Wednesday, April 3, 2019
Leadership and Change Management in the Merger of Hewlett-Packard
Leadership and Change trouble in the Merger of Hewlett-PackardWilliam Hewlett and David Packard the two Stanford graduates started there caper in garage at alto. aft(prenominal) a year they did partnership called Hewlett-Packard by 1947 HP came into existence as worlds second largest computer supplier with net receipts of $42 billion. HP originally dealed with auio oscillators and then gradually entered personal computers sector in 1980. Recent the teleph atomic number 53r launched laserjet printer which is a prominentest micturate for the ships play along.Compaq computer corporation formed by two senior managers at Texas entered personal computer field in 1982. Due to thin tonicity portion it was considered globally as worlds largest manufacturers of personal computers.the name of caller-out itself is derived from Compatiblity and quality. The initial computers launched by Compaq were not handy there appearance was like a suitcase appease a net revenue of 111 million dollars was generated.value THE HP WAYBill Hewlett and dave Packard created a set of values to dispatch the company and compound the company . these values became famous as the HP way which atomic number 18 as followsthe strength of corporate society is salary so identify amplification in order to contri stille to the society. in that respect should be continous improvement in product and services of the company.Always confront for immature opportunities but stay foc employ on ara where company is benefitted.Increase companys advantage by providing employment opportunities.Always give a work environment to encourage motivation and innovationBe a good citizen and be socialFocus on basic exponential growthLeadership at HPCarleton S. (Carly) FiorinaCarly Fiorina was highly qualified peson who earlier coming to HP had 20 years experirnce of working at AT T as a senior loss leader. she became CEO of HP in1999 and was the world-class woman to be the leader so such a consi derable company and nations prominent female executive.She was very extravagant in managing work. She had inexpugnable capability to visualize what should be done to achieve the set goals. She had a clear insight of the challenges that the company were facing.She was a properly Charismatic leader who was able to do the cultural switch flip in the company with her assertive nature and honesty. She possessed transformational leadership quality that helped to make up HP an effective leader in the competitive marketplace. HP was now more than flexible, innovative and possessed a effective internal environment whose special focus was customer satisfaction.The most important reason for success of Fiorinas was the arrant(a) balance between leadership qualities and oversight of the company resources with genuine melodic line for the employees and let them make feel as part and parcel of the company.As a good leader Fiorina started a stock option programme for employees which c reated a enthusiastic work environment for the employees. Under this program employee leave alone be profited if the company earns profit. Fiorina knows how to rise a company in the ever-changing environment. Several steps were taken to reinvigorate HP they were as follows invention was focused more.Structure was changed now front representation and back office concept came into existence.R D department was re engineered.Clear boot and values of the companyReasons for the MergerHP was progressing at a great pace. The basic aim of fiorina was to modernize the nicety of HP and to focus on profitable beas of business and HPs profit share increased from 54.43 to 74.48 dollars but still the company was not efficient as it could not met the set targets and collectable to this failure HP was supposed to cut grim the jokes. Even fiorina had holy terror of losing her job. This was the indication that changing only internal strategies was not worth for the success of the company so a freshly plan came into existence which was to fill Compaq worth of 25 billion dollars. Both companies believed that in order to do good in the recent competitive market and gain profit better way was to shed a nuclear fusion reaction but the stakeholders considered it as differently according to them company wont be loyal to Compaq customers and the biggest hassle was synchronization of members in the scheme. As during conjugation the culture of disposal ordain also change. Above all fiorina only considered the removal of one enemy in the PC market. According to her the market share will increase after merger and working unit will also increased. (Hoopes, 2001)HP experienced revenue growth but share prices constantly declined.Hp was badly affected by recession in 2001.Pay were cutted down and laid off. Jobs were cutted down.Stock price continued to decline at a great speed.Outsourcing was not proper.To improve economics and innovation.Strengthed business provides criti cal plenteousness in key growth market.CHANGE MANAGEMENTCulture lowlife be defined as the personality of a company. It encompasses the beliefs, values, leadership practices, ecesis structure, decision-making processes, and norms of a business.One of the primary reasons that culture is so important is because employee dedication affects customer loyalty, thus directly affecting both the profitability of a company as well as stakeholder value.11 As John Kotter and mob Heskett of Harvard explain in their book Corporate Culture and Performance, corporate culture is an important competitive asset. Kotter and Heskett believe that cultural strength among the employees of a company relates to performance in three key ways first, it leads to goal conjunction second, it creates high levels of motivation and third, it provides structure and controls without having to rely on formal bureaucracy, which ofttimes inhibits innovation and motivation.12At HP, where culture (i.e., the HP govern ment agency) has always had a the right way influence on how the company functions, undertaking cultural integration poses an particularly daunting task. At the same time that integration planners essential set HPs existing culture to unify the two companies, planners must also watch that HPs culture remains focused around the key elements of the HP Way trust, respect, achievement, integrity, teamwork, innovation, and an interactive work environment.Among the first-and arguably one of the most important-steps in incorporate cultures is to determine what constitutes a good culture and then to base changes on those elements. According to HPs integration planning team, a good culture mustbe clearly defined and broadly understoodreflect the business strategy and brandsupport best-in-class performance with customers, partners, stockholders, and employeesproduce alignment, commitment and convulsionestablish a competitive advantage andbe reflected in the communications and actions o f core leaders.Change models1.Unfreeze, Change, FreezeKurt Lewin proposed a three stage supposition of change commonly referred to as Unfreeze, Change, Freeze (or Refreeze). It is possible to take these stages to kind of complicated levels. It is extremely relevantStage 1 UnfreezingThe Unfreezing stage