Prior to its reorganization, Cisco Systems had a reputation for having a kind of “cowboy culture” in

Prior to its reorganization, Cisco Systems had a reputation
for having a kind of “cowboy culture” in which people with the most aggressive
and strong personalities pushed and shoved to try to gain John Chambers’s
approval. Those who controlled the most resources had the most power, and they
used that power for personal gain instead of the best interest of the company.
Now the company exhibits a sense of pride in managers who do something to help
others succeed, even if they don’t receive explicit or instant credit for it.
John Chambers will be the first to tell you that the current
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Prior to its reorganization, Cisco Systems had a reputation
for having a kind of “cowboy culture” in which people with the most aggressive
and strong personalities pushed and shoved to try to gain John Chambers’s
approval. Those who controlled the most resources had the most power, and they
used that power for personal gain instead of the best interest of the company.
Now the company exhibits a sense of pride in managers who do something to help
others succeed, even if they don’t receive explicit or instant credit for it.
John Chambers will be the first to tell you that the current collaborative
structure could not have emerged without the systems put in place to facilitate
communication between employees spread across the globe. Cisco had to figure
out a way to allow everyone to work together without hopping on a plane every
time they needed a meeting. Therefore, the company developed a technology
called “TelePresence,” which Chambers calls “a lifelike, ultra-high-definition
videoconferencing system that enables meetings so realistic that they truly
feel like everyone is in the same room even if they’re thousands of miles
away.” The technology seems to provide a competitive advantage to Cisco, though
for $300,000, it will set up the very same system for anyone who wants one!

An issue that keeps popping up, however, is what happens
when Chambers (who, at age 59, is recognized as one of the top CEOs in the
world) retires. The current structure is mainly a result of his influence,
though he also argues that the new structure minimizes his importance. The
succession plan remains up in the air. One thing is for certain though: The
nimble decision-making ability of Cisco’s councils and boards might be put to
use very shortly, because as of late 2009, Cisco had $26 billion in cash laying
around, waiting to be spent.

a. Given the technology available at Cisco, is it possible
for other companies to emulate its organizational structure? What might prevent
other companies from doing so?

b. Evaluate Cisco’s organizational structure in terms of its
ability to compete effectively with its competitors. What specific advantages
does it provide?

c. What types of employees is Cisco likely to attract with
the structure it has put in place? Does this prediction bode well or ill for
the future?

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