Organizational diagnosis of Hewlett-Packard's acquisition of Palm

Organizational Diagnosis

Surrounding the acquisition of Palm by HP, several issues contour to raise organizational challenges. For once, there is the actual organizational restructuring, understood in terms of the people who will be kept and who will be let go. This represents an extremely important dimension of Palm's integration within HP for at least three reasons. First of all, there is the technical necessity to reduce costs and eliminate the redundant positions. Secondly, there is the need to identify the most intellectually and professionally valuable individuals and retain them. Third, there is the necessity of approaching this issue in such a means that the stability of the working climate is not impacted and that the motivation of the staff members is not decreased.

A second issue refers to the organizational culture. It is in this order of ideas necessary to align the two different cultures within the same umbrella of organizational beliefs. Through the aid of this culture, the working environment would be stimulated and better integrated and a more fruitful collaboration between the employees of the two formerly separate entities would be ensured. A third issue is constituted by the marketing integration. Throughout the past years, neither HP nor Palm has excelled in terms of marketing and their promotions and communications with the audience have been decreased (Patel, 2010). This virtually implies an impending necessity to construct marketing campaigns that familiarize the customers with the new and enlarged version of HP.

In order for the organizational issues -- the three ones mentioned before, as well as several others -- to be better identified, researched, understood and resolved, it is necessary for a more thorough analysis to be conducted. In other words, a process of organizational diagnosis should be launched. There are several models of organizational diagnosis, each with its strengths and weaknesses. The following pages introduce some of these models.

1. The 7-S McKinsey model

This model divides the 7 issues considered pivotal within the organizational context into two categories -- hard Ss and soft Ss. The hard Ss are represented by strategy, structure and systems, whereas the soft Ss are represented by the shared values, the skills, the staff and the style (The College of St. Scholastica). There are several advantages and disadvantages associated with the model. In terms of the advantages, these include:

An integrated look at several organizational aspects and the search for problem and solutions within the overall company

It places people at the center of all operations and assigns great responsibilities to the human resources department (Free HR Guide, 2009)

Relative to the limitations, these include:

The creation of a fix assessment which might not serve the needs of each unique organizational agent

The extreme complexity given by the interconnectivity between all the seven dimensions.

2. The Galbraith model

The Galbraith model is somewhat similar to the 7-S model in the meaning that it also pin points distinctive elements of the organizational context, which need to be thoroughly assessed. These elements include: the organizational strategy, the organizational structure, the business processes and the lateral links, the rewards systems and the management of the human resource (Free HR Guide, 2009). The Galbraith model reveals strengths and weaknesses similar to those of the 7-S model. Particularly, it offers the benefits of:

Clearly pin pointed organizational areas to which attention would be focused

The integration of various organizational dimensions for analysis

In terms of the disadvantages, these refer primarily to the interconnectivity between the five elements and the subsequent complexity this raises, but also the rigidity of the components, which may not be applicable within the structures of all economic agents.

3. The Burke-Litwin model of organizational performance and change

This model is one of the most complex means of diagnosing an organization. It identifies a total of 12 areas to be integrated and assessed. It argues that it is necessary to interconnect all components in order to ensure success of the change process and to increase organizational performance. These 12 components are: the external environment, the mission and the strategy, leadership, organizational culture, the organizational structure, the managerial practices, the organizational systems, the climate within the work units, the tasks and the skills, the individual needs and values, the motivation of the staff members and the performances of the individuals and of the overall entity (Reflect and Learn). The main advantage of the model is given by its complexity, which implies increased resource consumption, decreased organizational efficiencies and tedious work. The advantage on the other hand is of the retrieval of relevant and solid findings based on which the adequate strategies can be implemented.

4. The congruence model

According to the Mind Tools website, the "congruence model is based on the principle that an organization's performance is derived from four elements: tasks, people, structure, and culture. The higher the congruence, or compatibility, amongst these elements, the greater the performance" (Mind Tools, 2010). The advantage of the model is that of simplifying the issues promoted by the previous models and revealing an analysis structure constructed onto four elements alone. This implies lower task complexities and leads to more efficiently retrieved results. However, it could also lead to sometimes irrelevant findings as it does not take into consideration elements outside the organization, such as the socio-economic climate. In other words, this model is highly applicable when conducting an internal audit, but its efficiency in developing competitive strategies -- or other organizational endeavors related to the outside environment -- is limited.

6. The multi-contingency diagnosis and design model

Based on the multitude of models presented within the specialized literature, Richard M. Burton and Borge Obel (2004) have come up with a model which identifies a series of organizational elements that contribute to the company's ultimate success. Their model could be represented as a triangle, at each of the three edges sitting three distinct sets of elements. A first set is composed from the strategic factors, the style of the managerial and leadership acts, the organizational climate, the size of the entity, its skills, the environment in which it operates, its level of technological integration and its overall strategy. At the second edge stand the structural and organizational configurations, the organizational complexity, formalization, centralization, incentives, coordination and control. Finally, at the tip of the triangle stand the fit criteria, viability, effectiveness and efficiency (Burton and Obel, 2004).

The main advantage of this model is that of combining all the previous models and being as such extremely comprehensive. This also represents its disadvantage, as it implies tedious work and increased resource consumption, combined with lost organizational efficiencies.

Based on the conducted analysis, it is believed that the best solution would be that of implementing a doctor-patient approach, materialized in the hiring of a team of specialized business consultants. Today, there are numerous companies offering their high expertise services of organizational integration, mergers and acquisitions. Given the context of HP and Palm, it is believed that an external team would be the most objective party and would be best able to select and integrate the most valuable components of the two business models.

References:

Burton, R.M., Obel, B., 2004, Strategic organizational diagnosis and design: the dynamics of fit, 3rd edition, Springer, ISBN 1402076843

Patel, N., 2010, HP and Palm: what happens next, Engadget, http://www.engadget.com/2010/04/29/hp-and-palm-what-happens-next / last accessed on July 29, 2010

A causal model of organizational performance and change (Burke & Litwin model), Reflect and Learn, http://www.reflectlearn.org/discover/a-causal-model-of-organizational-performance-change-burkes-litwin-model last accessed on July 29, 2010

Organizational diagnosis, The College of St. Scholastica, http://www.google.com/url?sa=t&source=web&cd=1&ved=0CBIQFjAA&url=http%3A%2F%2Ffaculty.css.edu%2Fdswenson%2Fweb%2FPowerpoints%2FOrganizationalDiagnosis.ppt&ei=uYdRTKSkMYqUOMy-4cME&usg=AFQjCNGTL9ElrN8D8QlJeGZvTwHnunMKeA last accessed on July 29, 2010

The causal model, Mind Tools, http://www.mindtools.com/pages/article/newSTR_95.htm last accessed on July 29, 2010