Free Management Essays - This essay will discuss the advertisement placed by Hewlett Packard in the Guardian, on the 3rd February 2000
This essay will discuss the advertisement placed by Hewlett Packard in the Guardian, on the 3rd February 2000. First it will discus the history and background of the organisation, and the internal and external factors that led to the advertisement. The advertisement had reinforced the core values relating them to the roots of the organisation. The advertisement appeared as if it was an attempt to change direction of the organisation, this will be reviewed against management theory, concluding on whether it is a new practice.
Most organisations (even the very large) have their foundations in one or two individuals who have the determination to turn a vision into reality. These founders of the organisation possess entrepreneurship. These leaders are embedded in the culture of the organisations. The stories, myths and artifices from their work are used as a tool to reinforce the values and norms to the members (Morrison, A. 1998). An encouraging tale for any would be an entrepreneur is the formation of Hewlett Packard Company (HP). Bill Hewlett and Dave Packard started in 1939, in a small garage in Palo Alto, California, producing audio testing for sound equipment. By 1979, the two employees had grown to 52,000 employees; the garage had generated multiple facilities and plants; with a portfolio of over 4,000 products for electronic measurement, analysis, and computation (Fulmer, R. et al 1999).
A major change for HP was forced in the late 1990s; the computer business was experiencing incredible change. Personal computers were becoming a common appliance in households all over the world. The technological advances included worldwide access to the Internet. As the availability and range of computers increased their retail price nose-dived. HP board decided that fundamental change was needed to continue its successful business record (Kniery, D. 2002).
The change agent for HP was the appointment of Carly Fiorina as chief executive. Appointing a woman who had not been promoted through the ranks of the company was a strong indication of HP's commitment to the concept of building a new management team. This radical change required radical thinking. The organisations culture was reviewed and changed under the banner of the "New HP Way." The new HP way involved all employees, especially managers to be leaders who create enthusiasm, and respond with extra effort to meet customer needs (Fulmer, R. et al 1999).
Cultural and structural factors have a direct impact on organisations, and they can impinge on the very success of the organisation. These are highlighted when an organisation attempts to redefine itself, to change their image in an attempt to maintain or to enhance their competitive capabilities. For an organisation to remain an effective it must review and measure its performance regularly. This will require using data effectively, to review current skills against future requirements. Technology will change future needs of the organisation and its performance. Human resource practices need to evolve with these changes. This includes empowerment of skilled workers and the need for new skills in utilising information in decision making (Gratton, L. 1999).
External pressures that organisations are constantly under compel them to continually look at methods to gain the competitive edge over other organisations, to move foreword and ultimately survive. By encouraging employees to increase their performance, beyond the minimum standard that is expected from them can give them “added value”; this contributes to the organisational effectiveness (Beardwell, et al 2004). There are numerous factors both internally and externally, that will all play a part in the success of the organisation, of these the human resource is the greatest. To be effective an organisation needs to constantly review the components within, what affect they will have on the success of a new strategy, identifying problem areas and managing these problems (Mullins, L 2005).
A measurement of the effectiveness of an organisation is its ability to changes in response to changes in the environment. The better the ability to response to changes, the more effective it will remain (Redshaw, B 2001). Daft (2001) discussed this factor as “the ability of an organisation or entity to choose appropriate goals and implement the procedures to achieve the goals. An organisation is a social entity that is purely goal directed, designed and deliberately structured to co ordinate an activity system, and is linked to the external environment” (Daft, R. 2001, :12).
All organisations necessitate strategic plans to move them forward; some are needed to overcome specific problems within the organisation or the market place. This is the matching the organisation to the environment, the “strategic fit”. Strategies can build on or stretch the organisation resources. Strategies necessitate consideration not only how they will affect existing resources, but if new resources are required, how they be controlled (Johnson G, & Scholes, K, 2004).
