Organizational Behaviour case study on HP/Compaq Merger. User can be contacted on pndyamit@gmail.com for editable copy.

1. HP/COMPAQ MERGER
IMPORTANCE OF CULTURAL DUE DILIGENCE DURING
MERGER PROCESS
Akash Jain Preksha DubeyAmit Pandey Sanghmitra Wankhede

2. THE MERGER PROCESS
Theoretical Aspects
Comparison
between the two
Companies
Creation of New
Values and
Objectives
Change
Implementation
through Processes
Due Diligence
And
Cultural Due
Diligence
Values
&
Objectives of HP
and Compaq
Creation of New
Values and
Objectives
Step-by-step
Implementation
and Evaluation

3. Due Diligence
Due diligence is an investigation of a
business or person prior to signing a
contract, or an act with a certain standard
of care

4. Analysis through Due Diligence
Historical activity
Ownership and structure of entity
Management team
Products and services
Assets and liabilities
Information systems and technology
Organizational culture

5. Cultural Due Diligence
• It analyzes key cultural domains
• leadership and management practices, styles, and relationships
• governing principles
• formal procedures
• informal practices
• employee satisfaction
• customer satisfaction
• key business drivers
• organizational characteristics
• perceptions and expectations
• how the work gets done in organization

6. CULTURE DUE DILIGENCE DURING
HP/COMPAQ MERGER
• Values enabled the realization of the merger making it possible to build a new
organization
• Value Democratization is a process of forming a new organizational society by
discovering common values
• Core values were not imposed on the employees by top management
• The process of discovering, defining, and adjusting organization activities to its main
values has made each New HP employee identify with the values and goals of the
organization

7. VALUES
HP COMPAQ
•We have trust and respect for individuals • Listening and solving customer problems
•We perform at a high level of achievement and
contribution
• Being passionate about everything we do
•We achieve our results through teamwork • Driving innovation and building cool stuff
•We act with speed and agility • Partnering for our customers’ advantage
•We deliver meaningful innovation • Communicating openly and honestly
•We conduct business with uncompromising
integrity
• Doing what we say
•We are passionate about our customers • Having fun

8. CORPORATE OBJECTIVES
HP COMPAQ
• Customer Loyalty • Extend our enterprise Capabilities
• Profit, Market Leadership and Growth • Grow and achieve critical mass in services
• Employee Commitment, Leadership
Capability and Global Citizenship
• Improve PC economics and increase supply
chain velocity

9. AFTER-MERGER VALUES
• PROBLEM: Completely different cultures
• STEPS TAKEN
The research sample covered 127 directors, 138 focus groups, 1600 managers, and employees from 22
countries
The subject of study was organization culture, differences and similarities between two corporations
Conducted comparable analysis of their organization

10. MODEL OF ORGANIZATIONAL FUNCTIONING
INPUT
Environment
Resources
History
Work
OUTPUT
System
Unit
Individual
Formal
Organization
Informal
Organization
Poplee
Strategy

11. CULTURAL GAPS
Cultural Gaps 1 2 3 4 5
Precedence. Looks to the
organization’s rich history as a
source of knowledge.
Inquiry. Focuses on future possibilities and
learn as they go.
Internal Focus. Focuses mostly
on improvement of internal
processes and structures; has
moderate
awareness of our competitors.
External Focus. Focuses mostly on pursuit
of new markets and customers; is very
much aware of competitors and closely
follows the moves they make.
Systematic. Relies heavily on
organized plans for our work.
Work processes are clearly
defined.
Spontaneous. Relies on ability to respond
to just-in-time opportunities; continually
“turns on a dime” to meet demands.
Precision. Getting the job done
“right” is more important than
getting it done quickly, even
though it may take extra time.
Speed. Getting the job done fast makes
“roughly right” outcomes acceptable even
though we may sacrifice discipline or rigor.
Reflection. Values review of
significant events; debrief events
to share insights and best
Iteration. Values a “trial and error”
approach; forges ahead without looking
back.

