Corporate governance has become an integral component of management. Management is a diverse discipline that entails numerous functions such as accounting, personnel management, and auditing. Corporate governance represents an emerging field in management theory. Corporate governance entails the evaluation of the best management practices. The strategic level of management makes all the decisions that may pertain to corporate governance. Other managerial levels make decisions that will have minimal implications on corporate governance in an entity. However, all the managerial approaches constitute corporate governance (Pfeffer).
The article highlights the problems that Hewlett Packard, an Information Technology (IT) firm is encountering. The entity’s management has made various deplorable decisions which have culminated in the myriad of problems that the entity is encountering. The entity has been performing poorly for a while. Its problems are further compounded by directors recruiting a Chief Executive Officer (CEO) externally. It would be prudent for the firm to recruit the CEO internally.
This is an advisable step that would ensure that an individual that understands the entity’s shortcomings takes the helm at Hewlett Packard. Additionally, it reveals that the directors are confident with the workforce presents in the organization. Appointing the CEO from outside the organization will have far-reaching ramifications that Hewlett Packard’s directors have overlooked. The new leaders will require time to entrench his philosophy in the organization. Such a transition period is characterized by anxiety and conflict as the CEO seeks to make visible progress in an organization that is in financial turmoil. Transition in such an organization will lead to further problems in the entity. Overall, the director should relook how they appoint key managerial personnel (Pfeffer).
Hewlett Packard has also been facing another hitch which has been the key trigger of its ailment. The entity has haphazardly engaged in mergers and acquisitions. It is vital to attest to the fact that most mergers and acquisitions fail. This implies that entities ought to be diligent, creative, and cautious when seeking the above forms of strategic ventures. Failure is rampant since most managers overlook various dynamics associated with mergers and acquisitions such as the workforce and the organizational culture. The entity also fails to establish a transition period. During the transition period entity should learn whether the arrangement is workable by evaluating the dynamics of the merger or the acquisition.
Due diligence seems to be an aspect that has been lacking in the deals that directors and top managers have sanctioned. The entity’s top brass seems to be in a hurry to expend the entity surplus funds. The technology sector is exceedingly dynamic and changes rapidly. Hence, the entity should look at a merger that will not only be beneficial in the short-run but also in the long run. This requires lengthy and detailed research on the two merging entities. The research should support the decision of the management. In such a scenario, Hewlett Packard should hire a financial institution that will guide how it undertakes mergers and acquisitions (Pfeffer).
The above detail reveals how Hewlett Packard’s management has made poor choices resulting in the decline of the entity. The entity is constantly seeking a financial partner who will support the entity. Such chronic managerial problems will require the entity directors to relook at the core values, mission, and vision of the entity. This would provide the entity with a fresh start and enable the entity to elude its perennial managerial and financial woes.
Work Cited
Pfeffer, J. Ray Lane, Hewlett-Packard, and the State of Corporate Governance. 2013. Web.