Organization Behavior And Culture Implication Of Leadership Business Essay


In 1938, two aspirational graduates from Stanford - Bill Hewlett and Dave Packards started their own business out of a shed in Packard's backyard. Hewlett and Packard then rented their own office in 1940 and formalized their business to Hewlett-Packard. HP became a corporation in 1947 and began offering stock to investors 10 years later. Entering the age of computer in 1980, HP clarified its position as a major player by introducing the first laser jet ink printer. HP then celebrated its 50th anniversary to conclude the decade at which the company reached 95,000 employees and grossing $11.9 billion.

In 1995, one year before his death, Dave Packard published "The HP way", the book contains history and the inside of the corporate include the organization's behavior and culture that lead to its success. "The HP way" has inspired those junior employees as well as employers to create a "utopia" corporation to work for. Unfortunately, the organization struggled a lot in the late1990s and after, one of the peak was being re-organized together with introducing the 'new HP way' in 1999 after Carleton Fiorina became the new president and CEO of HP.

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Despite of the struggle years later, HP is still a successful business that has been well-known for its culture and the process of managing.

Organization behavior and culture: Implication of leadership.

Firstly, Organization behavior is study about individual and group acts' impact on human behavior within the organization. It clarifies people-organization relationship in term of whole individual, whole group, whole organization. In addition, culture of an organization is the set of values that are adopted by the company's employees and guide the way people work and act congruently. Culture can be both visible and invisible values that people all shares.

The 'HP way' is known as the organization culture that will direct the company through time. By learning the 'HP way', new recruited workers will follow the objective and achieve successes to the company. Hewlett and Packard's leading style is the inspiration that conveys HP way to every corner in the organization. Under Hewlett and Packard era, HP way has some traits of the democratic-leading style; it is a very open and collegial of running a business.

Encouraging informal communication through ritual coffee and 'Beer Burst', workers get the chance to understand each other, sharing information and working out for the project. Information as well as ideas are free-flowing among the company, everyone is given a seat at the table and discussion is relatively open. Furthermore, HP also promotes chances for junior employees seeking advice from higher managers using the 'Open door' policy. This policy gives even the low-level staff permission to see higher-level employer for advices.

In addition, HP way did not appear as the order - work process, but the supervisory staff inspires employees through telling stories of Dave and Bill - the process of spreading this culture all over the organization. After that, the supervisor turns them loosely and let them move along with the target of the company. Working under HP way, employees can think creatively and effectively. They have opportunities to learn through individual tasks or group works. This process supports the freedom, acknowledges the contribution of junior workers. It is an incentive for employees to develop on themselves but still gets along with the direction and let them be the force that pushes HP to success.

In a fast changing environment like HP corporate, these policies above keep people up-to-date. The concept is spreading information freely and then synchronizing them. From that synthesis information, the senior managers will draw out the most optimal decision to make.

So, by arousing people's enthusiasm, HP way is shared among the corporate, creating a value that is well accepted by employees. However, there is still question about how organization culture is passed down to the new recruit workers and retained it unchanged through time.

Labor resource management.

The Human resource management contains three processes:

+ Attracting a quality workforce

+ Developing

+ Maintaining

Applying these processes to HP, we could observe the HP way in managing the workforce.

At first, HP has extended the search for potential and talent workers around the world using many tools and strategies, i.e.: Internship, University and public media. Employee after engages with HP will be guides to adapt the open mind and collaborative culture. Story telling is the most effective way to passed down HP way to new worker; Stories being told was about remarkable moment over the organization timeline which create a symbolic and heroic image of Hewlett and Packard. Unfortunately, with the increasing in number of workforce, the process of transferring culture to new recruited staff grew to be more difficult. System of management by objective was introduced in 1950s to ensure that each individual is well-prepared and motivated for the long-term objective.

