HP at cultural crossroads

-Akansha Madnani (1101) -Amit Kumar (1105) -Ankit Pawar (1109) -Gaurav Shakya (1113)

Evolution of HP culture
Company started by Bill Hewlett and David Packard in California in 1938 as an electronic instrument company. The founders hired like-minded people and communicated their beliefs to the employees. HP known for its relaxed and open culture. Open door policy was followed. Believed that benefits of accesibilty outweigh the disadvantages of interruptions.

Cont..
Management By Walking Around( MBWA). Believed in individuals own motivation to work. Congenial atmosphere at work. Culture maintained through extensive training of its managers and employees. Emphasis on treating all stakeholders with integrity and fairness. Promoted people from within. Avoided hire and fire policy and offered almost perfect job security.

Cont
Decentralised organizational structure. In 1957, a set of corporate objectives were formed that included: MBO Open Door Policy Open communication MBWA After founder retired, HP offered early retirement and lay-offs. Due to expansion, company faced troubles of bureaucracy, lack of new products. In July 1999, Carly Fiorina appointed as CEO.

Cont
Injected Discipline in HPs workforce. Compensation tied to performance and bonus given twice a year. Introduced concept of 360 degree feddback and breakthrough projects. Bonus based on companys performance vis--vis its competitors. Cost cutting through lay-offs, forced pay cuts and vacations. Employee morale went down. No significant improvement in financial performance.

Key components and their contribution

Work and give their maximum contribution job security pay hikes recognition when they perform well appreciation of their individual achievement open culture

Contd
acceptance of new ideas and creativity open door policy discussing their personal and family problem at work place which is an important factor in an employees performance bonuses and promotion

Fiorinaa Approach
Forced pay cuts Forced vacations Layoffs Postponing wage hikes Linking performance to compensation Breakthrough projects 360 degree feedback concept Bonus paid on basis of companys performance vis-vis competitors.

Employee reaction
Measures in sharp contrast with long established HP culture. Employee morale went down. Criticism from the analysts. Companys performance worsened. Shares of the company went down by 50% and profits fell significantly.

HP way vs. Carly way

Relaxed and open vs. disciplined. Lifelong employment vs. firing to save costs. Bonus paid once vs. bonus paid twice. Bonus based on profit vs. based on performance. R&D for improvement vs. R&D for breakthrough. individuals own motivation vs. employees are expendable. MBO, MBWA, Open communication vs competency putting performance ahead of teams and values.

Suggestions