A Case Study on Carly Fiorina,
Ex-CEO of Hewlett Packard
傅筱君
Applied English Department, Southern Taiwan University
Abstract
Carly Fiorina comes for a middle class family. Form a receptionist in real
estate brokerage company to "the most influential women in the world" called
by the U.S. ‘Fortune’ magazine. She was once one of the most successful
businesswomen in the world. Carly called herself as a ‘Change Warrior’. She
believes change is a hard thing, especially for the reformer. However, through
change one could gain more. She had stayed in AT&T for almost twenty years.
Her strong fighting spirit led her to conquering difficulties and to the way of
prosper step by step. The most familiar thing she did was the merger of Hewlett
Packard (HP) and Compaq. As a professional manager who became the CEO of
the biggest technology industry, she won this battle, but also led herself to
conge later. When people analyzed whether she was successful or not in HP,
some thought she failed, because she was dismissed by the broad. HP’s revenue
later turned from loss into gain, not because she had left, but because she had
been there for a couple of years.
1. Introduction
Hewlett Packard (HP) is the most popular printer and computer
producer in worldwide. Although it was very famous, its growth and innovation
were in a standstill. How to make the business prosperous as before would be a
significant issue. In the hierarchic company, Carly Fiorina’s unique feminine
identity subverted the stereotype that only men could be executives. Moreover,
she became the first female CEO in HP. It caused a lot of disputes, because she
did not have computer-related background. The broad of HP believed that they
needed an outsider to rectify everything. Therefore, she used her experience in
AT&T to save their revenue and reformatted business department. This case
study will focus on HP Company’s background, Carly Fiorina’s personal
background, Carly Fiorina’s undergoing, together with a SWOT analysis of HP.
.
1. 1 Hewlett Packard (HP) company’s background
Hewlett Packard (HP) was established by two Stanford University
classmates Bill Hewlett and Dave Packard in 1939. At the beginning, the
company was founded at a garage in Silicon Valley. The company's first
product was an audio oscillator—an electronic test instrument used by sound
engineers. The first customer of HP's was Walt Disney Studios, which
purchased eight oscillators to develop and test an innovative sound system for
the movie Fantasia. Through the time, Hewlett Packard Company made a lot
of profits and has become a famous printer and computer producer around the
world. However, with a lot of consumers, serve experiences, and Global market
share, HP still has to face crisis for their revenue. HP’s revenue is far behide
competitors’ during 1997and1998. In 1999, when Carly Fiorina just took over
the position of CEO, she was confronted with difficult task of finding a
solution to this problem.
1. 2 About Carly Fiorina
Carly Fiorina was born in 1953 in Austin, Texas, at a middle-class family;
her father was a university professor, and mother was a housewife .As Carly’s
father had to go to teach at different places, her family had to move frequently.
Therefore, she learned a lot of different cultures and had great adaptability to
new environments. She believes that change is difficult, but adventure will
learn more .She studied at Stanford University and majored in philosophy and
history. Without any financial support from family, she had to do a part time
job to pay her tuition. Thanks to the insistence of her mother, Carly learned
typing when she was in junior high school. During a semester break, she had do
full time job and detached to a lot of companies as a temporary secretary
including HP.
Carly was an incredible woman, from a receptionist in real estate
brokerage company to "the most influential women in the world" as called by
Fortune Magazine. After getting a MBA degree from the university of
Maryland, she decided to work. In1980,when she chose to join Ma Bell
(predecessor for AT&T), a lot of professors tried to dissuade her from entering
Ma bell. Those professors thought the organization of Ma Bell was too
bureaucratic and their pace was too slow. However, she had a different
viewpoint. In her opinion, the communications industry had good prospects.
Furthermore, the Bell system had the ‘management development program’ to
make those young managers shift in every department. She though this job was
so challenging. When she joined the staff training, at first her performance was
not good enough. Through the training course, she became more confidence.
1. 3 Changes in AT&T
There are several phases that changed her, not only her position but also
her performance, during two decades in AT&T.
1. Her professional attitude--- As she worked at a government
communications unit for a year, a difficult situation happened. Two heads of
bureau of Indian affairs visited, but they had met at a strip club. However,
she still audacious and professional did a great job as a receptionist. After
that, the balance of power changed. She got respected.
2. Her leadership style---In 1982, it was her first time to be a superintendent.
In order to cut off the sexual discrimination from her boss, she decided to
let her team perform better than expected. She set a higher target that they
must reach. But she had no idea how to do. She asked her subordinates’ to
do brain storming together before she could adopt their suggestions.
Moreover, she inspired the team morale and got attention. Every three
months, Carly made all employees to fill a simple questionnaire. Therefore,
their voice could be heard.
3. Her circumspection and inspiration---When she transferred to the
engineering department, she learned about schematic circuit. She found a
big mistake that their switch fee was overcharge. Finally she got promoted
as a regional manager, and the chance to pursue further education. She
learned new synergy technique, appreciated, and got the Massachusetts
institute of technology Sloan School of Management of business master of
commerce.
4. Her social skills---on the head of International Strategy and Business
Development, she had to deal with other companies around the world.
Although, there were some sexual discrimination. She still used her subtle
observation to overcome different culture custom problems. For example,
the Italian like to held dinner party at private place before started business;
the Koreans like to toast to show respect.
5. Her integrative competence---in 1995, she participated in AT & T spin-off,
established Lucent Technologies. She faced a lot of difficulty such as each
departments fight for their benefits, how to convince investors, and
promoted their belief. However, she found the heart of matters, and
successfully promoted the Lucent.1998, she was promoted to Global
Service Provider Business Unit Managing Director, and managed a sector
which revenue amount to 60 percent of total company.