is in all probability one of the more important stages to understand in the world of change we live in today. This stage is intimately getting ready to change. It involves getting to a point of understanding that change is necessary, and getting ready to impel away from our current comfort zone. HP was in need to understand and prepare the company for the change as completion was relevantly increasing.fiorina was been cause for change by lot of different characters and the chariasmatic leadership qualities that she possessed.Stage 2 Change or TransitionKurt Lewin was aware that change is not an event, but rather a process. He called that process a transition. Transition is the informal movement or journey we make in reaction to a change. This second stage occurs as we make the changes that are needed. HP used role models and allowed employees to develop parvenu solutions and Fiorina also gave a clear range of a function of desired change and gave benefits to the employees.Stage 3 Freezing (or Refreezing)Kurt Lewin refers to this stage as freezing although a lot of people refer to it as refreezing. As the name suggests this stage is about establishing stability once the changes have been made. The changes are accepted and live on the revolutionary norm. People form new relationships and become comfortable with their routines.Its often at this point that people laugh and give out me that practically there is never time for this freezing stage. And its just this thats drawn criticism to the Kurt Lewin model.7S model7S-McKinsey-model.jpg7S model was created by McKinsey and company in 1980. cardinal factors are included in this model. The 7S framework was dividing in thinking about organizational efficiency. In previous the manager focus was on organization because organization grew in size and complicated questions were also arised.Explanation of each elementStrategy HP created a Strategy to maintain and make competitive benefit over the competition.Structure Structure is the way the organization is constructed and who reports to whom.Systems In systems the daily activities and events that staff members join in to get the job done.Shared values Shared values are also called go ons(p) ordinate goals. These values are the center values of the company that are evidenced in the corporate culture and the general work.Style you have to adopt the style of leadership.Staff In staff employees and their general capabilities are included.Skills Skills are the actual skills of the employees who are working for the company.Post mergerThe proposed merger consolidated HP Compaqs product into four groups customer services, imaging and printi ng, portal devices, and information technology infrastructure. Although the new company was very competitive in respective segments but the merger made the company more powerful and fully integrated providing full services integrating both hardware and software solutions. the merged company had 145,000 employees.the new company strategy was to calculate for acquisition in consulting in order to expand market growth.The new HP also had the same commitment of customer priority,best engineering be after toease all problems, and acceptance to open system to able to face the jerky market shift. Copmaq will give great support in better-looking many solutions inIT InfrastructureCompaq and HP combined the server , terminal and software capabilities all the solutions were more compelling and fault tolerated. A new management software was introduced that was of great help to monitor,mange and optimize the whole network. tonic storage solutions that were more efficient than payroll and was able to store data 10 times more efficiently.the new(prenominal) former change was in service and support expertise that was helpful in building and calculative new innovative solutions.ServicesNew HP had now broad range of outsourcing, consulting and support that helps in formulating strategies and managing the infrastructure. It started to become partner for architecting various enterprises. straight because of combined forces of both the company new HP was aiming to be top-tier service provider that provided choices for implementation and making strategy for various IT projects. New HP had great value for partnership so to gain benefit of products PricewaterhouseCoopers, Accenture, and KPMG company did partnership with themAccess DevicesAs both the companies were strong in the market they offer a wide range of PCs, and many internet enabled devices. The new products simply work better and together. New devices were innovative and highly excellent technology. They work t he way they want to work according to the office environment.After merger most of Compaq products were re branded with the HP nameplate Compaq brands were consumer oriented products. in all Compaq computers were now shifted to HP . Compaq iPAQ were renamed to HP iPAQ.In 2007 HP released a new logo for their Compaq Division and in the next year all business line notebooks were renamed as HP Compaq series that was used for all HPs notebooks. The top business earning model was Hp Elite Book that was named as HP Compaq B seriesRESISTANCE TO CHANGEResistance to change is one of the basic reasons for the failure of change process and its implementation. Resistance to change in general is ubiquitous by nature. It is defined as a infixed response to any reaction or threat of change (Block, 1989). In HP resistance was visble among employees and shareholders.Resistance by employeesthere was Tension among the HP earlier before when the company decided to lay off thousands of employees becaus e of the economic downturn. Before the cuts were made, however, employees were asked to assist in a cost-cutting campaign either take mandatory vacation or accept a pay cut, among other choices.True to the HP Way, yet surprising to many on border Street, many employees offered to have their salary cut. When the company later proceeded with layoffs, many snarl betrayed. And thousands of more cuts are possible if the merger is approved.People fight against change because theyfear to lose something they value, ordont understand the change and its implications, or dont think that the change makes sense, or find it difficult to cope with either the level or pace of the change.Resistance by stock holderWalter Hewlett as a stock holder along with his sisters William and Flora Hewlett opposed the deal as stockholder rejection was one of the ways to terminate the deal.According to Walter Hewlett, Carly Fiorina had exaggerated the importance of racing shell in the computer business. Hewlet t believed that rather than make the company more competitive, the merger would expose HP to the brutal, low-profit PC business. Finally Hewlett concluded that the merger would significantly dilute the value of the companys business. David Packard issued a statement siding with Hewlett in adversary to the deal. In his statement, Packard, chairman of the Packard Humanities Institute.Packard, the oldest son of the other late co-founder, claimed that Fiorinas highhanded management and efforts to reinvent the company ran counter to the core HP values effected by the founders. Citing massive layoffs as an example of this departure from HPs core values.