Examination of the Organizational structure and logistics service innovation of Hewlett Packard

Introduction

HP is one of the most famous and well known names in the whole world of IT world. It has branches in more than hundred and seventy countries in the whole world. HP does its best to find out the best ways and solutions to introduce technology and services that is applicable to help people and companies to deal with the problems and challenges they faces in the modern daily life, HP group tries to manage possibilities, aspirations and dreams of its customers around the world. Hp company has the concept of applying what is new in thoughts and ideas, dealing with the technology that is enriched in experience and worthy ideas. So we will discus in this report about the big main problem that Hp company faced with its organizational structure, communication, customer’s services and satisfaction. And without these four factors the company might never success because they are the most important things the company must consider it.

Background

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HP stands for Hewlett-Packard who are the founders of the company. When they established the company in 1939, their initial capital investment was US$538. It’s an American company which producing electronic products such as laptops, printers, smart phones, scanners, monitors, electronic, accessories, photo printing service and …etc.

From 1940s until 1990s the company started focusing on producing electronic test equipment. As the business grew and became wider in HP, they hired more product designators and they started using more accessories, supplies, software, and components.

From 1999 until 2005 Carly Fiorina worked as chief executive officer of HP. She is an American businesswoman who was one of the republican nominee for the united states senate. Under her responsibility In 2002, the company united with the its competitor computer company Compaq. Carly did many problems for HP, one of the worst problems is interrelated to organizational structure. She made 11 layers. For example, an owner of virgin store want to purchase printers from HP, he couldn’t contact with the one who is responsible for this transaction , because there were many managerial levels so customers can’t reach the specific demanded employee, they have to go through many steps and appointments. It takes a very long time to get their requirements and demand. So they end up disappointed and not satisfied. On the other hand, the company loss their customers which leads losing profit. For this confusing customers and shareholders which was held by carly, the company end up exposed to shutdown . After that in 2005, she demitted as chief executive officer and chairman of HP. http://en.wikipedia.org/wiki/Carly_Fiorina

Mark hurd became in replacement of Fiorina and took the lead after she stepped down . He became the new chief executive officer and chairman of Hp from February 10, 2005 untill March 28, 2005. Robert P. Wayman was the chief financial officer and executive vice president of the Hewlett-Packard Company. He became interim chief executive officer for several months before hurd came and took the position. Hurd was assigned as the permanent chief executive officer and also appointed as the President. Somark fixed what has been damaged by carly. He tried to remove matrices at every turn, and minimize the levels of management. He did his best in turning hp IT main interior belt up and on strengthening and modifying the real estate achievement and performance over the years that followed his being in the position. Also, Mark gave great intention to technology, and to set up a powerful ties and improved productions to afford to the customers around the globe. These great efforts were crowned with a massive increase in the income and enlarging of the company and raised the price stock of shareholders and dealers, and a minimized the amounts needed for the structure to help HP to have a strong ability to face the market that has other competitors as in the international IT market.

As a result and under his leadership, the company developed and became the top of the sale of desktop computers in 2007, and in 2006 laptop computers. Since 2008, HP developed the market share in inkjet and laser printers to 46% and 50.5%, greatly.

http://en.wikipedia.org/wiki/Mark_hurd

Case Analysis

This case relates to many issues, the case shows that HP had a very long and a bad organizational structure which lead to had no communication inside the organization and between employees. And if any organization have problems in communication inside the organization it self and between employees then employees will not be able to communicate with customers to know the desires, demands and the suggestions of the customers. For this reason, employees will not be able to serve the customers. As a result, the customers will not be satisfied and the organization will lose customers and profit as well.

The main issue and the most important issue in this case appear in the organizational structure. It starts from the organizational structure, it can make the organization rises or falls by making the environment in the organization easy in communication and cooperation or hard.

When managers or people want to start business or work they do planning after they done with the planning, they need to begin to work on the plan and the first step to apply the plan is by designing an organizational structure. The objectives and strategy of the organization that you want to achieve them, determine the design of an organizational structure. According to design an organizational structure, we should first know what is organizational structure ?. We can define organizational structure in one important word which is “the framework” and that’s mean to divide the jobs and duties in the organization in a way that help the organization communicate inside and outside the organization. An organizational structure determines the authority, responsibility, coordinating, overseeing the work and controlling. The creation and the design of organizational structure shows how information flows between the managerial levels which as a result affect on the work flow and productivity. Refrences; Role sets and organization structure

Carly fiorina made a very long structure . When managers create, design and change the structure , they should consider these six points which are the key elements of an organizational design. The six key elements are; work specialization, departmentalization, p of control, chain of command, centralization and decentralization, and formalization.

I feel that we have to add the definition of each one because when I read it I felt it missing we didn’t explain all these points clearly and we didn’t talk about chain of command so just read it again and let me now.

logistics service shows if the organization have a strong and a good structure or not . because it helps in building the relationships with customers, switching costs and making the work performance and the market activities more efficient and effective.Refrence ; Organizational structure and logistics service innovation

We will point here how the relationship between organizational structure and logistics service innovation capability and market performance will affect on the organization. Changes in the organization strategy will cause changes in the organizational structure for example, having a shop in dubai city will be different from having shops in all united of arab emirates and that’s will affect on the size of the organization and the technology which used in the organization. The more the size of the organization is bigger the more the technology is needed and the technology becoming more complicated. Based on that the work environment in the organization will become stable or not .

