Organizational Structure at HP - Essay Example

?Running head: ERH3007 Short Report ERH3007 Short Report Insert Insert Grade Insert May 12, Outline Introduction Overview of the organization Structural issues Discussion of the ways to help solve some of the structural issues Conclusions and recommendations Organizational Structure at H.P Various organizations that we encounter in our daily undertakings in the society have complex operations that cannot be performed by an individual or few individuals. This then calls for the distribution of the activities among different individuals, a practice known as division of labor. Having divided the roles to different individuals, there is a need, again, to ensure coordination between the activities of the individuals to ensure that all are functional towards a common goal of the organization. The organizational structure will determine the firm’s ability in distributing the activities and how it coordinates the operations (Maguire, 2003, p.11). The organizational structure and design that is adopted by a given organization will greatly determine the performance and the final achievement of the organizational objectives. The kind of relations that is developed among all the stakeholders of the organization is very essential in ensuring that organizational objectives are set that are aimed at satisfying the needs of the stakeholders. There is need for the top management of a given organization to involve these other stakeholders in the development of policies that govern the operations within the organization. The way in which information is being passed from the top management down the hierarchy to the low-level implementers will influence the effective decision making process within the organization. A structure that has several layers may not allow for easy dissemination of information between the low-level employees to the top managers. The paper examines the organizational structure that was seen at H.P, a business firm that deals in electronic products in the global market. An analysis is provided for various structural challenges that have been faced by the organization. The poor organizational structure that was seen in the organization in the late 1990s and the early 2000s had various negative impacts on the operations of the organization. The organization was seen to have certain strategies that were not developed according to the competitive nature of the current global market and the needs of some stakeholders. The appropriate organizational structures that can be adopted by the organization to avoid future challenges are also examined. Concepts like corporate governance that have been seen to be behind the successes of various organizations are suggested here as the best measures to be taken in managing the situation at this organization. 1. Overview of the organization Hewlett-Packard (H.P) is business firm in the United States that deals in electronic products in a global market. The firm was established back in 1939 by Bill Hewlett and Dave Packard both from Stanford University. The company initially produced a sound electronic device known as an audio oscillator. Various developments have been seen in the types of products produced by the firms and it currently supplies products like laptops and desktop computers, printers, servers and digital cameras (Case Study). The organizational structure at HP is a complex hierarchical one with various management levels. At the top of the hierarchy is the Chief Executive Officer (CEO) or the President. This is followed by executive vice presidents serving in different areas of jurisdictions (Hewlett-Packard, 2011). The individuals at this level include the Chief Technical Officers (CTO), Chief Financial Officer (CFO), the Chief Marketing Officer, the Human Resource Manager and others. There is also the level of the senior vice presidents followed by the vice presidents in the hierarchy. There are other managers at different levels like marketing managers, procurement managers, and sales managers down the hierarchy before coming to the low-level implementers like the sales executives and the sales agents. In addition, a board of directors checks on the overall performance of the organization and recommends the necessary changes to be made. It was observed that there were several layers of management between the CEO and the customers in sales department of the organization (Case Study). The organization had a very poor culture under the leadership of Carly Fiorina as the CEO. There was a very poor relationship between the various organs of management in the organization. The CEO was seen to make decisions that were not supported by the board of directors of the organization and was not responsive to the Board’s cry that the organization was not moving in the right direction. Her move to have a merger between HP and Compaq led to massive delays in order processing that resulted into huge losses (Ferguson, 2004, p.18). The customers to the organization were also not given the attention that is required. Majority of the employees in the organization were concerned with the governance at the organization and an unjustifiable fraction was serving at a management level (Case Study). HP operates in an industry that is competitive and characterized by high level of inventive and innovative research. Various developments are registered daily in the technology world and the needs of the customers are often very dynamic. It is then required that a company that expect to survive in such a market be one that is sensitive to the changing market demands and adjusts its operations accordingly. The diverse environment requires an organizational structure that provides the employees equal access to the assets of the organization for research purposes (Markiddes & Williamson, 1996, p.7) The employees of such organization should be given the freedom and authority to carry out research and development (R & D) programs that are aimed at coming up with new ideas. There is need to develop organizational culture that instills in all the stakeholders the ethical principles that are required in an organization (Berenbeim, 2010, p.85). 