Organisation Behaviour at Hewlett-Packard - Case Study Example

Leadership Challenges at HP Student’s Name Subject Professor University Location Date Table of Contents Table of Contents 2 Introduction 3 Challenges Experienced 4 Leadership 4 Changes 7 Conflicts 10 Conclusion 12 Recommendations 13 References 15 Introduction The leadership in any of the organisation is very critical for the success to be achieved. However, the leadership framework is vulnerable and is at risk of facing very adverse conditions that may affect smooth operations. This essay identifies the challenges that are experienced resulting from the behaviour of the organisation using a case study of the Hewlett-Packard. The challenges of focus here are categorised under change, leadership and conflict. Alongside each challenge, the solution that would address the issue adequately is clearly identified. The generalisation is drawn in each of these cases. At the end, recommendations that are focused on addressing these challenges are also suggested and clearly placed and a conclusion made. Hewlett-Packard (HP) is an American multinational information technology corporation. It has its headquarters in Palo Alto, California, United States. Its structure of top leadership has been that of a C.E.O and a board of directors. The main product lines are imaging products, variety of printers and softwares, households networking, storage devices that are related, industry and enterprise servers, personal computing devices and the like. In the year 2013, it was considered to be the PC vendor that was the second largest globally in the sales unit achieved thereof. HP has been a globally large technology company in revenue terms. It has faced a dramatically great need for changes in the mode of the operations and the focus employed especially in the management framework. (Buscarino et al. 2012) Challenges Experienced Leadership There are a lot of obligations that the board of directors have to abide by. Following the classical view of organisation behaviour, these include: the disposition and acquisition of the assets of the corporate, material information disclosure to the public, effective communication with stakeholders and shareholders, enhancing that that all involved parties comply with the regulatory and legal requirements, overseeing the working of the external auditor, ensuring that there is integrity in the reports on finance and also overseeing the risk management establishments (Tsai 2011) Also included in these key responsibilities are the duties to ensure there is strategic company direction by the hiring of the managerial personnel who have the right qualifications. Their compensation is designed by the board and their performance is closely monitored. The roles that stand out, however, are first corporate strategy evaluation and approval and secondly that of hiring and firing of the CEO. There are different modes that are adopted by leaders in the running of an organisation. The range is wide covering strategies that are dynamically different. The approach, for example, may be transactional or transformational leadership in nature. In transactional leadership, there is a lot of specificity in the particular way in which things run. No big changes are anticipated in this view and the key focus is to keep things flowing normally. Incentives are offered for motivation unto excellent performance while various forms of punishments are employed to promote compliance. (Hargis, Watt & Piotrowski, 2011) In transformative leadership, on the other hand, the focus is the improvement of the success and the performance through crafting strategic changes that are above merely following a daily routine. The leadership is in itself a role model bringing about inspiration and interest to the tasks by the followers. Professional and personal development of the subordinates is enhanced through collaboration, motivation and team-building strategies. (Bass & Riggio 2012) The transformational leadership has four dimensions which are individualised consideration, intellectual simulation, inspirational motivation and idealised or charisma influence (Avolio & Yammarino, 2013). The individualised consideration covers the extent to which the leader focus of the individuals concerned at personal level. The leaders with the trait of intellectual simulation encourage and stimulate creativity in their followers. The inspirational motivation is found in the leaders appeal to the followers through articulating an inspiring vision that can be adopted in optimism. The charisma or the idealized influence is adopted by transformational leaders who display deep convictions and takes a certain route of action in line with the conviction that can be emulated. Transactional leadership take three dimensions which are: management by exception-passive, management by exception-active and contingent reward (Jin, 2010). The passive leaders takes actions after a particular behaviour has brought about negative impacts while active ones are closely interested in the behaviour of the followers and takes the right actions before the negative behaviours can bring about difficulties. The difference here is in the time that the corrective measures are taken. The contingent reward focuses on the extent to which the leader performs exchanges with the followers. The rewards to expectations are plainly put after the expectations are clarified. The HP has had different types of leadership employed. There are leaders that take a transactional leadership approach while others take a transformative approach. Before 1999, the HP leadership was fundamentally conservative in some aspects. The C.E.O. that were there were specialists with engineering backgrounds and they were taken from within the organisation. This enhanced awareness of the culture of the corporation to ensure that activities run as they was the norm. Radical changes that were transformational in nature came about thereafter when Fiorina was taken as the first female, the first external and the first CEO to be without an engineering background. The decision followed concerns that an outsider would bring about revitalisation of the vision of the company by introducing new perspectives (David & Brian 2011, p.1). Much of the leadership as headed by these CEOs have been transformative in nature. The challenge here is that the short-term that these CEOs have been having have not been as fruitful to bring about very major changes in this big organisation. These constant dynamic changes may be more appropriate for a smaller business. Fiorina