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Leadership and Change Management in the Merger of Hewlett-Packard

William Hewlett and David Packard both Stanford graduates began there business in garage at alto. After a year they does relationship called Hewlett-Packard by 1947 Horsepower came into existence as worlds second greatest computer dealer with net income of $42 billion. Horsepower originally dealed with auio oscillators and then steadily entered computers field in 1980. Recent the business launched laserjet printing device which is a greatest hit for the company.

Compaq computer company made by two senior managers at Tx entered pc field in 1982. Due to excellent quality service it was considered internationally as worlds most significant manufacturers of computers. the name of company itself comes from Compatiblity and quality. The initial personal computers launched by Compaq were not helpful there appearance was such as a suitcase still a net income of 111 million us dollars was produced.


Bill Hewlett and dave Packard created a couple of values to guide the business and change the business. these principles became famous as the Horsepower way which are the following:

the strength of corporate society is profit so identify revenue in order to donate to the contemporary society.

There should be continous improvement in product and services of the company.

Always look for new opportunities but stay centered on area where company is benefitted.

Increase company's success by giving occupations.

Always provide a work place to encourage determination and innovation

Be a good resident and become social

Focus on basic exponential growth

Leadership at HP

Carleton S. (Carly) Fiorina

Carly Fiorina was highly qualified peson who before coming to HP got 20 years experirnce of working at AT & T as a senior innovator. she became CEO of HP in1999 and was the first woman to be the leader so such an enormous company and countries prominent female executive.

She was very extravagant in handling work. She acquired strong capacity to know very well what should be achieved to attain the set goals. She experienced a clear understanding of the problems that the company were facing.

She was a robust Charismatic leader who was simply able to do the cultural change change in the company with her assertive nature and credibility. She possessed transformational control quality that helped to make Horsepower an effective innovator in the competitive market. HP was now more flexible, progressive and possessed a effective inside environment whose principal focus was customer satisfaction.

The most important reason for success of Fiorina's was the perfect balance between command characteristics and management of the company resources with genuine matter for the employees and let them make feel as part and parcel of the company.

As a good leader Fiorina began a stock option program for employees which created a enthusiastic work environment for the employees. Under the program staff will be profited if the company earns profit. Fiorina knows how to rise a company in the changing environment. Several steps were taken to reinvigorate HP they were as follows:

Innovation was focused more.

Structure was altered now front side office and back again office concept had become.

R & D department was re engineered.

Clear mission and worth of the company

Reasons for the Merger

HP was progressing at a great pace. The basic goal of fiorina was to modernize the culture of HP and to concentrate on profitable regions of business and HP's profit talk about increased from 54. 43 to 74. 48 dollars but still the organization was not efficient as it could not fulfilled the set focuses on and for this reason failure HP was likely to cut down the jobs. Even fiorina had threat of dropping her job. This was the indication that changing only inside strategies had not been worth for the success of the business so a new plan had become which was to obtain Compaq value of 25 billion dollars. Both companies assumed that in order to do good in the recent competitive market and gain revenue better way was to truly have a merger however the stakeholders considered it as in a different way corresponding to them company wont be faithful to Compaq customers and the largest problem was synchronization of people in the organization. As during merger the culture of business will also change. Above all fiorina only considered removing one competitor in the Computer market. Regarding to her the marketplace share increase after merger and working product will also increased. (Hoopes, 2001)

HP experienced revenue growth but talk about prices constantly dropped.

Hp was badly affected by recession in 2001.

Pay were cutted down and laid off. Careers were cutted down.

Stock price continuing to decline at a great swiftness.

Outsourcing had not been proper.

To improve economics and creativity.

Strengthed business provides critical mass in key development market.


Culture can be defined as the personality of a company. It encompasses the beliefs, prices, leadership methods, governance composition, decision-making techniques, and norms of a business.

One of the principal reasons that culture is so important is because employee loyalty affects customer devotion, thus directly impacting on both the success of the company as well as stakeholder value. 11 As John Kotter and Adam Heskett of Harvard explain in their book Corporate Culture and Performance, corporate culture is an important competitive advantage. Kotter and Heskett assume that cultural strength on the list of employees of any company pertains to performance in three key ways: first, it causes goal alignment; second, it generates high levels of determination; and third, it offers structure and handles without having to rely on formal bureaucracy, which frequently inhibits technology and desire. 12

At HP, where culture (i. e. , the HP Way) has always had a powerful impact on how the company functions, undertaking social integration poses an especially daunting task. At the same time that integration organizers must modify HP's existing culture to unify the two companies, planners must also ensure that HP's culture remains targeted around the key components of the Horsepower Way: trust, admiration, achievement, integrity, teamwork, innovation, and an interactive work environment.

Among the first-and arguably one of the very most important-steps in integrating cultures is to determine what takes its "good culture" and then to base changes on those elements. Matching to HP's integration planning team, a good culture must:

be clearly defined and broadly comprehended;

reflect the business strategy and brand;

support best-in-class performance with customers, lovers, stockholders, and employees;

produce alignment, commitment and enjoyment;

establish a competitive benefits; and

be reflected in the communications and actions of core leaders.

