Introduction
In every business organizations, managerial dynamics tend to influence performance. The leadership of the organization tends to be picked out for blame whenever the goals set are not attained. Similarly, culture also plays a critical role in determining the way a business organization operates and how it adapts to change. Companies whose organizational cultures do not permit change are likely to start experiencing problems in terms of innovation, productivity, and ultimately financial performance. It is the responsibility of organizational leaders to ensure that the prevailing culture is compatible with the new business environment.
The aim of this paper is to carry out an analysis of Hewlett-Packard from 1998 when Carli Fiorina was appointed President and Chief Executive Officer to the time of her departure from the company in 2005. The analysis is done from two perspectives: leadership and culture. On the basis of this analysis, the paper prescribes the changes that need to be made to the organization.
HP culture under Carli Fiorina
Carli Fiorina joined HP at a time when the company was still clinging onto the “HP Way†culture. The HP Way is a culture that was introduced by the founders of the company, David Packard and William Hewlett. Packard remained active in the HP business 1994 while Hewlett remained until 1987. While still in business, these founders were keen to ensure that the company did not break away from its past as far as culture is concerned. Even after retiring, the founders continued to ensure that those who were appointed to the leadership positions upheld its distinct culture that emphasizes on elimination of hierarchies, innovation, and profit-sharing.
The HP Way culture is based on the idea that smart people will always make the right choices if they are given access to the right tools and authority. This culture also puts a lot of emphasis on profits at the expense of revenue growth. For decades, the HP Way has become more or less like a religion. Since its formulation in 1957, this culture provides unwavering support for the principles of open door management, teamwork, egalitarian pay practices, flexible working hours, and full employment. The culture also encouraged leaders to embrace the concept of management by objectives. Under the founders’ watch, HP had also become famous for putting the concept of “management by walking around†into practice. In other words, the HP Way focuses on people and profits.
When Carli Fiorina joined HP during the late 1990s, the challenge of the onset of the internet age had already set in. The internet revolution had already brought about several business dynamics in the industry. One of the challenges was that consumers and corporate buyers were more interested in technology solutions than with off-the-shelf items. Another challenge was that companies in the industry need to leverage the internet as a way of attaining competitive advantage. By failing to shift its business operations towards technology, HP lost many customers to IBM. On the other hand, HP also lost customers to Dell, which did a better job of attaining competitive advantage by leveraging the internet.