transformational mind-set could be regulated to avoid many conflicts. The issue of cost cutting endeavours will also need to be considered (Ertimur, Ferri & Stubben 2010, p.410). In the term of Hurd, there were a lot of efforts that were directed to the cost cutting especially in the laying off employees. The question that arises in this context is as to whether an internal consideration for a CEO is more appropriate than an external alternative. A company that is well governed needs to have a system that is reliable for the development of efficient managerial talent internally. HP had internal CEOs over the years before Fiorina. Since then only the CEOs from the outside have been considered. The board members will majorly claim that the insiders that are there are not currently up to the task when confronted on the issue of appointment of a CEO who is external. It is to be noted, however, that the so called expert CEOs also had to start somewhere without a prior knowledge as being a CEO. Secondly, the outsider will also have to adjust in many aspects in the transition so as to fit in this new area of operation. The viability of the candidate should therefore not fundamentally be dictated by being from outside or from inside but rather from the competence that can be nurtured by the board of directors. (Burgelman 2012) The type of leadership that is exemplified will affect the organisation as a whole. The transformational leadership will need to be employed strategically and continuously. The changes implemented by the leadership should not be merely out of competition or a mere desire for change. The transactional leadership need to be carried out as far as the leadership is concerned until a need for a major change arises. This may have been of help to the HP in its endeavours. The successive leadership need to continue in the implementation of the previous strategies before coming up with new ones. The idea of having yet other ways of operations need to be made clear and justified. Changes The systems organizational behaviour theory considers the interactions of the various components of an organization forming the whole structure. In this perspective, the change that is made in any of the area of operation impacts all through the frameworks that is in existence due to the particular interconnections. There is need, therefore to have an equilibrium that is dynamically set out for a perpetual efficiency to be found out in the operation. The relationships that are created from these changes may not be linear bringing about complications to the organization as a whole. The changes that are implemented need to carefully put in check in order to avoid the difficulty that may arise in the running of the organization. This will give room for a very smooth flow in the individual components to the development of the entire operation. (Rice, 2013) Following the Lewis Change Management Model, the issue of the dynamic changes that have occurred in the HP and the consequences thereafter can be identified. Kurt Lewin developed a model of understanding the change in the organizations in the 1950s. This model of Unfreeze-Change-Refreeze is an analogy (Smith, 2011). As posited in the unfreeze section of change, the HP needed more motivation to be put across before launching to the change stage. This stage requires communication for understanding and support to be achieved. The acquisition of Compaq by HP, for example, was not well prepared in the unfreeze stage. It was not unanimously supported and it only passed within a very thin margin of 51.4 % support. The flexibility level should be really high starting with the management at the change stage so as to have a successful implementation. There must be communications that are very effective to go through this stage. The problems that are identified are to be handled in unity. The refreezing stage entails a return to a status of stability. The benefits of the change should be evident here. The full integration of the change to the culture will make the change to be considered frozen. The HP leadership has had sharp contrasts right from the freezing stage in many cases like the Compaq issue. The change and the unfreeze stages are therefore plagued hence good results are made unlikely. Fiorina made quick moves to revitalise HP which many of the insiders considered extreme. The reporting unit numbers were to 12 from 83 and the functions of the back office were brought to a consolidation. The marketing and the sales functions were restored in these changes. A compensation system with a base of performance was introduced in place of the program of the sharing profit that was earlier followed. This was in effort to facilitate high productivity individually (David & Brian 2011, p.3). Apart from these changes, the major controversial move was that of acquiring Compaq Computer. This move was considered frail strategically and it also drew a lot of public opposition. As it turned out to be, it was not a profitable venture. The changes in the HP that have brought about a lot of controversy and unfruitfulness once implemented have not been measured clearly. Adopting the Unfreeze-Change-Refreeze model is needed. The changes that have been implemented must have been qualified by support and ultimate success that they could have acquired. The frustration that they have experienced in the changes may not only be as a result of the strategy itself but also from the method of implementation in use. The understanding of the strength and weaknesses of an existing business is very vital (Ertimur, Ferri & Stubben 2010, p.58). This is particularly so in case of a business that has done so well over the years. This helps in the preservation of the business area of competitive advantage since there has been mastery over a keen placing over the years. The HP move to acquire the Compaq for $25 billion in stock should have been reconsidered. This does not mean that there shouldn’t be risk taking or expectation of a loss business but that the opportunity prospects need to be clearly identified as to outweigh the risks rather than making changes merely out of ambition. Conflicts In dealing with conflicts, the contingency organisation theory perceives their unavoidability but recognises that they can be managed. Any conflict that exists in the entire structure of the organisation be it from the outsiders, the departmental level or among the workers should be managed and controlled. Rather than majoring only on the ways to avoid the conflicts, the way to handle them is developed and implemented. This is achieved