SEU Hewlett Packard Is Counting on Organizational Change to Boost Revenue Growth Case Questions All answered must be typed using Times New Roman (size 12,

SEU Hewlett Packard Is Counting on Organizational Change to Boost Revenue Growth Case Questions All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarismWORD format only Assignment Purposes/Learning Outcomes:
After completion of Assignment-2 students will able to understand the
LO 4. Apply knowledge and techniques of strategic planning and decision making.
(Lo2.1)
LO 6. Apply knowledge and function effectively on teamwork activities, management skills
to create a development plan (Lo3.4)
Assignment-2
Please read case “Hewlett-Packard Is Counting on Organizational Change to Boost
Revenue Growth” at the end of Chapter 10 “Organizational Change & Innovation”
available in your textbook Management: A Practical Approach 7th edition by Kinicki, A.,
& Williams, B., and answer the following questions:
Assignment Question(s):
(Marks 10)
1. Which of the super trends are driving H-P to change?
2. Which of the forces for change are causing H-P to undertake major organizational
change? Explain.
3. To what extent is H-P following the four steps for fostering innovation? Explain.
4. What advice would you give Whitman based on what you learned in this chapter? Be
specific.
Answers:
1.
2.
3.
4.
Management in Action
0 employees,
a matter of days. The comien.competitors could do it in
upgrade
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Hewlett-Packard Is Counting on Organizational
Change to Boost Revenue Growth
Meg Whitman became CEO of Hewlett-Packard Co. in
2011. Since the time H-P’s revenue peaked in 2011 at
S127 billion, it has dropped every subsequent year. On
the positive side, the company had two consecutive
quarters of growth in 2014. H-P also is trying to right-
size and reduce costs by planning to lay off 16.000 em-
ployees. H-P carlier decided to lay off 34,000 people,
resulting in a total reduction of 50,000
Whitman described the job cuts “as an opportunity to
streamline the company further and I make it more nim-
ble. An expected $1 billion in cost savings in fiscal 2016
would allow H-P to
nvest in new technologies and
skills to revive growth.” Others, like UBS analyst Ste-
ven Milunovich, believe that these job cuts will erode
employee morale and may lead to increased turnover.”
“But fixing the world’s biggest tech company-with
S120 billion in annual revenues and 330,000 employees
is a herculean task. Bloated by more than 70 acquisi-
tions in the past 15 years, HP isn’t just sprawling and
stalled out; it may actually be running in reverse.”102
Whitman decided to change the organizational
structure to fuel growth. She created two clusters of
businesses. One focuses on
son corporate technology cus-
tomers. This group, which sells servers, storage, and
networking, delivered 43% of the company’s overall
operating profits according to Forbes. Unfortunately,
the software and services that accompany all this hard-
ware have not been as successful. H-P tried build the
software side of the business via acquisitions, which
according to Forbes have not been very successful. The
magazine
noted
that when
it comes to software acqui-
sitions, Autonomy [H-P’s enterprise software com-
pany] was merely the most high-profit misstep. All
told, over the past decade HP squandered nearly
$19 billion to buy myriad outfits that contribute only
7% to overall profit. The services unit, which staffs
other companies’ tech projects, is barely at breakeven.”103
H-P is currently looking for small to midsize acquisi-
tion candidates in cloud computing, security, and ana-
lytics software. 10
The second structural cluster sells printers, PCs,
laptops, and mobile devices to people worldwide. This
segment of the business contributed 29% of operating
profits in 2013. The problem here is that the lucrative
printer business is shrinking. Technology is simply
moving more toward ink-free photo and document
sharing, which benefits companies like Google, Face-
book, and Dropbox.
Strategically, H-P also is trying to get back into the
fast-growing tablet market. The company attempted to
gain entry in this market in 2011 with the TouchPad
model, but it was a failure. Since February 2013, the
company has introduced new models, and they are being
well received in the market. In a similar vein, H-P has
created an overall vice president for design. This was
done to create a strategic focus on product development.
H-P didn’t stop at just a reorganization or a new tab-
let strategy, according to Forbes. A survey of the com-
pany’s 20,000 salespeople revealed that employees
rated the internal sales tools a mere “7” on a scale of 1
to 100. For example, it took HP as much as three
to prepare a sales
process by using new tools from Salesforce.com.
Whitman also took to the road to reassure custom-
ers that H-P was doing the right things.” In the last
year, she conducted “305 one-on-one meetings with
customers or sales-channel partners, aides say, as well
as another 42 roundtable chats with small groups”
around the world.
It did not take Whitman long to realize that the or-
ganizational culture also needed to be changed to fos-
ter consistency between the company’s strategies and
culture. According to Forbes, she climinated the
barbed wire fence and locked gates that
separated
parking lots for the executives and the general cm-
ployee population. “We should enter the building the
same way everyone else does,” she said. She also de-
cided to work from a cubicle, like most employees,
instead of from a larger, more private location. She
keeps a picture of her mother in her office. She also
role models when she travels by staying at more mod-
estly priced hotels. Tas
While H-P is positive about the changes taking
place, some analysts are more skeptical. Bill
Shope, an
analyst from Goldman Sachs, concluded that “serial
restructuring cannot solve H-P’s secular challenges,
particularly following years of underinvestment.” He
forecasts that H-P’s revenue might fall to $107 billion
in fiscal 2015.106
FOR DISCUSSION
1. Which of the supertrends are driving H-P to change?
2. Which of the forces for change are causing H-P to
undertake major organizational change? Explain.
3. How might Meg Whitman have used Lewin’s and
Kotter’s models of change to increase the probability
of achieving positive organizational change? Provide
specific recommendations.
4. To what extent is H-P following the four steps for
fostering innovation? Explain.
5. What advice would you give Whitman based on
what you learned in this chapter? Be specific,
Organizational Change & Innovation
CHAPTER 10
333

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