An analyses of the organizational inputs for HP inc using Nadler-Tushman Congruence Model.
There are several organizational models that have been put forward, with the main aim of attempting to explain how organizations operate. These include Force Field Analysis (1951), Leavitt’s Model (1965), Likert System Analysis (1967), Open Systems Theory (1966), and Weisbord’s Six-Box Model (1976) amongst others. The different models attempt to analyze organizations differently depending on their principles and the organization in focus. This paper will limit its analyses to hp Inc, the Information Technology giant that manufactures computers and their accessories. This organization is analyzed using Nadler-Tushman Congruence Model (1977).
An overview of the Nadler-Tushman Congruence Model
This model was developed in the late 1970s. Compared to other models, this model is more comprehensive, and specifies inputs, throughputs, and outputs. The model is consistent with open systems theory (Katz & Kahn, 1978), which views an organization as a total system with inputs, throughputs, and outputs, connected by feedback loops. There are four assumptions that constitute the Nadler-Tushman Congruence Model:
1. Organizations are open social systems within a larger environment.
2. Organizations are dynamic entities (i.e., change is possible and occurs).
3. Organizational behavior occurs at the individual, the group, and the systems level.
4. Interactions occur between the individual, group, and systems levels of organizational behavior.
Hp inc. has been analyses within the context Nadler-Tushman Congruence Model. In this model, inputs include factors such as the environment, resources, history of the organization, and organizational strategies. The following analysis describes hp Inc key inputs since its inception to date. Being one of the most successful organizations, the inputs have played a vital role towards its success.
According to Nadler and Tushman, the environment constitutes ‘all factors, including institutions, groups, individuals, events, and so on, that are outside the organization being analyzed, but that have a potential impact on that organization.’ When hp was formed in 1939, it corresponded with a period when demand for engineering and electronic equipments was increasing (Wikipedia, 2008). Such equipment included generators, voltmeters, oscilloscopes, frequency counters, thermometers, time standards, wave analyzers, and many others. In the 1960s, hp was at the center of the Silicon Valley, and is generally recognized as its symbolic founder. Silicon Valley was significant in development of the silicon chip and other technological advances, including software innovations. This further increased the popularity of hp. In 2006, one of its main competitors, Dell inc, was experiencing a huge financial crisis, and resorted to selling its products at a high price in attempts to reduce the debts. This worked in favor of hp, whose products were not only cheaper but matched the standards of dell.
Present in nearly every country, Hp is the largest technology company in the world after Samsung electronics and International Business Machines in that order (Wikipedia, 2008). In 2007, hp posted US$104 billion compared to US$94 billion in 2006. Hp is the first ever IT company in history to report revenues exceeding $100 billion One of the most significant resources that hp inc boasts is its brand name. Brand names are known to not only to influence consumers’ preference but to associate brands with quality. The slogan for hp (invent) is synonymous to creativity, originality and discovery. This may have a certain influence on consumers’ preference. Hp also boasts one of the most comprehensive 24-hour customer supports within its website, and consumers can have any technical issue with their computers resolved at the click of the mouse. Hp recognizes the impact of conspicuous brand names. Under the hp-Compaq merger of 2002, a new ticker symbol was born (HPQ), which signified a combination of the two previous symbols, “HWP” and “CPQ”, to illustrate the merger.
According to Garter, a research firm, hp is the largest worldwide seller of personal computers, surpassing its closest rival Dell. By the end of 2007, the gap between HP and Dell widened substantially, with HP taking a near 3.9% market share lead. Being the 5th largest software manufacturing company in the world, hp is able to create its drivers for its own hardware, thereby significantly reducing the cost of production.
Hp inc. was founded by two Stanford university classmates-Bill Hewlett and Dave Packard-in 1939. This partnership, according to Wikipedia (2008) was formalized on January 1, 1939 with an investment of US$538. While deciding on the name of the company, Hewlett and Packard tossed a coin to decide whether the company they founded would be called Hewlett-Packard or Packard-Hewlett. Although Packard won the coin toss the company was named “Hewlett-Packard Company.” One of the most financial breakthroughs came in form of a precision audio oscillator (Model HP200A). This innovation, according to Wikipedia, used a small light bulb as a temperature dependent resistor in a critical portion of the circuit. This enabled them to sell the Model 200A for only $54.40 while competitors were selling similar, less stable oscillators for over $200. One of the company’s first customers was Walt Disney’s Studios, who purchases an audio oscillator to develop and test a sound system for one of its movies. This exhibits hp’s capability to attract high level customer even in its early days.
Nadler and Tushman (1980) define strategy as ‘the stream of decisions about how organizational resources will be configured to meet demands, constraints, and opportunities within the context of the organization’s history’. One of the most successful strategies that hp has adopted is cooperation with various manufacturers of computer-related accessories. For example, in 2002, hp merged with Compaq. Following this merger, HP became a major player in manufacture and sale of desktops, laptops, and servers for many different markets. Another of hp’s strategy is in its Enterprise support outsourcing program, started in 2006, with countries with lower cost workers. In this program, the Spanish support moved to Slovakia, the German support moved to Bulgaria and English support moved to Costa Rica. This strategy has helped hp to significantly reduce its labor cost.
Although this paper only analyses the inputs of hp inc. with reference to the Nadler-Tushman Congruence Model, the robustness of the model cannot be disputed especially on its ability to look at organizations in a holistic point of view. Indeed, the effectiveness of an organization has a bearing on both its ability to consider both the external and internal factors, which is characteristic of the model.
Katz, D. & Kahn, R. L. (1978). The Social psychology of organizations. (2nd ed.). New York, NY: Wiley.
Nadler, D. A. & Tushman, M. L. (1980). A model for diagnosing organizational behavior. Organizational Dynamics, Autumn, 35-51.
HP (2008). History. Retrieved October 15th 2008 from http://www.hp.com/hpinfo/abouthp/histnfacts/
Wikipedia (2008). Hewlett-Packard. Retrieved October 15th from http://en.wikipedia.org/wiki/Hewlett-Packard
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