Cisco's Organization Culture

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Case Details:

Case Code : HROB069
Case Length : 12 Pages
Period : 1984-2005
Pub Date : 2005
Teaching Note : Available
Organization : Cisco
Industry : Information Technology
Countries : USA

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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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"It (Cisco) grew up as an engineering community, almost a cult. They have always been very aggressive about their technology, and the lack of technology at their competitors. I've heard from lots of headhunters that it's nearly impossible to lever anybody out of Cisco."¹

- Melinda Le Baron, Research Director, Gartner Group.²

"Cisco has been described as a fast-paced, challenging, fun-loving, exciting, dynamic, diverse, intense, happy, engaging, friendly, team-oriented, lively, flexible, interesting, open, and energetic place to work."³

- Mangesh Kirtane, Director and Country Head – HR, Cisco Systems (India) Private Limited.

"Cisco culture is driven by high standards of corporate integrity and by giving back using our resources for a positive global impact. Through corporate philanthropy and public/private cooperation we are building strong and productive global communities in which every individual has the means to live, the opportunity to learn, and the chance to give back."⁴

- John T. Chambers, President and CEO, Cisco Systems Inc.

Introduction

Cisco Systems Inc. (Cisco), the leader in Internet Protocol (IP)-based networking technologies and networking gear, recorded $2.2 billion in revenues and a market capitalization of $9 billion in 1995.

By March 2000, market capitalization went up to $ 531 billion while revenues in 2000 were $19 billion. In 1995, Cisco accounted for 15% of the networking industry's profit and this figure went up to 50% in 2000. But with the tech meltdown of 2000-01, telecom companies and Internet service providers stopped purchasing telecom equipments from Cisco. Cisco was thus on a free fall, a situation the top management did not expect.

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

"If somebody would've told me then that we'd go from 70% growth to minus 30% growth in 45 days, I'd have said it was mathematically impossible," said John T. Chambers (Chambers), President and CEO, Cisco Systems Inc.⁵

Though the company recorded losses in 2001, it bounced back with net profits the next year. Cisco's net sales for fiscal 2004 were $22.0 billion, an increase of 16.8 percent from the $18.9 billion for fiscal 2003, while net income for fiscal 2004 was $4.4 billion or $0.62 per share, compared with $3.6 billion or $0.50 per share for fiscal 2003 (Refer Exhibit I for stock market movement of Cisco between 1990 and 2005). Industry observers were quick to point out that it was the organization culture of Cisco that helped it survive the tough periods of meltdown. Cisco was founded on a culture based on the principles of customer focus, open communication, empowerment, trust, integrity, and giving back to the community.

This culture ensured that Cisco was on the list of the Fortune magazine's '100 best places to work' for eight consecutive years, starting 1998.

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1] Flower, Joe, "The Cisco Mantra," www.wired.com, March, 1997.

2] Gartner, Inc. is an organization that provides research and analysis on the global IT industry.

3] "Cisco - Creating space for leaders to grow," http://www.people-one.com/hub/peopleperson/peopleperson- Mangesh.asp, October 24, 2001.

4] Carless, Jenny, "John Chambers Plays Leading Role in Discussing Global Prosperity and Security at World Economic Forum," News@Cisco, January 21, 2004.

5] Maney, Kevin, "Chambers, Cisco born again," USA Today, January 21, 2004.