Analysis of Hewlett-Packard’s Institutionalizing Structural Change
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Organizational change is difficult and challenging. However, once the change has been made and it is successful, there is one last step that is needed, which is institutionalizing the change. According to Fernandez and Rainey (2006), this is where employees learn and establish new behaviors and leaders institutionalize them so that new patterns of behavior become the norm. This has also been referred to by Cummings and Worley (2009) as refreezing from Lewin’s three stage change model where refreezing is to make the new practice routine. Therefore, institutionalization is an important part of any change program to maintain longer term success. An example of an organization that has institutionalized structural change within their organization is Hewlett-Packard.
According to Cummings and Worley (2009) there is an institutionalization framework that will affect an organization success in change programs. First there are the organizations characteristics and the intervention characteristics. These two factors then influence the institutionalization process which can be measured by the indicators of institutionalization (Cummings & Worley, 2009).
There are three main characteristics that include congruence, stability of environment and technology and unionization (Cummings & Worley, 2009). Unionization was not an issue for Hewlett-Packard, but congruence and stability were. Congruence is how well the intervention is believed to be aligned with the organization’s managerial structure and culture (Cummings &Worley, 2009). This was an issue for Hewlett-Packard when they changed from 50 autonomous product divisions that were decentralized to a centralized com...
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...argest IT company in the world with a revenue totaling $126 billion for fiscal 2010 and was ranked number eleven in the fortune 500 in 2010 (Hewlett-Packard Development Company, L.P.). IN addition, Hewlett-Packard is one of the few organizations that have successfully initiated a dozen change programs since they were founded in 1939. Therefore, they are a great example of how culture and reward systems fit into the institutionalization frame work and success of intervention (Cummings & Worely, 2009). Accordingly, it is important to not only understand the institutionalization framework, but also the organization’s culture and how it will affect an intervention. In Hewlett-Packard’s case, they have a very strong culture of individualism and teamwork that had to be considered when initiating new interventions so that they would be accepted and institutionalized.