The Organisational Behaviour Issues at Hewlett-Packard - Case Study Example

The Organisational Behaviour Issues that Contributed to the Leadership Challenges at HP Name Institution Course Date 1.0 Introduction Organisational behaviour is significant domain that dissects how individuals act in organisation. As such, organisation behaviour occupies a core position in management as it is critical in informing management on how navigate the social world at work place so as to direct the synergies of employees in attaining organisational goals (McGinnis, 2006, p.38-39). Kaifi & Noori (2011, p.89) observe that organisational behaviour construct is important in bringing the inter-phase between managers, employees and teams by empowering management to be in a position to recognise themes of concerns, elucidate the impact of such behaviours and how to build most appropriate practices that can ensure effective, robust and dynamic organisation. In this regard, the realisation is that ineffective management of organisation behaviour is likely to be detrimental to an organisation. One of organisations that have had issues with organisational behaviour is Hewlett Packard Company (Larker & Tayan, 2011). Utilising the case example of Hewlett Packard Company (HP), the discourse assesses the organisational behaviour issues that contributed to the leadership challenges at the multinational corporation. The paper analyses four critical issues and argues that they are the ones that have contributed to the leadership challenges at HP. The issues to be analysed include organisational culture & change management; power, politics & management; managing organisational processes; and group & team. 2.0 Hewlett Packard Hewlett Packard is an information technology corporation dealing software and hardware services which was founded in 1962 in Palo Alto, California, United States. Presently, the firm is the market leader in manufacturing of PCs after acquiring Compaq in 2002 (Hewlett Packard, 2014). However, Larker & Tayan (2011) in his case study established that since inception, the firm has had turbulent periods since late 1990s. For instance, he notes that the firms has had high turnover of Chief Executive Officers, engaged in controversial acquisitions, inconsistent changes and stormy relations among board members. It is these constant changes and stormy relations/ internal conflict among the board of directors that forms basis for discussion on how organisational behaviours that have contributed to leadership challenge at the firm. 3.0 Organisation Behaviour Issues at Hewlett Packard 3.1 Organisational Culture and Change Business environment is a dynamic one and it is the onus of any leadership of business organisation to re-align internal mechanism through various strategic processes so as to anticipate these changes. Re-aligning as a result of internal, industrial level dynamics and macro environmental factors implies organisational changes in all aspects such organisational culture (Kotter, 1995, p.60-61). Tung (2001, p.40) observes that an organisational that is unable to adapt to change is likely to be extinct. He gives an example of former vibrant market leaders who succumbed as a result of not being able to anticipate, direct and adapt to macro environmental changes. For instance, he notes that inability of Kodak to adapt to changing technology of photography from mere analogue film based to digital one heavily impacted on them significantly. The same experience was also exhibited in IBM in 1990s, yet in earlier years it was a giant computing company. Attempts by various chief executive officers as implementing change at HP is evident during their mantle. For instance, Larker & Tayan (2011, p.2) indicates that in the bid by Carly Fiorna (1999-2005) to re-energise HP, the CEO limited the reporting layers within the organisation from a high of 83 to 12, enhanced back-office functions and altered payment package approach from profit sharing approach to package anchored on performance-based approach that took cognisance of individual’s productivity. Equally, she set the firm on expansion path by acquiring Compaq in 2002 with hope that the firm could leverage of this opportunity to gain market leadership. the same trend is exhibited during the tenure of Mark Hurd (2005-2010) who once upon taking leadership mantle embarked on driving change by laying off 14, 500 employee, created a thin management layer and did away with corporate group by re-deploying them so that they can have hands on experience of what they are dealing with. Equally, he directed the firm in various acquisitions in the software and services space (p.4). It is this attempt by various chief executive officers to implement change that has exposed organisational behaviour issues that contributed to the leadership challenges at Hewlett Packard. Under organisational culture and change as an example of organisational behaviour in HP, two variabilities emerge out of the experience. The two are implementing change by curtailing resistance to change and consolidating the change by managing change fatigue. According to Kotter and Schlesinger (2008, p.132), implementation of change in any organisation is not an easy encounter as only a paltry few turn out to be