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The HP Way A DISTINCTIVE management style

History of HP

Hewlett-Packard Company, is an information technology company which started with focusing on a range of electronic devices. HP's primary business is in developing and processing computing, along with hardware, software and other services. Personal processing devices, organization servers, related storage area devices, and a diverse range of printers and other imaging products are the major product lines at HP. The company which acquired Palm for 1. 2 billion in cash and credit debt in the last month concentrates in marketing to businesses, households in two ways. First of all it does so straight and second of all, through online distribution.

Currently, HP contains the variation of selling the largest variety of computers and notebook computers on the planet. It operates in the US market from its facility in Houston, in Texas. HP is identified throughout the world for its unique management style that has come to be known as The HP Way. This is produced by HP's founder's Costs and Dave. In Bill's words, the HP Way is "a key ideology which includes a deep respect for the individual, a determination to affordable quality and stability, a committed action to community responsibility, and a view that the business is out there to make technical contributions for the improvement and welfare of humanity"

The founders of HP developed five tenets which would have to be followed to achieve organizational brilliance. These have been detailed in the bestselling booklet by David Packard, 'The HP Way. ' They can be the following:

1. We have trust and admiration for folks.

2. We focus on a high level of accomplishment and contribution.

3. We carry out our business with uncompromising integrity.

4. We achieve our common objectives through teamwork.

5. We encourage overall flexibility and invention.

What we are going to explore in this newspaper is how Make Hurd Ex-CEO of HP, failed to comply with many of these tenets, commonly known as the 'mantra' at HP, in so doing resulting in his obligated resignation from the business.

Biographical sketch HP's Ex-CEO, Symbol Hurd

Mark Vincent Hurd was the chairman, CEO and chief executive of Hewlett-Packard from September 2006 till early this month. Under his leadership, the business topped sales in desktop computer systems and notebook computers, a feat that he achieved in 2007 and 2006 respectively.

Hurd acquired a reputation for competitive cost trimming. He let go almost 10% of the labor force after becoming the CEO at HP. Hurd enforced a 5% chop in pay for all employees and incredibly interestingly took a 20% cut in his basic salary. Nevertheless the reimbursement committee at HP increased his salary by the same amount through extra.

In 2009, Hurd was considered one of the 'TopGun CEOs by Brendan Wood International which is an advisory organization.

Hurd's slate was not all clean before the major incident which occurred before this month. In 2006, HP was involved in a scandal in which in order to try and stop the leaks in the table, it approved pretexting and in doing so slipped on sticking with HP's SBC and "Global Expert ONLINE PRIVACY POLICY". Hurd apologized for the scandal which resulted in serious loss of trust and a lot of negative publicity, but justified stating he was centered on ensuring the turnaround was relating to company requirements and expected that others in the business would ensure that these conformity issues were managed properly. He was let off softly in this case, however this wasn't the case in that which was to come in another four years.

What went wrong at HP?

Origin of the problem

The problem for Hurd started with accusations of erotic harassment which originated from one of the lady members at HP. This resulted in a board exploration against Hurd for alleged intimate harassment claims by the former company at HP.

On further exploration, it was discovered that although Hurd didn't specifically violate any business sexual harassment policies directly, they performed find unacceptable judgments in the selection of the contractor and the use of her marketing services. Further analysis led to the discovery that Hurd cheated on charge reports. Some of this money appears to have attended the contractor who has pressed charges of erotic harassment. At this time one can ask ourselves, wasn't there any process in place for the selection of contractors at a business as large and reputed as HP? Aren't there any suggestions that needed to be followed to be able to decide on the compensation to get to these contractors? Returning to the actual issue accessible, it seems bizarre that considering the sort of money that Hurd was making, that he would actually have to stoop down to this type of patterns.

The situations whose bills were falsified were billed as CEO exec summits, high profile exclusive gatherings, where regarding to what was expected, Hewlett-Packard officers would be dependable to woo top customers. When Hurd, HP's key, came out at these gatherings, he relied on Jodie Fisher, the company in concern, a 50-year-old who previously was possible television contestant changed HP marketing advisor, who would subsequently add him to customers and also keep him company for the gathering.

In these situations, there have been receipts posted by Hurd submitted receipts for various bills which were billed from $1, 000 to $20, 000 in the two plus years. These included dishes and travel, which otherwise must have been accounted as personal since they were not related to business.

