Organizational Outputs
HP and Palm Inc.: Organizational Outputs
On July 31, 2010, Hewlett Packard purchased Palm Inc. Palm exclusively makes handheld devices such as smartphones, and mini-computing devices. Palm is a mobile operator system that would allow Hewlett Packard to compete with operating systems such as Symbian, iPhone, and Linux (Berry, p.1). The following organizational analysis will examine the organizational outputs of the combined company after the merger.
Organizational Outputs
When HP acquired Palm Inc., it allowed them to combine a leader with a global economy of scale with an award winning Web OS. This allowed HP to expand its outputs to include the many product lines offered by Palm, including the highly profitable the $100 billion Smartphone acquisition (HP, 2010). Prior to the acquisition, HP was a leader in many PC based applications. The acquisition of Palm Inc. allowed it to the increase its outputs. As far as Palm Inc. is concerned, its core business of the remains of the many different product lines that it offers in the Smartphone series. The acquisition helped HP to increase its organizational outputs, but it did not necessarily do the same for Palm Inc. However, Palm Inc. benefited from the acquisition by the gaining the resources of a global giant.
Group Outputs
The combined organization is divided into the HP and Palm Inc. In addition, these two major sectors of the organization are further divided according to product lines. Group outputs for HP include notebooks and PCs, whose sales continue to climb. Groups within Palm Inc. include the Treo ™ Pro, Smartphone, Palm® Centro™, and Palm Treo 500 Smartphone as well as groups for the other products that they market.
Prior to the merger, Palm Inc. was in danger of going out of business. Palm has new products under development that will not be released for twelve months. Palm has a standard twelve month release cycle for new products. Each new product in the pipeline represents a new group of products and increases their group-level outputs. Palm's survival depends on the ability to continually produce new products and to introduce new groups into the corporate structure. Palm will operate as a separate business unit within HP's corporate structure.
Individual Outputs
Corporate culture plays a key role in the ability of groups, and the organization, to reach their goals. In this merger, the corporate culture of HP will overshadow that of Palm's (Kessler, p. 1). This is not a merger of equals and Palm is being absorbed by a larger corporation. The larger entity comes with its own set of corporate culture and rules. Palm will have to conform to the culture of HP and its individuals will have to learn to work within that framework.
The palm has been supportive and accommodating to developers. Currently, HP seems interested in retaining Palm's culture. However, they will be reducing some redundant jobs within the business unit. It is expected that as the merger continues to operate under the new format, that Palm's culture will eventually be absorbed into that of HP. The corporate subculture at HP is more stringent then that at Palm. Palm is known for an open culture that promotes creativity and innovation (Kessler, p. 1). Palm of allows developers outside of the company to create an apps. All development at HP is strictly internal and often under a highly secretive cloak. These differences in individual outputs are one of the key differences that resulted from the merger.
Corporate Goals
One of Palm's main goals is to be able to use the leverage provided by a giants such as HP to cut their independence of on independent carriers. Palm allows the user to have many of the functions of a PC with them at all times. HP will not sell smartphones, but will leave them to Palm, Inc. HP saw the value in the products that were being offered by Palm, but it knew that it needed to boost up Palm if it were to be able to continue business. Smartphones fill a gap in HP's product lines to include both corporate and consumer markets.
In April of 2010, Palm stated that its goal was to become a leading global mobile device company. In order to achieve this goal they focused on product differentiation through innovative design and highly integrated services. The focus of their operation was on user experiences (Palm Inc., p. 1). These goals are similar to HPs strategic objectives, only HP operated in a slightly different market sector.
The acquisition of Palm by HP allowed HP to increase its product lines and revenue...
HP Palm Outputs In the Nadler-Tushman Congruence Model, outputs comprise everything that derives from the organization's activities. Thus, there are many categories of outputs. These include financial outputs (revenue, costs, profit), operational outputs (products, efficiency), human resource outputs (wages, benefits, employee turnover) and market outputs (market share, stock price). The congruence model seeks to explain a firm's relative success by analyzing its output performance in the context of the organization's goals.
HP Palm Generic Strategy Porter's generic strategy typology highlights that firms succeed either by being a cost leader, a differentiated producer or by being a niche player, again with either a cost or differentiated focus (QuickMBA, 2010). Palm's approach is mass market, and the company is essentially competing as a differentiated player. With its proprietary operating system and lack of ultra-low price points, Palm is clearly adopting the same differentiated strategy with
The problem is that the people who are in charge of these activities are not very good at what they do. They are simply being outcompeted by other individuals in other organizations. The Nadler-Tushman Congruence Model implies that when there is a high level of congruence between the activities at the individual, group and organizational levels, the company should succeed. Palm is an interesting case study because it counters the
In the short run, the company has an uphill battle to establish itself in a tough market -- Palm's past successes in the industry are almost irrelevant at this point -- but in the long run the potential exists for HP/Palm to develop game-changing technology. The overall strategic fit therefore is only partially congruent. Internally, the three factors are congruent with each other. The resources, environments and histories of these
The third important environmental input that Palm will need to analyze and consider is the technological elements. Other than being a consumer-driven industry, this is also a technology-driven market and achieving the declared corporate strategy depends a significant deal on whether Palm can deliver new technological solutions for its users, solutions that will allow the clients to benefit more efficiently from the products that Palm offers. Other important environmental inputs that
Problem Statement #2 The Problem The problem with Hewlett-Packard’s (HP) vision of how to run a successful organization shifted dramatically in the 2000s, beginning with its plan in 2002 to outsource “PC manufacturing facilities worldwide, in keeping with its longstanding strategy to decrease operations costs and improve profitability” (Mourdoukoutas, 2014). By outsourcing its manufacturing, HP entered into a phase of self-destruction, inviting the collapse of its own supply chain through fragmentation inevitably
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