Downfall of Hp

The Downfall of Carly Fiorina and HP

Joseph Mastromarino

MGT 498-Organizational Change

Professor Ghitulescu

The College of New Jersey

“The Downfall of Carly Fiorina and HP”

Introduction & Context for Change

Hewlett-Packard Company is a leading global provider of computing and imaging solutions and services for business and home. It is focused on taking advantage of the opportunities of the Internet and the rapid increase of electronic services. HP’s cornerstone consists of an industry that specializes in leading test-and-measurement, semiconductor products, chemical-analysis, medical businesses, communications, and life sciences. In the early 2000s, Hewlett-Packard Company was facing their biggest downfall in history. As a result of poor leadership skills, failed mergers and acquisitions strategy, and an unfocused vision for the company’s future, a substantial number of employees got fired, quit, and even found other opportunities elsewhere. The purpose of this research analysis is to examine the reorganization of HP and the acquisition of Compaq.

Carly Fiorina was named CEO and President of Hewlett-Packard Company in July of 1999. The Board of Directors unanimously decided to elect her to support HP in undergoing a transformation. The company wanted to pursue a candidate that had the necessary skills to undertake issues that caused the organization to lag behind in progressing in the information-technology sector. The situation that called on Fiorina, was that there were 83 product divisions, each headed by a general manager with responsibility for everything from new product development to marketing. The predecessors in the late 1980s thought it would promote entrepreneurialism and technical superiority. Decentralization caused the issue of divisions not cooperating and working against each other. The drawback with decentralization is that working capital started to become strained for reasons that baffled top management. It turned...