Hewlett Packard (Hp) Culture

Formal elements of an organization such as structure, strategy and technology have gained a lot of importance in past. Success of Japanese corporation in the 1980’s got the focus to other side of an organization. Values, belief and attitudes held by management and organization, which form informal elements, play a significant role in an organization. An organization can be best represented by an iceberg. The part which is visible above the water and easy to spot can be viewed as formal aspect of an organization. The part beneath water is difficult to be moved and can only be understood by exploring the deeper structures below it. This represents organizational culture. A range of definitions of culture can be found in literature. They are defined around characteristics such as artifacts, language, behaviour patterns, heroes, symbolic actions, beliefs, values and attitudes. (Senior & Fleming, 2006)

Louis (1980) defines culture as, “A set of understandings or meanings shared by a group of people. The meanings are largely tacit among members, are clearly relevant to the particular group, and are distinctive to the group. Meanings are passed on to new group members.” Thus organizational culture is a behavioural pattern that is formed implicitly within an organization. Peters and Waterman argue that it is not necessary that culture may always be formed implicitly. According to them, culture could be built by making values clear, transmitting them widely, reinforcing them in practice and backing them up. If they are constantly preached by use of mission statements or symbols, it could lead to a strong culture. (Senior & Fleming, 2006; Clegg et al., 2005)

An organization’s culture develops gradually over a period of time. Organization culture is important because it helps an employee define how they feel about their job. Influence of culture may be positive or negative. Positive influence helps to generate more commitment towards achievement of goals, cherish a sense of corporate identity and stabilizes interrelations within a firm. Negative side of it though may be that it leads to individuals thinking around same line of thoughts. Also with changing needs organization may need to regularly innovate. But the culture within an organization is very difficult to change. (Bennett, 1999)

Culture is characterized by shared values and norms, which define appropriate attitudes and behaviors. Strong cultures are formed when employees clearly understand the culture and they have strong feelings for it. Strong cultures enhance performance of an organization in two ways. Firstly higher ideals and values energize employees to achieve unified goals for an organization. Such ideals trigger employee commitment and effort to a higher level. Strong cultures are also helpful in shaping employees behaviour thereby boosting their performance. Stated values and norms helps employees focus towards organizational priorities. This is done without a need for formal control system. Thus effective culture is very important for successful implementation of a strategy. Founders of HP inculcated high values in employee’s minds. The values were so strong that employees felt committed towards the organization and did not require much of formal direction. The more ownership they had, better they performed. They could decide according to the situation what would be their best option. This led to strong bonding between employees and the organization. (Chatman & Cha, 2003)

According to Cameroon & Quinn, four types of culture prevail in an organization. Hierarchical structure is formed in a company having low trust and high regulation. In the hierarchical structure, organization focuses on internal maintenance with a need for stability and control. The market culture is the one with low trust and low regulation. It emphasizes on external positioning with a requirement of stability and control of an organization. The adhocracy culture is formed by high trust and low regulation. This culture externally positions itself providing a high degree of flexibility to an organization. Finally the clan culture is based on high trust and high regulations in an organization. It focuses on internal maintenance of an organization with concern for people and sensitivity for customers. (Dani et al., 2005)

Since the start of HP in late 1940’s, founders had worked at eliminating hierarchies and put forth a belief that smart people would make smart choices if they were given right tools and authority. Thus the culture at HP was of adhocracy type, i.e. high trust on employees and low regulation. Since tradition at HP was practically a religion, people found themselves in a very friendly place where they could work and share just like an extended family. The founders were considered as mentors or parent figures as the organization followed their principles called as �HP Way.’ Emphasis was on team work, equal rights for everyone and profit sharing. This shows that organization gave lot of importance to human resources and rightly valued it. This led to a strong culture and people way down the organization knew what they were supposed to do. The problem with strong culture though is that, they are successful for a short time. Since it prevents management from identifying new strategic directions, growth of an organization does not take place. Since people showed high commitment towards organization, CEO Lewis Platt in late 1990’s wasn’t afraid to delegate some of his responsibilities to respective business heads. (Dani et al., 2005; Palmer & Hardy, 2000)

Lewis Platt who was a strong follower of HP, found it difficult to strike an appropriate balance between central control and decentralization. According to Bjorkman (1989), radical changes in strategy have to be based on fundamental change in culture. It goes through four main phases. Firstly a gap is formed between organizational beliefs and characteristics of the environment. People tended to move away from the HP values and often pursued their own agenda in late 1990’s. Strategic drift is followed by financial decline and challenging organizational beliefs. This results in growing tension in an organization. Company thus lost its confidence and aggression. After this period, a new strategic vision develops as the organization passes through a period of confusion. HP was looking appointed Fiorina as the next CEO to provide the required aggression and change in the organization. (Mintzberg et al., 2005)

According to Peckham (1981), “symbols, like any other tools, wear out; they lose their usefulness. They become blunted and inapplicable, because the reality they were designed to deal with no longer exists.”