HP AT A CROSSROADS

HP at a Crossroads

HP at a Crossroads

Introduction

This case examines the paradox of bringing in a charismatic leader to spearhead organizational change in a company renowned for its strong legacy and culture. On the one hand, in the face of a rapidly changing competitive environment, HP, a Silicon Valley icon, was looking to initiate an organizational transformation. On the other hand, it was a company embedded in tradition with the charismatic Carly Fiorina having to struggle with the tensions between various organizational components, including company loyalists who opposed a change in the traditional systems, processes, structure, and culture. Also allows discussion of the strategic options available to Mark Hurd, HP's new CEO. This paper will show how one CEO took her own leadership style and completely transformed a company. Carly Fiorina's strategies for the success of computer giant, Hewlett Packard, has faced much criticism. Organizational change, specifically to the management of the company's corporate culture, has brought about much of the criticism. In the paper we will look at the leadership style of Carly Fiorina, details of the HP-Compaq merger and the effects of the merger, further changes in HP strategy, and finally, provide recommendations.

Analysis

Hewlett-Packard Company is a leading global provider of computing and imaging solutions and services for business and home, and is focused on capitalizing on the opportunities of the Internet and the emergence of the next-generation appliances, e-services and infrastructures. HP's corporate is located in Palo Alto, California. The company is lead by Carly S Fiorina who acts as chairman and CEO (Stata, 2003).

Six months after a major internal reorganization, media and analysts were stuffed into an auditorium on its campus in Palo Alto, Calif. The crowd was so large there wasn't a seat even for Bill Russell, then COO and executive vice president of HP's enterprise systems and software group. He was reduced to leaning against a wall alongside the other latecomers (Senge, 2003).

This standing-room-only crowd was there to hear HP's plans for redefining itself for the future. What it heard was an ambitious strategy to convert HP from a value-added hardware supplier into a strategic Internet player, with an emphasis on software technologies far removed from what HP was known for. The e-services initiative, as it was dubbed, would transform HP. Almost immediately, every product in HP's portfolio was given an e-services spin. Within a month, Carly Fiorina was tapped to replace Lew Platt as CEO, and HP's stock spiraled to more than $135 a share by mid-July (Revans, 2003).

Rather than build on all its momentum, however, HP then stalled. Talent slipped through its doors, partners defected and market share slipped away. And the envied stock price? It now trades at around $30--just half its split-adjusted value in July 1999. Then there are e-services. To date, the more forward-looking concepts outlined at HP's coming-out party--online brokering, wireless services and the ability for every enterprise to turn its computing infrastructure into an outward-facing revenue source--have yet to become a reality (Morrisey, ...