Hewlet Packard/Compaq: The Largest Technological Merger in History

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Introduction

Hewlett-Packard (HP) and Compaq Computers pulled off the largest technological merger in history. In September 2001, Carleton (Carly) Fiorina announced that HP will acquire Compaq’s stock transaction that will value at $25 billion (Hoopes, p. 4). The idea of the merger came up during a telephone conversation by HP’s CEO Fiorina and Compaq’s CEO Michael Capellas during June 2001, the original purpose of the telephone call was to speak about licensing agreement (Hoopes, p. 4). HP and Compaq, a Houston-based PC organization founded in 1982, decided that in July 2001 that the outline of the deal was established and after the announcement of the merger in September, the merger would be approved by the boards of both organizations (Hoopes, pp. 4-5). On the morning of November 6, 2001, Walter Hewlett, son of co-founder William Hewlett stated that he and his family would publicly oppose to the merger and later that day David Packard Jr., son of co-founder William Hewlett, also stated that he would publicly oppose to the merger. With little support for the merger, Fiorina had to justify why acquiring Compaq would eliminate a player in the PC market and that the merger for HP will create a full service technology firm that is capable from selling computers to developing complex networks (Hoopes, pp. 5-6). With the future of HP in jeopardy, Fiorina failed to sell the merger to the family members of the Hewlett or the Packard. An analysis of the HP and Compaq merger reveals a challenge for HP and how to manage cultural differences with proper internal communication. The methodology used for this paper will be the organizational resistance to change and organizational learning.

Brief Introduction of Hewlett-Packard

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