Week 10 Application Assignment - Dawn Whitaker

There is no question as to the amount of success Hewlett-Packard has enjoyed, or the seeming monopoly that they have on the computer printer market. In January of 1996, Hewlett-Packard (HP) was deemed Forbes’ “outstanding corporate performer of 1995” (Linden & Upbin, 1996, p.1), despite having stiff competition from corporate giants such as G.E. and Intel. In 1995, HP’s stock earnings per share increased by 51%, their share price soared 90%, sales growth increased to 26% (where it had plateaued at 22% over the previous 5 years), and revenues skyrocketed by an additional $6 Billion (Linden & Upbin, 1996). Behind their stellar performance, one can look to HP’s strong corporate culture as a contributing factor to their success. Organizational culture, can be simply defined as, “the way things are done” within organizations (Sorenson, 2009, p.1). According to Denison and Mishra (1995) there is a positive correlation between having a strong corporate culture and the productivity of an organization.

HP’s culture has perpetually been “a collection of small shops, largely autonomous divisions tied together only by a strong sense of shared values and explicit profit objectives” (Linden & Upbin, 1996, p.3). Being coined as “Boy Scouts on a rampage” (Linden & Upbin, 1996, p. 4), HP’s employees have earned a reputation as nerds with pocket protectors, further exemplifying the organization’s practice of maintaining skilled and knowledgeable engineers as employees (Linden & Upbin, 1996). Their corporate culture clearly stresses the importance of shared values and demonstrates an underlying principle of openness, resulting in the desire to earn the respect of their colleagues (Linden & Upbin, 1996).

Sorenson (2009) makes the claim that it is important for a corporation’s management to hire and train the right employees in order to maintain a consistent and strong culture. Management at HP could be considered lucky, to some degree, as they attract a certain type of employee, already in line with their corporate culture and eliminating the need for additional steps to achieve natural conformity among employees (Linden & Upbin, 1996). This philosophy has been ingrained within HP’s corporate culture since its beginning in 1938, as David Packard himself stated, “get the best people, stress the importance of teamwork and fire them up with the will to win” (Linden & Upbin, 1996, p.2). Employee motivation is further nurtured within HP’s culture with the practice of shared activities, shaping employees’ actions by social influence (Sorenson, 2009). “The culture is so strong that many of the employees mix socially as well as for business and often share outdoor interests--as Bill Hewlett and Dave Packard did--like mountain and rock climbing” (Linden & Upbin, 1996, p.4). This fostering of corporate culture through social camaraderie further enhances the alignment of the organization’s goals, resulting in enhanced productivity (Sorenson, 2009).

As we can see in Hewlett-Packard’s case, having a strong organizational culture directly contributes to the company’s performance and superior profitability. Nurturing employee motivation and maintaining an open environment allowing internal social influence, all contribute to the stability of HP’s corporate culture. Moreover, the ability to attract employees, already sharing the values of the organization allow for the maintenance of a strong culture with limited effort from management, and increased productivity--a definite formula for success!

References

Denison, D.R. & Mishra, A.K. (1995).Toward a theory of organizational culture and effectiveness.Organization Science, 6, 204-223

Linden, D. W., & Upbin, Bruce. (1996, January). Top corporate performance of 1995. "Boy Scouts on a rampage". Forbes, 157(1), 66. Retrieved April 1, 2012, from ABI/INFORM Global. DocumentID: 8703913.

Sorenson, J. (2009) Note on Organizational Culture, Harvard Business School, pp. 1-6