The expenses were incurred at HP-hosted "CEO forums, " usually in North America, in which Hurd participated, this person said. The girl functioned as a builder hosting the occasions.

Hurd's ouster is the third in five years at HP's top echelon. First was Fiorina's in 2005, then previous Chairwoman Patricia Dunn was ousted in 2006 amid a boardroom spying scandal that engaged spying on reporters' and directors' mobile phone records to suss out the source of leaks to the advertising.

From the above mentioned happenings it sure looks as though HP needs to be more careful in selecting individuals for their top brass candidates. Changing three CEO's, for the wrong reasons in less than five years is obviously not what every ideal company aspires towards.

Parties involved

There were three parties involved in this major concern which questioned the honest standards at commercial once again.

Firstly, Make Rudd who proved helpful so hard to create such an easy track job to the top. He appeared to on the right track, knowing what he needed and stopping at nothing less in order to do this, before this scandal struck him. As the investigations proceeded, Hurd accepted that he did not surpass the ideas of trust, admiration and integrity that he had espoused at HP. When a person at such a higher position can succumb to such low moral benchmarks, one shudders to think of the prospective risk that companies put themselves into by employing such wrong role models to lead their company.

Although Hurd was very fast in stating that his habit did not reflect on the operating performance or for that matter, the financial integrity at HP, the harm was already done. The entire HP name had taken a setback because of this incident. Buyers at HP, very normally responded to this occurrence, and the talk about prices of HP dipped by almost 10%. There continues to be no clear indication till now on who'll be the future CEO of HP, though CFO Cathie Lesjak who stepped in as interim CEO made it clear that she was definitely not in the performing.

Jodie Fisher, the service provider who accused Hurd of Sexual Harassment is the third party involved with this unfortunate incident. She is an individual mother who's an celebrity and businesswoman employed in sales and commercial real estate. Ms. Fisher was saddened by the fact that Hurd lost his job credited to her allegations. Though there was no proof to point that the allegations were true, they in the end led to the bigger problem of Hurd falsifying documents.

Actions taken by parties

Robert Ryan, lead indie director of the HP Table, said: "The panel deliberated extensively on this matter. It recognizes the substantial value that Make has added to HP over the past five years in creating us as a innovator on the market. He has worked tirelessly to improve the value of HP, and we greatly appreciate his attempts. He is leaving this company in the hands of an extremely talented team of professionals. This departure had not been related in any way to the company's operational performance or financial condition, both which continue to be strong. The panel recognizes that change in leadership is surprising news for everybody associated with HP, but we've strong leaders driving our businesses, and strong groups of employees driving a car performance. "

On his move to resign as the CEO at HP, Hurd said: "That is an agonizing decision for me personally to make after five years at HP, but I believe it might be difficult for me to keep as an efficient innovator at HP. " He further went on the declare that it was the only decision the board and himself could come to a consensus to. He was very forceful in mentioning that his activities did not at all reveal HP's performance.

The unfolding of the incident

An insider assertion from HP got previously exposed that Symbol Hurd had resigned carrying out a demand from the table anticipated to his unacceptable behaviour, which were not in line with HP's business expectations. In view of the incidence, they were uncertain if he was the right person for taking the company forwards.

"Mark's resignation implemented an internal analysis into a claim of intimate harassment asserted against Draw and HP by a female who is previous service provider to HP. The research was conducted by outdoors counsel together with HP's General Counsel's office and was overseen by the Mother board. Predicated on the analysis it was established that the past contractor's lay claim of intimate harassment was not supported by the reality. "

The investigation performed reveal, however, that Draw had employed in other incorrect do. Specifically, predicated on the facts which were obtained it was discovered that Mark had didn't disclose a detailed personal relationship he previously with the builder that constituted a discord of interest, didn't maintain accurate charge records, and misused company resources. Each one of these constituted a violation of HP's Benchmarks of Business Do, and jointly they proven a profound insufficient view that significantly undermined Mark's credibility and his potential to effectively lead HP.

Similar parallels in the past

Hurd isn't the first CEO to resign after a relationship surfaced. Before there were incidents at Boeing Co. , Penguin and far closer home, at Infosys where harassment at the work area has caused serious damage to the trustworthiness of the company at stake.

The Boeing Story

In March 2005, Boeing Co. announced that it acquired forced its chief executive to resign after a study uncovered that he had an affair with a female employee.

