When we talk about organizational leadership, the first thing that comes to our mind is an organization that actively inculcates current, as well as previous knowledge and experiences, codifies these information into meaningful insights, and channels these knowledge towards improving the management and flow of their business. Organizations are seen as learning by encoding inferences from history into routines that guide behavior” (Levity &March, 1988: 319) Today, organizational leadership enables companies to manage everything to be successful in their business, and to introduce a flatter organizational structure, which can lead to reduce costs and increase productivity. Organizational dervish means the process of improving actions of line managers and decision makers through better knowledge and understanding. To operate effectively, organizations need to fit or align themselves with their environment, strategies, capabilities and leadership skills.
To compete successfully in highly competitive and constantly changing business environment, however, organizations also need to achieve fitness and the ability to learn and change to fit new circumstances. In other words, firms can lose their competitive advantage through the lapse of time, therefore leadership skills are the only sustainable nominative advantage firms can have. After a colleagues’ discussion, and a series research, we have decided that Hewlett Packard (HP) will be the subject of our case study for the Organizational Leadership course project.
Reason being, the HP culture speaks, acts, and operates within their values, which will be further elaborated in their motto that is widely shared at HP, “The HP Way”. The core organizational values have been embedded and practiced by their employees over the years proves that HP is one of the best learning organizations around today. Hewlett-Packard (HP) is one of those companies that have risen to the pop. It is a well known company with a good name and great financial successes. But is this company able to remain at that top?
Could HP avoid failures that follow success in many high-tech companies? In HP it was always believed that one of the fundamental strengths of the company lay in its people. Since the beginning, as it is defined in the brochure “The HP Way’, they tried to help HP people share in the company’s success which they make possible; to provide employment security based on performance; to ensure them a safe and pleasant work environment; to recognize their individual achievements; to value their perversity; and to help them gain a sense of satisfaction and accomplishment from their work.
For employees it was very easy to identify with these values. Employees working in family feeling environment where a bell would signal that coffee and donuts they served, and employees would gather around to talk with one another. Following Hewlett and Packard example, managers spending time wandering through the organization to see what was going on, to build new channels with employees and to foster closeness with HP. It was understood that all hired employees hired here forever. Created independent divisions al they keeping this human touch.
However, nowadays, after overcoming few difficulties and expanding on highly competitive, fast growing and uncertain market many employees feel that “HP Way is dead”. The importance of “HP Way’ is that “HP Way” bestows the company with unique competitive advantage: highly competent employees who exhibit good teamwork and are committed to excellent performance. But competitive advantage is the only thing that can keep the company on the top. At the same time it does not work when employees are dissatisfied.
Thus leaving no room for doubt that organizational dervish is built on creativity, continuous innovation and responds to consumer feedback by being ready to change and adapt as a means of maintaining competitive advantage. 2. 1 Background Hewlett Packard (HP) is an American information technology corporation headquartered in Palo Alto California, USA. The company was founded in a one- car garage in Palo Alto by William (Bill) Retention Hewlett and Dave Packard. Currently, HP is one of the world’s largest information technology companies and operates in nearly every country.
HP specializes in developing and manufacturing imputing, data storage, and networking hardware, designing software and delivering services. Major product lines include personal computing devices, enterprise servers, related storage devices, as well as a diverse range of printers and other imaging products. Bill Hewlett ; Dave Packard graduated with degrees in electrical engineering from Stanford University in 1935. In 1939, Bill and Dave established HP with an initial capital investment of US$538; they worked on an audio oscillator in a garage in Palo Alto, California.
HP incorporated on August 18, 1947, and went public on November 6, 1957. While HP began as a company that produced all sorts of electronic products, their first focus was on test products like counters and voltmeters and their very first financially successful product was a precision audio oscillator, the Model HAPPEN. They sold HAPPEN for $54. 40 when competitors were selling less stable oscillators for over $200. The company was originally rather unfocused, working on a wide range of electronic products for industry and even agriculture. Eventually they elected to focus on high-quality electronic test and measurement equipment.
From the sass until well into the sass the company concentrated on making electronic test equipment: signal generators, voltmeters, oscilloscopes, frequency counters, thermometers, time standards, wave analyzers, and many other instruments. A distinguishing feature was pushing the limits of measurement range and accuracy; many HP instruments were more sensitive, accurate, and precise than other comparable equipment. Following the pattern set by the company’s first product, the AAA, test instruments were labeled with three to five digits followed by the letter “A”.
