Essay Example on Dell & HP Merge: Quality, Culture, and Cost Benefits

Dell and Hewlett-Packard (HP) agreed to merge their businesses to improve their profit margins. There were key moments in their decisions to merge their operations, including changes to the organizational cultures, firing of employees, and the ways clients could determine the quality of products.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

The first issue, the quality of a product is something born out of consumers' perceptions and is shaped in various ways. For example, the quality of a product is measured through the execution, where the nature of the product and how well it compares to the rivals' is considered. The second way of judging the quality of a product is through its features. At times, consumers appreciate these features over the actual product performances or the excellent delivery of service. Reliability is also another way of judging the quality of a product, where aspects such as the duration a product retains its functions and quality are considered (Macdonald, Kleinaltenkamp, & Wilson, 2016). Other key measures of evaluating the quality of a product include whether the goods comply with standards and their durability. The aspect of durability considers the value consumers obtain from a product before it loses its quality.

The case of Hewlett Packard and Dell Companies shows the modern ways of executing businesses. Ideally, tradition does not have any place in modern corporate thinking. In recent years, technology trends such as cloud computing, social networking, big data, and mobile have transformed traditional business practices. Digital transformation and technology adoption methods have enabled companies to remove ineffective and outdated processes in favor of scalable and intuitive digital tasks (Johnson, 2017). Companies that are currently using technology efficiently can form innovative services, models, and products faster. At the same time, these companies provide excellent consumer experiences while streamlining and optimizing operations for businesses. Before the introduction of the internet, collaboration among businesses was time-consuming and laborious. Presently, there are different software and tools, including messaging and teleconferencing services that have empowered a new communication wave at anyplace, anytime. The merger case between HP and Dell shows the effect of bureaucracy within companies.

Cumbersome bureaucracy within a company hinders the progress of new ideas and slowing down the work needed to be finalized. Between the endless paperwork, unnecessary policies, and lack of authority to make decisions, the business starts wondering whether the rule-makers within the company are working hard to make the task difficult (Riccucci, & Van Ryzin, 2017). Bureaucracy causes a lack of transparency in business activities, and this can be solved by regular communication within the workplace. Bureaucracy also causes the formation of meaningless policies. The lack of the ability to make decisions is also another cause of bureaucracy, which can be solved by setting achievable expectations with all persons involved.

However, the merger was not an entirely smooth process, but still a worthy one. The Chief Executive Officer (CEO) Carly Fiorina reiterated that the merger would considerably place the company in a better competitive position while also eliminating redundant product groups. The merger would also preserve the revenues of both HP and Dell companies. However, HP had significant risks. If the merger caused partners and consumers questions, then they would switch their allegiance to rivals. Combining these two organizational cultures under the name of HP is also challenging. Compaq was an already established organization with many workers and their own culture. After the finalization of the merger, HP would encounter Compaq's problems, because these companies have different cultural backgrounds. The PC business is low-profiting, and there are many rivals, including Dell. There is no clarity on the means the merger would assist HP in becoming more competitive.

At the same time, Hewlett-Packard is earning much from the business of inkjet printer. The ink/toner and lucrative printer refill business were vital in financing the PC business that was registering low profits (Hartley, 2011, p. 86). These high-profit margins have attracted other organizations to the printer market. Dell has also developed an interest in printing business and partnership with Lexmark. These kinds of the competition will reduce profits and affect the PC business. There are no ways the organization can become competitive with these high-profit margins. The competition will be based on price.

In the long-run, HP Company faces the risk of losing its innovative position in the industry. Restructuring after the merger must be planned and executed carefully. The job cuts must be restricted to support new clients and new markets inherited from Compaq (Hartley, 2011, p. 86). It is anticipated that workers would hinder the merger, knowing that there is the risk of losing their jobs. Workers must be informed about lost jobs. The effect is public relations problems with consumers. In the past, both organizations have struggled with resolving the conflict between indirect and direct sales channels.

Conclusion

Conclusively, Hurd's efforts were successful in the merger. Carly did a great work in planning the merger process and successfully executed the plan. Hurd remained steadily in the plan of Carly, even though there were many critics (Hartley, 2011, p. 91). Hurd carefully read the market and adjusted the new policies to areas where Carly failed. This case shows the challenges companies face when making decisions on merging their operations. Dell did not invest in Research and Development (R&D) but used standard technologies from other organizations. This assisted Dell to cut prices and manufacture high-quality computers. Dell did not show any interest in retail markets (Hartley, 2011, p. 93). The presence of the company in retail stores would produce extra prices and costs. The internet and related direct sales channels assisted Dell in reaching the consumers and selling computers easily without extra costs.

References

Hartley, R. F. (2011). Management mistakes and successes. Hoboken, NJ: Wiley. Retrieved from http://repository.fue.edu.eg/xmlui/bitstream/handle/123456789/3960/7015.pdf?sequence=1

Johnson, H. T. (2017). The tragedy of modern economic growth: A call to business to radically change its purpose and practices. Accounting History, 22(2), 167-178. Retrieved from https://mpra.ub.uni-muenchen.de/78000/1/MPRA_paper_78000.pdf

Macdonald, E. K., Kleinaltenkamp, M., & Wilson, H. N. (2016). How business customers judge solutions: Solution quality and value in use. Journal of Marketing, 80(3), 96-120. Retrieved from https://dspace.lib.cranfield.ac.uk/bitstream/handle/1826/10355/How_business_customers_judge_solutions-2016.pdf?sequence=3&isAllowed=y

Riccucci, N. M., & Van Ryzin, G. G. (2017). Representative bureaucracy: A lever to enhance social equity, coproduction, and democracy. Public Administration Review, 77(1), 21-30. Retrieved from https://www.researchgate.net/profile/Norma_Riccucci/publication/326019991_Representative_Bureaucracy_A_Lever_to_Enhance_Social_Equity_Coproduction_and_Democracy/links/5b58b8dba6fdccf0b2f4888d/Representative-Bureaucracy-A-Lever-to-Enhance-Social-Equity-Coproduction-and-Democracy.pdf