Organisation Design - Cisco (OB)

8/11/2019 Organisation Design - Cisco (OB)

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ORGANISATIONAL DESIGN OF CISCO

SYSTEMS1

ORGANISATIONORGANISATION

AL DESIGNAL DESIGN

OF CISCOOF CISCO

SYSTEMSSYSTEMS


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1.Introduction

Organisation design is not simply about mapping out an organisational structure, but also

about how the organisation is aligned with all other aspects, functions, processes and

strategies within the business. When looking at organisation design, the context within which

the business exists must be taken into consideration. The chapter begins by discussing what

an organisation actually is before looking at how organisation designs have evolved over

time. The chapter then considers various forms of design, factors that influence design, and a

range of tools and models you can use to understand how organisation design fits together.

The chapter concludes by investigating what role hrm plays within organisation design.

Throughout the chapter there are questions and case studies. We strongly urge you to take

time out to try to answer the questions. Only by doing so can you fully understand the

complexity and relevance of organisation design.

Whether we are aware of it or not, we have at some stage in our lives belonged to at least one

organisation. We also can quite easily identify organisations. These organisations can be

international (e.g. the world bank, national (e.g.parliament and the national health service,

or local (e.g. a local charity. !ut what exactly is an organisation" most of us would consider

it to be composed of a number of people, but would we say it also consists of the buildings

that the group of people use" #aturally there are many definitions. $cnamara (%&'%

suggests that in its simplest form) an organisation is a person or group of people

intentionally organised to accomplish an overall, common goal or set of goals).


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2.Definition and Meaning of Organization design

Organization design

*can be defined as the process of reshaping organi+a tion structu re and roles .Or s thealignment of structure, process, rewards, metrics and talent with the strategy of the business.

Organi+ational design is the way an organi+ation is to be structured and operated by itsmembers. -t is both a plan and process.

Organisational design is often defined narrowly as the process of reshaping organi+ationstructure and roles. -t can, however, more usefully be defined as

/ aligning the structure, processes, people, co0ordination and control mechanisms, and lateralconnections of an organisation with its strategy and operating environment.1

The underlying logic for this is that for an organisation to be successful, and be able toexecute its chosen strategy, it must have a formal design which addresses two complementary

problems

'. 2ow to partition the overall task of the organisation into smaller tasks of sub0units,

and


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%. 2ow to co0ordinate these smaller sub0unit tasks so that they fit together to efficientlyrealise organisational goals.

Organisational design is part of the broader fields of organisational development (oftencolloquially referred to as O3) and organisational effectiveness. These fields include more

behaviourally0centred approaches to improving effectiveness such as leadership behaviours,organisational culture and interpersonal communication.

/4the vast ma5ority of people go to their 5obs each day wanting to contribute to the missionof the organisation they work for. Too often, however, the organisation is a barrier to, not anenabler of, individual effort.1

6. 7albraith

There is a large body of research showing strong links between the design of organi+ationsand their effectiveness. This research has generated various organisational designframeworks, most notably 6ay 7albraith)s star model) which can be used to diagnose anddecide action on design issues. The research and frameworks have some commonfoundational themes

8 9uccessful organisational design is approached holistically. ll components of anorganisation : its people, formal structures, organising processes etc interact to determineeffectiveness. ny approach which does not consider these, or which deals with them inisolation is unlikely to generate an effective outcome.

8 ;very organisation exists to achieve something in a particular environment. To besuccessful an organisation)s design should reflect and match the choices, complexity,constraints and opportunities inherent in its strategy and operating environment. s thesechange, so should an organisation)s design in response.

8 ;ach component of an organisational design should combine with all the others to supportstrategy execution. The better the alignment or coherence between components, the greaterthe organisation)s likely effectiveness.


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3.What is organizational design?

n organi+ation or organisation is an entity, such as an institutionor an association, that has acollective goal and is linked to an external environment. The word is derived from the 7reekword organon, itself derived from the better0known word ergon which means *organ* .

Organi+ational design is a step0by0step methodology which identifies dysfunctional aspectsof work flow, procedures, structures and systems, realigns them to fit current businessrealitiesyou pick them out, one by one. -n particular, the two

basic forms of organi+ational structure are mechanistic and organic.