at all levels since this can arise from any part of the organisation. (Battilana & Casciaro 2012, p.391) Different models have been developed to deal with the issue of conflicts. Majority of this are the two-and three-dimensional models. The orientation of the task and the relationships are the fundamental focus of the two-dimensions. These two dimensions are in some instances also referred to as concern for others and the concern for self (Ting-Toomey & Chung, 2012). As Kilman and Thomas explain, these two dimensions are respectively also known as cooperativeness and assertiveness. The Thomas-Kilmann’s CMM is a very useful model to date in focusing on the behaviour when the situations involve conflicts (Altmäe, Türk & Toomet 2013). The model focuses on five CMMs which are competing, collaborating, compromising, accommodating and avoiding. The setting of a situation will determine the choice of these CMMs. The different circumstances will dictate which of these models to use. In avoiding, the conflict is ignored by both parties where the solution may be sought later if the conflict persists. In accommodation, one party concentrates on the perspective of the other party neglecting the needs it has. The compromising, however, will require that both parties look for the solutions that will bring about mutual satisfaction. In collaboration, the parties will have concentration on the areas of similar interests rather than those on varying opinions. In the completion, there is the uncooperativeness where there are efforts to achieve the goals at the expense of the others. The HP has experienced a lot of internal conflicts as far as the management is concerned. The use of these CMMs needs to have been clearer and specific to required issues. The sharp differences work negatively against the best interests of the company. The acquisition of the Compaq, for example, was highly opposed with very different notions across the board and the stakeholders also. The ultimate approval was with a very thin margin where 51.4% of the shareholders supported it and the rest 48.6% stood in opposition. (David & Brian 2011, p.1). Seemingly, both sides became very assertive without giving much attention to cooperativeness as explained in the two dimensions model. In 2010, Hurd resigned raising a lot of commotion. This led to a board split of four to six. The process of finding a replace for Hurd was faced with a lot of difficulties from the beginning hindering a search for a fit replacement. There was no clear consensus by the board members as to have an external or an internal replacement and also several candidates from the outside were not ready to engage in the task. After Leo became new CEO t, there was news that it was not all the board members who had met or interviewed Leo prior to the position. It was shortly after that there was resignation of four board members. Five directors stepped into their place. (David & Brian 2011, p.4) For the success of any organisation, there need to be solidarity in the leadership structure. There should be agreement as to the decisions that are made. Great opposition among the key strategies can be considered as a start of failure. The HP conflicts have resulted from the personal sharp differences in the opinions of the board of directors. There need regulation in the competition strategy in use in the HP, divisions have arisen in the leadership hindering the right course of action. Collaboration, compromise, accommodation and avoidance models need to be employed strategically as the cases may demand. This will avoid obvious differences that may further subdivide the shareholders (Leroy, Palanski & Simons 2012, p.260). Conclusion There have been continuous leadership challenges that have negatively affected the right move of HP. The board of directors need to be strategically set to address these issues objectively. For the success of HP, there will be need to reassess the particular endeavours that will take back this corporation back to its great performance and give it back the great competitive advantage. The target will ensure that the market share is well achieved. The issue of leadership in the HP should therefore perfect if the success is to be reached. The challenges in leadership have been explored with a case study of HP and alongside each challenge a solution drawn. Following these conclusions, the following recommendations are drawn. The discussion has also identified the application of the challenges in the Hewlett-Packard and the solution to these in a general case. The recommendation that addresses these challenges has been put forth. It is expected that any kind of challenges that a leadership face will be addressed strategically so that the best interest for all the stockholders and the shareholders are achieved. Recommendations The leadership, whether transformational or transactional, needs to be strategically structured to handle the course taken to achieve the goals of the organisation. Whether the idea lies in the progress of the already established operations or in the making of particular changes, the objectives of the organisation shouldn’t be bypassed. The mode of leadership that HP has employed in the recent past is the transformative. This, however, will need to be regulated so that it does not result to instability in the whole organisation. Transactional feature also need to come in strong so as to bring about a healthy balance. It is good that an organisation accepts and adopts meaningful changes. However, the changes that are done to the organisations need to be very considerate. As the model used in this essay to address changes explains, there need to be well structured move in the coming up with a change and implementing it through a massive involvement of the leadership and the followers. This will help in having a profitable change implemented with minimal or no opposition from the leadership and the followers. The major decisions like the formation of mergers and the acquisitions, as it is with the HP, need to first be handled internally and a consensus attained to avoid public fights and differences over the change. There should be consensus that is sought across all leaders to avoid sharp contrasts that may spring up as it has been with the case of HP leadership. An opinion from one party needs to be accepted or rejected objectively. A lot of troubles could have successively been done away with in the leadership of the HP had the board of directors and the CEOs sought to solve the conflicts objectively. 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