Improved versions went to suffixes “B” through “E”. As the reduce range grew wider HP started using product designators starting with a letter for accessories, supplies, software, and components. One of the company’s earliest customers was Walt Disney Productions, which bought eight Model BIBB oscillators in 1972 (at $71. 50 each) for use in certifying the Foundations surround sound systems installed in theaters for the movie Fantasia. In the sass, HP ended up becoming the founder of Silicon Valley.
In the early sixties, HP Associates division developed semiconductor devices primarily for internal use. Instruments and calculators were some of the products using these devices. HP partnered in the sass with Sony and the Yoga’s Electric companies in Japan to develop several high-quality products. The products were not a huge success, as there were high costs in building HP-looking products in Japan. HP and Yoga’s formed a joint venture (Yoga’s-Hewlett-Packard) in 1963 to market HP products in Japan. HP bought Yoga’s Electrics share of Hewlett- Packard Japan in 1999.
HP spun off a small company, Dynamic, to specialize in digital equipment. The name was picked so that the HP logo “HP” could be turned upside down to be a reverse reflect image of the logo “day” of the new company. Eventually Dynamic changed to Domed, and then was folded back into HP in 1959. HP experimented with using Digital Equipment Corporation minicomputers with its instruments, but after deciding that it would be easier to build another small design team than deal with DCE, HP entered the computer market in 1966 with the HP 2100 / HP 1000 series of minicomputers.
These had a simple accumulator- based design, with registers arranged somewhat similarly to the Intel ex. architecture still used today. The series was produced for 20 years, in spite of several attempts to replace it, and was a forerunner of the HP 9800 and HP 250 rise of desktop and business computers. In the sass, The HP 3000 was an advanced stack-based design for a business computing server, later redesigned with RISC technology. The HP 2640 series of smart and intelligent terminals introduced forms-based interfaces to ASCII terminals, and also introduced screen labeled function keys, now commonly used on gas pumps and bank AT Ms.
The HP 2640 series included one of the first bit mapped graphics displays that when combined with the HP 2100 21 MIX F-Series microcode Scientific Instruction Set enabled the first commercial WYSIWYG Presentation Program, BRUNO that later came the program HP-Draw on the HP 3000. Although scoffed at in the formative days of computing, HP would eventually surpass even IBM as the world’s largest technology vendor, in terms of sales HP is identified by wired magazine as the producer of the world’s first marketed, mass-produced personal computer, the HAVANA, introduced in 1968.
HP called it a desktop calculator, because, as Bill Hewlett said, “If we had called it a computer, it would have been rejected by our customers’ computer gurus because it didn’t look like an IBM. We therefore decided to call it a calculator and all such nonsense disappeared. ” An engineering triumph at the time, the logic circuit was produced without any integrated circuits; the assembly of the CPU having been entirely executed in discrete components. With CRT display, magnetic-card storage, and printer, the price was around $5000. The machine’s keyboard was a cross between that of a scientific calculator and an adding machine.
There was no alphabetic keyboard. The company earned global respect for a variety of products. They introduced the world’s first handheld scientific electronic calculator in 1 972 (the HP-35), the first handheld programmable in 1974 (the HP-65), the first alphanumeric, regrettable, expandable in 1979 (the HP-ICC), and the first symbolic and graphing calculator, the HP-ICC. Like their scientific and business calculators, their oscilloscopes, logic analyzers, and other measurement instruments have a reputation for sturdiness and usability (the latter products are now part of spin-off Silent’s product line).
The company’s design philosophy in this period was summarized as “design for the guy at the next bench”. The xx series of technical desktop computers started in 1975 with the 9815, and the cheaper 80 series, again of technical computers, started in 1979 with the 85. HP computers were similar in capabilities to the much later IBM Personal Computer, although the limitations of available technology forced prices to be high. In the sass, HP introduced both inkiest and laser printers in 1984 for the desktop.
Along with its scanner product line, these have later been developed into successful multifunction products, the most significant being single-unit printer/scanner/ copier/fax machines. The print mechanisms in Hap’s tremendously popular Laser line of laser printers depend almost entirely on Canon’s components (print engines), which in turn use technology developed by Xerox. HP develops the hardware, firmware, and software that convert data into dots for the mechanism to print. HP transitioned from the HAPPEN to the HAPPEN series minicomputers with attached storage such as the HP 7935 hard drive holding 404 Nib.
