Hp women ceo

Structure & Strategy change by the CEO of HPBuss402(03) Strategic Management

Yi Yong Sup

Article Introduction

http://www8.hp.com/us/en/hp-news/press-release.html?id=1212480

BUSS402(03) Strategic Management

Article explanation

1. rationalize HP's go-to-market strategy, branding, supply chain and customer support worldwide

2. better customer experience and drive innovation across per-sonal computing and printing

3. cost savings and accelerate HP's ability to pursue profitable growth and reinvest in the business

What’s the benefits?

speed decision makingincrease productivityimprove efficiency

Revenue $65 billion

Net income $6.3 billion

51% of total HP Rev

IPG (Imaging & Printing Group)

PSG (Personal Systems Group)

PPSG (Printing and Personal Systems Group)

TSG

Reason


CEO Change at HP

John Young(1978~1992)

Lewis Platt(1992~1999)

Carly Fiorina (1999~2005)

Mark Hurd (2006~2010)

HP Way New HP Way

60years 3~4 CEOs

Bill HewlettDave Packard(1939~1978)

13years 7changeAverage term = lower than 3 years

Leo Apotheker(2010~2011)

Meg Whitman (2011~)


StructureComplex and lots of commissions exist

Developing the new productNeeds to pass through 38 commisions

Speed is not fastOnly Technology-orientedToo much autonomy

HP WayRespect of human, Creativity, Development

5 Core ValuesTrustAchievement and contributionHonestyCommon goal achieve through teamworkFlecibility and innovation

MBWA : management by wandering aroundCEO visit the field, open communication

Provide employment stabilityTeam base job evaluationHigh levels of wage benefitsMinimize Discriminatory benefitsProfit distribution, reward system base on the team

Since the 1930s, No staff layoffsAt crisis of 1980s all staff salaries reduce about 10%


Structure ChangeHP Compaq M&AMake Clean room CITLayoff 6,000 and 3 management level staff

Dismiss 16,000 employees

4 big groups and 83 divisions2 back-end division + 2 Front-end division 12 product group

Hired 24,000 consultant

2005 integrated the IPG and PSG

Carly Fiorina (1999~2005)

New HP Way

Expert of Marketing, Information & CommunicationAT&T personal communication representativeAchieve global service growth 8->60%First HP outsider CEO

Product centric ->Customer needs diversifyCorresponding at unpredictable environment

Focusing all the capabilities at new technology developmentTechnology-oriented

Key strategy was E-Service

Quick decision makingSimplify the operating organizationsSimplify property staff and MMS staffReinvest it in customer service and R&D

Bad relationship with BOD


Mark Hurd (2006~2010)

2008 EDS M&A2009 3Com M&A2010 Palm M&A Ethical issue

Scandal with Marketing contractorTry to hide it but…

Very diligent personMild naturePublic-friendly ownerBOD and staff supportLeading the company revenue peaked But…

Also layoff 15,000 employees

Back to HPSeparated PSG, IPG divisionAlso separated the sub divisions ex) handheld notebook

Focused

Recovery of the mental stability of the organization


Leo Apotheker(2010~)

Make SAP No.1 at the software applications marketExpert of software

ReorganizationLimited careersCost reduction

Send Ann Livermore to the BODDismissed Pete Bocian, Randy Mott who was the executive vice presidentChange 4 BOD

Each division officer report directly to the CEO

Sale PC business of HPAbandon Mobile BusinessM&A of ‘Autonomy’ software developerStop making Tablet PC, OS of Smart phone

ReasonSales high but the profit is low

Move toSoftware information industry

Soft-ware;

40

PC; 30

Printer; 30 Software;

40

Printer; 30


Expectationis highEbay CEOExperience

Respect the staffHas a warm smileComfort, attractive

CashcowPC and printer profits are getting lowerMarket growth speed start to slow downGrowth rate of the division decreaseGlobal market share 16% (3% reduction)

RestructuringUntil 2014, plan to dismiss 29thousand people

ESSN (Enterprise server, storage, network)TS (Technology Service)

EG (Enterprise Group)

Meg Whitman (2011~)

2014 R&D IT will show the effect2016 HP will start growing again


Concentrating at Service & Consulting

Takeaway

1. Strategy should fit with the Structure.

Strategic change should be follow by Structure Organizational Structure Design

Fit is the most important

Fit with the Core value

Fit with the Environment change

Fit with the Principle, Policy, Practice

‘Structure follows Strategy’ Alfred Chandler


2. Consideration of culture and core competences

1. Conflict by GE management styleTraditional Home DepotEntrepreneur, decentralized organizational culture formed over decadesCustomer-Centric approach

2. Nardelli personal natureNeglected employees and shareholdersOfficers fired and hired executives from GEPart timer employment increase

3. Growth StrategyPursue excessive process-centric wholesale business modelCost saving by the lowering the quality of customer service

Employees’ look Nardelli as a destroyer of the traditional culture of Home Depot


Nardelli (2002. 12 ~ 2007.1)Revenue increase $45.7billion $90.4billionNet income $2.5billion $5.9One of the most promising CEO in US

Takeaway

Home Depot Core competenceBuilding a partner relationship with DIY customers and builders(who are the core customers)Customer Service staff sincerely supports the customer by helping their works

Chaotics Philip Kotler 2009

1. Talent fired2. Reducing the investment at R&D3. Crisis avoidance4. Stop developing new products5. Cost saving rather than Growth-oriented

6. Evacuate at Emerging market7. Except innovation at key strategy8. Change performance indicators9. Hierarchy than Cooperation10. Block external consulting


10 Mistakes Company make at the crisis

Pursuing EfficiencyService cuts

Staff replacementOrganizations such as the army

HP is having a hard time to recover their culture

Traditions and Values of the company have collapsed

It hard to rebuild it.

Designing the structure at HR officeThey can think its ideal or optimal structure

But it has gap between real life


Identity Crisis

Structure Design

3. CEO’s ability, personality is important (ethical issues)

Close Leadership

Strong attitudeMediation of attitudeFeel, behave, and perform in ac-

cordance with the attitude

Distant Leadership:Bypass & Cascading Models

Bypass-DistantWeak attitudeNo mediation of attitude

Cascading DistantStrong attitudeMediation of attitude

Simple structure – functional structure – Multidivisional Structure


Cognitive Elaboration Model of Close and Distant leadership

Thank You

Hp women ceo

Business

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