemented with main objectives to avoid layoffs and
implementing retrenchment. As a result, its employee
satisfaction declined.

• Employees leave the organization to work for startup

companies or be an entrepreneur.

CONCLUSION • The company should immediately take action by surveying

the employees to find out what their personal needs, issues
and goals for the company. From that survey the company
can recognize each employee’s problems. The company
should create comfortable atmosphere to support diversity of
their employees in the working environment.

• In this day and age, flexibility in business is needed in terms

of adjusting & integrating to local culture, but still has to be
aligned with HP Way as core value.