The HP Way - an example of corporate culture for a whole industry

The HP Way - an example of corporate culture for a whole industry

From the beginning the two founders have developed a management style which had never occurred in a large company before. They coined a new type of corporate culture which was to be called "the HP way."

HP always renounced the "hire and fire" mentality, which meant to employ many workers for a single big order and to dismiss them afterwards. Instead, the company offered its employees "almost perfect job security.") Even in 1974, when the U.S. economy was in a profound crisis and many people were unemployed, HP avoided layoffs by a four-day workweek, which was a unique measure in corporate America.

The two founders trusted in the "individual's own motivation to work") and treated their employees as family members; hence the custom to call each other by the first name - even the two chiefs were only known as Bill and Dave.

The HP workers were participated in the company with stock options and were even paid additional premiums when HP was successful - today known as profit sharing. These measures served to identify the employees with their work and to encourage them.

Moreover, the HP way included extensive employment benefits such as scholarships for the employee's children.

At the end of the 1950s Bill and Dave decided to write down the company's objectives, which were to serve as guidelines for "all decision-making by HP people,") since the company had grown ever larger. With some changes, those objectives are still valid t oday. They cover as follows: "Profit, Customers, Fields of Interest, Growth, Our People, Management, and Citizenship.") And these objectives are to be achieved through teamwork.

HP's strategies nowadays comprise mainly the "Management by Objectives", "Management by Wandering around" meaning informal communication within the company, and "Total Quality Control" which aims at producing highly qualified products.)

The HP way is seen as model for corporate culture in many countries.

The roots of many subsequent companies are located in HP, e.g. Steve Wozniak, who worked at HP and later co-founded Apple. This has led to the establishment of a new corporate culture in Silicon Valley and many firms have tried to imitate the HP way and ad opted measures such as stock options, innovative work rules, teamwork, and profit sharing.

Martin Groeger
Last modified: Mon Jul 8 06:39:22 PDT