An official spokesperson declared that the requirement in the decrees align with existing and effective Boeing procedures and procedures for reporting, looking into and remedying improper carry out. In addition they spoke about how exactly in the wake of the incident, there would be makes an attempt to review the existing policies and procedures and make any changes if needed.

The Ninth U. S. Circuit Courtroom of Appeals ruled reversed the trial court docket ruling and remanded the truth for trial, concluding that a jury could find that Boeing experienced manipulated the women's performance assessments in order to terminate them.

The appeals court docket discovered that "demeaning and derogatory remarks" created by womens supervisors about women in general, along with his relationships with her, could provide enough research to persuade a jury of "discriminatory purpose" even if the commentary weren't fond of her, the thoughts and opinions said.

In another circumstance, Boeing substantiated a female employee's erotic harassment lay claim but a calendar year later, her supervisor provided her lower scores on the performance analysis than others in her section.

She was subsequently fired even after several other managers requested that she be used in their departments, a fact that could lead a jury to find that the low performance score was "not credible, ".

Closer Home: The Infosys Story

At Infosys, Reka Maximovitch is a 30 year old lady legal professional who filed charges of "wrongful termination" and" sexual harassment" against infosys solutions and its own ex-director Phaneesh Murthy in the U. S. , resolved the proceedings out of court. Infosys settled the case for all of us $3 million!

Announcing the Rs 15 crore settlement of the suit, which possessed rocked the company, N R Narayana Murthy, chairman and chief mentor said, The company would add US $1. 5 million and the others would be paid by insurance companies.

Virtually blaming Phaneesh Murthy, Narayana said, Phaneesh didn't disclose to the company management, as an important functionary, that he previously a relationship with Maximovitch and also to the fact that she acquired filed in the judge for a restraining order against him.

Mr. Murthy, describing reasons for the arrangement, said that the allegations of Maximovitch were serious and the settlement demanded was in multiples of what had been settled. Also, under California laws, Infosys was also liable for the do of Phaneesh Murthy because he was an officer and an associate of the Table.

Phaneesh Murthy, who now works a consulting business, said he had decided to the settlement to avoid spending precious time on fighting the situation against his past subordinate. The tv show is behind us now and we have to proceed both personally and professionally, he said.

We need to ensure that organizational culture accounts for women's existence at the work area. Just the mere existence of laws exclusively is not enough to provide the solution. Establishments need to commence to value women as workers, and only following this change in frame of mind can we move towards a work environment free of harassment.

The Penguin Story

A observed Indian publisher David Davidar, who was the CEO and leader of Penguin Canada was sacked from the very best job following a sexual harassment case was filed against him by a former female colleague.

The girl colleague reported of harassment for the past three years and an outright assault at the Frankfurt Publication Fair.

This occurrence too marked the finish of what was a sparkling profession of an person from top management.

How do this incidents happen?

It is definitely very sad to note that a few of the very market leaders who enforce various criteria for ethical conduct within an group are the very ones who not in favor of it. Why does this happen? Could it be because people aren't aware of the seriousness of the need for ethical do? Or because they believe that being at the very best of the hierarchy retains them guarded from the results of their actions? Or could it be merely a sad occurrence where we misuse the energy that is directed at us whenever we feel that it will not be recognized?

At the finish of the day, tone at the very top only counts when market leaders use words that they believe in enough to reside.

What can be carried out to prevent such happenings?

In Hurd's case, it's very odd that someone at such a high level pulled off such incorrect accounts and did not get caught for it earlier.

There were thousands which was stated to be put in for Hurd's private security costs and the expenses for private travel on the business's jet.

Why did the officials at HP not consider these large sums of money which were stated to be put in? Was the mother board too worried to article this unethical behavior? Whichever the truth, something must be done in order to prevent this incident from going on again. If HP's table sincerely wants to get rid of such unethical behaviours, it should begin by acting sooner and much more decisively, in so doing indicating that such action is not at all something it will tolerate.

Executives and employees whatsoever levels within an organization have to be stressed about the importance of corporate governance. That is indeed the necessity of the hour.

Corporates can also follow some simple tenets like the people the following:

Add honest and moral clauses to the business enterprise code and make sure that they are enforced very strictly.

The market leaders at the helm of things need to set the tone right and present the right path to the a huge selection of employees below them in the business chart.

