HP Organizational Analysis

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Table of Contents

Introduction
Overview of the Organization
Structural Issues
Discussion of ways to help solve some of the structural issues
Conclusion and Recommendations
References

Introduction

The paper is a critical analysis of organizational structure of HP Company. This is tackled by providing an over view of the organization, the structural issues facing it, a thorough discussion of ways that can help solve the structural problems and finally a conclusion and recommendation section that summarizes the paper.

It is worth noting that, what drives organizations in carrying out their day to day activities is organizational structure. Organizational structure refers to a system that dictates the hierarchy, activities as well as how things are coordinated to help organizations attain their main goals and objectives. Different organizations adopt different structures. Despite this sort of arrangements, problems do occur and a time they are so serious that may threaten the wellbeing of the organization in question.

In the situation of HP, it is well known to be the first major organization to have CEO woman back in 1999. Fiorina Carly widen the business of the organization by acquiring other businesses. However the purchase of Compaq brought controversy which was the beginning of her trouble as the organization faced a number of problems ranging from financial to cultural issues.

She was later fired and in her place came Hurd Mark. The later received a number of complains regarding the sales department.

The issues raised included who was to be conducted, getting the go ahead in hiring sales representative to mention but a few. His analysis revealed that the many layers of structure were the problem. To curb this, the new CEO resorted to firing employees that were not performing well and cutting down on the layers (Jana, 2009).

In one instance he completely did away with a sales group. Having in mind that organizational structure is what every organization will consider, its functions are dependent in a number of factors such as the type of products and services offered to customers and target market ranges. The functions of organizational structure include determining focus range, the types of products offered, niches to be focused as well as the strategies to target markets.

Overview of the Organization

Hewlett Packard Company was formed in 1939 by two electrical engineering graduates from Sanford University. Hewlett Packard is the second names of Bill Hewlett and Dave Packard the founders of the company.

The Company was established at a garage belonging to Packard as the name was arrived at after a coin tossing between the two co founders of the corporation of which Packard won but they decided to name their electronics company Hewlett Packard Company.

The company was an idea after a fellowship in Stanford alongside Pastor Fredrick Terman who they consider their mentor (Packard, 2006). The Hewlett-Packard Company was incorporated in 1947 but the shares were offered to the public in 1957 (Jana, 2009).

With the initial capital of US $ 538 they were able to produce their first ever financial successive product, precision audio oscillator HP200A product to the market which gained fiscal uplift unlike the other previous products.

In this model they incorporated a small light tuber as a temperature resistor on the circuit. This project produced a number of the series to the market spanning a record breaking 33 years as the longest-selling basic electronic design of all time.

The introduction of HP200AB, an improvement of the model HP200A shoved it from the market. The Walt Disney Company was the earliest customers of the Hewlett-Packard Company as they acquired eight units of the HP200B oscillators’ model for attesting the sound systems in the theatres for the Fantasound for the movie Fantasia as noted by (Linstead et al., 2004).

Mission & Vision Statements

HP Company has developed a unique management style best known as the HP Way; its origin can be traced as way back from the founders and friends, Bill and Dave down to the employees. This, a core philosophy take into accounts the three major concepts of respect, dedication and commitment (Packard, 2006). Thus there was emphasis on the vigor esteem of the individual, devotion to reasonable quality and consistency, commitment to society conscientiousness together with the technical contributions for the progressive and interests of humanity is secured by the company.

Core Values, Operating Guidelines

The following are the doctrine of The HP Way:

There is belief and esteem for individuals.
The organization is of result oriented through soaring level of realization and contribution.
The Company’s core values are more than establishment and adhering to the processes but carry out the business with adamant veracity.
There is need of joint effort in order for the realization of the common objectives.
There is room for elasticity and advancement for the company to acquire new ideologies.

Structural Issues

From the case study, a closer examination reveals several structural issues that include; bureaucracy, many layers between managers and employees and other relevant stakeholders, lack of timely response to views of customers, high formalization, financial problems/struggles and misconceptions, lack of clear rules, there is no alignment of goals and organizational culture.

With regards to bureaucracy tasked with ensuring that everything is attained efficiently by utilizing the least amount of resources, it contributed to the problem of one of the managers not being able to timely acquire new set of employees to execute sales duties (Pugh, 1990).

It is agreed that having a bureaucratic system make it impossible for timely decision to be made, the notion rests on the various layers of management as well as strict adherence to laid down regulations. It is worth noting that the kind of organizational structure that brought about bureaucracy is line structure.

With this system there was a given channel of command and for approving anything top down approach was utilized (Shafritz et al.2005). This kind of structure could only be suitable for a small organization but not to a global one like HP.

Additionally, concerning the rate at which the organization was responding to customers’ issues, it is evident that it contributed to later not understanding who to call in situation of problems that needed clarification.

Having in mind that customers are the important stakeholders and are at a better position in dictating a company existence, ignorance to their plea, views and comments can be a disaster to the existence of an organization (Shafritz et al., 2005).

The inability of HP not to respond to what the customers raised can be attributed to the bureaucratic nature of the organization.

Although there are channels to be followed in such a system, the time taken before responding to the calls made discourages customers from trying to contact the organization for assistance in the future. The implications of such a scenario are numerous including customers looking for another alternative company, bad company reputation among others.

Financial struggle and misconception are another set of structural issue. It is always the desire of each and every organization to grow and widen their business wings across the globe. This can be done in various ways such as forming partnership, merging as well as acquiring other business entities.

