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This report is an attempt to investigate Hewlett Packard, a huge corporate, to gain an insight into how change management was implemented and how it was dealt with.

Extracts from this document...

Introduction

INTRODUCTION This report is an attempt to investigate Hewlett Packard, a huge corporate, to gain an insight into how change management was implemented and how it was dealt with. It's a contribution to the understanding of change management and leadership in general, and to the understanding of practical application in an international company in particular. This report is divided into three main parts: The first part is concerned with literature review. The literature review explains change management and leadership in context to the organisation in addition to discussing the theories relevant to each of the areas. The second part consists of sub parts. The organisation of discussion is introduced and background information leading to the change initiatives is discussed. It ends with the research findings and comments on the change initiatives and leadership displayed. The final part summarizes the outcome and limitations and explores future directions. INTRODUCING CHANGE Mintzberg (1998) quote 'no intended strategy can ever be so precisely defined that it covers every eventuality, realised strategies have emergent as well as deliberate characteristics'. History has witnessed no organisation being able to sustain its competitive edge for long (Peters, 1989). Daft (1983) discusses four types of change which affect organisations, i.e. technology, product or service, administrative changes and people attitudes (culture). I feel that any of these changes would affect the other and lead to a total change encompassing the organisation. Although change is present everywhere and in every form, resistance to change is not surprising (Kotter and Schlesinger, 1979). Organisational change can be described as strategic or non-strategic change (Pettigrew, 1987), incremental or quantum change (Greenwood and Hinings, 1993), planned or emergent change (Wilson, 1992), and change in relation to scale (Buchanan and Boddy, 1992). Change typically touches upon process, design, culture, and politics (Cao, Clarke and Lehane, 1999). Management of change exhibits four key features, dissatisfaction with the present strategies, vision of the better alternative, a strategy for implementing change and resistance to the proposals at some stage (Margerison and Smith, 1989). ...read more.

Middle

This was the first time a company with thousands of product lines and scores of business units had attempted a front-back approach, a strategy that required sharp focus and proper coordination. In the earlier set-up, most of the strategic decisions were left to the heads of product divisions. To ensure that most of the important decisions came from the top, Fiorina created an executive council on the investment of resources in the best available opportunities. These measures transformed HP into a tightly coordinated corporate machine where decisions were made quickly and more confidently. The new arrangement solved a number of long-standing problems of HP, making it easier for suppliers/clients to do business with it. Instead of having to deal with an array of salespeople from different product divisions, customers now dealt with only one sales person. The new arrangement also helped HP's product designers focus on the design aspect. It gave the front-end markets the authority to finalize deals that were most profitable for the company. For example, they could sell a server at a lower margin to those customers, who opted for long-term consulting services. THE HP-COMPAQ MERGER One of the most significant moves by Carly Fiorina was the decision to buy out one of HP's major competitors-Compaq, in September 2001. The deal involved HP buying Compaq for $25 billion in stock (the final cost of HP was $19 billion). This was the biggest ever buy-out in the history of the computer industry. The merged entity was to have operations in more than 160 countries with over 145,000 employees, offering the industry's most comprehensive set of products and services. The new company retained the HP name and its combined revenues amounted to $87.4 billion, almost equal to that of the industry leader IBM ($88.396 billion in 2000). Under the terms of the deal, Fiorina was to continue as the Chairman and CEO of the new company. ...read more.

Conclusion

* Invent different ways of working. * Make a contribution everyday. If it doesn't contribute, it doesn't leave the garage. * Believe that together we can do anything. * Invent. Carly Fiorina believed that if these rules were carried out with the employees on their journey, if they created an environment where people's hearts and minds are fully engaged, where strategy is ennobling, where great aspirations are powered by the desires of people to do something worthwhile, then the employees will have touched others they encounter on their journey. Adapted from www.siliconvalley.com, December 2001. APPENDIX 3 HOW THE HP-COMPAQ MEASURED UP AGAINST THEIR RIVALS IN DIFFERENT PRODUCT SEGMENTS, AT THE TIME OF THE MERGER PRODUCTS ANALYSIS PCs With 19% market share, the combo was the world's largest PC maker. But with PC sales and margins at record lows, the companies had lost a total of nearly $500 million in 2001, while Dell was gaining. Printers Hp's dominant 50% market share was likely to grow, as were sales of its hugely profitable printer ink. The negative aspects were weak margins and sales, and mounting pricing pressure from Lexmark, Canon and other rivals. Low - End Servers Compaq dominated, and the combined companies had a huge 37% market share in Windows-based machines. But cutthroat competition from Dell and IBM was likely to eat away at sales High - End Servers In this key high - margin market, HP and Compaq were laggards. Compaq would be phasing out its Alpha servers, while Hp's high-end UNIX machines were stagnating against Sun and IBM. Services HP and Compaq coveted IBM's services business. But 62% of their 65,000 service specialist were doing basic computer repair, not the lucrative high-end consulting Bid Blue specialized in. Storage Compaq's $5.2 billion storage business would most likely get a big boost at hp sold Compaq gear to its customers. Still the merger wouldn't help HP take customers from storage giant EMC and others. Software Providing complete solutions for big corporations requires specialized software called middleware. But HP badly lagged rivals, and Compaq was a no-show. Source: BusinessWeek Analysis, September 17, 2001. ...read more.

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