Business Strategy

What strategy did Carly Fiorina adopt for HP? In terms of competition, do you think Fiorina made good choices? Frame your answer in the context of HP’s industry, markets, and rivals.

When Fiorina was appointed as the CEO of Hewlett-Packard (HP), she embarked on significant changes for the company. One of the strategies she implemented was the centralization of many HP services. HP had more than 80 business units, which Fiorina brought together into a four-division giant (Helgin et al., 2005). She also decided to centralize the management of business tasks, such as branding and advertising. The choice of centralization was important for HP. Centralization of the business allowed the company to take advantage of its strengths in the industry. A clear chain of command would enable the company to form strategies that help it stand out in the market. However, Fiorina also made some decisions that would negatively affect the company’s performance. For instance, HP stopped developing its high-end processor after a partnership with Intel. The company competed with Dell as the smaller competitor and IBM as the industry giant. By stopping the production of its high-end processor, HP no longer had a competitive advantage that would make it stand out in this highly competitive market. The company struggled in the software and service market, which reduced its competitive edge in the industry.

A firm’s president or chief executive officer (CEO) characteristically plays a dominant role in strategic planning at the firm. Explain why this can be desirable in many ways. Also explain what can happen when the dominance of the CEO is overwhelming the strategic decisions. How does this relate to the HP case and Carly Fiorina? What characteristics do you think the board should look for in determining Fiorina’s replacement?

The CEO of the organization shapes strategic decision-making. The CEO is the leader of the organization who uses their management skills and knowledge to ensure good performance in an organization (Pearce & Robinson, 2005). Having a CEO as the dominant decision-maker of an organization can have its advantages as well as disadvantages.

Having a CEO who has superior knowledge of the organization and its strengths and weaknesses can lead to good strategic decision-making. When the CEO has a great understanding of the organization’s strengths and weaknesses and fully understands the right strategies to apply, they will easily positively impact the organization. For instance, in the case of HP, Fiorina’s appointment was quickly followed by her making some strategic changes that the business needed. She made changes based on her understanding of the organization and strategic concepts.

However, having CEO dominance in decision-making can lead to poor decision-making. The CEO is just one person who needs input from others who understand the organization. When the CEO’s word is final, the organization is at high risk of poor decision-making. The leader of the organization should be willing to get advice from other people to make the best possible decision. This disadvantage can be seen in the case of HP, where the CEO, Fiorina, had too much decision-making power. Some of her decisions were criticized, but she never listened. If there had been required input from the other top leaders of the organization, then maybe the bad decisions would never have been implemented.

Considering the above factors, there are several characteristics that the leaders at HP may look for when choosing a new CEO. First, the newly appointed leader should understand the business, its units, operations, and the business environment. This knowledge will help the CEO make informed decisions that will benefit the company. Another factor that they must consider is the personality of the candidate. They should hire a person who is a good listener and can consider others’ opinions to change their decision-making.

References

Helgin, B., Hamm, S., Ante, S. Hof, R. D., Edwards, C. & Burrows, P. (2005). Can Anyone Save HP? (cover story). Business Week. 3921, 28-35

Pearce, J. A., & Robinson, R. B., (2005). Strategic Management: Formulation, Implementation, And Control. New York, NY: McGraw-Hill.

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[u01d1] Unit 1 Discussion 1

Saving Hewlett-Packard

Based on the information from this unit’s readings, answer the following:

Business Strategies

1. Strategy reflects the company’s awareness of: how, when, and where it should compete, against whom it should compete, and for what purposes it should compete. What strategy did Carly Fiorina adopt for HP? In terms of competition, do you think Fiorina made good choices? Frame your answer in the context of HP’s industry, markets, and rivals.
2. A firm’s president or chief executive officer (CEO) characteristically plays a dominant role in strategic planning at the firm. Explain why this can be desirable in many ways. Also explain what can happen when the dominance of the CEO is overwhelming the strategic decisions. How does this relate to the HP case and Carly Fiorina? What characteristics do you think the board should look for in determining Fiorina’s replacement?

Your post should be substantive and logical to the questions proposed. Read the Discussion Participation Scoring Guide to learn the discussion participation requirements of this course.

Resources

Can anyone save HP?

UNDERGRADUATE DISCUSSION PARTICIPATION SCORING GUIDE

Due Date: Wednesday weekly (Looking for DISTINGUISHED – set up your paper to hit each Topic)
Percentage of Course Grade: 30%.

DISCUSSION PARTICIPATION SCORING GUIDE

Due Date: Weekly.
Percentage of Course Grade: 30%.

Participation Guidelines

Actively participate in discussions. To do this you should create a substantive post for each of the discussion topics. Each post should demonstrate your achievement of the participation criteria