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
