Pestl Analysis

Topics: Change management, Management, Organization Pages: 13 (3552 words) Published: May 12, 2013


In the mid 1990s, global computer major HP1 faced major challenges in an increasingly competitive market. It’s culture emphasized teamwork and respect for co-workers, which over years translated into a consensus-style culture that proved to be a disadvantage to the fast-growing Internet business era. To cope with the changing industry and its demands HP appointed Carleton Fiorina in 1999 as the company CEO whom in her term of office brought signifant changes and was largely known for her risk taking and overly ambitious measures in pursuits of saving the company only to increase market share for a short period (revenues grew 15% financial year ending in October 2000-January net profits were well below the stock market, December 2000 laid off 1,700 marketing employees). She restructured the organization in trying times and introduced structures and procedures that improved their performance however didn’t make room for capacity delivery capabilities as their grew increasingly following that, further restructured it again causing unclear ambiguous responsibilities of profits and losses between front and back end managers. As a result there was no clear financial control and increased disorder prevailed. Analyst criticized her for being too ambitious and tackling HP problems all at the same time.

Change is an act of making or becoming different from what was previously. Which in general can be thought of as inevitable, as long as life exists and persists, change is bound to occur. In the context of organizations today the quality of people and their engagement will increasing be key factors in organizational survival and growth. One can tell the absence or poor management of change in the workforce and overall organizational structure can deter the revenue sales and market share of that organization as witnessed in the above predicament that faced Hp. It goes without saying that; to remain competitive in the turbulent business time’s today change impacts HRM approach within companies thus making the role of the HRM crucial and influential. The report will further detail recommendations of the newly appointed Change manager consultant to HP, which in light of the above problems of HP has decided on embarking on an Strategic Organizational Change framework that will carefully scrutinize where HP finds itself (problematically) what can be done to salvage these problems and most importantly how will they go about to ensure that the internal and external factors affecting these variables are well addressed and adhered too.

HP share market gain had begun gained too reduce in late 2000. HP pc share had fallen from 78% to 69% for the 12months ended January 2001. Sales of HP windows 7 had dropped from 10% to 8% in the same period. HP did not perform well in the software business. From the above results that has occur HP: The following barriers were identified: * Dysfunctional culture: HP’s culture

* Change is poorly implemented
* Differing organization values
* Poor leadership
* Lack of skill to implement change
* Managers attempt to change employees when in fact the system may need to change What changes do we need to make?
Leadership: HP’s need an effective leader who will be able to involve the people with the organization throughout the change as early and openly as possible. The leaders will have to understand where the organization is at after moment and work at what measures to use to get where the organization want to be. Organizational Culture: HP needs to emphasize the importance of the business and possible change the way they been managing employees, for an organizational culture culture to be effective hp needs to make people or employees understands that they are working for the fast growing internet business organization and that goes to a...
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