Structural Issues Relating to HP - Case Study Example

TITLE: A REPORT OF THE ANALYSIS OF A CASE STUDY ‘FIXING WHAT IS BROKEN: HP’S STRUCTURAL CHALLENGE’. NAME OF THE STUDENT: REGISTRATION NUMBER: UNIT NAME: COURSE NAME NAME OF THE DEPARTMENT LECTURER’S NAME DATE DONE DATE SUBMITTED: OUTLINE Preliminary Section A Title Page Table of Contents Body 1. Introduction 2. Back ground information of the Organisation 3. Structural issues relating to HP 4. Discussion of ways to help solve some of the structural challenges 5. Conclusion and Recommendations Supplementary Material Reference list (APA format) 1. INTRODUCTION Organizational structure provides the protocol over which tasks are allocated, co-ordinated and supervised. This is done in line with the organizations set objectives, missions and goals. It sets pace as the viewing glass through which individuals can be able to identify with the organization and its environment. Organizational structure comes inform of hierarchical structures. However not all organization will adopt this as there are a variety of organizational structures. This includes; pre-bureaucratic, bureaucratic, post bureaucratic, Functional, divisional and matrix structures. All this varieties can be adopted depending on the company’s needs and objectives. It enables the allocations of different responsibilities for different functions and processes to different entities such as branches, departments, work groups and even individuals. These structures affect the organization in several ways from service delivery to discipline in the company. Basically, it affects it in two major ways; first, it sets the foundation over which standard operating procedures and routine rests. Finally, it give authority to individuals of who gets to participate in which decision making process and to what extent their views can influence and impact on the organizations actions. This paper is a report into an analysis of HP’s structural challenge and how that can be fixed. It is a case study report that indicates how management has the influence on the functionality of the HP’s company. This paper will present the back ground of this case study to validate the line of though on the role of the organizational structure in the performance of the HP Company. A SWOT analysis will also enable as to identify internal and external factors responsible for the down fall of HP Company. This will enable us to identify the potential challenges faced by the organization. It will assist as to make out the potential and future threats about the structural issues that influence the working of the company. In addition, it will help us find possible solutions to the challenges facing the Company. Finally, it will culminate to the recommendations on ways to salvage the company from organizational structural challenges facing it. This paper will also mention other cases that had similar organizational challenges and how they were solved the problems. 2. BACKGROUNG INFORMATION Hewlett-Packard Company (HP), a first major company in the US has had its largest Organizational challenges over the years. It is a dominant company known for its cameras, calculators and computers that mark every office in the world. The organizational challenges started back at the time it was the only company being headed by a woman Carl Fiorina in 1999. This had made headlines basing to the fact that gender disparities were quite conspicuous at the time. As a start she started down the lane with acquisition of a major company Compaq which was a rival computer company at a cost of US$25 Billion. This did not only start to financial and cultural problems but also, organizational structural problems that brought about poor performance. This brought about indifferences between her and the board of directors over the direction, the company was heading. This performance saw her get fired as the CEO of HP Company on Early February 2005. By the end of the following month, Mark Hurd had been hired to take over the steward ship of the company as the New Chief Executive Officer of the Company. His inquisitiveness into the management of the company, found out that there was quite a big challenges into the organizational structure of the company; there was a problem with the company sales force and the operating procedure set was very complex that it was not even clear to the cooperate clients on who to conduct for their problems. Responsiveness of the management was also slow such that it had taken the head of cooperate technologist three month to hire 100 specialists. The sales people on the other hand were taking less time with the clients as most of the time was spend negotiating bureaucracy of the company alongside other administrative tasks. All but not the least, just for the sales people to get a sample product to a customer or a price quote was just a time consuming ordeal. It came to the realisation of Hurd that rapid and stringent measures had to be taken. There were 11 layers into the structure between him and the customers, which was quite in efficient. In the branches in Europe, there were four people involved just to close a sales deal of business. While the competing companies had three at the most. This might have been one of the reasons why HP was losing on many bids. The staff number was just away too high with less than 60% working within the corporate sales while the rest were support staff or in management. This really strained on the company’s revenue and that could be the reasons why the company had financial problems coupled to organizational challenges as well as cultural inefficiencies. Time is of the essence in salvaging the HP Company in order to retain and regain its previous clientele and also position itself back as a major first company in the US. 3. STRUCTURAL ISSUES Carly Fiorina and Mark Hurd both took over the company at the time the company is experiencing some huddles and it is therefore their responsibility to see the company go through the challenges. Fiorinas strategy starts in an extreme way leading the company down the success story, while Mark Hurd has to take it up the lane. It is at a point where the company has cultural conflicts, Financial constrain and organizational in appropriateness in the line of business they are in. They all strategies on the changes for which to work for that when implemented will support their objectives. Planning for change in the company ought to adopt several dimensions. The structure has to accommodate the extent of planning; this determines how much change can be planned establishing the possibility of setting up conditions that will permit natural change to take place. The degree of change may be either incremental: that is relatively small and involving the fine tuning of behaviours within a just system, or quantum changes that has far reaching consequences on how the company operates. The degree of learning, the target change, merits and the demerits of organizational structure have to be addressed. Is the