What the Heck Is Wrong With Hewlett-Packard?

First Mark Hurd, now Adrian Jones? Hewlett-Packard (NYSE: HPQ  ) has sued Oracle (Nasdaq: ORCL  ) again, this time for poaching a sales executive who left HP under what appear to be (ahem) suspicious circumstances.

According to court filings quoted by The Wall Street Journal, Jones, who joined HP in March 2007, served as a sales executive for the Asia Pacific region until his departure in February of this year. He apparently resigned five days after copying internal HP documents to a USB hard drive, then joined Oracle a month later.

Today, he's listed as Oracle's senior vice president, systems sales, Asia Pacific & Japan in his LinkedIn profile, which means he's working with Hurd again.

Predictably, HP is suing to keep Jones from using what he allegedly took to create an "unfair competitive advantage" in its fight for market share with Oracle, the Journal reports. The PC maker sued Hurd for similar reasons, though HP never accused Hurd of stealing documents.

Intrigued yet? Wait, it gets better. According to the Journal, Jones was about to be fired for violating its code of business conduct. Jones allegedly had an inappropriate relationship with a subordinate, for whom he approved a 97% increase in pay. He's also accused of wrongfully claiming reimbursements for thousands of dollars in expenses for visiting this employee. Stop me if any of this sounds familiar.

Hurd's tale isn't as romantically charged as Jones's is, yet the patterns of abuse are startlingly similar. Both have been accused of what amount to "ethical lapses" in polite language, and both apparently abused shareholder capital for personal gain.

As an investor, it makes me wonder:

  • What the [expletive] is going on at HP?
  • What the [expletive] are you doing hiring these guys, Oracle?

This isn't an appeal to the "holier than thou" in each of us but rather a pair of serious questions. Management talent matters; ethics matter more. Look no further than Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) and the David Sokol affair to see what questionable judgment can do.

If you thought of high tech as higher education, HP would be the school suffering from past probations and wary looks from deans and prospective students suspicious of its history of unflattering incidents. Oracle would be the "we don't care what you think about our graduation rates" powerhouse who'd do whatever's necessary to raise a banner.

Maybe I'm making too much of this. Maybe this is the way Silicon Valley salespeople act and companies respond. But if that's really the case, then maybe it's time I parked the thousands I've invested in Oracle into some other worthy stocks. As for HP, let's just say this confirms the short thesis I've espoused for months now.

Do you agree? Disagree? Let us know what you think about HP's lawsuit, Oracle's business practices, and the soap operas that make Silicon Valley what it is using the comments box below.

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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Berkshire Hathaway and Oracle at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool owns shares of Berkshire Hathaway and Oracle and is also on Twitter as @TheMotleyFool. Its disclosure policy is at a loss for answers at the moment.


Read/Post Comments (7) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 08, 2011, at 3:06 PM, 30YrHP wrote:

    "You are judged by the company you keep" is an old adage that Oracle needs to consider. Now with 2 high profile executives with a record of such bad judgment and personal lack of morals, what are we to think of Oracle? How long before the scandals start there? HP showed a high ethical standard in getting rid of Hurd and maybe Larry Ellison needs to step up and throw both these bums out now before the lies start if they haven’t already.

  • Report this Comment On April 08, 2011, at 4:07 PM, seemenow wrote:

    Could it be that HP has a very specific Standards of Business Conduct and takes it seriously? Lapses in judgement happen all the time. I would be worried about companies that never report issues...

  • Report this Comment On April 08, 2011, at 8:27 PM, gjarrington wrote:

    Seems more like HP has decided since they can't compete with Oracle they'll become a thorn in their side instead.

  • Report this Comment On April 08, 2011, at 8:50 PM, 30YrHP wrote:

    A thorn in their side? WTF? These are 2 philandering thieves and liars who are now high ranking executives at Oracle. HP didn't make them chase and harass women(allegedly), submit false expense reports to cover for those activity at the cost of the company(allegedly), or steal HP property...they did it themselves and should be held responsible. Oracle is just the company stupid enough to hire these dirt bags. If Oracle wants to make a stand and get rid of both of them I would applaud it I seem to recall that Oracle just won a case where their intellectual property and software were stolen...were they being a thorn in the side of SAP? Someone needs to be accountable or it will happen again at Oracle and they will have no one to blame but themselves. Get real and get rid of the bums before they screw Oracle like they did HP...once a scumbag always a scumbag...

  • Report this Comment On April 11, 2011, at 5:25 PM, abdulcrod wrote:

    30yrHP: So let me get this straight: HP dumps Hurd after it hires a PR firm to determine whether disclosure of the sexual harassment letter will be bad for the company? And when the PR firm says yes, it’s sayonara to the guy who actually delivered value to shareholders. They say they didn’t dump him because they determined what he did was wrong – in fact, their own investigation showed no sexual harassment. Then, this Jones guy leaves and suddenly he’s a philanderer and an expense account thief – so wait: those things only mattered once he left the company? HP seems to get on its high horse when it serves them, not when it’s allegedly the right thing to do. I wish they’d just shut up and focus on their own business – stop making headlines that only make them look like idiots.

  • Report this Comment On April 12, 2011, at 5:39 PM, gjarrington wrote:

    HP is a broken culture. I worry for its long-term viability. Judging from the headlines, mayhem seems to rule the day. And when you’re competing against IBM, you can’t sell mayhem to customers.

  • Report this Comment On April 19, 2011, at 6:05 PM, pmeadowcroft wrote:

    Some of these commenters seem unaware...Larry Ellison drives these hires...after all, he leads from the front and is driving a culture of...?success?

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