HP at Cultural Crossroads

            
 
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Case Details:

Case Code : HROB012
Case Length : 11 Pages
Period : 1990 - 2001
Pub Date : 2002
Teaching Note : Available
Organization : HP
Industry : Computers and Technology
Countries : USA

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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A Company in Trouble Contd...

Things became worse when the HP management announced that it would lay off another 6,000 workers in July 2001, the biggest reduction in the company's 64-year history. The management also sent memos saying that the layoffs would continue and that the volunteering for pay-cuts would not guarantee continued employment.

In September 2001, HP and Compaq Computer Corporation announced their merger5. According to company insiders, once the merger was implemented, Fiorina was likely to lay off another 15,000 to 30,000 employees as a part of a major cost saving drive. The merger was expected to yield cost savings upto $2.5 billion primarily because of layoffs.

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

The steps taken by Fiorina surprised analysts. They said that these steps were a major departure from HP's organizational culture - 'The HP Way' of promising lifelong employment and employee satisfaction.

According to the company insiders, though change was necessary, employees' morale had suffered badly. Many employees had lost faith in Fiorina's ability to execute her plans. They also felt that her changes were destroying much of the company's cherished culture. HP Vice-President for Human Resources Susan Bowick admitted, "Morale statistics are lower than we've ever seen them."

Background Note

Stanford engineers Bill Hewlett and David Packard founded HP in California in 1938 as an electronic instruments company. Its first product was a resistance-capacity audio oscillator, an electronic instrument used to test sound equipment. During the 1940s, HP's products rapidly gained acceptance among engineers and scientists. The company's growth was further aided by heavy purchases by the US government during the Second World War. As their business succeeded, the confidence of Hewlett and Packard increased. The founders, who shared some basic values, also hired and promoted like-minded people.

They also explicitly communicated their beliefs and values to the employees...

 Excerpts >>


5] HP was to buy Compaq for $25 billion in stock in the biggest ever deal in the computer industry. The merged entity was to have operations in more than 160 countries with over 145,000 employees.

 

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