SAMIUR RAHMAN

1511-110-014
HP Environmental Management Policy: A Case Study
International Business
Sir A. Butt
May 3, 2011
Preston University

Table of Contents

Acknowledgments....................................................................................................................................... 3
Introduction to Case Study ........................................................................................................................ 4
History of Case .................................................................................................................................. 5
SWOT Analysis................................................................................................................................... 6
Strategic Corporate Objectives............................................................................................................... 7
Production Strategy................................................................................................................................... 9
HRM Strategy............................................................................................................................................. 10
Marketing Strategy.................................................................................................................................... 11
Financial Strategy....................................................................................................................................... 12
Recommendation to Management.......................................................................................................... 13
Attachments............................................................................................................................................. 14

Acknowledgments
First of all, I would like to say Alhamdulillah, for giving me the strength and health to do this project
work. Internet, books, computers were as my source to complete this project. Hats off to my fellow
classmates and seniors who supported me and encouraged me to complete this task on time. Also, the
authors of the book Mr. Alan M. Rugman and Mr. Richard M. Hodgetts had provided the case.
Then I would like to thank my teacher, Sir Ahmed Butt for guiding me and my friends throughout this
project. The difficulties we were facing in the completion of the task were cleared by him.

Introduction to Case
To start, HP (including the formerly independent Compaq) had a set of fairly rigorous environmental
health and safety (EH&S) standards applied in its own plants. For HP, one of the first wake-up calls came
from a group of its own employees in 1999. The group saw the importance of maintaining the same
level of labor, health, safety, and environmental standards in outsourced factories as the ones HP had
when it was doing the majority of its own manufacturing. At Compaq, which had competed on cost and
scale a decade ago, most of the elements of what became the supplier Code of Conduct were in place
since the 1990s. David Lear, who was a long-time Compaq employee, says, Building industry
infrastructure has been supported with our data. We applied this to our own factories years ago, and
have pushed these global standards in terms of the value of minimizing disruptions, for instance, fire
control standards. What were to Compaq good business fundamentals for cost and quality
competitiveness merged with HPs longstanding corporate citizenship commitments to create a deepseated understanding of why this was worthwhile and also how to do it. As production shifted to
contract manufacturers, policies that had been developed for in-house operations naturally migrated
into the supplier base. HP benchmarked other industries and codes, designing its Supply Chain Social &
Environmental Responsibility Program in 2001 and 2002 before releasing the code in 2003.

History of Case
Todays MNEs are trying to get in line with the expectations of the stakeholders, and some companies,
like BP, 3M, Kodak, and Hewlett Packard, are outdoing themselves.
Hewlett-Packards environmental management policy oversees the environmental quality of its products
through their life cycle. The company EMP is complemented with an Environmental Management
System. Through its EMS, Hewlett-Packard audits its operations regularly with business managers being
accountable to the CEO on their environmental standing. The system is based on the principle of total
quality management. The quality of their products depends on their effect on the environment.
Environmental issues are an integral part of planning and decision process. Hewlett- Packard designs
and constructs its facilities to minimize waste generation, and to promote energy efficiency and
ecosystem protection. It also encourages suppliers to adopt similar environmental principles.
In 1992 the company began a product stewardship program. The program maintains the following
guidelines; to design products and packaging to minimize the energy they consume, to use fewer raw
materials, and to use more recycled material; to develop products that are easier to reuse or recycle;
and to reduce emissions from the manufacturing process. The first priority is to avoid hazardous waste.
It is important to note that the companys EMS and EMP were found to be consistent with international
standards set in the ISO.
In 2002, the proposed merger between Hewlett-Packard and Compaq overshadowed the excellent
environmental performance of Hewlett-Packard. Perhaps this indicated that stakeholder ethics and
environmental management are still secondary to the core strategy of a company. The Hewlett- Packard
CEO MS Carley Fiorina, pushed for the merger with Compaq in order to create a more balanced overall
business portfolio. This would give the new combined company a much more competitive position in
servers and storage and improve its performance as a customer- based service organization. In early
2002, the stock market was not reacting well to the proposed merger, possibly because it perceived that
the two company cultures were not all that complementary.

