KNOWLEDGE MANAGEMENT CASE STUDY HEWLETT-PACKARD COMPANY

Students: DOBRINESCU Ctlina GHEORGHE Carmen

Introduction Knowledge management is essentially about getting the right knowledge to the right person at the right time. Here, our project represents our work and how we think that improvements can be made through: the organizational management: The right processes, environments, culture, and systems, managerial/leadership: the right focus, strategy, implementation, cultural: the organizational culture, as well as national culture for multinational firms, influences the way people interact, technological: The right systems, tools, and technologies. Throughout the project, we will present and explain a series of information about Hewlett Packard and we will also discuss the potential role of knowledge management systems. We have tried to organize the project as logically as possible, going from a general introduction of the firm to the firms vision, objectives, intellectual capital statement etc. The project also includes a series of figures, tables, images that are very comprehensive and easy to understand; however, we have explained and analyzed them. About knowledge management "If only HP knew what it knows it would make three times more profit tomorrow" Lew Platt, ex CEO Hewlett Packard General presentation of the company. Hewlett-Packard Company or HP is an American multinational information technology corporation headquartered in Palo Alto, California, United States. It provides products, technologies, software, solutions and services to consumers, smalland medium-sized businesses (SMBs) and large enterprises, including customers in the government, health and education sectors.

The company was founded in a one-car garage in Palo Alto by William (Bill) Redington Hewlett and Dave Packard. HP specializes in developing and manufacturing computing, data storage, and networking hardware, designing software and delivering services. Major product lines include personal computing devices, enterprise, and industry standard servers, related storage devices, networking products, software and a diverse range of printers, and other imaging products. HP markets its products to households, small- to medium-sized businesses and enterprises directly as well as via online distribution, consumer-electronics and office-supply retailers, software partners and major technology vendors. HP also has strong services and consulting business around its products and partner products. HP has successful lines of printers, scanners, digital cameras, calculators, PDAs, servers, workstation computers, and computers for home and small business use; many of the computers came from the 2002 merger with Compaq. HP today promotes itself as supplying not just hardware and software, but also a full range of services to design, implement, and support IT infrastructure. 1 3.Knowledge management vision. Knowledge management objectives The achievements of an organization are the result of the combined efforts of each individual in the organization working toward common objectives. These objectives should be realistic, should be clearly understood by everyone in the organization, and should reflect the organization's basic character and personality. Hewlett-Packard Mission Statement: To provide products, services and solutions of the highest quality and deliver more value to customers that earns their respect and loyalty.

Hewlett-Packard Vision Statement:

1

http://en.wikipedia.org/wiki/Hewlett-Packard

To view change in the market as an opportunity to grow; to use profits and the ability to develop and produce innovative products, services and solutions that satisfy emerging customer needs. Hewlett-Packard Objectives: Customer loyalty Earning customer respect and loyalty by consistently providing the highest quality and value. Profit Achieving sufficient profit to finance growth, create value for their shareholders and achieve their corporate objectives. Growth Recognizing and seizing opportunities for growth that builds upon their strengths and competencies. Market leadership Leading in the marketplace by developing and delivering useful and innovative products, services and solutions. Commitment to employees Demonstrating commitment to employees by promoting and rewarding based on performance and by creating a work environment that reflects their values. Leadership capability Developing leaders at all levels who achieve business results, exemplifying their values and lead them to grow and win.

Global citizenship

Fulfilling their responsibility to society by being an economic, intellectual and social asset to each country and community where they do business. 4.Audit of the intangible resources The company also has many intangible resources that are important for the companys position within the industry.The intangible assets of a company can be quantified as Human Resource (ex. corporate culture, knowledge and trust), Innovation (ex. capacity to innovate, scientific capability and ideas) and Reputation (brand value, customer loyalty and market representation). Human Resources There are over 304,000 people employed by HP in many different countries across the world (Hewlett-Packard Annual Report, 2010). The company succeeds when their people do, so this is a critical position. HR professionals are good listeners, great collaborators and excellent at inspiring the team. The human resource supports the businesses, the managers and employees with operational matters, direction and guidance. This is done through recruitment and selection, training and development, organization design, including culture and structure, employee and industrial relations, compensation and benefits and workforce management programs. HP believes in a diverse workforce because it promotes creativity and innovation. Its workforce comprises of people of diverse ages, cultures, ethnicities and experiences. This is one reason the company is very successful. Innovation Innovation has defined the success of HP. The culture of the organization has embraced the value of knowledge sharing. Hewlett Packard has a well-known reputation for its commitment to innovation. With seven operating divisions across 170 countries the company has deployed teams of engineers and knowledge workers to enhance existing systems and continue new product development. The company is

