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This organizational structure though very effective in the 1960s and 1970s didnt fair well during the early 1980s The organization was highly decentralized with the divisions operating much like independent businesses The organization failed to address the need for overall coordination Autonomy had resulted in some overlapping products customers complained that products developed in one HP division were not compatible with those from other divisions The companys position in the personal computer market was threatened by a lack of cohesive effort among three geographically separated divisions and so it was time for a changeThere were two main phases in the reorganization at HP in the early 1980s The lack of coordination between HPs three separate divisions was the most obvious problem which lead to phase I To assess this problem HP announced the consolidation of the Personal Computation Group and the Computer Terminals Group Each of the two groups now could make decisions in a more centralized system For example decisions about marketing and RD could now be made at the group level by a single manager but before the reorganization the only common manager was the companys president Phase II was implemented in February 1983 when HP announced a realignment of its computer products organization The realignment would provide an improved strategic focus and strengthen channels of customer interaction Top management was not modified within the reorganization but specific group names and some responsibilities changed Paul Ely head of all HP computer operations stated In some ways it follows IBMs restructuring in October 1981 in that it provides for single sales interface with the customer and common development and manufacturing for all common products However the groups for developing vertical markets and personal workstations which HP added recognize important new directions in the computer industry The benefits that resulted from this reorganization were that it gave more freedom to divisions to work on new ideas and to be creative and entrepreneurial which leads to
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