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Hewlett-Packard Redefines the HP Way
"Coming together is a beginning; keeping together is progress; working together is success."
The case study, Human Resources at Hewlett-Packard, presents a portrait of an evolving organization that moved from its earliest base as a small privately owned company, with a single manufacturing focus, to a multinational conglomerate with multiple lines of business. Like many start-ups, in the early years, the company ethos exemplified that of its entrepreneurial founders. Entrepreneurs are often characterized by their capacity to have a hand in all facets of the organization, including human resources, and this was the situation at Hewlett-Packard for several decades. The case study presents a scenario in which the new CEO must address task force findings and questions about the viability of "the HP Way" and its role in employee engagement, strategic planning for the multinational context in which Hewlett-Packard now competes, and the evolution of a mature company in a mature industry. That Hewett-Packard has changed over the years, morphing into an organizational structure that bears little resemblance to its original form, is not surprising. Nor is the distress that long-time employees feel with regard to these changes. The case study spins in the direction of communicating the inevitability of the company's evolution, given the degree of change in the competitive landscape. After all, the case study seems to implore, how could Hewlett-Packard be the same when it has gone through so many iterations that is not even in the same business? Moreover, the case study presents a thorough enough summary of the corporate history of Hewlett-Packard that the iterations stand out against a background of technological changes that acted as catalysts for the company's redefinitions.
In its early years, in fact, over the period of time when the company focused on electronic test and measurement instruments, Hewlett-Packard could well be described as an adhocracy. Alvin Toffler first popularized the term adhocracy in 1970, and is now commonly used to refer to the management structure of particular organizations. According to Robert H. Waterman, Jr., an adhocracy is "any form of organization that cuts across normal bureaucratic lines to capture opportunities, solve problems, and get results" (Waterman, 1990, 42). Subsequently, Henry Mintzberg further refined the idea and developed a taxonomy organizational management structures. According to Mintzberg, an adhocracy is counterpoint to bureaucracy and is a complex and dynamic organizational form that will increasingly be found in the future (1994). Mintzberg (1994) argued that, as an organizational form, an adhocracy fostered problem solving and innovation, thriving in a diverse environment. Mintzberg (1994) further suggested that the characteristics of an adhocracy were unique to the form and included, among others, the following attributes: (1) A highly organic structure; (2) little formalization of behavior; (3) job specialization based on formal training; (4) a tendency to group the specialists in functional units for housekeeping purposes but to deploy them in small, market-based project teams to do their work; (5) a reliance on liaison devices to encourage mutual adjustment within and between these teams; (6) low standardization of procedures; (7) roles not clearly defined; (8) selective decentralization; (9) work organization rests on specialized teams; (10) power-shifts to specialized teams; and (10) horizontal job specialization (Mintzberg, 1994). As with Hewlett-Packard in its formative years, there is an absence of hierarchy, with all members of the organization having the authority and responsibility within their areas of specialization to make decisions in a coordinated and collaborative fashion, and to assume responsibility for taking actions that would affect the future success of the organization (Mintzberg, 1994).
Bad as things must have seemed to the employees at Hewlett-Packard as they watched the culture erode into a meaner, leaner, and impersonal conglomerate, things were significantly worse for Mitch McDeere in his junior position at Bendini, Lambert & Lock. In the movie, The Firm, a number of important contrasts between an adhocracy are evident. The most prominent of which is a rigid hierarchy, an attribute of any large law firm. Junior level employees in law firms typically toil long hours for little compensation -- the carrot, of course, being the promise of eventually becoming a partner. The firm has no incentive to change any of its time-tested and lucrative practices, nor is it interested in participatory management. Nonetheless, the partners at Bendini, Lambert & Lock do encourage McDeere to be creative (could we read that as innovative) in his efforts at tax loophole creation for major clients (Metzger, et al., 1993). Bendini, Lambert & Lock stands as counterpoint to Hewlett-Packard. If there is anything Bendini, Lambert & Lock is not, it is a learning organization.
In Senge's words, learning organizations are places "where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to see the whole together" (Senge, 1990). By way of organization, in The Fifth Discipline, Peter Senge outlines five areas or disciplines that he believes are necessary for an organization to function as a learning organization. These five disciplines include: Personal mastery, mental models, shared vision, team learning, and systems thinking. By that definition, Hewlett-Packard would be considered to be an organization in which all five of Senge's disciplines are alive and well, having withstood the reshaping required by entering new lines of business and achieving in a highly competitive, transformative and disruptive environment. A learning organization is a group of people who have woven a continuous, enhanced capacity to learn into the corporate culture, an organization in which learning processes are analyzed, monitored, developed, and aligned with competitive goals. A dominant characteristic of a learning organization is its capacity to generate knowledge and learning faster than competitors -- this enables the learning organization to translate its insights into a strategic advantage to out-market, out-manage, out-perform, and out-sell the competition.
The work of Bohman and Deal is primarily focused on organization development and, as such, in their book Reframing Organizations, the authors present four frames for managers to consider when evaluating their company for strategic planning, restructuring, or even something as straight forward as the Hewlett-Packard practice of division reviews. Each organizational practice, standard operating procedure, or concept ought to be reframed in terms of the organizational structure, relationship (human resource), politics, and image (symbolic) (Bohman & Deal, 2008). This framing and reframing approach to management and leadership is intended to provide clarity that contributes to more effective operations and more inspirational leadership. The application of this organization development approach is entirely germane to Hewlett-Packard as it encompasses and hones in on the areas in which Hewlett-Packard has made sea changes in response to a rapidly and relentlessly changing environment.
The most fundamental relevance of the HP situation described in the case study is the impact that shareholders can have on a company's ethos. Whether a company is privately held or traded publicly on the stock exchange, shareholders can wield an inordinate influence on how the company is operated. When profits become the primary focus of a company, the values are truly held by the company -- as evidenced by their practices -- are typically not the values that the company claims it espouses. Nor does shareholder influence promote a foundation for a learning organization, in which leadership is critical to effective alignment between the vision and the manner in which the company achieves the vision.
Through my readings and study, I oppose the tack that the case study takes, and I assert that a company can take the high road with regard to employee relations and still be competitive. My argument is based largely on my awareness of a number of prominent companies that are doing just that. Those companies that most effectively exhibit the generally…[continue]
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