Change models

1. Unfreeze, Change, Freeze

Kurt Lewin suggested a three stage theory of change commonly referred to as Unfreeze, Change, Freeze (or Refreeze). It is possible to take these phases to quite complicated levels. It is rather relevant

Stage 1: Unfreezing

The Unfreezing stage is probably one of the most important stages to understand in the wonderful world of change we stay in today. This level is about getting ready to change. It involves addressing a spot of understanding that change is essential, and getting ready to move away from our current safe place. HP is at need to comprehend and prepare the company for the change as conclusion was relevantly increasing. fiorina was been encouraged for change by great deal of different characters and the chariasmatic leadership characteristics that she possessed.

Stage 2: Change - or Transition

Kurt Lewin was aware that change is not an event, but instead a process. He called that process a move. Change is the inner movement or quest we make in reaction to a change. This second level occurs even as make the changes that are needed. HP used role models and allowed employees to build up new solutions and Fiorina also offered a definite picture of desired change and offered benefits to the employees.

Stage 3: Freezing (or Refreezing)

Kurt Lewin refers to this level as freezing although a great deal of people make reference to it as 'refreezing'. As the name advises this stage is about establishing stability once the changes have been made. The changes are accepted and become the new norm. People form new interactions and become comfortable with their routines. It's often at this point that people laugh and tell me that basically you can find never time for this 'freezing' stage. And it's just this that's drawn criticism to the Kurt Lewin model.

7S model

7S-McKinsey-model. jpg

7S model was created by McKinsey and company in 1980. Seven factors are included in this model. The 7S platform was dividing in thinking about organizational efficiency. In past the manager emphasis was on group because corporation grew in size and complicated questions were also arised.

Explanation of each element:

Strategy: HP created a Strategy to maintain and make competitive benefit over your competition.

Structure: Framework is what sort of organization is made and who studies to whom.

Systems: In systems the daily activities and happenings that staff members interact to complete the job.

Shared worth: Shared values are also called "ultra ordinate goals. These prices are the centre values of the company that are evidenced in the corporate culture and the general work.

Style: you have to look at the design of leadership.

Staff: In personnel employees and their standard functions are included.

Skills: Skills are the genuine skills of the employees who are working for the company.

Post merger

The suggested merger consolidated HP Compaq's product into four organizations customer services, imaging and printing, gain access to devices, and it infrastructure. But the new company was very competitive in respective segments however the merger made the company better and fully included providing full services integrating both hardware and software solutions. the merged company got 145, 000 employees. the new company strategy was to consider acquisition in consulting in order to expand market growth.

The new HP also possessed the same determination of customer priority, best engineering design toease all problems, and approval to available system to able to face the unexpected market shift. Copmaq will give great support in providing many alternatives in:

IT Infrastructure

Compaq and HP merged the server, safe-keeping and software features all the alternatives were more persuasive and fault tolerated. A fresh management software was created that was of great help monitor, mange and improve the complete network. New storage space solutions that were better than payroll and could store data 10 times better. the other past change was in service and support knowledge that was helpful in building and building new innovative alternatives.


New HP possessed now vast range of outsourcing, consulting and support that helps in formulating strategies and taking care of the infrastructure. It started to become partner for architecting various companies. Now because of blended forces of both the company new Horsepower was looking to be top-tier company that provided options for execution and making strategy for various IT jobs. New HP possessed great value for relationship so to get good thing about products PricewaterhouseCoopers, Accenture, and KPMG company have relationship with them

Access Devices

As both companies were strong on the market they offer a wide range of Personal computers, and many internet empowered devices. The new products simply are better and jointly. New devices were innovative and highly excellent technology. They work the way they want to work according to the work place.

After merger most of Compaq products were re brand with the HP nameplate Compaq brands were consumer oriented products. All Compaq pcs were now shifted to HP. Compaq iPAQ were renamed to HP iPAQ.

In 2007 Horsepower released a new logo for his or her Compaq Division and within the next calendar year all business lines notebooks were renamed as "HP Compaq" series that was used for all those HP's notebooks. The most notable business earning model was Hp Elite Book that was called as Horsepower Compaq B series


Resistance to improve is one of the essential reasons for the failure of change process and its own implementation. Resistance to improve on the whole is ubiquitous naturally. It is thought as a natural respond to any effect or threat of change (Block, 1989). In Horsepower amount of resistance was visble among employees and shareholders.

Resistance by employees

there was Tension among the Horsepower before before when the company decided to place off thousands of employees because of the economic downturn. Prior to the cuts were made, however, employees were asked to aid in a cost-cutting plan either take necessary vacation or admit a pay trim, among other choices.

True to the Horsepower Way, yet unusual to many on Wall Street, many employees wanted to have their salary lower. When the company later proceeded with layoffs, many believed betrayed. And thousands of more slashes are possible if the merger is approved.

People fight change because they:dread to lose something they value, ordon't understand the change and its implications, or don't feel that the change makes sense, or find it hard to deal with either the particular level or tempo of the change.

Resistance by stock holder

Walter Hewlett as a stock holder along with his sisters William and Flora Hewlett compared the offer as stockholder rejection was one of the ways to terminate the offer. According to Walter Hewlett, Carly Fiorina had exaggerated the importance of scale in the computer business. Hewlett assumed that alternatively than make the business more competitive, the merger would expose Horsepower to the brutal, low-profit Computer business. Finally Hewlett figured the merger would significantly dilute the value of the company's business. David Packard issued a statement siding with Hewlett towards the offer. In his statement, Packard, chairman of the Packard Humanities Institute. Packard, the oldest son of the other later co-founder, stated that Fiorina's highhanded management and efforts to reinvent the business ran counter to the core HP values founded by the founders. Citing significant layoffs for example of the departure from HP's central values.

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