Hewlett Packard (HP) - Introduction to Business Organization - Coursework Example

? Hewlett Packard (HP) - Introduction to Business Organization Hewlett Packard (HP) - Introduction to Business Organization Introduction: Hewlett Packard (HP) is one the world’s largest and leading IT and technology company. It deals in manufacture and supply of laptops, printers, PC’s and variety of range of computers. HP operates a large network for the manufacture and supply of technological products; it operates in 170 countries of the world fulfilling the technological needs of millions. (HEWLETT PACKARD. 2012) HP was founded in 1939 by two of the classmates of Stanford University- Bill Hewlett and Dave Packard. It’s first ever product was an electronic test instrument and one of its early customers who boosted their sales initially was Walt Disney. (HEWLETT PACKARD. 2012) HP operates in 170 countries of the world which makes it operative in America, Asia Pacific, Europe, Middle East and Africa (EMEA). Its head office is located in Palo Alto, California –USA. Further it has installed HP Solution Centers in over 80 locations all around the world which provide technical support regarding the products to million of customers. (HEWLETT PACKARD. 2012) HP operates as a public listed corporation and is listed on New York Stock Exchange. Financially, HP is a very sound company with an annual turnover of $127,245 million, generating a profit of $7,074 million. HP has a diversified portfolio of products and operates many different segments. Region wise it mostly generates its sales- 45% of it from America (which includes US, Canada and Latin America) the rest is generated from EMEA and Asia Pacific. Its most revenue generating segment is that of personal computers products and services which generates around 60% of the revenue. Other segments which are operated are imaging and printing group, enterprise server, storage and networking, HP software and HP financial services. The company is currently headed by Meg Whitman, the CEO and President of HP who was appointed on the posts recently in late 2011. (HEWLETT PACKARD. 2012) Organizational Structure: An organization’s structure plays a great role in executing its strategies. HP’s organizational structure has grasped international attention from past decade. In 2000 Carly Fiorina was appointed as the Chief Executive Officer at HP, at that point Fiorina changed the organizational structure of HP which had been there for last 64 years. She dismantled the decentralized structure of HP and introduced a more modern concept of structuring the organization in which HP was to operate with a front-back approach in which back-end unit was to deal with manufacturing while the front-end dealt with sales, marketing and customers. That was the first time a large company with numerous production lines adopted this structure which requires high level of coordination. (PEARCE & ROBINSON. 2000) However this structural strategy was a fail and in 2005Mark Hurd was appointed as the CEO and he changed the structure back to it what it was before Fiorina, that is, a decentralized structure with independently run smaller units with a narrow product focus. The current organizational structure at HP allows for greater accountability, high sense of responsibility, aids in cost reduction and accountability of spending and better control on production to sale activities. The decentralized structure at HP is basically made up of seven divisions/segments which are either organized on the basis of products or functions. Such a structure enables HP to have greater insight about the environment in which it operates as a technological business is highly dynamic, the divisions and units have to be adaptable and agile to the changes which is done by resting the power to plan day-to-day activities to the segments. However major strategic decisions are held with the higher level. Such a structure also supports a giant like HP which serves a market of trillions all around the world to execute more effectively. HP has expanded by mergers and acquisitions, by adding products and services to its portfolio. For e.g. HP recently acquired EDS, 3Com and Palm and integrated these businesses to the division where they can provide the most value. A decentralized structure enabled HP to execute better with the integration. (PEARCE & ROBINSON. 2000; PRIDE, HUGHES & KAPOOR. 1999) Leadership and the Management: The company is headed by Meg Whitman who is holds the position of CEO and President at HP. Meg comes from a very strong background and has years of experience of the corporate level. The Harvard graduate had served as the CEO of eBay, Florist Trans world Delivery and Stride Rite Corporation. Since she has been appointed in HP in September it is too early to say about her leadership style. However, Meg has been well known for her effective democratic leadership, she ranked number one in 2002 on the list of Best CEOs and number two on most powerful women in America in 2004. Meg is a visionary leader; she is ambitious and believes in growing quickly but steadily. Her focus has always been on empowering customers through their feedbacks and being mindful about the competition in the industry. (BELASEN. 2012) HP’s board and management take various decisions for the growth of HP which ensures that the company delivers consistent financial performance and achieves its goals set for the period. This mainly includes decisions about the mergers and acquisitions and their integration in the structure in such a way that will benefit HP as a whole. (HEWLETT PACKARD. 