HP rose in popularity, marketing their computers to the average consumer and on March 3, 1986, HP opened an online store to help reach them “the HP. Com domain name, making it the ninth Internet. Com domain ever to be registered. ” In 1987, the Palo Alto garage where Hewlett and Packard started their business was designated as a California State historical landmark. In he sass, HP expanded their computer product line, which initially had been targeted at university, research, and business users, to reach consumers. HP also grew through acquisitions, buying Apollo Computer in 1989 and Convex Computer in 1995.
In 1996, Packard passed away. In 1999, all of the businesses not related to computers, storage, and imaging were spun off from HP to form Agilest. Silent’s spin-off was the largest initial public offering in the history of Silicon Valley. The spin-off created an $8 billion company with about 30,000 employees, manufacturing scientific instruments, semiconductors, optical outworking devices, and electronic test equipment for telecoms and wireless and production. In July 1999, HP appointed Carry Farina as CEO, the first female CEO of a company in the DOD Jones Industrial Average.
Farina served as CEO during the technology industry downturn of the early sass. During her tenure, the market value of HP halved and the company incurred heavy job losses. The HP Board of Directors asked Farina to step down in 2005, and she resigned on February 9, 2005. In the sass, particularly on September 3, 2001, HP announced that an agreement had been reached with Compact to merge the two companies. In May, 2002, after passing a shareholder vote, HP officially merged with Compact. Prior to this, plans had been in place to consolidate the companies’ product teams and product lines. Before the year ends Hewlett passed away.
In the year 2004 HP released the DVD 1000 Series, including the HP Pavilion DVD 1658 and 1040 two years later in May 2006, HP began its campaign, The Computer is Personal Again. The campaign was designed to bring back the fact that the PC is a personal product. The campaign utilized viral marketing, sophisticated visuals, and its own web site (www. HP. Com/personal). On May 13, 2008, HP and Electronic Data Systems announced that they had signed a definitive agreement under which HP would purchase DEEDS. “The transaction still requires DEEDS stockholder approval and regulatory clearance from the European Commission and other non-U.
S. Jurisdictions and is subject to the satisfaction or waiver of the other closing conditions specified in the merger agreement. ” The agreement was finalized on August 26, 2008, and it was publicly announced that DEEDS would be re-branded “DEEDS an HP company. ” As of September 23, 2009, DEEDS is known as HP Enterprise Services. On November 1 1, 2009, com and Hewlett-Packard announced that Hewlett-Packard would be acquiring com for $2. 7 billion in cash. The acquisition is one of the biggest in size among a series of takeovers and acquisitions by technology giants to push their way to become one-stop shops.
Since the beginning of the financial crisis in 2007, tech giants have constantly felt the pressure to expand beyond their current market niches. In sass, particularly on April 28, 2010, Palm, Inc. And Hewlett-Packard announced that HP would be acquiring Palm for $1. 2 billion in cash and debt. The addition of Palm handsets to the HP product line provides some overlap with the current PAS mobile products but will significantly increase their mobile presence as those devices have not been selling well.
The addition of Palm brings HP a library of valuable patents as well the mobile operating platform known as web’s. On July 1, 2010, the acquisition of Palm was final. The purchase of Palm, Inc. ‘s web’s began a big gamble – to build Hap’s own ecosystem. On July 1, 2011, HP launched its first tablet named HP Touched, bringing web’s to tablet devices. On August 6, 2010, CEO Mark Hurt resigned amid controversy and SCOFF Cathie Leaks assumed the role of interim CEO. On September 30, 201 0, L©o Pothered was named as Hap’s new CEO and President.
On August 18, 2011 HP announced that it would strategically exit the smart-phone and tablet computer business, focusing on higher-margin “strategic priorities of cloud, solutions and software with an emphasis on enterprise, commercial and government markets” They also contemplated spinning off their personal computer division into a separate company. Hap’s fundamental restructuring to quit the ‘PC’ business, while continuing to sell servers and other equipment to business customers, was similar to what IBM did in 2005. On September 22, 2011, Hewlett-Packard Co. Named former eBay Inc.
Chief Executive Meg Whitman its president and CEO, replacing L©o Pothered, while Raymond Lane became executive chairman of the company. HP Coos over the last 20 years I Lewis Platting/1999 1 Carry Affrication/2005 1 Mark Hurdlers/2010 Cathie Lakefront 6/8/20th 30/9/2010 | Leo Photographers/2011 1 Meg Whitewashing/2012 | HP over the years diversified its business. It provides infrastructure and business offerings that include handheld devices, some of the world’s most powerful supercomputer installations, storage solutions, digital photograph, chital entertainment, computing and printing.
