Ethics and Compliance: HP Ethics Essay

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Looking at the consolidation of real estate locations and cores sites, HP

"consolidated 85 data centers into just 6; driving key initiatives in areas such as energy efficiency, capacity utilization, 24x7 resiliency and service automation. As HP's transformation effort demonstrates, consolidating local and regional data centers can bring substantial benefits. These include lower costs and higher availability; simpler, more cost-effective operations; and automation of routine management functions" (Hewlett- Packard Website. 2011). Cost savings is ultimately balanced against cost incurrence and HP seems to have found the right mix.

Initiatives and Sales

The streamlining of operations, consolidation of real estate holdings, and workforce restructuring are primarily cost initiatives designed to effect and control expenses. That said top line revenue growth depends on increasing productivity from technological innovation and employee efficacy in implementation. Organic sales growth does depend on a committed workforce who has the tools and support requisite for success. A potential obturation to sales growth may involve the significant decrease in employees: 9,000 as the result of the 2006 restructurings, and 25,000 resulting from the EDS restructuring (Hewlett- Packard 2009 and 2010 Annual Report). Certainly, as revenues become sustainable out of the global economic downturn there will be rehires and workforce expansion however, the timing of these actions must be coordinated with an overall HP global growth plan.

Risks and Financial Effects

As the HP Annual Reports indicate

"there are significant risks associated with our workforce restructuring programs, including potential delays in the implementation of those programs in highly regulated locations outside of the United States, particularly in Europe and Asia, decreases in employee morale, and the failure to meet operational targets due to the loss of employees" (Hewlett- Packard 2009 and 2010 Annual Report).

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Yet, in the midst of these potential negative externalities is the development and continued revitalization of a company which continues to be an industry leader in "products, technologies, software, solutions and services to individual consumers, small- and medium-sized businesses ("SMBs") and large enterprises, including customers in the government, health and education sectors (Hewlett- Packard 2009 and 2010 Annual Report).

Summary

Global restructuring plans such as the HP initiatives are strategically important to the long run profitability of the organization. The "Driving Operational Efficiency" directives at HP are designed to streamline and augment the Value Chain as developed by Michael Porter. Through the consolidation of real estate positions, analysis of all sectors and departments to unlock productivity and reduce costs, and the restructuring of the workforce; HP is intent on developing a competitive advantage in their industry through upgrades and developments of: inbound logistics, operations, outbound logistics, marketing and sales, and service. (QuickMBA. N.D.).....

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