Hewlett Packard :Organization Culture Analysis

                                                            Organizational Culture

Organizational culture is the collective behavior of humans that are part of an organization, it is also formed by values, visions, norms, working language, systems, and symbols, it includes beliefs and habits. It is also the pattern of such collective behaviors and assumptions that are taught to new organizational members as a way of perceiving, and even thinking and feeling. Organizational culture affects the way people and groups interact with each other, with clients, and with stakeholders.

Ravasi and Schultz (2006) state that organizational culture is a set of shared mental assumptions that guide interpretation and action in organizations by defining appropriate behavior for various situations.

Schein (2009), Deal & Kennedy (2000), Kotter (1992) and many others state that organizations often have very differing cultures as well as subcultures.

Culture as Root Metaphor takes the perspective that culture is something the organization is. Culture is basic, but with personal experiences people can view it a little differently. This view of an organization is created through communication and symbols, or competing metaphors.

The organizational communication perspective on culture views culture in three different ways:

• Traditionalism: Views culture through objective things such as stories, rituals, and symbols
• Interpretivism: Views culture through a network of shared meanings (organization members sharing subjective meanings)
• Critical-Interpretivism: Views culture through a network of shared meanings as well as the power struggles created by a similar network of competing meanings.

Seven primary characteristics capturing Organizational Culture:

1>Innovation & Risk taking 

2>Attention to detail  

3>Outcome orientation 

4>People orientation 

5>Team orientation 

6>Aggressiveness 

7>Stability 

Hewlett Packard :

HP is an American multinational hardware and software corporation headquartered in Palo Alto, California, United States. It provides products, technologies, software, solutions and services to consumers, small- and medium-sized businesses (SMBs) and large enterprises, including customers in the government, health and education sectors.

The company was founded in a one car garage in Palo Alto by William  Hewlett and Dave Packard. HP is the world's leading PC manufacturer.

The founders stated (in 1950s !!!) "The achievements of an organization are the results of the combined efforts of  each individual  in the organization working towards common objectives."

Culture :  the HP way

From the beginning the two founders have developed a management style which had never occurred in a large company before. They coined a new type of corporate culture which was to be called "the HP way."

HP always renounced the "hire and fire" mentality, which meant to employ many workers for a single big order and to dismiss them afterwards. Instead, the company offered its employees "almost perfect job security.") Even in 1974, when the U.S. economy was in a profound crisis and many people were unemployed, HP avoided layoffs by a four-day workweek, which was a unique measure in corporate America.

The two founders trusted in the "individual's own motivation to work") and treated their employees as family members; hence the custom to call each other by the first name - even the two chiefs were only known as Bill and Dave.

The HP workers were participated in the company with stock options and were even paid additional premiums when HP was successful - today known as profit sharing. These measures served to identify the employees with their work and to encourage them.

Moreover, the HP way included extensive employment benefits such as scholarships for the employee's children.

At the end of the 1950s Bill and Dave decided to write down the company's objectives, which were to serve as guidelines for "all decision-making by HP people,") since the company had grown ever larger. With some changes, those objectives are still valid today. They cover as follows: "Profit, Customers, Fields of Interest, Growth, Our People, Management, and Citizenship.") And these objectives are to be achieved through teamwork.

HP's strategies nowadays comprise mainly the "Management by Objectives", "Management by Wandering around" meaning informal communication within the company, and "Total Quality Control" which aims at producing highly qualified products.)

The HP way is seen as model for corporate culture in many countries.

The roots of many subsequent companies are located in HP, e.g. Steve Wozniak, who worked at HP and later co-founded Apple. This has led to the establishment of a new corporate culture in Silicon Valley and many firms have tried to imitate the HP way and ad opted measures such as stock options, innovative work rules, teamwork, and profit sharing.

Organization Culture:

The organization culture of Hewlett-Packard is also known as “The H-P Way”. Within the context of “The H-P Way”, the employees of the organization together with the management are expected to follow a saying “Don’t Be Evil”. The H-P Way is supposedly to be honest in all its operations and in all of the information coming out from the business organization. But, one cannot remove the fact that not all information are going out and being spread out to the whole world. It is for those with the information power to keep a secret what they know and for the whole world to find out. This is what happened to Hewlett-Packard (HP) that caused a catastrophe in the whole world. It was said that the organization is not being honest and good at all. Thus, it resulted to the whole world staying in the dark that made them look really evil.

HP Culture at Crossroads:

The turbulent period«.1990s· 



Competitionincreased.



Operationsexpanded(83productdivisionsatmultiple locations) 



Hewlett retired in 1987, followed by Packard in 1993

Impacted Organizational Culture

Laying off employees

Carly Fiorina was appointed as the CEO in 1999 

The Compaq Episode: 

Hewlett-Packard, founded in Palo Alto in 1939, has long been famed for the "HP way," its much-touted corporate culture which fosters innovation by giving employees autonomy and opportunities for professional growth. Compaq’s image is very different: Newsweek, while terming HP "literally the original high-tech garage startup," describes Compaq’s 1982 origins as "reflecting the giddy period when PCs were busting out." BusinessWeek notes that Compaq has been viewed as "a mere purveyor of hardware" and that the employees it will be contributing to the deal will be mostly lower-paid computer-repair people. The merger announcement led Slate.com to wonder: "If HP Swallows Compaq, Is It Still HP?"

Can a mega-company absorb another mega-company and still run things the way it used to? Should it even try? How large does corporate culture loom in the high-tech sector, or in any industry? Is there one type of culture that holds the key to success? And how important is the smooth blending of two distinct corporate environments to the success of a merger or acquisition?

Culture clashes can be a surprisingly large stumbling block in creating profitable mergers, adds Hanson. She cites a recent study sponsored by the Society for Human Resource Management and conducted by Towers Perrin that was titled "Making Mergers Work." In the study, HR professionals listed "incompatible cultures" as among the biggest obstacles to success in mergers and acquisitions. "The companies may go in and do due diligence, look at all the financial matters, but it’s really the cultural and people issues that can mean the demise of a successful merger."

With the merger, HP reportedly aims to move away from products to focus more on providing services. Will its corporate culture, in addition to successfully absorbing Compaq, need to undergo a paradigm shift? Most of the professors agreed that HP would have to thoroughly transform itself to make it in the service sector - an effort not necessarily facilitated by the merger. "I’m not quite sure how this merger will help them get into services," says Rothbard. "HP tried to buy PricewaterhouseCoopers last year explicitly to get their expertise in services. One reason the deal fell through may have been HP’s realization that PwC’s business was so different from theirs that it would be really hard to implement. Maybe they are hoping with Compaq and a new economy of scale, they can grow in the services area in a more incremental way."

"Innovation in product is not the same thing as delivering services," Cappelli says. "There are competencies and capabilities you need to be a service-sector, customer-service-oriented organization. It requires more sales emphasis, for one thing. That’s not necessarily the most obvious fit with the competencies HP has had before." Guillen agrees. "A typical plant manager has very different problems confronting him or her during the day than a manager of a service operation, who has to think about ways to increase customer loyalty, create bundles of services to offer and so forth. The world of manufacturing is so different from the world of customer relationships, that it seems the leadership style and culture need to change as well."