2. Structural issues There are a number of issues that were observed to be not in order in the organizational structure of HP Corporation. Firstly, it was observed that there were numerous management levels especially in the sales structure. There was a very wide gap between the top management of the organization and its customers (Case Study). In this way, it is not very easy for the needs of the customers to be addressed effectively owing to the complex reporting relationship that is created. It may take months before the customer’s needs or observations concerning the products reach the top management. During such a period, some of the customers will have been lost to the competitors and obtaining them back would be a big task to the organization. The complexity of the structure and the reporting relationship was seen to affect a decision making process where hiring sales specialist took more time than necessary. Besides, it was observed that there were too many managers and support staff in the organization. It was observed that more than 40 percent of the sales workers did not sell to directly to the customers (Case Study). They were again executives of their own and they were delegating duties to the others. In this way, some of the employees of the organization were overworked whereas others underperformed their duties. It is also apparent that the individual responsibilities of the employees of the organization were not fully spelled out or the individuals in the organization were not competent and did not understand their roles. This is evident when the customers raise issues that they do not know who to approach with a particular problem to be addressed (Case Study). Even the other workers in the organization had a similar feeling that the organizational structure was messed up and it was not very clear who was supposed to perform what. It was observed that workers that were supposed to be engaged in direct sales of products to customers spent a substantial amount of time in the internal governance of the organization. In effect, there was a very little connection between the organization and the customers 3. Discussion of the ways to help solve some of the structural issues The governance and control defined by a given organizational structure will have impacts on its performance (A.M.ASCE et al, 2009, p.519). There are certain procedures that can be applicable in correcting the situations like the one observed at HP under Carly. Some of these procedures were already put in place by the new CEO who took over in 2005. Firstly, it is important to acknowledge the fact that organizations require different structures depending on its age and the production level that has been attained (Graubner, 2006, p.33). HP has matured and thus there is a need to revise the structure and do away with the departments that are ceremonial and not very necessary in the operations of the organization. The roles that were to be performed by the department can be transferred to related department that is in place. Similarly, the management levels that are redundant should be eliminated and the roles conferred on the other individuals in the hierarchy. This is aimed at bringing the top management closer to the clients of the organization. Information will be easily passed up or down the hierarchy as the reporting relation is now definite and clear. Collaboration between various individuals will ensure a proper coordination of the activities within the organization (Berenbeim, 2010, p.85). It also saves the company the overall cost of production due to the reduction in the number of managerial positions that often carry home large amounts of money in terms of salaries and benefits. There is also a need to clearly define the roles of the individuals in the organization in line with the firm’s objectives. The confusion that was seen at HP was due to the roles that were poorly defined for the workers. Every one in the organization appeared or wanted to be an administrator. The issues that arose during the merger with the Compaq were due to a difference in understanding the organizational objectives between the CEO and one of the sons of the founder Hewlett, who was then a board director (Taylor, 2002, para.3). The employees in the sales department were mixed up in their roles and the customers could not make a distinction between their specific roles. There are cases in organization where the roles can overlap between individuals or departments. Such an overlap should be stated clearly to avoid confusion and/or conflicts between the departments. Having established the roles, it is then necessary to have procedures to determine the ability of the individual employees in carrying out their duties. Carrying out a performance evaluation