Abstract

Cisco Systems, Inc. (Cisco), an Internet technology company, had an organizational structure comprising of various cross-functional teams. The key decisions in the company were taken by councils, boards and working groups. These committees (around 60 as of 2009) working at different levels were cross-functional in nature, and according to the company, lent Cisco speed, scale, flexibility, and rapid replication. Cisco had made the shift to this type of organizational structure in 2001 and had refined it in subsequent years. According to John T. Chambers (Chambers), the Chair-man and CEO of Cisco, the company had reorganized to break free of the silo culture in the company prior to 2001, so that it could remain agile and innovative in a rapidly changing industry. The company felt that the traditional command-and-control model had lost its relevance, and the future would be about collaborate models of decision making. He also claimed that the new organizational model had served the company well and helped implement its aggressive growth strategy amidst the economic downturn. Industry observers and organizational experts were divided in their opinion about Cisco’s organizational structure and appro-ach to decision making. While some industry observers felt that such a model was effective, others felt that the manage-ment-by-committee approach would slow down decision making and impede inno-vation. Some experts were extremely critical of Cisco’s organizational model. But others believed that if Cisco could further refine the model by addressing some of the lacunae associated with it, it could very well be adopted more widely and be accepted as a radical management innovation.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the various issues and challenges associated with organizational design
• Discuss the pros and cons of different types of organizational structures and in the light of this analysis, critically analyze Cisco’s organizational structure
• Discuss the pros and cons of Cisco’s approach to deci-sion making
• and Discuss ways in which the organizational model at Cisco can be improved further.

Keywords

Organizational structure, Organizational design, Decision making, Cross-functional teams, Matrix organization, Command-and-control model, Collaborative model, Management innovation, Councils, Boards, Working groups, committees, Networked Virtual Organization, Delegation, Cisco