successful. Indeed, this is what is evident in the attempt by various chief executives bid to implement change. The same proposition is affirmed by Beaudan (2006, p.2) who indicates that “three out of five change efforts are only a partial success, and two out of five end up in failure”. For instance, one of the executives while describing Curly observed that she did not understand HP culture. This is an example of resistance as the CEO was deemed as an outsider. Secondly, her action to make HP leading competitor against IBM by then (IBM computing was later bought by Lenovo) she initiated acquisition of Compaq in 2002. However, this clearly presents resistance and fatigue to critical shareholders. For instance, Walter Hewlett who is a director and son of founder member of the company showed open dissatisfaction with the process. The same opposition was fronted by David Packard son of founder member who doubted her ability to change HP’s culture. This resistance spilt into board of directors and split it into two factions. There were those in support of her actions while there those who were full of scepticism (Larker & Tayan, 2011, p.2-3). Finally, no one captures resistance to change as Robert Keyworth who notes that “very good people have tried to transform this company through organic growth, targeted acquisition and the old way” (Larker & Tayan, 2011, p.3). this affirms his belief in old ways as opposed to new untested approaches. Sustaining change by overcoming resistance and fatigue is critical yet it is missing in various instances in HP operations. Kotter (1995) eight step change management model calls for the fact it is not only necessary to initiate change, but also to sustain it. To sustain change it is integral to have powerful teams to guide change yet this is lacking in the whole process. Fatigue and resistance is evident when outsiders question the whole process, key leaders not being able to avail their support and diversion of budgetary allocation (Beudan, 2006, p.2). For instance, Curly was opposed by the two son of founding members yet they could have been integral in guiding change. Secondly, Curly was unable to consolidate gains and embedded them in the culture of the organisation by ‘refreezing’. As such the reprisal was resistance and fatigue. From the above experience, it can be postulated that the missing mix in the whole process is effective leadership that can overcome resistance through effective followership. Indeed, Beudan (2006, p.2) proposes that resistance and change fatigue/ stall warming can be overcome by leadership. For instance, Beaudan (2006, p.5-6) opines that to place on track waning support, leaders should rethink change goals and expectations, changing the change’s speed, changing the mix of people and adding excitement to the process. Critical is the inability to add excitement to the whole process as Curly Hurd was unable to convince strategic stockholders especially sons of founding members to support her cause. Followership empowers a manager/leader to condition stakeholders ‘to effectively follow the directives and support the efforts of a leader to maximise a structural organisation’ (Thach, Thompson and Morris, 2006, p.306). 3.2 Group and Teamwork Team building is an important process in ensuring team synergy is attained. The integral role of team building cannot be over emphasised owing to the fact that organisation is composed of groups of people with different personalities and traits. For success of the organisation, it is the onus of the leader to direct their effort towards a common purpose so as to attain organisational goals. Schiffman (2004, p. 17) conceptualise teamwork as “the work of a number of persons in close association as members of one unit”. According to Hackman & Wageman (2009, p.275-276), the ultimate responsibility of success of a team or failure of a team squarely lies on the shoulder of a leader. As such a leader the responsibility of the leader is to “establish direction, create structures & systems, and engaging external resources” so that the organisational goals and team synergies are attained. This is exactly what is missing in the Hewlett Packard organisation especially team building. While not all individuals might to agree with a leader in regard to the ideologies, those who oppose should be at minimum. Nevertheless, this is not the case during tenure of most CEO from 1999-2011 as it is marked with limited unity that contradicts principles of teamwork and teambuilding. For instance, the two sons of founding member opposed most of Curly strategies. The exact test of teamwork under her tenure is on the vote on hp Plan to buy Compaq. While Carly and her group emerged victorious, it was slim one of 51.4% of shareholders with 48.6% opposing (Larker & Tayan, 2011, p.3). This trend is not limited to Carly Fiorina tenure, but also to Mark Hurdy (2005-2010) time at the helm hp. As team, group members should be able to speak in one voice and act in a coherent and no in divergent perspective. For instance, under Mark Hurd, Patricia Hurd was forced to resign owing to leakage of confidential information to press. These mostly related to discussions on strategies, leadership and corporate structure. Hurd equally was forced to resign as a result of being