organization structure very stiff? Is it bureaucratic? What should be the emphasis on the rules, policies and protocols? Businesses are rapidly changing and adapting with the transitions is the criteria for successful running. Especially at this time when Mark Hurd is trying to initiate some reform agenda, Agility and flexibility should be the key point to emphasize. This is very necessary because the world is not that predictable nor solutions absolute, complex challenges need to be addressed with complex ideas. Hurd’s strategy is to make the environment inside HP Company to be some kind of a small world using the small world model in hierarchies. Key metrics in a small world model is the average path length for individuals and for the whole organizational network. A good score means that someone can reach others quickly without going through many intermediaries. It therefore means that can access everyone else easily and quickly. The shorter the information path, the quicker the information gets delivered, the less distorted it is when it arrives. Adopting multiple short paths makes it efficient; it enhances the visibility into what is happening in other networks creating awareness. Reducing the employees by firing the under performers, scaling down the layers of the hierarchy from 11 to three layer is a tough measure while shuffling individuals into sales group will be of a very serious consequence whose impact may be devastating. Unless the organizational structure is overhauled as a whole to enable cultural growth, relationship development while outlining specific protocols each individuals will have to instigate. No amount of development may actually be achieved. 4. DISCUSSION Planning and managing change is one of the most difficult tasks especially at international levelled companies. These challenges may be cultural, technological and even Organizational in structural elements. ‘The more a plan is prepared in anticipation of change the better will be the outcome because it enables you to identify the flaws or the likely short coming to be encountered’ (Burton, 2006, pp 20). The extent, degree of change, learning, target change and the organizational structure need s to be evaluated keenly. Hurds strategy of reducing the number of hierarchy in the company is well placed; this will develop some small world concept which will enable accessibility of all persons both at the management and the external clientele. ‘Service delivery will be enhanced as the shortest distance will enable a fast exchange of information among all the interested parties’ (Khosrowpour, 2006, pp 512). This is a mechanism that will also enable free flow of cultural attributes. However special code of ethics needs to be put in place as the guiding operating procedures to direct the flow network of information along the communication channel. Cultural values will therefore be easily integrated to the teams and that is how the whole system will be overhauled. Moreover, a company can adopt the matrix structure of the organization. This has been applied elsewhere on a survey from seven top multinational companies. The overruling factor was five contemporary challenges: firstly, Misaligned goals, secondly, Unclear roles and responsibilities. Thirdly, ambiguous authority, Fourth, lack of a matrix guardian, finally, a silo focussed employees. ‘A matrix is a grid like structure that has been used in organization structures’ (Burns & Whorley, 1993, pp 167). It is the best as it allows businesses to address multiple business dimensions base on different command structures. It has many traits that can be associated with managing a global organization as HP and other multinational companies. It extrinsically illustrates two highlights; the strength and the weaknesses. ‘It has the advantage of allowing companies to leverage some good amount of resources while staying small and task oriented’ (Gottlieb, 2007, pp 2). It has room for innovativeness and very fast action in delivery of services especially to the clients. A senior executive of the company having 100 days before his strategy can be approved is quite demotivating and slows the whole chain of sales performance. This can only be handled best if a matrix system is put in place. The matrix system does also not have room for traditional principles of authority which behoves ambiquity and conflicts as was the case with Caryl Fiorinas case. However, it will require the support of the managerial and administrative support especially at a time when companies seem to be losing the trend of their objectives. All matrix forms may not possess the perfect situation for the business and may tent to possess inherent flaws. An analysis into the strength and the flaws indicate that the strength outweighs the flaws. This should be adopted for the following key reasons basing on the case study. HP under Mark Hurd needs to realign the flow of information that will enable clients have somebody to address their issues, even in the company, communication will be made direct so that everybody will have his own specific roles realigned and not sales men who are supposed to handle clients handling bureaucratic and administrative responsibilities of the company. ‘It will also facilitate the multi task on its business objective in order to meet the set objective to retain and regain the former clients while pursuing others at the same time due to competition’ (Khosrowpour, 1993, pp 178). The economies of scale will be established and this will start to salvage the company from the financial crisis it is facing after the purchase of Compaq Company. Finally, the environmental demands such as competition, a customer complains and other responses will be handled amicably to avoid interference with the corporate social responsibility. 5. RECOMMENDATIONS AND CONCLUSIONS. a. Recommendations The situational analysis of HP Company indicates that all the challenges being faced currently can be solved. I therefore recommend the following solutions. i. Adopting a small world model of network in organizational management. ii. Establish a hierarchical structure of the organization with well defined role and responsibilities. iii. Incorporate the matrix structure of management as it will coordinate all functions within the organization b. Conclusions Organizational structure gives the mandate for all undertakings within the organizations. A well structured organization will therefore find that it has a decision making mechanism that identifies and solves all the problems amicably. Each structure should be allocated it own duties and authority to implement which should be under the prerogative of one general person to act as a check and balance. The structure should be small to enable easier exchange of information and also generate a response very fast. Therefore, a small world model complexed with the matrix rule of organizational structure will offer a perfect solution for the problems in HP Company under the steward ship of Mark Hurd as the CEO. Read More