Managers of organisations have responsibility to get the strategic intent right, not just for the advantage of the organisation. Drucker (1989) discussed the responsibility of management as being “decisive not only for the enterprises itself, but for the Managements’ public standing….for the very future of our economic and social system and the survival of enterprise. The decisions that managers make, do not just affect the organisation, they have an affect on the whole of society, with ethical, environmental and social considerations. Misjudged and misguided strategies have in the past brought down organisations both financially and in their reputation, damaging the public’s opinion of them (Drucker (1989) cited in Mullins 2005:214).
HP strategic change was headed by new guiding principals. The “Rules of the Garage” reminded both employees and customers the foundations of the organisation. HP rules are (1) Believe you can change the world. (2) Work quickly, keep the tools unlocked, and work whenever. (3) know when to work alone and when to work together. (4) Share - tools, ideas. Trust your colleagues. (5) No politics, no bureaucracy (These are ridiculous in a garage.) (6) The customer defines a job well done. (7) Radical ideas are not always bad ideas. (8) Invent different ways of working. (9) Make a contribution every day. If it doesn't contribute, don't leave the garage. (10) Believe that together we can do anything. (11) Invent (Kniery 2002).
The “Rules of the Garage” incorporates both individual and organisational goals, linking them to the strategy, culture, beliefs and ethic stance of the organisation. The `”Rules of the Garage” describe HP guiding principles. Kniery (2002) discussed the rules stating “HP believe that they can change the world, by employing the best people….continually seeking ways to better assess customers experiences….. reinforcing the values in the founders story, making HP a stronger organisation, allowing constant improvement, while helping others explore a new way of working (Kniery, D. 2002:24).
HP believed their new strategy would transformational for the organisation, with competitors wanting to learn their management methods and install them in their own organisations. Organisations require innovative skills to survive; this is the complexity of the chaos theory. Organisations are now viewed as self-regulating, emergent, open, whole systems. Capra (2002) discussed the change in organisations as “a contrast in the metaphor of organisations being machines to that of organisations as living systems” (Capra 2002 cited in Nixon 2004:58).
This was not so much a shift in practice, more a reinforcement of the established values. HP has always maintained a decentralised organisation, and has constantly worked to keep a flat hierarchical structure. Participative management has helped HP maintain the closeness and personal involvement of a small company, even as it has grown into a large organisation (Fulmer, R. et al 1999).
The structure of an organisation will have a direct affect on its future. Child (1988) commented that “the allocation of responsibility, the grouping of functions, decision making, co-ordination and control and reward, all these are fundamental requirements for the continued operation of an organisation. The quality of an organisations structure will affect how well these requirements are met” (Child, J. (1988) cited in Mullins, L. 2005:597).
The structure of the organisation provides a frame work for the activities and how they are controlled. The need for economic efficiency and improved competitiveness is leading to participative management and employee involvement. This has contributed to down sizing and flatter organisations structures. This shift in management practice has altered the chain and span of control. Those that advocate the flatter structures maintain that they reduce management costs, improves communication by a reducing the chain and introduces control by proximity. Down sizing an organisation reduces bureaucracy and increases decentralisation (Daft, R. 2001).
Healthy organisations would like to be viewed as containing harmonious working relations, committed to working together towards the common goal. Conflict is a reality within the organisational climate; therefore conflict has to be managed. The most specific level the culture of the organisation can be seen as the aggregation of the cognitive interpretations of the organisation workforce, conflict can reveal itself. This conflict arises from the personalities and experience of the individuals, together with the interactions between employees that can cause distortion (Hamlin, B. et al 2000).
Classical authors described organisations in terms of its purpose, with its prescribed structure; the hierarchy of the organisation. The importance was placed on work planning, achieving this through managing the technical requirements, and the presumption of rational and logical behaviour from within the organisation (Mullins, L. 2005). Classic management literature is all about the need for controlling and coordinating by designing systems, creating structures and making decisions. Managerial work also involves directing, such as issuing directives, delegating tasks and authorizing decisions (Mintzberg, H. 1999).
