Hewlett-Packard Company: The Departure of Mark Hurd (A)
For five years Mark Hurd has enjoyed dramatic success as the CEO of Hewlett Packard, turning the company’s PC division around and getting the company back in the black through aggressive cost-cutting, including the elimination of 14,500 jobs. However, employee morale is through the floor and there may be high turnover costs down the road. When Hurd is accused of sexual harassment by a female contractor, and her attorney is the high-profile feminist Gloria Allred, H- P’s Board of Directors has a very difficult decision to make. Should the board use the sexual harassment accusation as an excuse to oust the wildly successful – but unpopular – CEO?
- To examine whether people in management positions at large companies should face termination for relatively minor infractions;
- To determine the extent to which unrelated factors, such as a manager’s past success or popularity among employees, play a role in deciding whether a manager found guilty of misconduct should be terminated;
- To highlight how difficult it is for managers to balance the interests of a company’s stakeholders when different stakeholder groups have opposing interests;
- To analyze how companies should respond to harsh criticism by the media or other interested parties;
- To consider how a company should respond when an employee with sensitive information accepts a job offer with a competitor;
- To provide an example of how a company’s decision to terminate a key executive could have a significant impact on the long-term success of the company.