This paper examines the leadership and organizational challenges Mark Hurd inherited when he became CEO of Hewlett-Packard. It identifies four core problems — a vague strategic vision, under-management, Carly Fiorina's autocratic leadership style, and a complicated matrix structure — and explains how Hurd addressed each. The paper then offers prescriptive recommendations, emphasizing participative and delegative leadership styles, a simplified organizational structure, and a transparent reward system. Drawing on leadership theory, it argues that clear vision execution, employee trust, and participatory management were the keys to HP's subsequent turnaround, evidenced by a $10 billion sales increase and an 80% rise in stock price within two years of Hurd's appointment.
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The paper demonstrates applied case analysis: it takes established leadership concepts (autocratic vs. participative vs. delegative styles) and applies them systematically to a real organizational scenario. Rather than describing theories in the abstract, the writer uses them as diagnostic lenses to explain why past management failed and how different approaches could succeed.
The paper opens by cataloguing four distinct problems identified under Fiorina's tenure, each treated as a discrete subsection. The second section explains how Hurd addressed these problems in practice. The third section broadens into forward-looking recommendations on leadership style and organizational design. A brief closing quotation and reference list round out the paper. This three-part arc — diagnose, correct, recommend — is a standard and effective format for applied business case writing at the undergraduate level.
The following are the core problems Mark Hurd identified after being appointed the new CEO of Hewlett-Packard.
Previous CEO Carly Fiorina's vision for HP — "digital, virtual, mobile, personal" — was vague. No one knew whether it was being executed or not. It is important that a company's vision be specific and well understood by every employee. A company cannot exist without having a clear purpose or vision.
Another problem with HP was that it was under-managed. Fiorina was a broad visionary who failed to provide the company with a specific and clear direction. Hurd not only gave the company a direction but also a purpose. He focused on solving problems and executing plans. He began working with divisional teams to learn about their challenges and how to address them, asking what they needed and ensuring that all operations ran smoothly.
HP's history reflects a culture of friendly, approachable management. Fiorina's tenure changed that. Rather than making employees feel they were all working together and could bring problems to her, her autocratic leadership style created distrust. Employees began to feel they were working for her rather than with her. Autocratic leaders tend to be controlling, bossy, and dictatorial — a poor fit for HP, which requires creativity and a participative environment. Such a style discourages employees from doing their best, undermines trust in the company's success, and contributes to reduced sales, low morale, and slow growth.
HP's complicated matrix organizational structure was one of its main operational problems. The structure required employees to report to more than one manager, which generated conflicts, confusion, and an elevated rate of errors and miscommunication. It demanded an extremely high level of synchronization among managers. Employees were unsure how their bonus and reward system worked — whether compensation was tied to individual performance or to divisional results. A company should have a straightforward reward system that is clearly communicated to all staff. The matrix structure also created difficulties for the sales division, which was reporting to five different divisions simultaneously. As a result of these misunderstandings, many talented executives left the company, and HP struggled to attract replacements.
The first step in rectifying HP's problems was the appointment of Mark Hurd — the leader the company genuinely needed. His leadership style was participative, and he focused on clear visions, aims, and purposes. He retained Fiorina's "digital, virtual, mobile, personal" vision but modified it, ensuring that everyone understood what it meant and felt a sense of purpose in their work. Employees need direction, and that is what Hurd provided. To reinforce the message across the company, HP arranged workshops and activities where employees could interact with one another and with senior management. These initiatives served two purposes: creating a friendly environment that encouraged employees and strengthened belief in the company's vision, while also motivating staff to perform better.
Hurd employed both delegative and participative leadership approaches. He invited and encouraged employees to suggest solutions to the company's problems, which increased employee trust in both the company and its board of directors.
Hurd also worked to make HP's matrix structure less complicated and more understandable. Upon learning that one sales division was reporting to five separate divisions, he took decisive action: he divided the sales function so that each of HP's product divisions had its own dedicated sales unit. He also linked the reward system to both divisional and company-wide performance — a decision that proved effective. Additionally, consideration was given to moving toward a flatter organizational structure, which simplifies information flow, task assignment, and day-to-day management.
The CEO should adopt a participative style of leadership to address issues such as low employee confidence and internal doubt. Greater emphasis should be placed on building and maintaining strong relationships with employees. Through this approach, management can learn about employees' problems, their needs, and what they look for in senior leadership. Rather than focusing solely on management priorities, leaders must concentrate on employee needs — demonstrating genuine concern for their well-being and thereby reviving trust.
Smith, J. A. (1998). A pattern approach to the study of leader emergence. The Leadership Quarterly, 9, 147–160.
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