HEWETT PACKARD MANAGEMENT PROBLEM
Hewett Packard Management Problem
Proper management of organizations is vital for the achievement of the objectives and vision of any company. While organizations may focus on ensuring that they remain competitive and invest a lot of money in employing competent managers, Robbins and Coulter (2011) argue that managerial problems account for most cases of underperformance. Thus, understanding the problems facing the management of an organization and creating policies to solve them goes a long way into ensuring permanent solutions are achieved. This case study focuses on management issues faced by Hewlett-Packard; also known as HP. The firm is one of the biggest IT companies in the world, and its origin can be traced in a rented car garage in the late 1930s. The founders namely Bill Hewlett and Dave Packard were two classmates from Stanford University (Malone, 2007). Through decades, it has grown its software, hardware products and services portfolio. Good leadership and constant innovation have helped the company become competitive in the market. The firm clienteles include both small and medium enterprises ranging from private to public across the globe.
Management Problem
However, despite tremendous growth through the years, HP has been affected by various management strategies. These challenges come in the wake of globalization where markets are becoming saturated. There is increased level of competition and technology is evolving at a fast rate and the only thing saving companies from collapse is innovation (Nickel and Ziegler 2012). Research conducted indicates the major management problem facing the IT giant is the implementation of wrong strategic decisions leading to poor product and service performance. This report explores the cause and the depth of the problem and recommendation based on the information (Cohen and Feigenbaum 2014).
Research questions
The research on the management problem facing Hewett Packard is based on two questions namely:
- How do strategic decisions by the management affect the company performance?
- What are the measures to be implemented to help improve company performance?
Literature Review
Duysters and Lokshin (2015) indicate that HP has been rated as global number one firm for seven years consecutively from 2007-2013. The categories in which the IT Company bagged awards include manufacturing of personal computer before another IT company that is new in the market known as Lenovo surpassed it. The reason for such is due to management issues with the roots in the previous decade.
According to Arendt and Brettel (2010), each organization has senior managers tasked with the role of formulating and implementing strategic decisions in the contemporary management. These top-level employees make a decision with the aim of tackling complex issues in the market. This is due to changing complex and evolving businesses environment. Hung and Yen (2010) adds that decisions made in the firms have had far-reaching repercussions which are reflected in years and decades to come.
In this case, HP is no exception because the decision made at the beginning of the last decade continues to affect its growth recently. The firm in 2001 acquired Compaq Computer with an objective of leveraging the global PC market and containing stiff competition from emerging giant IT companies from the Asian continent. Later in 2010, it acquired another company hit by a financial crisis-stricken Palm (Kilic and Alpkan 2011).
The motivation behind these acquisitions was to leverage the companies’ innovation while ignoring other factors such as matured and saturated the market in the globe. On the other hand, it ignored the plethora of issues faced by the organizations in the time of acquisition. Besides, the rate at which the managers were being changed was at alarming rate because there were four chief executives in a span of seven years (Nickel and Ziegler 2012)
These decisions have had an impact on the product and service line. For example, the company tablet was a blunder because it recorded uncertainty between the central business segments. In addition, its personal computers were plagued by internal feuds, unrest, and swindles. These aspects made the product miss business opportunities leading to declining revenues and market share (Nickel and Ziegler 2012). A blend of extravagant acquisitions and poor product performance led to declining revenue forcing the company to have a massive downsizing initiative. This is because the company focused on cost reduction rather than innovation (Duysters and Lokshin 2015).
For HP to improve its performance, it should look into the four issues such as employees’ relation, finance, processes, and market trends. These areas are the foundations of a business and essential for the success of the company. All the segments of the organization must function collectively to meet the common objective of making a profit and diversifying the product among others.
Further, the firm operations are imperative because they determine the quality of the products and timely delivery. Many companies fail because of communication breakdown between various sections. Lastly, strategic planning is essential because it allows assessment of fundamental shifts, competitors monitoring, flexibility, and continuous adaptation to the business environment (Duysters and Lokshin 2015).
Methodology of Analysis
The case study of Hewlett Packard collects data using both primary and secondary sources of data collection. This is to facilitate understanding of how management decisions affect company performance and measures to be implemented. Primary data was acquired from company employees and professionals. Secondary data was collected from published books, journal, articles, and online articles. Only authentic staff and practitioners will qualify to provide information, and authoritative sources will be reviewed to enhance the quality of research. In addition, the information analyzed to help make a precise analysis and recommendation on what to do to improve performance.
Findings of the study
Data was analysed from both primary and secondary sources to find issues facing the firm in relation to the paper objectives. According to Cohen and Feigenbaum (2014), the company embarked on a strategic mission to develop its product, diversify its market that increased the risks and thus poor performance. Employees in the company hold that HP management expansion strategy was poorly implemented leaving the company in utter dismay. The two acquisitions resulted in massive losses for a short period and market losses
On the other hand, there were issues of managing the firm dynamic consumer in a diverse cultural environment. For example, different people in various regions of the world have different product tastes and preferences. The management decision failed to excel in global arena due to lack of market consideration in the age where consumers prefer standardized goods and services. According to Arendt and Brettel (2010), consumers are not only looking for the quality of the product but even the pace of delivery and customization. The inability to make innovative decisions on these issues affected all products lines such as tablets, personal computers, printers and others.
