Background and Additional Research Summary Two Stanford engineers in California founded HP Company, which deals in global computer, in 1938 as an electronic instruments company. Engineers and scientist quickly approved HP products by 1940 and its growth arose tremendously during the period due to purchases made by American government during the Second World War. By 1970s, HP had grown from highly centralized to into one with many widely dispersed divisions and activities. HP began to use a concept called ‘local decentralization, in which a division was given full responsibility for a product line. The decentralization, that HP had until 1980s had had its own problems for the company. HP began to be perceived by users as three or four companies, with little coordination between them. An elaborate network committee was found to be the source of slow decision-making in the organization. The then CEO John young therefore dismantled the committee as a part of reorganization. He further divided the computer business into two primary groups to ensure decentralization. The revenue of HP increased from $13.2 billion in 1990 to $38.42 in 1996 courtesy of a large market share of PCs and printers. However, due growth and size of operation with 83-product division, bureaucracy had increased significantly. In 1999, the board of HP Company appointed Carleton S. Fiorina (Fiorina) as the new CEO of the company. Revenue grew by 15% for the financial year 2000, due to reorganization strategies carried out by Fiorina. The company realized a low net profit that was below the net profit of the industry towards the end of the financial year that ended in Dec 2001. Layoffs of 1700 marketing employees soon followed. Analysist suggested that the reason behind this was Fiorina’s aggressive management reorganization in the face of global slow down in technology sector. Discussion of Issues Management Issues: HP a major global computer company has increasingly faced challenges in areas of management, communication, and leadership. In order to bring back efficiency in the company, Miss Fiorina the CEO of the HP Company as at in July 1999 introduced aggressive management reorganization (Tuner 87). Leadership Issues: Fiorina in an attempt to set things right, began demanding regular updates on key units. She enhanced discipline in the sales force by establishing and maintaining the required targets. By introducing incentives, she aimed at ensuring that the targets set are met. However, during Fiorina’s tenure despite the reorganization, she did little to improve the HP performance. The market gains made when she was a CEO started to dwindle. PC share had fallen from 7.8% to 6.9% for the 12 months ended January 31, 2001. Financial Issues: Reorganization brought about by Fiorina had an impact on the financial well being of the company. For the quarter ended January 31, 2001, the net profits were well below the stock market expectations leading to employee layoffs. Communications: The reorganization resulted to more problems in the communication aspect. The new structure did not clearly assign responsibility for profits and losses as the responsibility to growth was shared between front-and back-end manager