The Hewlett-Packard Company
Hewlett-Packard Company, which is commonly known as HP, is a multinational information company based in Palo Alto, California. The company was founded by Bill Hewlett and Dave Packard in 1993. The first product of HP was an audio oscillator which was first bought by Walt Disney. In 1940, Walt Disney used the audio oscillator in testing audio gear in the 12 particularly equipped theatres that showed Fantasia. The company provides a wide variety of both software and hardware components. These hardware and software are related to consumer services, large enterprises, small and medium-sized enterprises including customers in health, education and government sectors. Besides, in 1966, the company entered the computer market with its product of HP 2116A. HP 2119A was designed to have control of the enormous product line of test, measure equipment. It became a marketing timesharing computer system in 1969 and continued to produce new products like the HP-35 hand-held calculator. Towards the end of the 1980s, the company had a full variety of computing gears from personal computers and peripherals to large scientific machines. This paper critically examines the general organizational structure of HP company, including the impact of ethical issues in the society and as well as the market it serves as discussed below.
The organizational structure of HP
Product division, independence, and deal of autonomy form the basic operating unit of HP. The company has its production organization, its R&D program, and its internal relation based on the marketing structure. Besides, the company also has its personnel department, its own QA program, and its accounting staff. In terms of organization structure, the company has two broad categories, namely, management structure and market structure. Don't use plagiarised sources.Get your custom essay just from $11/page
I). Management Structure
HP has undergone several developments since its first time in the market. On 18th August 1947 witnessed the incorporation of the company after Packard winning the coin toss but instead named their electronics manufacturing enterprise as Hewlett-Packard Company. On 6th November 1957, the company later went on the public. In the 1960s, the partnering of the HP, Sony, and Yokogawa Electric companies in Japan facilitated the development of several high-quality products. These quality products were not aligned to huge achievement since there was a high cost in building HP gears in Japan. In 1963, Yokogawa and HP made a joint venture to enable HP company to market its products in Japan. The joint venture between the two companies was later followed by the buying of the Yokogawa Electric shares by HP in 1999. However, the 1970s HP was identified by Wired magazine as the producer of first marketed mass-produced personal computer, that was, the Hewlett-Packard 9100A. This product was called desktop calculator since the inventors feared that the product would face rejection by their customers, who were also computer gurus since the product was not like IBM.
Consequently, engineering triumph involving logic circuit was developed without any integration of the loops the assembly of the CPU that was executed in discrete constituents. The product had a CRT display, printer, and magnetic-card storage, hence making the price to be about $5000. The keyboard of the machine was designed across between an adding computer and a scientific calculator; thus, it lacked an alphabetical keyboard. In May 2002, HP merged with Compaq following the resignation of Fiorina due to the demand of the Hp Board of Directors. The merger took place after a proxy fight with the son of Bill Hewlett, Walter, who objected to the merger. The merger strategy witnessed the domination of the market by HP through the production of desktop, servers, and laptops for various markets. Besides, HP also has flat organizational structures that have a few levels of middle management between managers and staffs.
The company had well-trained employees who are more productive when involved directly in the process of decision making, rather than being supervised closely by the various existing layers of management. The flat organizational structure is only applicable in the smaller organizations and individual units existing within the large organizations. Moreover, some financial responsibilities require more conventional structure. Some theories are illustrating that flat organizations usually become more traditional hierarchies when they start to be directed toward productivity. Although the flat organization model is attached to the conventional hierarchical, it promotes the involvement of employees through a decentralized process of decision making. Also, the model plays a vital role in elevating the level of responsibility of baseline workers and as well as elimination middle management layers, feedback and comments, thus reaching all personnel involve in decision making more quickly.
Moreover, an organizational structure usually depends much more on individual relationship between employees and managers due to the frequent interaction between managers and workers. Divisional structures within the HP organization enable effective coordination of intergroup relationships as compared to functional structures. In terms of product structure, each product division has a defined function that is necessary for the specific service produced.
II). Market and cross-functional structure
HP employees the use of group functions into divisions characterized by being responsive to the needs of specific customers. Hp faces a big problem in terms of geographic structure in controlling activities on a national and international level. HP uses group function and geographic structure into regional divisions to service its customers in various geographic areas since each geographic division has access to the full set of the features need in providing commodities. The company also has a decentralized organizational structure whereby daily operation and responsibilities regarding decision making are delegated by the high management, to middle and junior managers within the company, thus enabling top management to base their focus majorly on decisions. On the other hand, the cross-functional team comprises individuals having different functional expertise and working towards a common goal. Typically, the cross-functional team includes workers from various levels of the organization. This team also operates as a self-directed team that responds to broad but not precise directives.
Products manufacture by HP
HP Company produces a large variety of computer products which make it to the dominated world market and have a significant advantage over others. Besides, due to the vast production of products, it also ensures the availability of spare parts hence becoming the most preferred company in terms of both software and hardware computer items. The products produced by HP include black and white laser printers, colour laser printers, laser multifunction printers, and specialty photo inkjet printers. Also, the company provides software products, scanners, tablets, mobile phones, pocket computers, desktop calculator and computers, and external hard disk drives, among other vast products. The enormous product of HP makes potential customers who can purchase a large number of products to carry out the transaction easily since this product is readily available in various HP shops.
Method of calculating manufacturing cost for the company
HP uses component devaluation costs in calculating key components like microprocessor chips and memory. According to SPaM’s calculation, the method accounts for the lion’s share of the inventory cost of HP products. For instance, the price of a CPU may fall to about 40% during its eighth-month life cycle and the consequences for holding excess parts when there is an enormous drop. However, in 1997, few makers of electronic hardware realized how perishable their products were; therefore, HP maintained its inventory level in several places like factories and distribution centres, merge centres, and in transit. The most advantageous part of this approach is that it enables to control how much inventory it is holding. This approach also ensures a reduction in the number of nodes within the supply chain, consolidation of the manufacturing facilities, payment of the going price, and working in harmony with suppliers to minimize inventory when there is future anticipation of the price drop.
The breakeven point for HP
Calculation of breakeven point is a very critical key in terms of financial analysis tool used by many business owners. The most crucial aspect of this approach is knowing the fixed and variable costs for the products produced within the organization. HP is not exempted from using this method since it enables the company to calculate the breakeven point. Computing the breakeven point in terms of sales volume for HP, the following values of the three variables should be established
i). Fixed costs: cost dependent on sales volumes like rent
ii). Variable costs: costs dependent on sales volume like the cost of manufacturing a product
iii). The selling price of a product.
In summary:
Fixed Costs ÷ (Price – Variable Costs) = Breakeven Point in Units