All organisations require control of their resources, which is accepted in principal by most employees. Mullins (2005) discussed that most people did not wish to have “control applied to them, but they recognised the need for a control system” (Mullins, L. 2005:832). Wilson (1999) described employees’ reaction to control as they are “not just passive objects of control, they may accept, deny react, rethink....or rebel” (Wilson, J. 1999:103). Control in flatter organisations stems from the culture. This form of control is the acceptance and wiliness to meet the requirements of management.
Cultural control is achieved through careful selection, training and socialisation of employees. This form of control is achieved through strong professional identification and an acceptance of the organisations values and beliefs. The employment practices allow semi autonomous working with little hierarchical control. This allows employees the freedom to be innovative and creative without bureaucratic control. Training and development of employees is on going and proactive, this is accomplished through strategic HR practices (Beardwell, et al 2004).
Strategic HR creates value by providing opportunities for organic learning, development of intellectual capital and enhances core competencies. This value is crucial to the organisation's future success. This is vital to develop the organisations identity through its culture. This is individual to each organisation, and should not be copied from another. This is the only method to incorporate all parts of the company's operations into a value chain that drives the strategy (Treen, D. 2000).
Knowledge is viewed as objects of the organisation, and therefore can pass between different states. Knowledge management systems states they can be ‘externalised’ and ‘merged’ with tacit forms of knowledge. Through the processes of conversion between employees it triggers the process of intuiting, interpreting, and integrating them into the organisation (Cohendet et al 1999:523).
In open organisations employees are valued for their ideas, creativity and past experiences. Diversity is treated as strength, and individuals are encouraged to develop ideas, to speak out, and confront actions. As firms evolve, they pick up skills, abilities and resources that are unique to them, reflecting their particular path through history (Barney, (1995) Cited in Paauwe, J & Boselie, P. 2003). This is particularly true of a firm's human resources, employees who are recruited, trained and who become part of the specific organisational culture and network (Paauwe, J &Boselie, P. 2003).
The HR and business strategies need to match; this has in the past been a major strength of HP. This has given clarity to the business planning process. Strong leadership is combined with organisational development and demographic planning. But the growth in the organisation has brought increased bureaucracy, which has sapped innovation and reduced knowledge transfer. The effect has been the traditional approach to cultural control is changing. This change has been cause by the growth and success of the organisation (Johnson G, & Scholes, K, 2004).
The role of human resource explicitly views employees as another resource for managers to exploit. In the past, managements had failed to align their human resource systems with business strategy and therefore failed to exploit or utilise their human resources to the full. The force to take on HRM is therefore, based on the business case of a need to respond to an external threat from increasing competition (Guest, D.1999).
This view reflects a longstanding capitalist tradition in which the worker is viewed as a commodity. The consequential exploitation may be paternalist and benevolent; but, equally, it may operate against the interests of workers. Essentially, workers are simply resources to be squeezed and disposed of as business requirements dictate. More importantly, the interests of workers and their well-being are of no significance in themselves. As John Monks (1998) stated “In the wrong hands HRM becomes both a sharp weapon to prise workers apart from their union and a blunt instrument to bully workers” (John Monks, J. (1998) cited in Guest, D.1999:257)
It is argued by chaos theorists that the world of the organisations is unstable and chaotic, making it impossible for them to foresee the future. Therefore traditional approaches to strategic decision making are no longer relevant (Johnson J & Scholes K 2004). Increased competitiveness has raised the value of organisational strategy, for organisations to be competitive they must adapt faster to change. Therefore all organisations are subjected to the constant pressure of change (Mullins, L 2005).
The “Rules of the garage” have reinforced HP core values, but the subsequent growth in the organisation has increased bureaucracy, which is contradicts the rules. The rules did not offer anything new in management practice; flatter cultural organisations have been around since the 1960s. The new HP way reinforced the innovation of the organisations founders, which has always been a guiding principal.
The size of the organisation has a greater impact on the control systems within the organisation, than culture driven practice. Control systems grow with the organisation. It appears that the only way to remain culture driven is to restrict growth of the organisation, or to operate within small units.
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