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HP offers all employees the opportunities and resources to excel in their jobs and prepare for new challenges. The networked workforce allows employees to learn from each other in many different ways across the world. Face-to-face training and live virtual training are provided to enhance the ability within organization. In addition, the statistic shows that HP offer more than 10,000 courses, which employees used a total of 2.5 million times during 2011, a 56% increase from 2010. In order to motivate skilled and talented workforce, HP proposes a 'work-life balance' program includes: back-up childcare services, stress-management resource and flexible work arrangement, etc.

Certainly, the process of Human resource management has indicated that HP is an ideal company to work for, providing professional business environment for individual to develop personal skill and experience the HP's culture.

HP compare to Maori business.

The HP culture was described as a model that is closer to the western style of corporate rather than the Maori style of business. If the main objective of HP is to maximize the profit of shareholder, Maori way of business focuses on the collectivism, increase the welfare of the business as a whole. Maori way interested in the human form of collective while HP has some trait from the western class style which is concerned about the benefit of an individual. Maori culture based on the belief to 'iwi/collective'. Moreover, Maori emphasis on deliberative processes at the expense of decisiveness - The group of people have more power than the chief himself, so they believe that the ideas coming from more people is rational and far superior than one person. While HP employees are managed by the senior employer and manager's words is the only final decision.

Compare to Maori style of business, by freely trading the shares in market, HP's assets are fully used and exploited which creates a certain advantage to compete in the international market. In the other side, beside the only and unique 'HP way', Hewlett-Packard should learn to adopts the ideas of embracing the different on everybody, reception rather than prosperity, develop through varies directions to become a success player in IT industry.

Decision making and Strategic management.

Decision making can be regarded as the mental processes resulting in the selection of a course of action among several alternative scenarios; it is the most important procedure that decides the long-run direction for a corporation which includes 5 steps:

Identify and define the problem

Generate and Evaluate alternative courses of action

Decide on a preferred course of action

Implement the decision

Evaluate results

In the late 1990s, problems in HP can be defined as follow:

No synchronizing between divisions

De-centralized setup costs more time to make decision

The company's stagnant revenue and the declining in profit growth rate.

HP's culture turns out to be a sharp disadvantage in the fast growing business era.

After the promotion, Fiorina began to re-organize HP wishing this innovation will

bring HP back to the golden-time even-though the decision was not fully evaluated. Moreover, The New CEO also wanted to regain some competitive advantages through applying the strategy of cutting some cost in marketing and R&D department.

However, the re-organizing occurs in a very short span of time giving employees

no value or instruction that guides them along the changes. Furthermore, idea is that time chosen for massive restructuring was inappropriate since there was a slowdown in technology sector around the world. Ideally, Process of the massive re-structuring should be postponed until after the stagnation in IT industry.

Observing the cutting cost strategy that was operated in HP after the merging with Compaq; Cutting cost strategy belongs to business-level strategy formulation, which specialize on answering the question: 'How can we best compete for customers in our market using our products and services?'. Cost leadership strategy allows HP to sell its products and still make profits even when selling at low prices that competitors cannot match.

Unfortunately, Cost-cutting may be necessary for efficiency and effectiveness, but it is never sufficient for growth and the creation of long-term, sustainable value.  The easiest practice in management challenge must be cost-cutting; However, the harder trick is to make the right trade-offs between short-term gain and long-term success. HP has pay too much attention on short-term strategy like cost leadership and forgot about the long-term strength- the main force that drive the organization. long-term value requires real competitive differentiation. HP's unique assets include its supply chain, its distribution network, the breadth and depth of its product portfolio, the diversity of its geographic presence and the size and loyalty of its customer base.


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HP way is the driving force from the dawn of Hewlett-Packard, the advance organization culture in the early time. HP is still a success company and a major player in the IT industry despite of those struggles in the late 1990s.

In 2004, Hewlett Packard markets to a new sector of consumers, selling movies, music, television and photography products. The company grossed more than $104 billion is 2007. Hewlett-Packard is still the world's leader in sales of personal computers, printers and computer servers, with revenue in 2011 of $127 billion