Ensure that there is constant screening process of the employees that is carried out to unravel such shortcomings.

Audits can be conducted throughout the year in order to ensure proper accounting rules.

Proper steps for hiring of people in an group need to be ensured in order to prevent unfair routines for hiring of individuals.

With the current economic climate as shaky as it has been, there is absolutely no longer a bloating flood to lift all boats. Companies must use resources properly and make contact with the fundamentals of working companies.

Unethical Business Practices

Although Hurd's activities were, while trivial in financial conditions, they represented a systematic violation of the company's trust and honest expectations -- serious enough to oust a charismatic and widely admired executive credited with resuscitating HP.

Hewlett Packard's Mother board of Directors shown on Friday (August 6, 2010) that if you violate HP's Standards of Business Do (SBC) you can lose your task, in case you will be the chairman and CEO.

The decision showcased that many people are expected to adhere strictly to the SBC in all business dealings and marriage and further enforced that older executives should established the specifications for professional and personal conduct.

Luckily, for HP, Mark Kelleher, an analyst with Brigantine Advisors, said Hurd's resignation comes down to "one individual doing some really stupid things. " Because of the fact that it was just one one who was in charge of unethical tactics in the company, and not a whole network of individuals, the image of HP is not as badly damaged as it could have been.


The road ahead for HP will never be easy. Although Lesjak reassured that investors remained confident in the company, HP's talk about price dipped 10% as reports of Hurd's resignation rippled through Wall Street.

Since Hurd experienced a stabilising occurrence in the business and galvanized the formerly chaotic company, he was known as the glue that performed a complex organisation together. People noticed Hurd as developing a knack for finding new areas where HP could lower its costs, as well as for retaining order among the very best executives. Going forward, disciplined execution has become part of HP's DNA. The brand new leader must maintain fiscal discipline more than anything at HP.

There have been suits known as a shareholder derivative lawsuit, which have been filed against HP. The suit accuses the management plank at Horsepower for not living up to the requirements which are expected of the company which had such great repute.

Lessons Learnt

In today's times, creating a mistake can be so detrimental to an organization is so many ways. There have been so many incidents of unethical behavior in corporate plus some of the bigger settlements have a tendency to revolve around situations of love and sexual harassment. There need to be proper recommendations and regulations for issues such as harassment at the workplace for a company to operate efficiently. Also, as seen in Hurd's case, there also must be proper techniques in place to ensure that companies/employees are chosen only on basis of merit rather than for other unethical reasons. Transparency should be used in organizations. And the need of the hour is effective corporate governance which needs to be practised in organizations.


What the Horsepower case reinforces is that the claws of unethical behaviour can touch anybody within an corporation, even the supervisor right at the very top who is travelling the company. You can always plan numerous workshops and seminars on ethics but there is no surety that those will be effective. When someone chooses to beat the machine, someone at such a high position, they will try anyways. However, organizations must stress on making employees alert to the methods and plans in the business regarding ethical benchmarks and encourage visitors to report wrong behavior. Not knowing in what is moral is not an excuse for unethical behaviour. It really is difficult to get people in companies to be whistleblowers, particularly when it's the person at the top who is in the incorrect. Didn't Draw Hurd's aides understand that the accounts that they were preparing weren't accurate? Didn't they understand that something was amiss? Or sadly, was it only a case of no person attempting to be the whistleblower to a guy so high up in the business, for dread about the consequences. Whenever a global company as large as Horsepower can have such evident discrepancies in the recruitment and selection process regarding vendors, it makes one question whether this loophole in their system is also being misused at other levels of the business. The worst has recently happened. The person right at the top has committed problems that have changed the entire game for the company. Stock prices dipping, traders filing legal suits - and this has business lead the IT major to maintain turmoil. Luckily, in the case of HP, the harm had not been too deep since it only included one person who made some bad decisions in the business. The business could bounce back because of the fact that there was no inner network of such malpractices in the business, and even if there are, this event will definitely prove to be a lesson to everyone - Regardless of at what level up the hierarchy you may be, the hand of law will always get you.

I think that the environment for ethics and conformity has changed drastically within the last decade.

A lot of the arrived of the Enron and WorldCom scandals and the causing Sarbanes-Oxley Work. But it's more than simply a matter of legal compliance. Companies should do what's right, rather than complying with rules. And what is right depends upon all our stakeholders, so we have to listen to them and understand their goals to be successful.

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