HP Company’s Management Practices and Innovative Products

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

In 1939, Bill Hewlett and Dave Packard who were both college classmates at Stanford University created a company, Hewlett Packard. The company was well known for its management practices, reliable and innovative products.

The culture and the management practices, ‘HP way’, were progressive and included a focus on the profits more than revenue growth, full employment, egalitarian pay practices, and flexible working hours. The practices connected with the values of the founders on the importance of profit and people (Beer, Khurana & Weber 2005).

In the first four decades, HP sold test and measurement equipments and it was during that time that the HP Way was developed. Beer et al. (2005, p.2) asserts that the products could be sold for high profits since they were based on the leading-edge technology developed at HP.

HP launched computer and printer products in the 1970s. Initially, these were for commercial applications but later, the company developed products for domestic use. During this period, big up-front research and development investments was required for the computers. Also, many divisions at HP that worked so well in the instrument business were required.

Beer et al (2005) asserts that in the late 1980s, the company also began to build lower-margin PCs. It is during this time the founders expressed concerns regarding whether the low-margin computer business was a good fit for HP. HP had three business areas by the early 1990s which were the test and measurement instruments business.

HP sold a variety of high-margin instruments to engineers through highly independent HP divisions. Between the year 1992 and 1996, HP enjoyed rapid sales growth of over 20% annually, but not without concerns over the increasing reliance on low-margin PCs and profits from printers.

The CEO of Compaq approached Fiorina in the year 2001 in order to address the possibility of merging HP and Compaq. Negotiations started on the board’s realization that the deal made sense. The negotiations were led by Fiorina and they could not continue without her presence. A public announcement was made for the merger between HP and Compaq (Beer et al 2005).

HP moved from just the top thirty PC makers to number three after IBM and Compaq between the early 1990s and about 1997. According to Beer et al (2005) two shifts in the industry dynamics made the competitors to rework their strategies and organization in the late 1990s. Major customers especially on the business, were looking for their suppliers to provide technological solutions meaning suppliers needed to have a high level of coordination across the commercial side’s activities.

IBM, a major competitor to HP, by then had successfully implemented a solutions strategy by bundling computers, software, and other products with services to meet the needs of the customers for the integrated solutions. The rapid growth of the internet was the second shift involved. In the late 1990s, HP’s performance began to falter resulting from Dell and the Asian economic crisis causing it to miss quarterly profit.

Beer and Werssowetz (1985) argue that in the early years of the formation of the HP company, a number of management concepts were developed by the founders that involved a set of corporate objectives and a business style known as the HP way. This style of management involves a participative management style will support, demands freedom for individuals and an initiative as it emphasizes commonness of the objectives and teamwork.

Employees are provided with direction in the form of well-defined negotiated goals, shared data, and the support of necessary resources. Process used in HP provides structure and strength to help in assuring the desired products of their efforts. Exceptional subtlety in approach and trust and openness in relationships are required to try to gear a common supportive process while retaining individuality.

The strong beliefs in several areas by Hewlett and Packard shaped the company since the beginning. According to Beer and Werssowetz (1985), several aspects of the corporate objectives are embodied by HP’s product strategy. R & D to create products that will compete through new technical contributions rather than through marketing or through other competitive devices is emphasized on.

Technically oriented non-sense approach of the people who started the company is reflected by the product strategy. The company’s approach to human resource management and the product strategy complement each other.

The most fundamental business unit at HP is the product division. Until a product area contains the six basic functions of R & D, manufacturing, marketing, quality assurance, finance, and personnel is a division (Beer & Werssowetz, 1985, p.5). There were 40 HP divisions by the end of 1980.

The responsibility of 10 product groups is to coordinate the activities of the divisions. The company’s objectives are also reflected by the important financial elements. A comprehensive system of management by objectives primarily directs the daily activities of HP. The overall objectives are communicated and subunit objectives negotiated at each company level. Objectives provide a large measure of freedom in how goals will be accomplished. The goals must be made to mesh both horizontally and vertically throughout the organization.

To succeed in any organization, one should look at different aspects to keep moving. If at all HP intends to realize growth in revenue, it must achieve its corporate objectives. However, the company’s products must first fulfill the needs of the diverse market.

Reference List

Beer, M., Khurana, R., & Weber, J., 2005, Hewlett-Packard: culture in changing times. Boston: Harvard business school.

Beer, M., & Werssowetz, R.,1985, Human resources at Hewlett-Packard. Boston: Harvard business school.

Click Here To Order Now!

HP Company’s Management Practices and Innovative Products

Do you need this or any other assignment done for you from scratch?

We have qualified writers to help you.

We assure you a quality paper that is 100% free from plagiarism and AI.

You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)