Hp and Compaq Culture After the Merger

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As someone who has been through two major computer mergers, Paul Brandling knows that one of the toughest things to get right is fostering a new corporate culture. As a long-standing Compaq employee, Mr Brandling is familiar with the stories about the Digital Equipment Corpora-tion employees in Europe who still meet to talk about DEC more than four years after Compaq took over. Mr Brandling, who survived the DEC merger as well as the earlier Compaq takeover of Tandem Computers, is now responsible for merging the Australian and New Zealand operations of Hewlett-Packard and Compaq. As managing director of HP South Pacific, Mr Brandling has the tricky task of reassuring customers and motivating staff, while at the same time sacking up to 600 people. The job losses are part of a global cost-cutting program to make the $US18.6 billion ($34 billion) merger of HP and Compaq succeed in the eyes of financial markets. The merged group was launched on Tuesday in California by the new chief executive officer and former HP CEO Carly Fiorina and former Compaq CEO and now HP president Michael Capellas. Both executives said the cultural differences had been overplayed and they did not think that melding the two compa-nies together would be a problem. However, during the merger process many Compaq staff expressed reservations about Ms Fiorina's brash style. In the eight months since the merger was announced, Ms Fiorina led the brutal proxy battle to push the deal through, as well as being forced to appear in an acrimonious court case brought by Walter Hewlett, a son of the HP founder. Commentators said she showed little empathy for the workers, while analysts and fund managers said they were glad that Mr Capellas was in charge of the integration process. In Australia, the potential problem of a management upheaval at the top of the merged organisations was avoided because

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