Hap’s target market includes households, small to medium size business and enterprises. HP has grown into a world leader in the computer industry, with more than 29,000 catalogs of products and revenues of $42 billion in 1999. HP provides sales and services in approximately 600 offices throughout more than 1 20 countries and has manufacturing, research, and development operations in 59 cities in 18 countries around the world. To maintain these operations, HP has 83,200 employees in the United States and internationally. There are several stages and things that appended at HP over the years.
But the most significant one was the merger with Compact that happened in 2002. HP has taken its mobile computing products to a new level with the introduction of handheld computers, pips pocket PC and Pads and it became a major player in desktops, laptops and servers for many different markets. The economy at that time, especially in the IT industry was not booming. They made this decision to make that merger with Compact and, over the years, have demonstrated that it helped HP to build their portfolio and to become the number 1 in the IT industry.
Mark Hurt who is CEO, came on road after Carry Farina stepped down. So they have been in the news for all of these things and you are probably familiar with it. But the most important thing, today, is that HP has become the number one IT Company in the industry and they feel very proud of that. So I’m going to show you some numbers and statistics of what have been done in the last three years that have made HP so successful. HP is a very global company. 67 percent of HP revenues are coming from outside of the U. S.
That is a very significant demonstration of globalization and the globalize of their portfolio. HP does business in 170 countries. They have more than a billion customers. Who owns a printer from HP, a computer from HP, an pips or servers or data centers in their industries? So probably they have HP customers here in the audience. But that is the reach for their company. If you look at the charts there, you can see better probably from their copies, they are the number one or number two leaders on a variety of products. HP has the Imaging and Printing Group that delivers all the printers and imaging products.
They have the Personal Systems Group and they have the Technology Solutions Group that delivers all the data center support on not only the hardware, the software, but also the services. So they have variety and breadth in their portfolio, which none of their competitors has. They can compete with IBM in certain aspects, with Dell in others and a lot of other companies. They have a very unique business model. This is the market share in some products. You can see the numbers are unbelievable: high, double digits in most of their products and 40 percent in some products.
So they are really the leaders in where they play. Over the last few years in the company, when they finished 004, they had a 151,000 employees around the world, $80 billion in revenues, which was growing from the year before by 9 percent and they had $4. 2 billion operating profit. The stock price was $20 at that time. Look at the other side of the picture, which is how they end their fiscal year. They had 156,000 employees, $104 billion in revenues. They grew year over year 14 percent, that’s pure growth of their company. The operating profits are $8. Billion and stock price, was $50. HP currently is the market leader for printing solutions and its core business of Personal Computers, servers, and printers have seen increase in he profit margins, highlighting the fact that it continues to play to its strengths while undertaking new ventures. The traditional device continues to show significant strength against their competitors. If their core businesses continue to thrive then it will have the money it needs to pursue the goal of expanding its software and services business.
In 2007 HP was the first IT Company in history to report revenues exceeding $100 billion and it has topped the list of the largest worldwide seller of personal computers since 2007. It acquired DEEDS in 2008 and com in 2009. HP was ranked 9th in the Fortune 500 ranking in 2009. An incredible growth and profitability has been achieved and they are very pleased with the results, but keeping on the top is harder than reaching it. The key to Hap’s success is due to its organizational leadership which continually innovates and responds to consumer feedback by being ready to change and adapt according to the latest trends and technology. . 2 HP Mission Statements Profit To achieve sufficient profit to finance our company growth, create value for our shareholders and to provide the resources we need to achieve our there corporate objectives. Customer loyalty To provide products, services and solutions of the highest quality and deliver more value to our customers that earns their respect and loyalty. Field of Interest To participate in those fields of interest that build upon our technology and customer base, that offer opportunities for continuing growth, and that enable us to make a needed and profitable contribution.
Growth To view change in the market as an opportunity to grow; to use our profits and our ability to develop and produce innovative products, services and solutions that satisfy emerging customer needs. Employee commitment To help HP employees share in the company’s success that they make possible; to provide people with employment opportunities based on performance; to create with them a safe, exciting and inclusive work environment that values their diversity and recognizes individual contributions; and to help them gain a sense of satisfaction and accomplishment from their work.
