HP had a strong organizational culture leading to its success. Its culture allowed employees to become loyal, motivated and responsible. They are given written statement of company goals, regular team meetings, coffee breaks, management training, retirement parties, company speeches, in-house journals and salaries are reviewed every three months through evaluation based on the achievement of objectives. INMOS, due to pressure from defeating in Conservatives in the 1979 election and forcing them to privatization at a crucial time in the company’s development. In 1984, INMOS was sold to Thorn EMI. Another downturn in the year forced INMOS to cut back 20% of it activities and Thorn EMI to look for a development partner. Later the Transputer was developed and INMOS was again sold to SGS-Thomson (now STM), again later joined forces with QPL International in 1992. INMOS faced many pitfalls and may be a result in organization culture. It was also the role of British government in subsidizing R&D and the dilemmas which often accompany it. Even though INMOS may have started off successfully but without the full support from the Conservatives after 1979, many setbacks slowed down progress of the company forcing privatization of the company. The interaction of strategy and organization can explain the contrast in success in HP and INMOS in this situation. Briefly explained in the previous paragraph, the ownership variables greatly affect the process of goal setting and strategy formulation. According to Chandler (1962), structure followed strategy and this explains the multidivisional structures of HP. Where INMOS had a large and active R&D department due to the development of new product, in this case, Transputer. HP may have a better skill and knowledge in managing firms than the government. The government may be good to support but INMOS should not rely too much on government funding.
In many ways, environmental threats limit the growth of INMOS forcing it to be sold several times. Economy, technology and labour are all threats to INMOS. Economy, where there was increased foreign competition from Korea where there is an oversupply in 1998 and fall in demand in microchips. The strength of the pounds made it even more difficult to compete. The high cost of new manufacturing technology in Britain made it hard to meet increased demands. The relative high wage of workers in Britain threatened closure of INMOS between 1979 and 1984 when the Conservatives did not support them, hence funding was a crucial time as it relied too much on the government and generating not enough income itself. HP also face environmental threats but only economically. HP has announced higher-than-expected profits, giving rise to hopes that the results will spark a fresh rally in technology stocks. HP has announced a job cut of 3,000 in April 2001, it blamed the "rapid deterioration in consumer information technology spending around the world" (18th April, BBC news). Already, there has been estimated 5% loss in sales worldwide this year. In November, 2001, HP is in the progress of HP-COMPAQ combination and further job cuts are expected. A combination of this sort would not be something that is going to have an initial impact. The company would likely develop additional partnerships and further expand into outsourcing services. Similar to INMOS, HP forced to cut jobs to balance its income and expenditure due to the worldwide economic crisis this year, an environmental factor.
Generally speaking, the management strategies of the two companies are not comparable due to the different background of ownership. They obviously have different objectives. On the whole, HP has an excellent management strategy, hence a very good structure as first operated in four divisions. HP Way allowed each employee to have a clear view of objectives and guiding principles. Yet again, organization culture is important but management is not just few points to cover, it is complicated and is an interlinked problem. INMOS can be considered as a failure as it did not manage properly and had a bad structure. We can see this easily as the funding faced a problem as the Conservatives took over. Many of its problems are interlinked, and causes a flow of consequences of privatization and so on. In broad, HP has a better management strategy and more a lot successful. Timing and environmental factors assisted HP more than INMOS.
Bibliography:
Business in Context (3rd Edition), David Needle, ISBN 1 16152 358 0
Financial Times,
BBC News,