A successful strategies is based on the objectives, skills and capabilities of the organization, all this will determine the structure. Therefore, managers should consider that structures not a way to show the implementation of the work as carly did , instead they should consider the structure as the basic element of strategy formulation and as the basic resource that help the organization to improve and develop their performance and activities properly.Refrence ; Organizational structure and logistics service innovation

If the organization have all the skills , strategies, capabilities and resources that are valuable , it will attain and achieve a lot of advantages even a competitive ones. This achievement and attainment of these advantages will make the organization improved and developed their short-term and long-term performance.Refrence ; Organizational structure and logistics service innovation

Carly did a lot of issues in HP. She made a high specialization, a high departmentalization and high formalization which prevent people to be creative and innovative. Also, the p of control was narrow which made many managerial levels. she thought that making many levels in the structure would make a lot of jobs opportunity but it turned out that people lost their jobs because many levels made no communication and made a bad work performance and the right information did not get to the right person through all this levels so people couldn’t achieve their jobs so they lost it. She did Centralization in the organization because she gave the authority for top managers to make decisions and she did not make innovation and risk taking by letting low managers make decisions. This led to poor work performance and a slow of work flow because when a non-managerial employee need to have an approval about a task they should wait for a top manager to approve and take the decision and that will take a long time especially if there are many levels . so the task will move from a person to another until the top manager see it and approve, that would take a very long time and will not help any urgent cases by urgent customers. So centralization reduce discussion , sharing information and exchanging new ideas. Refrence ; Organizational structure and logistics service innovation

Therefore, the customer service will be bad and as a result the customer will not be satisfied at the end.

So what carly should understand that The organizational structure should be created based on HP company strategies , objectives, goals , skills and …etc ,that HP may wish to achieve them.

The organizational structure is can be defined in one word “frame work” so it is coordinating and overseeing the work by dividing the work into smaller tasks But not many levels which make it hard for the organization to communicate and to cooperate and that’s a bad work environment .

Refrence ; Organizational structure and logistics service innovation

What carly did led to no communication internally inside the organization it self between employees and that’s led to no cooperation between departments and employees . therefore, this bad environment work led to poor performance because the information flows between levels of management was slow and the flow of the work was slow too. so there were no or less productivity and then no or less profit.

On the other hand , there is no communication externally too. No communication between the organization at the first place led to no communication between organization or employees and customers and that’s led to no cooperation between organization and customers, corporate customer and stakeholders. So the organization will not be able to serve the customer and the customer will not be satisfied . as a result the company or the organization will lose customers and profit as well and that’s will make the company collapse and that’s what carly did with HP.

We put here graph

One of the most important point that organizational structure is affecting on the organization members and their behaviors. As long as the structure is simple and organic, people will have a high attainment and will work efficiently and effectively with a high motivation.

Refrence ; Organizational structure and logistics service innovation

If these 6 points that we’ve discussed are high in the organization then the organizational structure is called “mechanistic” and that’s what carly did with HP . but if these 6 points are low , then the organizational structure is called “organic ” and that’s what mark hurd did to solve the problems in HP. He changed the structure and its properties from “mechanistic” to “organic ”

Check high low

Mark Hurd turned out everything upside down, when he transformed the structure to organic , he canceled 3 layers of the organizational structure it minimized from 11 to 8 layers. As a result of minimizing the levels the p of control became wider , also there were more decentralization in the organization which help to save time , costs and it helps to exchange information, discussion and increase the level of communication internally and externally. and that’s led to what it called ” Cross functional team” which means the departments employees working all together as a team. in addition, Mark Hurd reduced the formalization in HP company . for example, there were an employee didn’t attend the meeting on time , he has an excuse but the manager didn’t accept it , although the employee is a hard worker. The manager is strict and he acted so formal and he wasn’t flexible with employees that will effect employees creativity and they will not be motivated. That’s mean the manager got a high level of formalization . instead of that the manager should be in between not too high formalized and not too low because it will led to have flexibility and communication between managers and employees. If we have the same example but the manager was so low formalized he’ll be easy to go , no one will take him seriously.

When the formalization has decreased the relationship between managers and employees became more flexible and this has made the communication high and it broke the ice between them and it help them to produce more and come up with more new ideas and that called ” cross hierarchical teams”

+refrences in case analysis and background+ search a web for Plagerism

+ add charts they r 3 + table of content + editing + fix the information 3n al cross hierarchical teams + 6 points + high low 6 points

Questions related to the case:

How did Mark Hurd decide to address his company’s structural problemHow do you think the company’s costumers responded to these changes?

Hurd to terminated and sent away inefficient layers of sales management. He represents one top manger that customers can contact and be in contact with.

Top sales representatives started to made better decision with his team due this low waste of time.

We believe that Hurd makes a great and a good change in the company; he makes the dealers pleased by solving Hp problems. He solves the customers contacting problem. He also answered the sales people problem so they can have more time with their dealers.

How do you think the company customers response these changes?

After the company started new structural and eliminated all the problems, they paid big attention for the customers. Customers no longer feel the time consuming. These new strategy made customers very pleased and they help the company to become at the top of leading in computer market again. As every company knows customer are the king. Customers are why organizations became.

Conclusion:
What we learn from this case is ..

We therefore conclude that each company should find out the good and the best CEO depending in their educational rate and their ability to hold this challenging job. Good CEO leads to customer’s satisfaction. Good CEO takes part in the problems with staff and employees so they realize that he is helpful for every situation company needs. Good CEO creates good feelings of enthusiasm among people ” one hand can’t clap without the other, without ambience, ambition cannot success “. Here at Hp Hurd tried so hard to create the ambition. He made them trust and confide in themselves because he realized that ” potential is always higher than where we actually are”.

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