Another management problem that affected the company performance includes the inability to deal with cultural diversities of the market and business ethics. The administration failed to completely understand the nature of employee’s diversities prevalent within the firm. The company has a range of employees from all over the world and therefore differing cultures exist. Thus, management decisions on how to manage their culture have not been active thereby dragging company performance.
Another management problem revealed is the issue of managing the employee’s innovation about entrepreneurship. Being an IT industry at the top of competition ladder exposes HP to business environment dynamics. Technology and innovation ultimately control the organization momentum. To deal with the market forces the firm needs an understanding of how to handle the issues for business success (Arendt and Brettel 2010). However, in various instances, the management has enacted organization policies to minimize the cost while forgetting the issue of innovation.
The result of these decisions significantly reduced the investment directed to research and development. This is complicated by frequent changes of top-level management entitled to make the strategic decision thus causing breakdown of strategic implementation. Such do not only affect company workers but also other that do business with HP. Some decide to cancel contracts and shed shares held in the firm, and this affects the business financial performance and productivity in many areas.
Alternatives and Recommendations to Improve Company Performance
The paper identifies an alternative to deal with the concerns highlighted. These include company realignment and mass customization of its products. Ensuring the organization has an appropriate structure will enhance decision execution and increase its efficiency and effectiveness. The result will be faster and streamlined organizational performance capable of coping with rapidly shifting business environment and trends. The problem of mass customization, fast delivery, and the right cost is an issue for the company.
The organizational realignment will help the company recover the lost grounds and further improve its performance and profitability. The effect will be felt in all company portfolios and also rationalize the global market strategy. Other aspects to be targeted include supply chain, branding, and global customer support. Improving these areas of the firm will lead to excellent customer experience and innovation of products such as printing and personal computing (Nickel and Ziegler 2012).
On the other hand, organization realignment helps in providing the opportunities to reduce the cost of operation and that of products. In such an environment, the company will accelerate and increase its capability to return to profitability. The revenues can be reinvested in the business. Further bringing the new structure can help solve the issues of quick decision making thereby increasing employees and firm’s productivity. It is also essential for improving the efficiency and providing simplified client experience across the world. Therefore, realignment strategy will create a powerful force for company growth (Nickel and Ziegler 2012).
Kilic and Alpkan (2011) argue that many companies especially in the IT industry face myriads of predicaments when dealing with mass customization, delivery, and manageable friendly price. This comes in the wake of shifting consumer preferences and tastes where many customers desire customized orders to be delivered at fast pace. The company may customize the product but on the other hand, fail to address them swiftly and at a friendly price. However, it is possible for Hewlett-Packard to confront the issue in its entire product portfolios such as printers, tablets, and personal computers. This combination has been proven to be possible in other sectors.
The key to the strategy is adopting a piecemeal method where HP should rethink and integrate product designs. On the other hand, the same should be applied to the technique of delivering these products in the supply network. By adopting such moves, it will be possible for HP to operate at maximum efficiency thus making it quickly to satisfy customer preferences and taste and desired price (Kilic and Alpkan 2011). Another approach includes Modular Product Design that will create supply chain flexibility. This will help in fast product customization and inexpensively. The management should utilize the model because it can maximize the speed of manufacturing the product. In addition, it helps the company production, the parts to be assembled thus increasing the rate (Hung and Yen 2010).
Recommendations
The above alternatives for improving company performance require coordination of the management tea. This is because these decisions are not easy to make because it involves managers from marketing, distribution, manufacturing, research and development and finance. The five areas must coordinate to form a team that will solve the issue of mass-customization and realignment. The marketing team will help determine how mass customization can suit customers’ requirements.
Research and development department need to redesign the computers, tablet and printers among others to be most efficient in the supply network. On the other hand, manufacturing and distribution require situated in the most suitable places for delivery purposes. Finance department facilitates the plan to the alternatives because of mass customization, and organization realignment requires resources.
Regarding evaluation, each group should be evaluated separately. For instance, the marketing section should be assessed based on the revenue growth. Research and development based on the cost of components and product’s functionality while manufacturing and distribution on the price of delivering and assembling products to the clients.
Therefore, the focus should be on the objective of each segment in bringing organization performance. The joint group of managers should make the product attract consumers, multiple possible functionalities, reduced price and product stability regarding volume. Coordination and negotiation when making a critical decision and strategy should be cultivated to make the company more efficient.
Bibliography
Arendt, S. and Brettel, M., 2010. Understanding the influence of corporate social responsibility on corporate identity, image, and firm performance. Management Decision, 48(10), pp.1469-1492.
Cohen, P.R. and Feigenbaum, E.A. eds., 2014. The handbook of artificial intelligence (Vol. 3). Butterworth-Heinemann.
Duysters, G. and Lokshin, B., 2015. Determinants of alliance portfolio complexity and its effect on innovative performance of companies. Journal of Product Innovation Management, 28(4), pp.570-585.
Hung, Y.C. and Yen, D.C., 2010. A structural model of supply chain management on firm performance. International Journal of Operations & Production Management, 30(5), pp.526-545.
Kilic, K. and Alpkan, L., 2011. Effects of innovation types on firm performance. International Journal of production economics,133(2), pp.662-676.
Malone, M. S. (2007). Bill & Dave: How Hewlett and Packard built the world’s greatest company. New York, N.Y: Portfolio.
Nickel, S. and Ziegler, H.P., 2012. A multi-stage stochastic supply network design problem with financial decisions and risk management. Omega, 40(5), pp.511-524.
Robbins, S. P., and Coulter, M. K. 2012. Management. Harlow. Pearson