SWOT Analysis
Strengths:
Customers are loyal to HP brands and products. HP is maintaining good friendly environments with
suppliers and took initiative to integrate environmental oriented activities within.
Companies maintained healthy relationship with labor. HP is financially sound.
HP production processes including system procedures, and concern for environment are resulting into
making the company environmentally concious.
Weaknesses:
Customers are patronizing those IT companies who are taking care of the environment. HP is not
providing the lead in the enviromental oriented products and services, vis a vis other industries.
Mission, vision, and long term objectives needs reinvention, redifining it.
Marketing management needs improvement.
Stock market as anticipated to be increased after the mergers will not remain same.
Oppurunities:
The economy of USA is showing resilience against the negative implication of 9/11. HP is equipped to
internalize social shift taking place in USA.
HP is implementing all the concerned laws and legislations. Political environments are relatively stable
and policies related with IT have not seen any major shift.
HP is consistent with technological advancement and maintaining the pace. International environments
for HP apparently seems abusive.
Threats:
There is a social shift taking place in USA. Society is seeking out realtime solution, hassle free, and great
concern for environment.
Legislations are being passed related to IT industry. And there are weak players in the industry as well.
Technological changes are being felt in the IT industry.

Strategic Corporate Objectives

HP's Corporate Objectives have guided the company in the conduct of its business since 1957, when first
written by co-founders Bill Hewlett and Dave Packard.
Customer loyalty
To provide products, services and solutions of the highest quality and deliver more value to our
customers that earns their respect and loyalty.
Underlying beliefs supporting this objective:
Our continued success is dependent on increasing the loyalty of our customers.
Listening attentively to customers to truly understands their needs, then delivering solutions that
translate into customer success is essential to earn customer loyalty.
Competitive total cost of ownership, quality, inventiveness, and the way we do business drives customer
loyalty.
Profit
To achieve sufficient profit to finance our company growth, create value for our shareholders and
provide the resources we need to achieve our other corporate objectives.
Underlying beliefs supporting this objective:
Profit is the responsibility of all.
Balance of long-term and short-term objectives is key to profitability.
Profit allows us to reinvest in new and emerging business opportunities.
Profit is highly correlated to generating cash, which brings more flexibility to the business at a lower
cost.
Profit enables the achievement of our corporate objectives.
Market leadership
To grow by continually providing useful and significant products, services and solutions to markets we
already serveand to expand into new areas that build on our technologies, competencies and
customer interests.
Underlying beliefs supporting this objective:
There are more places we can contribute than we will be capable of contributing: We must focus.
To be average in the marketplace is not good enough, we play to win.
7

We must be No. 1 or No. 2 in our chosen fields.

Growth
To view change in the market as an opportunity to grow; to use our profits and our ability to develop
and produce innovative products, services and solutions that satisfy emerging customer needs.
Underlying beliefs supporting this objective:
Growth comes from taking smart risks, based on the state of the industrythat requires both a
conviction in studying the trends, but also in inducing change in our industry.
Our size (and diversity of businesses) gives us an ability to weather economic cycles and turn them to
our favor.
Employee commitment
To help HP employees share in the company's success that they make possible; to provide people with
employment opportunities based on performance; to create with them a safe, exciting and inclusive
work environment that values their diversity and recognizes individual contributions; and to help them
gain a sense of satisfaction and accomplishment from their work.
Underlying beliefs supporting this objective:
HP's performance starts with motivated employees; their loyalty is key.
We trust our employees to do the right thing and to make a difference.
Everyone has something to contribute: It's not about title, level or tenure.
An exciting, stimulating work environment is critical to invention.
A diverse workforce gives us a competitive advantage.
Employees are responsible for lifelong learning.
Global citizenship
Good citizenship is good business. We live up to our responsibility to society by being an economic,
intellectual and social asset to each country and community in which we do business.
Underlying beliefs supporting this objective:
The highest standards of honesty and integrity are critical to developing customer and stakeholder
loyalty.
The betterment of our society is not a job to be left to a few; it is the responsibility to be shared by all.
This objective is essential to delivering on the brand promise.
8

Production strategy
Ultimately, the effectiveness of the green movement comes down to the willingness of consumers to
participate. And HP knows that consumers are willing. Through its many pilots and successful programs,
the company learned that, while consumers will always show a preference for being eco-sensitive,
programs will only be effective if they are convenient and free.
In 1997, HP initiated a campaign to collect printer cartridges. In 2003, the company upped the ante and
decided to offer a postage-paid, return-for-recycling envelope in products sold in the United States and
parts of Europe. As of 2005, over 92 million LaserJet cartridges and 20 million HP Inkjet print cartridges
were returned and recycled through its global operations.
According to Gilles Bouchard, HPs EVP for global operations, Consumers have a role to play, but the
system needs to make it easy. Retailers are critical. In fact, over $6B worth of RFPs came to HP with
some sort of SER mandate.
Working with Office Depot, HP piloted a program for the first free, nationwide, electronics takeback
program in the United States. It was enormously successful, with over 10.5 million pounds of equipment
collected from over 200,000 people and transported back for recycling. In Germany, HP experimented
with pilots to offer coupons for returned electronic waste with similar results. Through experimenting
with these types of programs, the correct formula of incentives and convenience will yield success for
the environment, the consumers, the supply chain, and HP.