found culpable of submitting inaccurate expense report. Equally, at this juncture the board did not act as a team by soberly deliberating the issues. There were those who felt that such instances did not warrant Hurd resignation while others felt it was critical to resign as he could not be trusted. This again presented a split board with vote pattern being six to four (Larker & Tayan, 2011, p.5). In a nutshell, team development is an issue within Hewlett Packard. The one critical appreciation under organisational behaviour for HP is the appreciation that people differ and team development starts with managing individuals as they have varying traits (Schermerhorn et al, 2011, p.156). In this regard, the firm should seek to overcome forming and storming phases so as to quickly embrace norming and performing phases. This will greatly reduce friction that the firm have experienced amongst different personalities. Key to the whole process is to be able to manage different roles as identified by Robbins et al. (2009, p. 220) through human relations approaches such as transformational approaches, social and emotional intelligence. 3.3 Managing Organisational Processes Closely related to teamwork is the inability to manage organisational processes especially conflict negotiation. Organisational conflict is detrimental to the achievement of organisational purpose as different stockholders and management would be pulling in different organisation. It is significant to appreciate the fact organisation contains three broad internal shareholders whose vested interest differs. For instance, the interest of employees is to offer their skills in return the organisation offers them financial rewards and for stockholders is to finance and in return expect return on their investments. However, within these mentioned internal stakeholders, their interests vary differently. Thus it is the onus of management/ leadership to chart a path through negotiation process that harmonises these vested interests (Kreitner, Kinicki & Buelens, 2001, p.182-184). However, this is not the situation at Hewlett Packard Company. Kreitner, Kinicki & Buelens (2001, p.186-189) identifies three principal forms of conflicts. There are personality conflicts, cross-cultural conflict and intergroup conflict. For instance, personality conflict is rooted on the differences that exist on individual personality traits and thus straining interpersonal relationship between individuals working in a group. On the other inter group conflict is premised on the realisation within the organisation there is a possibility of different groups and at a time their aspirations if not well channelled might diverge. The organisation behaviour issue in this context that has contributed to the leadership challenges at hp is the personality; intergroup conflict and inability by the leadership to manage conflict. For instance, in the search process that lead to appointment of Leo Apotheker in 2010, the board had a tug of war by not agreeing on which procedure to follow while hiring Apotheker (Larker & Tayan, 2011, p.5). This is because the board was not able to strike a common ground on whether to go for an internal candidate or external yet it can be assumed with past experience if they were a learning organisation they would have made a rational decision on the best approach. Indeed, experience of past conflict deterred numerous qualified candidates who have been approached including executives at Microsoft, NCR and IBM. The plausibility of such fear might have been enhanced by the uncertain environment associated with constant board infighting. The infighting is substantiated by one director who observed that Apotheker was appointed as result of emerging the best out of unattractive group as result of the exhaustion associated with infighting. This saw the resignation of five board members (Larker & Tayan, 2011, p.5-6). Inability to manage conflict is a manifestation of various organisational behavioural shortcomings. According to Taylor & Fielbig (2009, p.517) principal amongst them is the inability to effectively engage in negotiation and mediation process. Negotiation is an important process where differing parties can ventilate and elucidate on issues so as to limit the spats that arises out of disagreement as seen with resignation after appointment of Apotheker by four directors. Equally participatory approaches to policy formulation should be enhanced (Wagner, 2009, p.445). In participatory approach, the firm is guaranteed that voices of all interested parties shall be heard before the decision is made and this will be binding as opposed to the negative consequences that were exhibited in hp that criticism follows by the same board members who were in the meeting and out to support holistically the decision arrived at. Indeed, this is what Larrick (2009, p.461) advocates for by calling for organisations to broaden the decision frame so as to make effective decision. 