HP and Leo

The Article I found was “Executives Churn at H-P”. It was in the Wall Street Journal on May 26th 2011. There has been some change at HP since Mark Hurd, the previous CEO left August 6th 2010. He had taken control April 2005. Since he was CEO he had made major changes for the better to the company. He reduced expenses by $15,200 in his time with the company. HP also surpassed IBM as the world’s largest technology company. He was forced out due to hiding a relationship with a marketing consultant. It is also said he misused company funds. Some thought this was a harsh punishment for this CEO especially is light of other CEO issues that have come out. For example: cooked books, stolen from the company and done much worse than Mark. On the Monday after Mark was forced out HP’s stock dipped 8%. After a short time with an interim CEO Leo Apotheker has been selected as the new CEO. Apotheker took over in November 2010. Since then over 10 executives have either left or been forced out. Some are leaving due to unhappiness with Apotheker’s strategies and moves. Others are being forced out or retired. This isn’t typical for such large companies. These changes might be due to their stock hitting a 52 week low. Leo Apotheker has already filled many jobs and has another 15 executive’s position to fill. He is also changing who they report to. Almost all of the new hires will report directly to him. I can see how when some new comes in there will need to be changes but that is a high amount of turnover in less than one year with the new CEO. The people that are left would be wondering “Am I next?” There are many strategic, tactical and operational decisions to make when the management changes. While some changes are needed how could they tell that quickly over 15 executives needed to be removed from the company? While Leo did come from another company as a CEO I personally would have a hard time being lead by a person who came in and cut most of my coworkers very quickly. In the long run it might be for the best of the company but I do not feel he has been there long enough to make that decision. Mark Hurd wasn’t forced out because he wasn’t good at his job. He was forced out due to a bad decision on is part. A decision in today’s world that is very common. I have also included a chart of HP’s stock prices in the past couple months.

Here is the link to the story I was talking about.
http://online.wsj.com/article/SB10001424052702303654804576345693663298956.html?KEYWORDS=executives+churn+at+hp

Home Depot and Robert Nardelli

Robert Nardelli served in The Home Depot from December 2000 to January 2007. Prior to that, Nardelli had risen to become one of the top four executives at General Electric. Here, I want to discussed about various control measures taken by him at Home Depot to execute his vision. Like the article said: Nardelli's strategy to expand into the contractor supply business, while cutting costs and streamlining operations in 1,816 U.S. Stores. What kind of motivation let him realized that achieving better process controls from decentralized company into a centralized corporation that could add consistency and get more profit for the company? What is the impact to the Home Depot's organization behavior after Robert Nardelli take the CEO position?

First, I think that he is task-oriented leader who provide the employees with direct and clear instruction. He makes the decision making more centralized and take away the autonomy that the store managers enjoyed at Home Depot. For example, he replaced many thousands of full-time store workers with legions of part-timers to cost-cutting program. What's more, he changed the Home Depot's return policy. In the past, customer can return the any item purchased at a Home Depot without a receipt. Now, the policy is to refund cash only for goods returned with a sales receipt within 90 days. This policy reduce the company cost for millions each year.

Second, he assured that the Home depot use central purchasing power so that it become more efficient and more uniformity throughout the organization while help Home Depot to fulfill well defined processes thereby getting some kind of discipline that makes the company can have positive growth. For example, he embarked on an aggressive plan to centralize control of the company such as he invested more than $1 billion in new technology, including self-checkout aisles and inventory management systems that generated reams of data. In addition, he declared that he wanted to make sure the company is controlled by himself.

Just like I said before, Robert Nardelli is directive leaders who provide specific directions to their employees.This also ensured that decision making power is centralized and store managers are supposed to follow orders which will help in controlling costs better to save the company money and ensure better efficiencies.

However, by using centralized method to manage the Home Depot, Robert Nardelli do not notice that there are some drawbacks for using centralized method. In order to reduce the cost, Robert Nardelli cut the great, knowledgeable salespeople or full-time employees who were so helpful to customers. The result was higher profit due to lower employee overhead. But it also dramatically changed the Home Depot brand because store staffing was sparse, the employees were not as motivated and customers struggled to find what they needed in the do-it-yourself stores.

In the end, I want to ask that is centralized method really good for company even though they know they will lose some customers? But centralized can make sure company can have dramatically gross margin growth and meet the stakeholders expectation. How can a good CEO do the best decision for the company?

Reference:

1. http://www.businessweek.com/magazine/content/06_25/b3989044.htm

2. http://www.msnbc.msn.com/id/16469224/ns/business-us_business/t/out-home-depot/

3. http://www.thelatimergroup.com/aboutus/newsversions/spotlight_v5issue2.html

Kochen

Carly Fiorina - HP Compaq merger-was she helping or hurting HP???

