Cisco's Organizational Structure and its Collaborative Approach to Decision Making


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Case Details:
Case Code : HROB132
Case Length : 25 pages
Period : 2001-2010
Pub Date : 2010
Teaching Note :Not Available
Organization : Cisco Systems, Inc.
Industry : Information Technology
Countries : US; Global

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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Background Note

Cisco was founded by a group of computer scientists, who had together designed a software system named IOS (Internet Operating System), which could send streams of data from one computer to another...

Cisco's Organizational Structure

Right from its initial years, Cisco had a flat organizational structure. Over the years, the company had brought about certain changes in its organizational structure focusing on cross functional teams...

Rationale of the Reorganization

Speaking about the organizations structure, Chambers, said, "Our organization structure leverages the power of communities of interest which we call councils which we believe are $10 billion opportunities, boards that we see as $1 billion opportunities and working groups...

How it Started

The idea for the new structure occurred during the economic down turn in 2001, when Cisco wrote off US$2.2 billion in losses. Realizing the Cisco's hierarchical structure was preventing it from moving fast, Chambers started grouping executives into cross-functional teams...

Results

In late 2008, while Cisco's stock was witnessing a decline, analysts said that the company was still in a strong financial position with US$26 billion in cash. "Not only do we have the $26 billion, we now have 26 new market adjacencies that are not relevant to our revenue today, but they will be three to four years from now," said Chambers...

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