3.4 Organisational Power and Politics Exerting control over others is an important process that is requisite for delivering a unified front with orderly chain of command and responsibilities. However, a leader is not in a position to implement various strategies if he or she is not able to influence others so as to drive through the strategic responses appropriate for the organisation. Secondly this can only be attained through strategic alliance and reciprocity (Kreitner, Kinicki & Buelens, 2001, p.204-208). Indeed, from the internal happenings this is one of the issues evident in organisation behaviour of Hewlett Packard. For instance, most of the CEOs experienced resistance and were not able to build a strategic alliance with board members in a convincing manner. For instance, Carly Fiorina decision to acquire Compaq was heavily criticised by sons of founding partners at hp. Additionally, the inability of Fiorina to mange perception made neutral individuals such as Robert Knowling who was initially neutral on the acquisition of Compaq and its role in the competitiveness of hp changed his mind to oppose it (Larker & Tayan, 2011, p.3). 4.0 Recommendations To overcome gaps exhibited especially from 1999-2011 during the tenure of the three CEO and various board members so as steer the organisation to excellence path and market dominance, it is imperative that the organisation address the following issues. The first is on managing organisational change and culture. The paper found out that hp exhibits a weak ability through its board and chief executive officer in managing change and culture, especially how to freeze change by overcoming resistance and sustaining change that might be brought through stall warming by managing change fatigue. The key processes that the firm should seek to embrace are device how to ensure massive effective followership through transformational and inspirational leadership that is able to unsettle and galvanise individuals to the common purpose. The second organisational behaviour issue identified that contributed to the challenges at hp is the inadequacy in group and teamwork management. To curtail these discrepancies where everyone seems not to be cohesive and speak in one voice so that the ultimate goal of organisation is attained is to enhance team building processes. One principal approach is to mange individuals, employ interpersonal skills and engage in constant bonding activities through consultation and communication so that the board and the appointed chief executive officer are to read from the same script and deliver coherent policy. The third organisational behaviour issue identified that contributed to the challenges at hp is the constant conflict at the board. The emerging information is that the board were preoccupied by turf wars and personalities as opposed to constructive criticism. This is evident with the level of public disagreement, leaked information, and infighting in all policy and strategic aspects where most were passed by narrow margin as opposed to expectation of consultation and arrival at unanimous decisions premised on rationality. Therefore, the onus of the organisation is to embrace more of designing structures that fit the strategy; participatory approach in strategy formulation & sharing of information; stimulation of creativity; and negotiation & mediation as means of managing conflict. The fifth issue that contributed to the leadership challenges at hp is inability to structure especially between board and the chief executive officer and amongst members’ power and politics. The point of re-invention would be to ensure that they contract leaders with strong interpersonal and emotional intelligence skills who are able to influence the whole organisation. Secondly, they should seek for individuals who are able to build strategic alliance and reciprocity. 5.0 Conclusion The aim of this paper was to examine the organisational behaviour issues that contributed the leadership challenges at HP. The paper found out that there are four issues that contributed to leadership challenges at HP. First the paper found out that there is inadequacies in relation to management of change and culture, therefore making most board members resistant to change. Secondly, established that group and teamwork is wanting owing to the fact that the board ia not able to pull to work direction their synergies. Closely related to teamwork and teambuilding is the issue of organisational processes management, especially conflict which was evident in all engagement that the board took and those undertaken by chief officers? Finally, the paper realised that issues of power and politics in HP was also wanting owing to inability of CEO to influence and build strategic alliances internally. References Beaudan, E 2006, Making change last: how to get beyond change fatigue, Ivey Business Journal,22(7), 23-89. Belbin, 2011. Method, Reliability & Validity, Statistics & Research: A comprehensive review of Belbin’s team roles. Retrieved on 3 May 2014 from: http://www.belbin.com/content/page/5596/A%20Comprehensive%20Review.pdf. Hackman, R. J. & Wageman, R. (2009). Foster team effectiveness by fulfilling key leadership functions in Locke, A. D. (Ed). Handbook of principles of organisational behaviour. West Sussex: John Wiley & Sons. Hewlett Packard (2014). HP history. 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Use participation to share information and distribute knowledge in Locke, A. D. (Ed). Handbook of principles of organisational behaviour. West Sussex: John Wiley & Sons. Read More