In the ever-changing, cutthroat business world, effective business communication skills are vital if a company is to survive. Organizational behavior deals with various issues regarding diversity, motivation, communication, leadership issues and so on. Few months back, I read about HP Compaq merger and I found that story very interesting. It raised lot of questions on my mind about the issues of communication and leadership skills. The story is all about Carley Fiorina, who was the former CEO of Hewlett-Packard. Fiorina rose quickly through the ranks at AT&T and Lucent Technologies to become the most powerful businesswoman in the United States when she took the helm at HP in 1999. She prevailed in a bitter proxy fight over the firm's merger with Compaq Computer. However, she was abruptly fired in 2005.

Organizational change, specifically to the management of the company’s corporate culture, has brought about much of the criticism. Fiorina made a controversial move in 2001, when she announced HP's plans to acquire Compaq. The sons of the company's founders, who sat on the company's board, opposed the $19 billion purchase but it narrowly passed, with 51 percent of the company's shareholders voting in favor of the deal. Walter Hewlett, son of founder William Hewlett, sued Fiorina and HP, alleging manipulation in the vote. While the merger signaled a victory for Fiorina, HP's performance in the wake of the deal was erratic. "HP shares are worth less today than on the day before the merger was announced or on the day it closed," The Economist said in 2004.

In an Organization behavior, the practice of ethical leadership includes two pillars: the moral person and the moral manager. Ethical individuals behave morally in their leadership roles and, at the same time, promote ethical conduct in followers. Fiorina acted as an ethically neutral leader who gained a reputation for being self-centered. She was perceived as lacking compassion, integrity, and humility. Her focus on the bottom line and individual rewards weakened the firm's ethical culture. Knowing the financial condition of HP in 1999, In my opinion, Fiorina had drawn criticism for what was seen as an imperious leadership style.

What are your opinion about that? Did Fiorina go wrong on the decision of merger? What are your opinions about the impact of her decision on both the companies?

References: http://www.alwebtechnology.com/mergers-and-acquisition-a-case-study-and-analysis-of-hp-compaq-merger/

http://www.allbusiness.com/company-activities-management/company-structures-ownership/11674773-1.html

Wikileaks and Julian Assange

Hey Group, 

I found this article about Julian Assange , founder of Wikileaks , a non profit organization that publish secret documents and information in the public domain, Julian Assange believes that total transparency is the key to success and good for all. I think that he poses a profitable impact on his organization but a negative impact on the society. Wikileaks was founded in 2006 for the exchange of free information for that they have anonymous sources and they hack into secure systems to find documents to expose to people. According to one of the interviews of the founder this organization doesn't have any official headquarters which is actually not accountable in my opinion and there are many law suits filed against Julian for disobeying the laws.

Are the people harmed ?? My answer would be yes not only on the people but also on national security because its actually leaking the confidential information of the government i agree that everybody has a right to know but then doing it unethically is not the way to do it it is possible that by doing the way Julian is doing it can lead to spread of misinformation the only claim that the information is accurate but their is no evidence to prove it. Its open to public so anybody from anywhere can access the information which is a chance of loosing security and credibility. 

Relation to Organizational Behavior? 

I think the way Julian behaves is quiet unethical he only thinks that he is right in what he is doing not worrying about the national security and society. The way he perceive the information puts the danger to US diplomacy on a whole and by exposing important information, it puts the country at a greater risk for terrorism. According to Army Times, "A recent document spill by WikiLeaks included detailed and blunt exchanges between foreign and U.S. officials on such politically sensitive matters as a top-secret U.S. bombing campaign in Yemen". 

This is by far my analysis about the organization and its founder?? I will be looking forward for your comments so that we can have some interesting point of view on this. 

Sources : Here are the links for the articles i took this story from . 

http://www.time.com/time/world/article/0,8599,2006496,00.html 

http://www.wikileaks.ch/ 

http://www.smh.com.au/entertainment/books/genius-or-estranger-in-a-strange-land-20110527-1f7vq.html 


AYUSHI SHARMA
 

Introduction of Team Members and Blog

Hey Big Bang Impact Blog fans! We are so excited to work as a team of Big Bang Impact Blog for class MQM 421. Before starting our posts, let we introduce you team members. We are the team of four.
Our names are Dena Wibben, Kochen Ling, Ayushi Sharma, Shruti Singla. Our Blog “Big Bang Impact” talks about leaders who have impacted their organization, negatively or positively. They brought a change in their organization and when we talk about organization, Change management is one of the most vital and interesting concept. This blog will also talk about the mergers and acquisitions of the company and how that have impacted the working of any organization. We chose this theme for our blog, because it is a never ending quest to know about the success stories of leaders and also at the same time, learn lessons from failures. After all, It is all about the stories of organizations So,wait for some interesting posts to come.........