Carly Fiorina: Implementing changes at HP*



Case Code : CLBS043
Publication date : 2004
Subject : Business Strategy
Industry : Information Technology
Length : 03 Pages
Price : Rs. 50

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Key words:

Hewlett Packard (HP), Carly Fiorina, John Young, centralized organizational structure, group structure, local decentralization

* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.


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The caselet discusses the steps taken by the new CEO Carly Fiorina in a bid to improve the financial performance of HP. The caselet discusses the problems faced by HP during the mid 1990s due to its highly decentralized organization structure. The caselet also analyzes the effect of the management reorganization plan implemented by CEO Carly Fiorina.


  How Carly Fiorina made changes in the organizational structure of the company.
  The impact of changes in organization structure on employee morale and customer satisfaction.
  The changes in organization structure that HP brought in since the 1950s.


HP followed a highly centralized organizational structure till 1950s. In 1960s the company adopted a divisional structure as the top management thought that the divisional structure would give considerable autonomy to its employees.

The company brought in certain changes in 1968. With increasing number of operating divisions and product lines, the company adopted a group structure. Under the group structure, related divisions were combined and a group manager headed the group. The company's orientation towards decentralization process enabled it to improve its field marketing activities....

Questions for Discussion:

1. The organizational structure of HP was changed several times under various heads. What are the structural choices available with HP and which according to you is the best structure for HP? Justify your answer.

2. Under Carly Fiorina, there were dynamic changes in organizational structure of the company to accommodate the needs of strategy. With reference to the case discuss the relationship between strategy and structure.