Market leadership To grow by continually providing useful and significant products, services and solutions to markets we already serve-and to expand into new areas that build on our technologies, competencies and customer interests. Leadership capability To develop leaders at every level who are accountable for achieving business results and exemplifying our values. Global citizenship Good citizenship is good business. We live up to our responsibility to society by being an economic, intellectual and social asset to each country and community in which we do business. 2. HP Vision Statements HP today announced a year-long observation of the 40th anniversary of HP Labs, the company’s central research organization, and outlined an ambitious, far- reaching vision for the future of information and communications technology. That future could include: Worldwide, connected, continuous, secure computing through virtually unstained, automated data centers; * Bringing the power of digital technology to commercial printing, and creating ubiquitous, low-power, low-cost, lightweight displays that could convey multimedia information in formats as small as a wrist watch or as large as wallpaper. Advances in computing technology that could extend Moor’s Law beyond the limits of classical physics and provide a quantum leap in performance, reliability and security, vastly improving information and communications services in business, education, medicine, government and daily life. HP Labs also will continue to investigate entirely new business opportunities for the company and conduct fundamental scientific research in computing, IT services and imaging and printing. “HP Labs researchers were among those who did and who worked, in fundamental ways, to help create the world we enjoy today. 2. 4 HP Workforce From the beginning the two founders have developed a management style which had never occurred in a large company before. They coined a new type of corporate culture which was to be called ‘the HP way. ” 3. 1 Rising the HP Way On August 23, 1937, they put their thoughts to paper, beginning with a mineral statement about design and manufacture of products in the electrical engineering field, followed by a startling statement: “The question of what to manufacture was postponed ‘ Later, they brainstormed ideas, making a long list of product possibilities.
They considered phonograph amplifiers. They considered air conditioning controls. They considered television receivers, welding equipment, and public address systems. They even considered medical equipment. In the months after that first meeting, the young engineers kept their start-up alive with contract projects, including an electronic shock jiggle aching to help people lose weight. Finally, they hit upon the audio oscillator and sold eight units to Walt Disney, earning the company its first substantial revenues.
We’re taught that you need a clear understanding of how you will create competitive advantage?a great idea for launching an enterprise. “But they had a great idea?the ultimate source of competitive advantage?if you can just see it, the key point: Bill Hewlett and David Packard’s greatest product was not the audio oscillator, the pocket calculator or the minicomputer. Their greatest product was the Hewlett-Packard Company and their greatest idea was The HP Way.
This wonderful book, which David Packard wrote shortly before his death (1996), outlines the history of the company and the development of the HP Way. Hewlett and Packard formalized the HP Way in 1957, the year the company went public. With the business growing, the founders realized they needed a set of corporate objectives to guide their division managers. The objectives were UnUSUal for their time. The six objectives (a seventh was added later) began with a focus on profit; however, Hewlett and Packard rejected the idea that a company exists merely to maximize profits.
Packard voiced a contrary view: A many has a responsibility beyond making a profit for stockholders, “Profit as an enabler of other, equally valuable objectives, the company has a responsibility to recognize the dignity of its employees as human beings, to the well-being of its customers, and to the community at large. ” Jaime Ash, a retired engineer said “The people running the company thought it out well as to what kind of company they wanted and how you make a company successful in the long run, not just increasing the stock value and getting out. These people really had a vision in the long term.
The fact that it had been successful, the way they had succeeded, it meant that it was a sustainable thing. ” When former employees reminisce about the HP Way, they tell stories about how Hewlett and Packard regularly roamed the halls, talking with employees about their projects; how employees put on annual skits where they ribbed their bosses, including Bill and Dave; how co-workers were reassigned to new jobs rather than fired; how the company for a time implemented a shortened work week for all employees so certain individuals would not lose their jobs.
Everybody respected everybody else and management was part of the team. Following the founders’ lead, managers ere expected to know their employees and share with them what was going on in the company. Both Hewlett and Packard spent time at various HP sites, talking to employees at all levels. They had a pretty good feeling of how people felt. Hewlett and Packard also believed in creating a loyal and dedicated work force.
They practiced “reassignment” rather than firing, with some employees searching for up to six months for a position in which they would thrive. Employees who couldn’t be reassigned were allowed to “quit,” so their record would not be hurt. The pair turned down short-term contracts, so they would not have to lay off hunks of their work force after the contract was over. Packard said they didn’t want to run a “hire-and-fire operation. From the earliest days of the company, Hewlett and Packard also practiced management by objective “the antithesis of management by control,” managers allowed employees to determine how best to accomplish agreed-upon goals, thus fostering innovative thinking and an entrepreneurial spirit. But to Hewlett and Packard, and their employees, it also meant something more: Trust. “Belief in people had been fundamental at HP. ” In the HP Way, a manager trains his employees by only putting-in his oar when he project was on the line.