2012) The highly dynamic environment in which HP operates it has to deal with a lot of changes, which on one hand includes effective implementation of change that occur due to its organization’s structure that is the frequent mergers and acquisitions and on the other hand the changes that an IT company faces which includes effective change management of the effects that change in technology causes. HP has changed his shift towards more customer centric approach and their entire change management revolves around the same approach. Their product development, HR policies, operational excellence all focus on customer satisfaction and loyalty. HP focuses on innovation in order to provide more value to customers. Change is managed as effectively as possible in HP by following the framework to manage change which involves consideration and evaluation of different stakeholders involved and affected by the change component, the cost of change, other areas that can be affected by change and people responsible for change and overseeing its management. (HIAM. 1997; WIGODSKY. 2004) Marketing Strategies: HP operates in many counties of the world making it cater many markets worldwide. It offers a wide portfolio of products and services all around the world which makes the marketing an essential activity at HP. It operates a large network of customer care and supply of products and services over internet. HP operates with a customer centric approach therefore customer satisfaction and loyalty is part of all it marketing strategies. (HEWLETT PACKARD. 2012) HP’s marketing strategies can be better understood by the analysis and implementation of 7Ps of marketing. The first P of Product- HP provides a wide range of products to its customers, HP is involved in the providing infrastructure technology, outsourcing of business processes, application development and technological maintenance support and consultation; it also deals in personal computing and related access devices and products and services related to imaging and printing. It further supports its products with HP Care Pack which extends customer’s warranty or upgrade in a cost effective way. The second P- Pricing, HP is very customer oriented when pricing its products, it first conducts research about how much a customer is willing to pay then design the product accordingly. HP provides a variety of range of products and services within the expected price range of the customers. The third P- Place, HP has presence all around the world in all continents. It has subsidiaries present in countries Tokyo, Houston, Miami, Ontario and Singapore etc. Further HP’s Solution Centers are installed in around 80 locations all around the world. Such a world wide spread gives HP an edge over its competitors to serve its customer easily. The fourth P- Promotion, HP has offered variety of promotional offers to its customers, for e.g. it a branding initiative was launched to integrate the electronics and computer products, it runs a ‘Trade-in Program’ where a customer can trade its old product by getting a free quote, it advertises its products and services on many vehicles, websites and on other media, it’s employees blog about its products and services and provides customers technical support through these blogs etc. The fifth P- People, HP employees almost 321,000 people worldwide. It values its people and hires the best possible staff and work on their training and development to get out the best of them. HP operates on cultural lines laid by the founders know as the ‘HP Way’, which fosters teamwork in the organization and respects the individualism. The sixth P- Physical Evidence, HP has a website which is interactive and extremely informative as it provides information about history to customer support. Further HP has proved to be an environmentally and socially conscious company and is working for many environmental and social concerns. The seventh P- Process, HP’s strategy focuses on achieving innovation with speed and agility. Over the period it has taken many initiatives to improve its processes through redesigning for cost effectiveness. HP has installed Design for Supply Chain (DfSC) system, which allows HP to consider the effect of decisions on whole supply chain. Mark Hurd's one of the CEO, cut 15,200 jobs and encouraged remaining to stress operational efficiency. (HEWLETT PACKARD MARKETING MIX; HEWLETT PACKARD. 2012) Human Resource Management: One of the most important aspects of HP’s culture is that it supports teamwork and cooperation within and beyond the divisional boundaries. HP operates on cultural lines laid by the founders know as the ‘HP Way’, which fosters teamwork in the organization and respects the individualism. HP has used this component of its culture very well and because of the interdivisional cooperation and collaboration it has been able to double its market value and has shown strong performance since years. (SCHULER & JACKSON. 2007) HP is one of the pioneers in setting human resource policies. HP uses rewards and incentives to motivate its employees. Unlike many companies, HP promotes entrepreneurial behavior among its managers and rewards success by compensation packages. The successful leaders at HP are given pay raise, stock options, personal computers etc. HP provides great benefits to its staff and is famous for great to work with all around the world, they are famous for putting great energy in developing their people and all this make it easier for them to attract the best workforce all around the world. Besides generous compensations it provides it employees with health benefits program, retirement programs, paid leaves etc. (SCHULER & MACMILLAN. 