12. Cultural Similarities 1 2 3 4 5
Winner Focused. Conflicts are
resolved
by debating until there is a
winner.
Issue Focused. Conflicts are resolved by
exploring the merits of differing points of
view.
Competition. People
tend to be focused on their own
advancement
and achievement.
Cooperation. People tend to offer help
and support to ensure others are
successful.
Dominance. Persues growth
through product
proliferation/line extensions
and acquisitions.
Value. Pursues growth through product
innovation and anticipation of emerging
customer needs.
Threat. Is anxious about their
future. Past successes are not
sufficient to ensure continued
performance.
Opportunity. Is excited about their future.
Track record has positioned them well for
future success.
Reaction. Changes
in response to significant
events.
Initiation. Initiates change
in anticipation of significant events.

13. HP values (1989)
• Trust and respect for
individuals
• A high level of
achievement and
contribution
• Uncompromising
integrity
• Teamwork
• Flexibility and
innovation
Compaq values (2001)
• Listening and solving
customer problems
• Being passionate about
everything we do
• Driving innovation and
building cool stuff
• Partnering for our
customers advantage
• Communicating openly
and honestly
• Doing what we say
• Having fun
The new HP values
(2002)
• We are passionate
about our customers
• We have trust and
respect for individuals
• We perform at high
level of achievement
and contribution
• We achieve our results
through teamwork
• We act with speed and
agility
• We deliver meaningful
innovation
• We conduct business
with uncompromising
integrity
CREATION OF NEW VALUES

14. HP Objectives
Profit
Customers
Our People
Citizenship
Management
Field of Interest
Growth
Extend our enterpise
Capabilities
Grow and achieve
critical mass in
services
Improve PC
economics and
increase supply chain
velocity
Compaq Objectives Customer Loyalty
The new HP
Compaq Objectives
Profit
Market Leadership
Growth
Employee
Commitment
Leadership Capability
Global Citizenship
CREATION OF NEW OBJECTIVES

15. RELATIONSHIP
BETWEEN
VALUES
CORPORATE
OBJECTIVES
AND
CORPORATE
PROCESSES
AND POLICIES

16. FAST START PROGRAMME
• A dedicated program to stimulate the core values of new HP
• Two day business meet to intact teams
• Designed to provide:-
- clarity of direction and roles
- engage managers and their teams
• Every manager was required to conduct a Fast Start meeting for
his/her intact team
• Fast Start meetings had specific deliverables

17. KEY OBJECTIVES
• Accelerate leadership readiness throughout HP
• Deploy critical business information
• Establish team agreements
• Review and action plan for change and HP integration management.

18. REQUIREMENTS FOR FAST START
• Session to be completed within 30 days of team announcement
• Majority of team members to be present at sessions
• Workshop time for information sharing , discussions and dialogues:-
• New HP Strategy, Structure, Brand & Culture and its implications
• establishment of team agreement,team norms & key goals
• Producing an integration plan of record(I-POR)

19. FAST START PROCESS

20. RESOURCES CREATED TO FACILITATE FAST
START SESSIONS
• Facilitation Guide for managers and consultants
• Fast Start checklist and discussion guide
• Fast Start line manager’s presentation
• Printable version of black and white printer
• Fast Start supplemental slides
• Fast Start FAQ’s
• Fast Start performance tracker
• Supplemental resources

21. MODULES IN THE FAST START WORKSHOP
• Welcome and Meeting ObjectivesModule 1
• IntroductionsModule 2
• The HP Business contextModule 3
• Leadership SessionModule 4

22. MODULES IN THE FAST START WORKSHOP
•New HP culture in actionModule 5
•Team Agreement DevelopmentModule 6
•Organization Design and SelectionModule 7

23. MODULES IN THE FAST START WORKSHOP
• Management ResourcesModule 8
• Review of Integration Implementation PlansModule 9
• Action Planning and Team Debrief
Module 10

24. THANK YOU