Please review the article and try to answer the following question:"Based on the article on HP, as a Production Manager how do you want to design the Production Process? What type of Organization do you think HP is? Justify your answer with example."
In 1939, two engineers, Bill Hewlett cision-making responsibility and and David Packard, started authority. The approach became Hewlett-packard in a garage. Bill known as the 'HP Way', a structure and Dave did everything them- that encouraged innovation by abol- selves, from designing and build- ishing rigid chains of command ing their equipment to marketing and putting managers and employ- it. As the firm grew out of the ees on a first-name basis. garage and began to offer more and But by the mid-1980s, although different types of test equipment, still profitable, Hewlett-Packard Hewlett and Packard could no had begun to encounter problems longer make all the necessary operating decisions in the fast-changing microcomputer and mini- themselves. They hired functional managers to computer markets. According to Business Week: run various company activities. By the mid-1970s, Hewlett-Packard's 42 div- Hewlett-Packard's famed innovative culture isions employed more than 30,000 people. The and decentralization [had] spawned such company's structure evolved to support its heavy enormously successful products as its 3000 emphasis on innovation and autonomy. Each minicomputer, the hand-held scientific division operated as an autonomous unit and was calculator, and the ThinkJet non-impact responsible for its own strategic planning, prod- printer. But when a new climate required its uct development, marketing programmes and fiercely autonomous divisions to co-operate implementation. in product development and marketing, HP's Peters and Waterman, in their book In Search passionate devotion to 'autonomy and entre- of Excellence, cited HP's structure as an import- preneurship' that Peters and Waterman ant reason for the company's continued excel- advocate became a hindrance. lence. They praised HP's non-restrictive structure and high degree of informal communication (its Thus Hewlett-Packard moved to change its struc and high degree of informal communication (its Thus Hewlett-packard moved to change its struc ture and culture in order to bring them in line t-Packard with its changing situation. It established a began in thin system of committees to foster communication garage in 1939. within and across its many and varied divisions It now operates and to co-ordinate product development, market- globally through ing, and other activities. asophisticated The new structure seemed to work well, for a complex of while. However, the move towards centralization facilities and soon got out of hand: communications networks.Its structure and The committees kept multiplying, like a culture have virus. [Soon] everything was by committee changed ivith ... no one could make a decision ... By the growtli. late 1980s, an unwieldy bureaucracy had bogged down the HP Way. A web of committees, originally designed to foster connmmication ... had pushed costs up and slowed down development. Entering the 1990s, HP had no fewer than 38 in-house committees that made decisions on everything from technical specifications for new now deals with three committees instead of products to the best cities for staging product 38. We are doing more business and getting launches. This suffocating structure dramatically product out quicker with fewer people.' increased HP's decision-making and market- reaction time. For example, in one case, it took In iess than a decade, Hewlett-Packard's struc almost 100 people over seven weeks just to come ture has evolved from the decentralized and up with a name for the company's New Wave informal 'TIP Way' to a centralized committee Computing software. system and back again to a point in between. HP In 1990, when one of HP's mast important pro- is not likely to find a single best structure that will jects, a series of high-speed workstations, slipped satisfy all of its future needs. Rather, it must con- a year behind schedule as a result of seemingly tinue adapting its structure to suit the require- endless meetings about technical decisions, top ments of its ever-changing environment. management finally took action. It removed the project's 200 engineers from the formal manage- ment structure, so that they could continue Sot'RCBS- See Donald R Harvey, Business Polity and work on the project free of the usual committee StrategicManagement (Columbus, OH; Merrill, 1982), red tape. The workstation crisis convinced IIP pp. 2()9-70; Thomas J. Peters and Robert H. Waterman, In management that it must make similar changes Search of Excellence: Less&nsjrom America's best-run throughout the company. companies (New York: Harper & Row, 19821. Excerpts from Who's excellent now"", Business Week (5 November 1984), [Top management] wiped out HP's pp. 76-8; Barbara Buell, Robert D. Hot" and Gary MeWilliams, committee structure and flattened the 'llewlutt-Packard rethinks itself, Business Week (1 April 1991), pp. 76-9; and Robert D. Hof, 'Suddenly, Hewlett- organisation. The results arc incredible,' Packard is doing everything right', liwiiness Week (2! March says [TIP executive Bob] Fraiikenberg, who 1992), pp. 88-9