focused on researching, designing and developing products, services and solutions that suit customers changing needs and emerging technological trends. The life cycle of IT devices and equipment are in constant flux and require innovation to stay ahead of the curve. Reputation Finally the brand value of HP is a significant asset; it was valued at 18.9 billion dollars in 2009 (datamonitor, 2010). This is a strong reputational asset. HP has distinguished itself by marketing to private consumers, small to medium businesss (SMB), large enterprises and government agencies. The brand named is recognized and respected by a wide socioeconomic demographic which has enabled HP to enter many markets with a desirable reputation. The HP brand further enhances the companys financial leverage and growth. The reputational asset of Hewlett Packard has driven the company to examine the environmental responsibilities that the company has in manufacturing and development. The very nature of the IT industry demands that companys intangible resources be as strong if not stronger than its tangible assets. Due to this characteristic, a company must strive to have a competitive advantage in its intangible resources. Knowledge metaphors can help us to understand the changes of ever timebound landscapes of knowledge. Metaphors are tools of reason and meaning-makers, multiple, contextual, and to some extent public and negotiated, and thereby producing ever-new meanings. Knowledge management commonly use metaphors for knowledge implies an analytical mode of cognition in which verbal information is processed serially, sequentially, logically, and rationally. When using alternative deep metaphors knowledge management can be enriched by a relational and synthesizing mode of cognition, where knowledge processes are perceived as simultaneous structures and patterns. Such alternative metaphors also provide insight into the structure of a system by integrally and comprehensively focusing on the whole and overall meanings

instead of details only. The use of new knowledge metaphors may lead to the highlighting of different knowledge-related issues in organizations. The journey metaphor unveils that gaining a new view and vision of the world is difficult, as it is not automatically and immediately incorporated into conscious and accepted competences of the surrounding group. This has important consequences for knowledge management. We highlight and summarize specific consequences of the Knowledge as a Journey metaphor for knowledge sharing, knowledge acquisition, knowledge retention, and knowledge innovation.In this metaphore, the hero represents the new employee, the journey represents his career, the destination represents his career goals Knowledge sharing: One of the challenges of the journey is that the hero does not conceal his hard-won knowledge for personal advantages. Contrary to defensive attitudes as knowledge is power, not invented here and human repulsion to seek advice from others, the employee narrative unveils that human factors and motivational aspects are the real obstacles of knowledge sharing in organizations. At the same time the metaphor highlights that the full content of knowledge can never be shared, like the whole experience of the journey can never be communicated by words. However, telling stories about a knowledge journey can contribute to the transfer of knowledge. Knowledge acquisition: Having acquired knowledge in non-familiar situations and in different contexts, the hero returns to his homeland in the awareness that knowledge obtained for different purposes may be helpful in totally different contexts. The journey metaphor higlights that non-familiar tools may elicit innovative developments, given that people acquire new knowledge by conquering organizational barriers, by entering new connectionist ways of business performance and by looking for new knowledge connections - across a variety of borders and disciplines. However, the journey metaphor also highlights that on his return, the hero is often confronted with disdain and condemnation. This also happens with people that bring new knowledge to the organization, for example newly hired staff that bring in their experience from other contexts. For knowledge management it is important to be aware of this mechanism of refusal of

