HP Matrix Structure, Communications, and Global PMO Strategy

HP's Matrix Organizational Structure

Hewlett-Packard operates a matrix organizational structure. The primary means of divisional breakdown is by region. HP has a corporate headquarters along with regional headquarters in Canada, Latin America (Miami), Singapore, Japan, and Switzerland (HP.com, 2011). In addition to geography, HP organizes itself by business unit. EDS and Compaq retain some autonomy from the main HP organization. HP is structured around seven main businesses: Services; Enterprise Storage and Servers; Personal Systems Group; Imaging and Printing Group; Financial Services; Corporate Investments and Services; and Software (HP 2010 Annual Report). This form of departmentalization allows HP to focus on product development and innovation within the functional and product groups, while directing marketing efforts at the international and regional level.

HP retains a relatively centralized system of authority. In particular, the company takes a centralized approach to research and development and corporate strategy functions (Hill & Jones, 2009). This allows HP to develop an integrated suite of products and services. The company often markets different products and services to the same set of corporate and government clients, which highlights the benefit of centralization: HP can tie different products together, providing greater value to consumers while also achieving better results by leveraging existing client relationships and installed technology bases.

The combination of centralized strategy and R&D functions with decentralized marketing functions can, however, create problems. Decentralized marketing units may have little awareness of what the centralized units are doing, and vice versa. This communication gap could lead to sales representatives not fully understanding the products they sell, or to R&D not fully understanding the needs of different market segments.

Centralized Authority and Decentralized Marketing

HP maintains a strategy of open communication in an attempt to reduce the impact of these challenges. The company's managers are encouraged to raise and address issues as they emerge. Tools such as a company intranet, quarterly all-employee meetings, and management blogs are designed to improve the flow of information between departments and geographical units (HP, 2007). This enables two-way communications flow across the organization. While the emphasis in a centralized operation can sometimes stifle innovation or impede communication, HP's use of multiple mechanisms to facilitate dialogue allows the company to address issues quickly and effectively.

The company has historically vacillated between formal and informal communications flows. In the 1990s, the informal flow of communications became a liability, as critical information was not always disseminated to the right people in a timely manner (Sieloff, 1999). As a result, HP took steps to formalize its communications. In more recent years, the company has shifted back toward informal communications, employing a variety of mechanisms to support this. An over-reliance on formal knowledge management systems had removed some of the benefits that informal knowledge transmission provides, including speed, efficiency, and candor. HP now attempts to foster a corporate culture that emphasizes communication, seeking to restore the advantages of informal channels while retaining the formal mechanisms that still exist. The organization thus pursues a two-pronged approach to help it overcome potential communications issues.

For employees working in the project management office (PMO), several communications competencies are worth emphasizing. The first is communications design. It is essential that the communications systems architecture for any project allows for the right information to reach the right people at the right time. All employees involved in a project must be both able and willing to use the system in order for its benefits to be fully realized.

The second element is the importance of formal communications. With employees distributed around the world and working across distinctly different parts of the corporation, confusion can arise, and critical information can easily be missed. Formal communications systems help employees identify who they need to contact about specific issues and make relevant resources more readily accessible.

Formal and Informal Communications at HP

Informal communications systems also serve an important role, and employees working on projects should be adept at communicating informally. This will increase the pace at which projects proceed, as communications can become delayed when confined solely to formal channels. Employees need to work effectively with one another despite cultural and linguistic differences. Some degree of intercultural communication skills will therefore be required in order for HP to minimize misunderstandings across its global workforce.

Another area of focus should be building a commonality of goals among project participants. In an organization as complex as HP — with some degree of decentralization across certain functions — different members of the company may prioritize the objectives of their own units over company-wide goals. It is important, therefore, to leverage corporate objectives and elements of corporate culture in order to align the different groups involved in a project with the organization's broader aims (Perry & Sanderson, 1998).

There are a number of global differences that the PMO must be aware of when coordinating communications across international projects. Different cultures communicate differently along several dimensions. Some of the key cultural communications dimensions have been identified by Geert Hofstede (2009), and include the degree to which employees in different cultures are willing to defer decisions to authority figures (power distance), the directness of communication styles, and differences in time orientation. Some cultures are more individualistic while others are more collectivist. These differences can lead to significant confusion when people from different cultural backgrounds interact. HP's communications coordinators and project managers must be aware of these dimensions and prepare project team members accordingly.

HP has introduced a new organizational structure that emphasizes a single point of contact for customers (O'Neill, 2010). This is a 21st-century response to the growing trend toward integrated devices and services. HP has made several strategic moves toward integrating its products and technologies — such as acquiring EDS and Palm's patents — to deliver better service to its customers. Whereas the prior structure sometimes resulted in multiple HP representatives dealing with a single customer, the new structure's emphasis on a unified contact point allows HP to better understand customer needs and to develop and sell integrated products and services more effectively.