Running head: Case Study Analysis Report 1

Case Study Analysis Report

Dan O'Brien

AET 560

March 13, 2017

Dr. Randy Howell

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Case Study Analysis

How investor demands for increased profits combined with a top down management style

almost topple a successful company during challenging economic conditions.

Introduction

Most people are familiar with the products offered by the Hewlett Packard Company by

the desktop printers that surround us at work and home. Printers produced by HP are economical

to obtain but cost the consumer may times the purchase price of the printer in consumable ink

cartridges. One might wonder how such a profit making organization can be driven to the brink

of failure with such a successful business model. HP found itself under increasing demands from

investors to increase profits. In response to this HP brought in a Chief Executive Officer, CEO

that was driven by the end result of profits. A change program was introduced to acquire

competing companies and those of computer products that could enhance the product line of HP.

The combination of the timing of HPs ambitions and nature in which change was introduced can

be attributed to the downfall of the organization.

Background

After initial successes and profitable years HP found its performance suffering from

lackluster profits. In response to investors, HP hired a CEO that brought in a top down

leadership style that was driven by results. This aggressive leadership style demoralized the

workforce and was combined with a series of acquisitions and mergers that were intended to

increase the bottom line of HPs profits. What happened was the exact opposite, the mergers and

acquisitions drove down company profits and generated significant turnover in the organization

(Spector, 2013). Following years of disappointing results and the seemingly imminent collapse

of the company urgent changes were realized.

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Key Problems

The path taken by HP in response to investors and the actions of CEOs had driven HP

away from its core company values and vision. Problems at HP were very apparent as the stock

price fell from $55 a share to $12 a share in November of 2012 (Brumley, 2013). The company

was in crisis mode under the leader ship of the new CEO, Meg Whitman, who had initiated a

restructuring of HPs business operations. The personal computer market that HP had gotten into

with the acquisition of Compaq computer was not performing as expected due to increased sales

of competitor tablet and laptop computers. Internal managers were looking to get out of the

personal computer business altogether. The new CEO cancelled the plans to get rid of the PC

division, sticking with HPs original vision (Brumley, 2013).

With the HP workforce feeling alienated and demoralized and suffering many years of

underperforming results the new CEO took actions to put the organization back on the road to

success. Poorly fitting acquisitions and efficiency programs based on cost cutting failed to

reverse the downward spiral of HP. The organizational culture was a consistent factor that was

contributing to HPs failures and was impairing the judgement of members. Some thoughts of

such cultural issues are said to cause a groupthink mentality with senior managers who try and

sensor information from the rest of the organization thus preventing creative thinking of other

members of the organization (Spector, 2013).

Alternatives

The crisis at HP caused a real need for change within the organization. The awakening

period was realized by a dissatisfaction with the workers moral and uncertainty of the future of

the company. Current systems and structures could benefit from an unfreezing period so changes

could be implemented. Executive and management changes were required to get all on board
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with change implementation and any resistors removed from the organization. The mobilization

period allowed members to see where gaps lie for improvements. The acceleration stage sets the

plans in place to define what changes will be presented by change leaders and the

institutionalization stage measures the progress of the changes. Some theories in social science

present the unfreezing period where new systems and structures can be presented to the

organization. Members can move behaviors to align with newly presented systems and

structures and refreeze the process to make part of a companys operating procedures. While this

theory may be an effective method to use with mechanistic organizations it may not yield the

same results in organic organizations such as HP (Cawsey, 2016).

Proposed Solutions

Change solutions presented to HP needed to include the organizations core values and

visions to be successful. To include all members of the organization these core values and visions

should be included when presenting new or additional visions to the culture. Meg Whitman

utilized a horizontal communication style that valued the input of workforce of HP before

introducing change plans. This practice asked for the active participation of members to help

realize the needed changes. This practice actively sought the opinions of all in the organization

even if those opinions may have been contrary to the change direction. Involving the members

of a workforce will reduce resistors to change plans and give an effective change plan the best

chance for success.

Conclusion

Successful organizations such as HP are not immune to change. Without change

organizations can become complacent and lose their relevance in the marketplace. Ambitious

companies can overtake markets of stagnate competitors, process and structured systems can
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become a hindrance to productivity. Change programs require input and buy in by all in an

organization, change for the benefit of a select group may end up backfiring such as in the case

of HP.
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References

Brumley, J. (2013) Surprise! The Hewlett Packard Turnaround Is for Real. InvestorPlace.com.

Retrieved from http://investorplace.com/2013/08/hewlett-packard-whitman-

turnaround/view-all/#.WMQfY_nyvIU

Cawsey, T. F., Deszca, G., & Ingols, C. (2016). Organizational change: An action-oriented toolkit

(3rd ed.). Thousand Oaks, CA: Sage.

Spector, B. (2013). Implementing organizational change: Theory into practice (3rd ed.). Upper

Saddle River, NJ:Pearson.