new knowledge and to support new employees in their attempt to bring new knowledge and innovative ideas to the organization. Knowledge retention: In the heros journey, the hero receives a call for adventure which can be compared with when qualified workers look out the window and see new opportunities outside of the organization. So in a way, the journey metaphor deals with the problem of how to capture knowledge when it walks out the door. The hero leaving for his journey symbolizes the loss of critical knowledge by managers and executives retiring and exciting from the company. However, the metaphor also highlights that the journey itself will produce new and potentially valuable knowledge for the hero. From a KM perspective the challenge is to capture this new knowledge for the benefit of the organization the person is leaving. The old employer should try to learn from the transition his former employee is making. One way to do this is to support the transition through coaching by a senior figure, just like in the hero journey where the hero meets a caring senior figure who offers tools and advices for his mission. So, paradoxically as it may sound, organizations should invest in employees who are leaving by coaching in order to learn as much from the transition as they can. Knowledge innovation: The journey metaphor highlights the fundamental notion that innovation is not just the introduction of new knowledge, but a non-linear and complex process that involves discovery, barriers, trails, monsters (failures), and the combed competence of connectionist people from various backgrounds. It also highlights that it requires people to quit isolated and remote islands of knowledge, to discover the unknown and to welcome interdependent relationships between various internal and external partners and stakeholders, including outsiders, in the innovation process. As a consequence, knowledge innovation can not be managed in the traditional, planning & control sense of the word. Instead, knowledge innovation can only be encouraged and supported by allowing people to go on a journey of discovery, by providing them with coaching from senior, experienced people, and by giving them the opportunity to meet other and new perspectives and opinions. In addition, management should encourage the voicing of different perspectives and meanings instead of trying to provide one fixed meaning to the organization.

Knowledge innovation results from the confrontation and reconciliation of various perspectives, meanings and opinions. 2 The more we become aware of the role metaphors play in the way we conceptualize knowledge in knowledge management theory, the more we need to research the impact this has on our knowledge management approaches. Analysis of knowledge transfer process and its limitations As we all know, knowledge represents information or a type of skill acquired through experience through our lives which can not be replaced. The transfer of knowledge represents the process of transferring information from one part to another. Therefore, we are looking for creating and sharing knowledge for any future human being. It is true that we can hardly give a proper definition to knowledge, given the fact that we are confronted with a complex resource, but we will find a way to get over the cultural difficulties in order to present and analyse the knowledge transfer process. In order to understand properly, we will synthesize little information and give an example from our company, Hewlett-Packard. Nowadays, it is extremely important to share knowledge given the fact that organizations are full of employees who need to advance in their job and to acquire more experience. However, it is necessary to find the knowledge holders within the big organizations and to motivate them to share their beliefs by respecting a structured plan of application. Hereby, we are dealing with a paired work, very important for our community. Now that we are more familiar with the term of knowledge transfer, we will present some data from our company, HP Romania.

http://www.ejkm.com/issue/download.html?idArticle=191

It is necessary that people work together in unison toward common objectives and avoid working at cross purposes at all levels if the ultimate in efficiency and achievement is to be obtained. Dave Packard In our opinion, this sentence expresses very well the process of transferring information between us. Only by working together we can share the same values and reaching the same objectives, the performance.

To achieve sufficient profit to finance the growth in the heart of HP, we created values for the shareholders who nowadays work in our company in order to achieve the other corporate objectives. HP's performance starts with motivated employees, only by this type of belief it can be possible to motivate people to gain more and more experience and to receive information from any other person. Employees are often responsible for lifelong learning and HP measure people on the results every month so they achieve goals. However, we must pay attention at the human being to whom we transfer the information. Every employee is different and we must focus on every type of person in order to find their lack of information and then involving our experience in the knowledge transfer. Knowledge transfer is often similar to training, that type of formation which can be found in every big company in order to form people, gaining in the same time knowledge, skills or competence. There are two types of knowledge possessed by people, tacit and explicit. But why it is so important to share tacit knowledge? Explicit knowledge is presented all over the world through expert books and types of procedures, so it is very easy to people to adapt their needs according to that knowwhat.

The knowledge one person has is difficult to store and retrieve for other people to use. The tacit knowledge represents the direct interaction between an employee for example and the company for which he works for. In HP, we focus on integrating every new person in order to feel comfortable and feel interested in our values and beliefs. HP is ready to invest in the training of the employees to better understand the importance of sharing the useful information.

Analysis of knowledge creation process and its limitations The ability to create new knowledge is also extremely important because can be related very easy with the knowledge management. According to the Nonaka's model, knowledge creation process is about continuous transfer, combination, and conversion of the different types of knowledge, as users practice, interact, and learn. To better understand the process, we will analyse the following pictures.

