Nadler-Tushman Congruence Model Suggests That Capstone Project

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In the short run, the company has an uphill battle to establish itself in a tough market -- Palm's past successes in the industry are almost irrelevant at this point -- but in the long run the potential exists for HP/Palm to develop game-changing technology.

The overall strategic fit therefore is only partially congruent. Internally, the three factors are congruent with each other. The resources, environments and histories of these two companies are complementary of one another. HP has experience in fighting tough battles in personal computing, and the combination of the two firms' technologies, brands and customer bases should be successful. The missing element is strategy. In this case, there are a lot of assumptions that HP makes with respect to the value of Palm technology. The strategy rests on this key resource input being highly congruent and relevant to the external environment. If it is not congruent with the external environment -- that is if HP cannot become an industry leader in technological innovation in mobile computing, then the merger will lose congruence significantly on the basis of the external environment and resources losing their internal congruence.

Another issue that may arise, one which casts doubt on the effectiveness of the strategy, is that Palm appears to be somewhat minimized in HP's plans. If it is true that HP mainly acquired Palm for its patents, then Palm as an entity could suffer from neglect, or even be directly broken up. Palm's employees are proud, and the generally positive history of the company will clash with any strategy that involves minimizing or subsuming Palm. Yet HP may be considering doing just that.

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What HP does with the Palm brand and Palm as an independent operating entity will largely reflect on how congruent its strategy is with Palm's existing organizational culture. HP needs to ensure that the two companies merge their cultures, and this is a difficult prospect. At this point, it is unknown if they will be able to achieve this.

Conclusion

HP has acquired Palm, and on the surface there appears to be a relatively high level of congruence between the three main input categories of the two firms and the strategy that HP appears to have in mind for the merged entity. However, there are risk factors and how HP chooses to address these issues could undermine the congruence significantly. If HP does not value Palm as an independent entity with a proud history, there could be significant loss of talent at Palm, to the detriment of both companies. If HP is wrong about the value of Palm's patents, a similar situation could occur. Thus, it is important for HP, in order to maintain a high level of congruence between strategy and inputs, to promote a strong Palm unit within the HP corporate family.

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