However, HP led with misconception controversially bought Compaq computers under the leadership of Fiorina Carly. Her action to acquire Compaq was largely seen as a plan done for sake of diversification and not based on the return the project will generate.

This kind of misconception broadened the company’s development making the organizational structure in place not to be able to handle such an expansion. It is this action that increased the risk of losing HP focus in meeting the needs of customers as well as effectively utilizing the available resources (Morgan, 2006).

Similarly, such a rapid expansion in most cases affect the company’s target market since specialization is not emphasized as compared to the one in which is having a narrow focus. The decision to acquire other businesses needs to be guided by certain procedures and guideline. It is clear that by the time the CEO made the decision to buy Compaq Computers such rules were not in place.

Poor communication method is another structural problem linked to bureaucracy. With the top down approach, it is usually difficult for those in lower ranks to pass their views and opinions to the top management.

This is attributed to the various layers through which information need to pass before reaching the desired person for necessary actions to be taken (Serenko et al., 2007). Despite the fact that the response will be positive, time factor is of essence.

It is information that gives people the ability to act rationally and in situations where the same is not guaranteed then there are problems. Lack of 360 feed back contributed to employees having lower morale as well as unsatisfied customers who were troubled with regards to who to contact.

Discussion of ways to help solve some of the structural issues

This section brings forth numerous ways that can help address the above discussed structural issues. However, only two of them will be discussed in details. Among the solutions to the organizational structural issues include; job description, adopting technology, creating clear guideline, communication across organization to help give direction, adopting learning organization concept, horizontal linkage and life cycle product (Grey & Garsten, 2001).

Having in place a well planned communication systems that will enable the organization timely receive and provide feedback to the relevant stakeholder will be of essence in addressing a number of problems. One way to attain this is to cut down on the various layer between manager and employees as well as the customers and other stakeholders (Raymond & Snow, 1992).

With improved channel of communication, the views from all relevant stakeholders’ especially customers will be quickly and timely responded to. HP will then be in a better position to outwit their competitors.

Additionally, improved approach of information sharing will create an environment in which employees are free to air their views, such a democratic working environment contributes to motivated and satisfied workers who will work to provide their best to the organization (Daft, 2010).

A second solution for HP is to adopt the concept of a learning organization.

It is worth mentioning that a learning organization has a number of benefits. For instance it will help the organization maintain higher levels of innovation and creativity hence being competitive. Similarly, a learning organization will better place HP in responding to external factors hence maintaining competitive advantage (Argyris & Schön, 1996).

Similarly, learning organization when it comes to the issue pertaining to changes, HP will be at an advantage as they can adopt change quickly and successfully.

In situations where the relationship between the organization and their relevant stakeholders are analyzed, a learning organization through the five characteristics of a learning organization (team learning, system thinking, mental models, and personal mastery and shared vision) makes it to be people-centered firm. This brings with it a number of advantages such as improved corporate image (Jacobides, 2007).

Conclusion and Recommendations

From the review of HP organizational structure, it is evident that it is important for any organization to have in place a structure which will help it attain their main objectives. However, whatever the type of structure adopted, there are bound to be issues which will derail the organization from attaining its goals and objective.

The causes are mainly internal, shaped by some external factors (Malone, 2007). For HP, the organizational structure issues in the case study provided included; bureaucracy, many layers between managers and employees and other relevant stakeholders, lack of timely response to views of customers, high formalization, financial problems/struggles and misconceptions, lack of clear rules, there is no alignment of goals and organizational culture.

All these aimed at bringing down the organization.

To solve these structural issues there were a number of options but the two main one chosen and recommended include adopting the concept of a learning organization where “people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to see the whole together” (Senge, 1994 p. 3). Secondly I recommend that HP put in place mechanism that will foster effective communication and 360 degree feedback systems.

References

Argyris, C. & Schön, D. (1996). Organizational learning II: Theory, method and practice, Reading. Mass: Addison Wesley.

Daft, R. (2010). Organization Theory and Design. Mason, Ohio: Thomson.

Grey, C. & Garsten, C. (2001). Trust, Control and Post-Bureaucracy. New York: Sage Publishing.

Jacobides, M. (2007). “The inherent limits of organizational structure and the unfulfilled role of hierarchy: Lessons from a near-war” Organization Science, 18(3): 455-477.

Jana, R. (2009). “HP’s Cultural Revolution” Web.

Linstead, S. et al. (2004). Management and organization: A critical text. Basingstoke, Hampshire: Palgrave.

Malone, M. (2007). Bill & Dave: How Hewlett and Packard Built the World’s Greatest Company. New York: Portfolio Press.

Morgan, G. (2006). Images of Organization. Thousand Oaks, CA: Sage.

Packard, D. (2006). The HP Way: How Bill Hewlett and I Built Our Company. New York: Harper Press.

Pugh, D. (1990). Organization Theory: Selected Readings. Harmondsworth: Penguin.

Raymond, E. & Snow, C. (1992) “Causes of Failure in Network Organizations,” California Management Review, Summer.

Robbins, S. & Barnwell, N. (2006). Organization Theory: Concepts and cases. Sydney: Pearson.

Senge, P. et. al. (1994). The Fifth Discipline Fieldbook: Strategies and Tools for Building a Learning Organization. London: Sage.

Serenko, A. et al., (2007) “Organizational size and knowledge flow: A proposed theoretical link.” Journal of Intellectual Capital, 8(4): 610-627.

Shafritz, J. et al. (2005). Classics of Organization Theory. Belmont, CA: Thomson Wadsworth.

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