(Figure 1)

(Figure 2)

Figure 1. Ikujiro Nonaka and Hirotaka Takeuchi propose a model of the knowledge creation in order to understand the nature of knowledge creation and how it can be created. It is called the SECI model. There is a spiral of knowledge involved in their model, where the explicit and tacit knowledge interact with each other in a continuous process. This process leads to creation of new knowledge. The central thought of the model is that knowledge held by individuals is shared with other individuals so it interconnects to a new knowledge. The spiral of knowledge or the amount of knowledge so to say, grows all the time when more rounds are done in the model.3

http://knowledgeandmanagement.wordpress.com/seci-model-nonaka-takeuchi/

Socialization Means sharing tacit knowledge through direct communication or shared experience, for example teaching someone by examples. (Training, formations) Externalization The process of transforming tacit knowledge to explicit knowledge by the help of concepts. Tacit knowledge can be understand in this way, so it can be also used by others. Combination Means the externalization of explicit knowledge to various entities. Explicit knowledge it can be combined with the knowledge already acquired in the first two phases. Internalization Internalization means understanding explicit knowledge. Explicit knowledge can be converted into tacit and in this way it becomes a part of individuals information. The quantity of knowledge increases and the previous three phases can be modified. Once internalized, new knowledge is then used by employees who broaden it, extend it, and reframe it within their own existing tacit knowledge.4 To remember, knowledge creation is a process of interactions between tacit and explicit knowledge. In the second figure, we can observe the benefits of the SECI model and the order of steps. As we moves up through different phases, we can arrive to new types of knowledge creation.

Intellectual capital statement

http://nicosord.hubpages.com/hub/Nonaka-and-Takeuchi-knowledge-management-cycle

Definition: The combined intangible assets owned or controlled by a company or organization that provide competitive advantage. Intellectual capital assets can include the knowledge and expertise of employees, brands, customer information and relationships, contracts, intellectual property such as patents and copyright, and organizational technologies, processes, and methods. Intellectual capital can be implicit and intangible, stored in people's heads, or explicit and documented in written or electronic format.5

Therefore, intellectual capital is a capital asset consisting of intellectual material. We can talk here about Intellectual Capital as an Asset. Assets are usually purchased, or equivalently a deposit is made, in hopes of getting a future return, or interest from it. Financial assets can include cash, stocks, and bonds; fixed assets such as buildings, machinery and equipment, or even intangible assets such as goodwill or a company's reputation among customers. The opposite of an asset is a liability - something of negative value, usually a debt owed by a company. Previews goodwill and purchased intangible assets with indefinite lives for impairment annually at the beginning of its fourth fiscal quarter and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. For goodwill, HP performs a two-step impairment test. In the first step, HP compares the fair value of each reporting unit to its carrying value. HP determines the fair values of its reporting units using a weighting of fair values derived most significantly from the income approach and to a lesser extent the market approach. Under the income approach, HP calculates the fair value of a reporting unit based on the present value of estimated future cash flows.
5

http://www.qfinance.com/dictionary/intellectual-capital

Conclusions

To conclude, the value of knowledge management is very important because the information needs to be managed by all people in order to enable a reliable level of predictability of the future. A very important point in our analysis is that managing knowledge can help our company increase the chances of success by building learning environments and creating a system of learning routine; in this way stimulating the process of intercultural change between countries. Nowadays, in the present business environment and economic market, the knowledge management can help people to enjoy any change by having new ideas, which lead to innovation, a very good strategy for each organization. Finally, lets keep in mind the three reasons of knowledge management which can affect the success of a company: 1.) Facilitates decision-making capabilities, 2.) Learning organizations by making learning routine 3.) The stimulation of cultural change and innovation.

Bibliography http://hp.com

http://en.wikipedia.org/wiki/Hewlett-Packard http://knowledgeandmanagement.wordpress.com/seci-model-nonaka-takeuchi/ http://nicosord.hubpages.com/hub/Nonaka-and-Takeuchi-knowledgemanagement-cycle http://www.qfinance.com/dictionary/intellectual-capital http://www.ejkm.com/issue/download.html?idArticle=191 http://www.stock-analysis-on.net/NYSE/Company/Hewlett-PackardCo/Analysis/Goodwill-and-Intangible-Assets http://www.forbes.com/sites/francinemckenna/2012/11/20/hewlett-packardsautonomy-allegations-a-material-writedown-puts-all-four-audit-firms-on-the-spot/ http://www.wikinvest.com/stock/HewlettPackard_(HPQ)/Purchased_Intangible_Assets http://www.linkedin.com/company/hewlett-packard/hp-laptops-notebook-computerstablet-pcs-1078/product?trk=biz_product

BRTIANU, C., Knowledge and Intellectual Capital, Business Excellence, 2011, Bucureti