MANAGEMENT CONCEPTSCIA-3

CASE STUDY

ON

“THE HP WAY”

BY,S.BHAVESH JAIN

1BBA-B1520229

MANAGING THE HEWLETT PACKARD WAY

William R. Hewlett and David Packard are two organizational leaders who demonstrated a unique managerial style. They began their operation in one car garage in 1939 with $538 and eventually built a very successful company that now produces more than 10,000 products, such as computers, peripheral equipment, test and measuring instruments, and handheld calculators. Perhaps even better known than its products is the distinct managerial style preached and practiced at Hewlett-Packard (HP). It is known as the HP way. “What is the HP way?I feel that in general terms it is the policies and actions that flow from the belief that men and women want to do a good job, a creative job, a better job and that if they are provided the proper environment they will do so.”

Bill Hewlett, HP Co-Founder

The values of the founders – who withdrew from active management in 1978- still permeate the organization. The HP way emphasizes honesty, a strong belief in the value of people, and customer satisfaction.The managerial style also emphasizes an open-door policy, which promotes team effort. Informality in personal relationships is illustrated by the use of first names. Management by objectives is supplemented by what is known as managing by wandering around. By strolling through the organization, top managers keep in touch with what is really going on in the company.This informal organizational climate does not mean that the organization structure has not changed. Indeed, the organizational changes in the 1980s in response to environmental changes were quite painful. However, these changes resulted in extraordinary company growth during the 1980s.

QUESTIONS:

1. Is the Hewlett-Packard way of managing creating a climate in which employees are motivated to contribute to aims of the organization? What is unique about the HP way?

ANSWER:-

- Yes, The Hewlett-Packard way of managing a climate in the organization motivates the employees to contribute to the aims of the organization.

- As Bill Hewlett the Co- Founder said that it is the general policies and actions that flow from the belief that men and women want to do a good job, a creative job, a better job and that if they are provided the proper environment they will do so, and HP is undoubtedly following this way.

- UNIQUENESS about the HP way is,1. The HP company exists to make a technical contribution,

and only pursue opportunities consistent with this purpose;

2. The HP company demands of itself and its people superior performance-profitable growth is both a means and a measure of enduring success; 3. The HP company believes the best results come when you

get the right people, trust them, give them freedom to find the best path to achieve objectives, and let them share in the rewards their work makes possible;

4. The managerial style also emphasizes an open-door policy, which promotes team effort;

5. Integrity, Honesty and Customer satisfaction.

2. Would the HP managerial style work in any organization? Why, or why not? What are the conditions for such a style to work?

ANSWER:-

- YES, the HP managerial style will work in any organization.

- It is because, the uniqueness what it posses will help motivate the employees to contribute to the aims of the organization, it would lead to good, creative and a better job so that all the objectives are met in the organization.

- The conditions for such kind of style of work is Informality in personal relationships which is illustrated by the use of first names. Management by objectives is supplemented by what is known as managing by wandering around. By strolling through the organization, top managers keep in touch with what is really going on in the company.

- In HP, this informal organizational climate does not mean that the organization structure has not changed. Indeed, the organizational changes in the 1980s in response to environmental changes were quite painful.

- These changes resulted in extraordinary company growth during the 1980s and after that.

SWOT ANALYSIS:

STRENGTHS:1. Employee strength of 3,50,000 worldwide.2. It’s consumer centric approach makes it a reliable choice.3. good after sales service which helps to maintain good consumer relationship.4. It’s ability to bring out news designs and innovation at affordable cost.5. Good distribution network across the world.6. Brand reputation.7. Diversified product portfolio.

WEAKNESS: 1.Market share growth is slow due to competition; Fake products/ imitations affects.2.Due to mass production it is unable to provide customize solutions to the customers.3. Its lagging in digital entertainment market.

OPPURTUNITIES: 1. Increase in IT awareness the scope for supply of desktops and laptops is increasing.2. It has opportunity for growth in service industry because it has bought “EDS” which is world’s No. 2 service provider.

THREATS:1. More People are becoming cost conscious so the profit margins have become low, so pricing the products has become an issue.2. With increase in number of local players there is threat of component pricing3. Due to economic downturn, increase competition and saturated market there is slow revenue growth.