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Hp Leadership Change

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Module 3 - Case Mgt 401
Trident University

Module 3 - Case Mgt 401
IS CEO Meg Whiteman an example of internal or external succession at Hewlett-Packard and why?
CEO Meg Whitman is an example of external succession at Hewlett-Packard. Hewlett-Packard went in search of a new CEO outside of the organization as a reaction to then CEO Leo Apotheker’s struggle to keep the $ 9.5 billion organization competitive, and a stock plummet of 47 percent. (Levy & Kucera, 2011) I venture to guess that Hewlett-Packard’s board was banking on Whitman using her proven talent as CEO of EBay Inc. to expose Hewlett-Packard to fresh management methodologies, systems, and approaches that differ from those used internally. (Sullivan, 2005)
What happended at HP under the leadership of Leo Apotheker?
Leo Apotheker was replaced after only eleven months as Hewlett-Packard’s CEO. Apotheker was the former head of European software giant SAP and was hired by Hewlett-Packard, one of the United States’ predominate hardware companies. HP’s software business made up around 2% of the company’s annual $125 billon revenue. (Goldman, 2011)
Apotheker unsuccessfully tried to shift Hewlett-Packard’s culture from a hardware company to a more profitable software business. He knew and was successful in the software business and couldn’t make the transition to HP’s business plan. He made poor leadership choice and was stubborn about acquisitions, like Palm and Autonomy. By the end of tenure he wanted to take HP out of the hardware business altogether, an area of the market that HP led both in the United States and globally. (Goldman, 2011)
Apotheker’s poor execution of his vision and lack of communication to investors drove HP stock shares down more than 40% in less than a year. He not only failed at conveying his vision for HP, but he couldn’t make the marriage of software and hardware work. HP may very well be out of business today if the board of directors had not removed him as CEO. (Goldman, 2011)
Why did Leo Apotheker become CEO at HP?
HP had three CEO’s in ten years. Leo Apotheker became CEO because Hewlett-Packard fired CEO Mark Hurd the year before. Mark Hurd was fired after submitting false expense reports to conceal a relationship with a former employee. Before Hurd, Pattie Dunn was let go for spying on board members and journalist. A year before Dunn, Carly Fiorina was forced ro resign after a failed merger with Compaq. HP hired Apotheker in hopes to shut the revolving CEO door that cost the company more that $83 million in severance pay. (Goldman, 2011)
How would you describe the most recent succession that occurred at H-P?
I think that it obvious that HP hasn’t had a strong succession plan. The company has had four CEO’s in ten year all from outside the company. Ideally HP should groom its next CEO from inside the company to prevent what has happen over the last decade. I think that HP presumes that an outsider, like Meg Whitman, might quickly transform the failing company and its culture. I think that Whitman would need to build a strong management staff to act as change agents, if HP is going to be successful. Her leadership and vision will need to be well communicated to all levels within the organization. To get the investors back her strategic plan needs to be sound, well thought out and in line with what HP does best…selling hardware.

References
Goldman, D. (2011). HP CEO Apotheker fired, replaced by Meg Whitman. Retrieved from www.money.cnn.com/2011/09/22/technology/hp_ceo_fired/index.htm
Levy, A., & Kucera, D. (2011). Hewlett-Packard reeling accelerates CEO succession crisis: tech. Retrieved from http://www.bloomberg.com/news/2011-09-22/hewlett-packard-shares-reeling-47-accelerates-ceo-succession-crisis-tech.html
Sullivan, J. (2005). Strengthening your leadership bench with external succession planning. Retrieved from http://www.ere.net/2005/01/24/strengthening-your-leadership-bench-with-external-succession-planning/

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