HRM Strategy
One of the strengths of the hp approach to aligning its culture and strategy is that the importance of the
relationship between the two is articulated and, therefore, salient to HP employees. One way that HP
accomplishes this articulation is by employee wide distribution of its "Statement of Corporate
Objectives." these objectives reflect the HP culture, serve to guide the continuance of the HP way, and
also serve as the basis for HP's strategic focus. The SCO has requirements that deals with selection and
placement of individuals based on their appropriateness for the job (with particular emphasis on
creativity) and the continuing development of those individuals. The second requirement also deals
directly with selection and placement. HP stresses the need to select managers who have the ability to
engender enthusiasm, particularly enthusiasm for the HP way. Finally, the need for cooperation
between organizational levels is emphasized. One way to accomplish this cooperation is by reinforcing
common objectives through HRM.

10

Marketing Strategy
With the merger of Compaq and Hewlett-Packard in 2002, the technology industry held its breath and
waited for the destruction of the two computer giants. Mergers are a messy business and few observers
expected these two companies to survive the union.
HP's new approach was developed to deal with the 86 marketing departments in use at the time of the
merger. When the merger occurred, it created a series of internal problems. HP had to deal with
multiple platforms, legacy systems and a lack of continuity among its marketing departments. Each
department had separate budgets and resources, leaving the company with no idea of the marketing
focus or the total amount spent on marketing. The new strategy allowed the company to focus on a
results-based, data-driven model. The aim of this strategy was to give the new company a single
language that enabled parts of the marketing campaign to be integrated. In order to create this singular
approach, HP began using Seibel CRM and Marketing Resource Management tools. The tools provided
HP's top executives and department managers with the ability to speak the same language using
numbers to measure marketing success, the accuracy of forecasted expenses and program
effectiveness. With the chief financial officer and department heads effectively communicating, the
company could focus on speaking to the customer.
HP has customers in every arena of the business world. To get the most out of its customers, the
company began using the consumer as a guide to its small business and corporate initiatives. Their
customers have shown a marked enthusiasm for this approach, which in turn has given HP more
qualified leads and business partners. This strategy allows the company to be led by the customer.
HP's reliance on a Customer Relationship Management program is no accident. By creating goals that
can be measured, HP has managed to cut spending by 10 percent. These goals allow the company to
funnel the marketing dollars to the strategies that show tangible results, creating a more efficient and
effective marketing strategy.
HP has created two major initiatives within the company that have motivated the staff and increased
the efficiency of the company. The campaigns are called Achieve More with Less and Operation One
Voice. Achieve More With Less challenged the company to consolidate systems and reduce redundancy.
Operation One Voice was used to take all of the marketing initiatives to the customer, raising the profile
of the brand's image. HP used this initiative to reach out, employing the methods that customers used
to contact the company. By using customer-driven communication lines, HP was able to convey its
message directly to the customer. The use of the customer-driven approach has led to a successful
launch of the company's marketing strategy.

11

Recommendation To Management
HP should change its procurement practices in such areas as managing risk, analyzing spending,
managing supplier relationships, e-procurement, and buy-sell systems (HPs methods for buying
components directly from suppliers in private transactions and immediately reselling to contract
manufacturers). These procurement practices helped HP to save $1.2 billion in production materials, to
reduce supply chain costs by 22 percent, and to lower inventory by 21 percent.
Both sellers and consumers should be educated by the company about the repercussions of
environmental hazards and how to conserve energy.

HP has developed an edge in socially and environmentally responsible supply chain practices in the
electronics industry. The effort is generating meaningful operating benefits today and looks likely to
position HP for a unique competitive advantage in the future. Whether this turns out to be a fad or a
lasting shift in the structure of industry depends in large part on what HP does. Looking ahead, the
imperatives are as follows:

Continue engineering the supply chain to optimize the global footprint of all HP products

Proactively engage regulators first on their intent and on their legal language second.

More aggressively market the customer benefits of SER at a product level in terms of total cost of
ownership. Develop and use market demand to engage both consumers and channel partners in
operationalizing the closed-loop supply chain.

Develop an explicit blueprint of the ultimate electronics supply chain toward which HP is working.
Use this as a roadmap to decide how much intellectual property to share with others, and when to
take advantage of circumstances to make tactical changes

12

Attachments

13