process helps in identifying the employees that are doing well in the respective areas of jurisdiction and those that are not doing well. The latter group could be due to mere negligence or due to inability to perform the assigned task. Further investigation should be done to identify those that cannot perform the task despite the adjustments that can be made. Such individuals need to be fired and replaced so that they do not transfer workload to others within the department. On the other hand, those who are found to be performing their roles effectively should be rewarded accordingly. Research evidences have shown that meeting these psychological needs of the performing employees is essential for overall good performance (Naoum, 2001, p.97). The employee appraisal aimed at motivating them can take different forms like increase in salaries and other benefits. It also forms a good basis of promotion of an employee to a higher level in the structure of the organization. The traditional reporting relationship, however lean the structure may be, is not very applicable in the modern management of organization. There is still a delay in information dissemination associated with some odds to the organization. There is thus a need to establish ways through which the customers and lower level employees can communicate direct to the top management. The use of modern technology, like Internet, is currently appropriate in ensuring quick communication to the management of the organization. Most organizations currently have customer service portals where the customers can raise their issues direct to the relevant management personnel. These strategies should be adopted taking into consideration the cultural differences among the workforce (A.M.ASCE et al, 2009, p.521). The differences will affect the individual perceptions on the method of communication used. It is also important to understand the dynamic nature of the current market. The external environmental factors affecting the business should be considered in developing the structure (Maguire, 2003, p.26). The needs of the customers are constantly changing and the organizations need to be updated on these trends and be able to respond in time. Thus, in developing the organizational structure, there is need to put a lot of emphasis on and allow for research and development. There should be flexibility and less specialization at the lower levels in the product development section to allow for new ideas (Graubner, 2006, p.67). A department should be fully in place that is concerned with research and development on the types of products that are in current need in the market. A culture should be development in the organization that allows every employee to test the new skills that might lead to invention of new products. There should be a close link with the potential customers of the organization. 4. Conclusions and recommendations From the above discussion, there are important notes that can be drawn. A good organizational structure will be that with few layers of managers. As such, the reporting system is not very complex with the managers having closer contact with the employees under their jurisdictions. The roles of every individual should also be clearly stipulated to avoid unnecessary overlap of responsibilities and to ensure that the clients of the organization understand who to address a particular issue. A culture needs to be developed in the organization that provides all the stakeholders with a proper feeling of belonging to the organization. The employees, the customers, the stockholders, the society and the public should be made part of the organization in the decision-making processes. The employees of an organization are often better placed in identifying areas in their operations that need reinforcement. It is therefore very necessary that they be included in every management decision to be made in the organization. There should also be a close relationship and a proper understanding between the Chief Executive Officer or the managing Director of an organization and the management board. The interest of shareholders of profit maximization should also be fulfilled taking into consideration the external prevailing market conditions. References A.M.ASCE, S. et al. (2009). Model for Organizational Governance Structure Choices in Construction Joint Ventures. Journal of Construction Engineering & Management, 135(6), 518-530. Berenbeim, R. (2010). Navigating the Tensions between Principle Rules and Values. Vital Speeches of the Day, 76 (2), 84-87. Ferguson, R. (2004). Migration woes cause HP backlog. eWeek, 21(37), 1-18. Graubner, M. (2006). Task, firm size, and organizational structure in management consulting: an empirical analysis from a contingency perspective. Wiesbaden: DUV. Maguire, E. (2003). Organizational structure in American police agencies: context, complexity, and control. New York: SUNY Press. Markiddes, C. and Williamson, P. (1996). Corporate Diversification And Organizational Structure: A Resource-Based view. Retrieved from http://flora.insead.edu/fichiersti_wp/Inseadwp1995/95-78.pdf. Naoum, S. (2001). People and organizational management in construction. London: Thomas Telford Publishing. Taylor, C. (2002). HP's fierce face-off. Time, 159(9), 46-48. Retrieved from http://web.ebscohost.com/ehost/detail?vid=4&hid=7&sid=41007b7d-0f13-440f-896a-b31e0804090a%40sessionmgr4&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=a9h&AN=6228856. Read More