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HP CEO calls in consultants for top-to-bottom review

Outside management techies to scrutinise the lot, corporate culture included

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Hewlett-Packard has begun a top-to-bottom review of the company's operations, covering the whole of its business lines and strategies down to corporate culture. CEO Lewis Platt told staff of the review, which is being conducted by external consultants, in a memo last week. The company's sudden attack of navel-gazing comes after a fairly lacklustre year where although it has been able to at least hold its position in the sales tables, revenues have flagged. It improved profits in its most recent quarter, but largely through tightening the screws on expenses. So far, HP has blamed reduced sales growth on the Asian crisis, but the company's margins must of necessity have been hit by its push for volume in, for example, the consumer and Intel workstation markets. It is also the last of the major computer companies to have so far avoided radical corporate surgery. It may well be that Platt has decided on the review as a mechanism for carrying this out before an IBM, Compaq or Dell style emergency makes it unavoidable. There is as yet no announced date for the completion of the review, nor are there many clues as to the likely outcome. Likely consequences however include spinning off and/or separating out some of the company's multitude of businesses. Test and measurement equipment would seem a likely candidate for this, but it will also be worth watching HP's enterprise operations. HP has only just merged its Intel and PA-Risc enterprise operations into one unit in a bid to combat tougher competition from Sun and IBM. It'll be interesting to see if Platt's consultants support or reject that move. ®

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