She believes that all victories come from the same elements, appropriate
support, appropriate team, and successful determination.
2. 0 SWOT analysis of HP
The SWOT is the most universal way to help a company make decisions.
Through this analysis, they can make good business strategies. Strengths and
weaknesses are internal aspects in the company. That means they are the most
powerful elements to performance of company. The strengths may refer to the
business culture, abundant resources, and selfishness. The weakness may refer
to marketing, leadership, and strategies. Opportunities and threats are external
factors for the environment. That means they can not control in changed
environment. The opportunities refer to recruiters, a new leader, and
reorganized trademarks. The threats may refer to competitors, market, and
prices of products.
Strengths
HP has profound business culture and resources. It was build up by its
founder. Using those preservation and combine reinvention would make it
invincible.
Weaknesses
Although it got a lot of resources, these resources still could not help HP
to lay a status. It lacked strategies and failed to do away the bureaucratic
organization. The former two main factors caused staffs in HP passive in
marketing and offering service. The later bureaucratic organization caused the
staff only forcing on their own business.
Opportunities
The broad of HP wanted to recruit a new leader and reorganized the
company. Therefore, a brand new energy and speed could make HP different
then before.
Threats
The whole market changes all the time, not to mention the competitors.
The HP invested new products; however, they still far behind their competitors.
The prices of HP’s products were too expensive. Over all other factors, the
main reason was its passive attitude in expanding its business and market.
3.0 Takeover and Innovation
Carly Fiorina took over the HP company as CEO in 1999. She used
‘thousands tribes’ to describe messy internal structure of HP. For the
organization, she would like to preserve and follow the business culture, such
as have respect for and trust in the people, pursuit excellence achievements and
contributions, teamwork and encourage innovation. She reformed the method
of execution of industry characteristics. She also found that it is necessary to
enhance synergy and establish basic discipline. Therefore, she integrated eighty
production departments into ten business departments so as to gather up
resources. She also changed its strategy into customer-driven services and offer
systematic solutions for consumer. The staffs in HP only focus on their own
business. Carly used the rewards and appraisal (Expectancy theory) and
management by objectives (MBO) ways to make the staff understand the goal
that a head of other industries and anticipate for bonus.
3.0 take over and innovation
Carly Fiorina was took over the HP company as CEO in 1999. She used
‘thousand tribes’ to describe mess internal of HP. For the organization, she
would like to preserve the way of HP and follow the business culture, such as
respect and trust of the people, pursuit excellence achievements and
contributions, teamwork and encourage innovation. Reform the method of
execution of industry characteristics. It needed to enhance synergy and
establish basic discipline. Therefore, she made eighty production departments
integrated into ten business departments, to gather up resources. She also
changed its strategy into customer driven service and offer systematic solutions
for consumer. The staffs in HP only focus on their own business of department.
Carly believed that to learn how to horizontal cooperation with other
departments was essential. She used the rewards and appraisal (Expectancy
theory) and management by objectives (MBO) ways to make the staff
understand the goal that a head of other industries and anticipate for bonus. In
addition, she also changed the training system, in order to develop managers as
leaders.
4.0 The Compaq Merger
From 2000 to 2001, the global economic was recession and industry
structure changed. One of ex-board of HP suggested Carly to merger the
Compaq. During that time, she thought that they should not take initiative. In
fact, she had been observed Compaq for year. She believed that Compaq could
not handle pressure and soon they would need HP more then HP needed them.
After merged Compaq announced, both of their share prices were decline.
However, she met a group of business representatives, and they said that they
were excited and supported about this merger, because there would be more
new product portfolios they could sell. Although, the staffs of two companies
had faith, there was still some opposition. The main against force came from
the HP board. They oppose to merge Compaq, in other word, it was a fight
leaded by two family factions to oppose Carly Fiorina publicly. The board of
HP originated proxy battle and tried to spread some false rumors to make the
crowd query. They claimed that in the employee opinion survey, a lot of staffs
oppose to merge. As matter of face, according to Carly‘s employee opinion
survey shown the majority staff supported the merger. In the end, she won the
proxy battle. Nevertheless, after the proxy battle, Carly wanted to compromise.
She modified her leadership style and gave the board some alternatives even
abandon Compaq merger. However, She still got dismissed and without
respectful formal handover ceremony.
5.0 Conclude
Accordance with the Compaq merger, a lot of people disputed about
whether Carly Fiorina successes or not. For the reform of HP, many people and
the staff who against her believed that she would break ‘the way of HP’.
actually, she still preserved the spirit and added something new. She was really
hard working to understand the whole organization and business. Therefore,
she used her former experience in AT&T and got the heart of HP’s problems.
On the other hand, the Compaq merger, people believed that Carly did not help
HP’s performance and its share price. In fact, the revenue climbed steadily
under her leadership and after merged Compaq, HP became the second-largest
computer company in the world. When the board announced that they
dismissed Carly, there were thousands of comfort emails form HP staffs and
official around the world. If a person really made a huge mistake, how come
she still got so many supports? People should not only one-sided rhetoric.
Carly Fiorina choose not to talk about what her felt for fired to media, but
through her autobiography could make people more understood her and the
whole truth. To sum up, over all what she did was basic on her business
experiences and deliberated what would be the best decision for the whole
picture. If there should find the fault with her, in my opinion, I believed that
would be her pace of reform was too rush. Therefore she offended executives
within the company.