1980; HEWLETT PACKARD. 2012) HP believes in spending greatly on the development of its employees as they are the greatest asset HP can possess. HP has an individual process in which each employee is supposed to make his own development plan and identify time frames to achieve it. It not only trains people for the jobs today but where there is a need it provides the training and development for future roles. Training at HP is provided in a number of ways which include on the job training, through coaching from mentors and managers, off-site courses, seminars etc. It is ensured at HP that the best is utilized out of the employee and their development is at paramount importance. (HEWLETT PACKARD. 2012) Supply Chain Management: The contribution the supply chain management excellence brings to a manufacturing company can not be ignored. HP is aware of the importance of its supply chain and all the components of it and has been constantly working on its improvement. HP operates an end-to-end supply chain which focuses on all internal and external organizations therein including, vendors, intermediaries and customers. Being a multinational operative in many counties of the world, HP achieves globalization, partnerships and collaborations through its supply chain management. It has further integrated technology with the supply chain management and has greatly benefited from these processes and has passed it to all members of the supply chain. (HEWLETT PACKARD. 2012) HP operates one of the largest supply chains of the world and has a huge distribution network which serves billions of customers worldwide. HP’s global customer support service is the most value adding to the company and that Is not possible with a large well managed supply chain. Its supply chain is built up of 32 manufacturing and assembling plants, 700 vendors and 119 logistic partners. It incurs 64% of the total cost on its supply chain management. Collaboration is a key feature at HP. Once a target market and product is identified the entire supply chain works together and designs the optimum distribution network to bring the product to the market. HP has introduced an approach manufacture of product which is known as ‘design for supply chain’. This approach is unlike the traditional one, it evaluates the cost of the product throughout its lifecycle which requires the input of all the departments and components of supply chain in the process of design. In this approach in the designing process people from research and development, engineering, suppliers and environmental analyst are all involved in the design process. The design made is the one that optimizes the benefits and minimizes costs for e.g. if the design is for logistic enhancements the packaging will be done in a way which will optimize shipping costs. HP through its supply chain has been able to gain a competitive edge against its competitors. (BLANCHARD. 2010) Conclusion: HP is the leader and the pioneer in technological company with its presence world wide giving it the opportunity to cater the market of billions. HP operates on a decentralized basis which is the best way to operate a giant like HP, which is made up of several small autonomous units supporting independent decision making along with tight control on the costs. HP competes on the cost leadership basis and has built up a state of the art structure which is based on collaboration and team work with in the organization. This teamwork embedded in HP’s culture make it operate in a very efficient way allowing departments and the components of supply chain management work together to achieve the best. HP holds a strong position internally and externally both, it has strong culture in which collaboration and teamwork is embedded which fosters excellent employee management. HP’s management works hard to fulfill its short term and long term strategies and fulfill its period goals. It has a very strong financial position and a newly elected CEO and President who has been famous for her leadership skills. HP stands strong in its market and no one seems to take its position in a while. Bibliography BLANCHARD, D. (2010). Supply chain management: best practices. Hoboken, N.J., John Wiley & Sons. SCHULER, R. S., & JACKSON, S. E. (2007). Strategic human resource management. Malden, Mass. [u.a.], Blackwell. SCHULER, R. S., & MACMILLAN, I. C. (1980). Gaining competitive advantage through human resource management practices. Philadelphia, Pa, Wharton School of the University of Pennsylvania, Snider Entrepreneurial Center. WIGODSKY, A. S. (2004). RAPID value management for the business cost of ownership: readiness, architeture, process, integration, deployment. Amsterdam, Elsevier. http://www.engineeringvillage.com/controller/servlet/OpenURL?genre=book&isbn=9781555582890. HIAM, A. (1997). The portable conference on change management. Amherst, MA, HRD Press. BELASEN, A. T. (2012). Developing women leaders in corporate America: balancing competing demands, transcending traditional boundaries. Santa Barbara, Calif, Praeger. PRIDE, W. M., HUGHES, R. J., & KAPOOR, J. R. (1999). Business. Boston, Houghton Mifflin Co. PEARCE, J. A., & ROBINSON, R. B. (2000). Strategic management: formulation, implementation, and control. Boston, Irwin/McGraw-Hill. HEWLETT PACKARD. (2012).[Online] Available at: [Accessed 15 March 2012]. HEWLETT PACKARD MARKETING MIX.[Online] Available at: < http://marketingteacher.com/case-study/hewlett-packard-case-study.html#> [Accessed 15 March 2012]. Read More