?or most companies, the design process leads to a more effective organi+ation design,significantly improved results (profitability, customer service, internal operations, andemployees who are empowered and committed to the business. The hallmark of the design

process is a comprehensive and holistic approach to organi+ational improvement that touchesall aspects of organi+ational life, so you can achieve

;xcellent customer service

-ncreased profitability

@educed operating costs

-mproved efficiency and cycle time

culture of committed and engaged employees

clear strategy for managing and growing your business!y design we)re talking about the integration of people with core business processes,technology and systems. well0designed organi+ation ensures that the form of theorgani+ation matches its purpose or strategy, meets the challenges posed by business realitiesand significantly increases the likelihood that the collective efforts of people will besuccessful.

s companies grow and the challenges in the external environment become more complex,businesses processes, structures and systems that once worked become barriers to efficiency,customer service, employee morale and financial profitability. Organi+ations that don)t

periodically renew themselves suffer from such symptoms as
http://en.wikipedia.org/wiki/Entityhttp://en.wikipedia.org/wiki/Institutionhttp://en.wikipedia.org/wiki/Associationhttp://en.wikipedia.org/wiki/Entityhttp://en.wikipedia.org/wiki/Institutionhttp://en.wikipedia.org/wiki/Association


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-nefficient workflow with breakdowns and non value0added steps

@edundancies in effort (/we don)t have time to do things right, but do have time to do

them over1

?ragmented work with little regard for good of the whole (Aroduction ships bad parts

to meet their quotas

Back of knowledge and focus on the customer

9ilo mentality and turf battles

Back of ownership (/-t)s not my 5ob1

Cover up and blame rather than identifying and solving problems

3elays in decision0making

Aeople don)t have information or authority to solve problems when and where they

occur

$anagement, rather than the front line, is responsible for solving problems when

things go wrong

-t takes a long time to get something done

9ystems are ill0defined or reinforce wrong behaviors

$istrust between workers and management

3.1 Methodology

lthough adaptable to the si+e, complexity and needs of any organi+ation, the design processconsists of the following steps.

Charter the design process

s senior leaders, you come together to discuss current business results, organi+ationalhealth, environmental demands, etc. and the need to embark on such a process. Dou establisha charter for the design process that includes a /case for change,1 desired outcomes, scope,allocation of resources, time deadlines, participation, communications strategy, and other

parameters that will guide the pro5ect.

(t times, senior teams may go through either a strategic planning process or an executiveteam development process prior to beginning a redesign initiative, depending on how clearthey are about their strategy and how well they work together as a team.

Assess the current state of the usiness


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Dou don)t want to begin making changes until you have a good understanding of the currentorgani+ation. Esing our Transformation $odel, we facilitate a comprehensive assessment ofyour organi+ation to understand how it functions, its strengths and weaknesses, and alignmentto your core ideology and business strategy. The assessment process is astounding in the

clarity it brings an organi+ation)s leaders and members, not only regarding how theorgani+ation currently works but how the various parts are interrelated, its overall state ofhealth and, most importantly, what needs to be done to make improvements.

Design the ne! organization

The senior team (and


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accomplished quickly. 9ome may require more detail and be implemented over a longerperiod of time.

Are0design Workflow

Aost0design Workflow

The first chart illustrates the tendency of most people within organi+ations to think in termsof silos and organi+e people according to the similarity of their functions.

The second chart illustrates how the company redefined structural boundaries to becomemuch more cross0functional on the front end of their business. They combined people from anumber from a number of departments into teams that took full responsibility for managingcustomer orders. The company was able to improve their total billings of a ma5or product line

by F&G and increase their margins by %FG.

Of course, this chart greatly simplifies all of the design decisions which includedimprovements in workflow and system support, and the role of leaders and other supportfunctions in the new organi+ation. !ut this gives you an idea of the kinds of integration andimproved collaboration that can result from organi+ational design.


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#.$he %&olution Of Organisational Design $heory

We saw in the previous section that organisations are deliberately structured and have design.

particular design of an organisation might be described as bureaucratic : that is to say, ithas bureaucracy. What do we mean by this, and how does it relate to organisation design"Our understanding of bureaucracy generally comes to us through the work of the 7ermansociologist $ax Weber ('HIJ:'K%&, who uses the term in relation to his discussion ofauthority. Weber explores why it is that we obey other people and suggests three types ofauthority traditional, charismatic and legal0rational.

-t is the legal0rational authority that applies to bureaucracy. This type of authority depends noton tradition, as in the case of monarchy, or on the charismatic qualities of a person. Thereason we tend to obey this authority is because it has been defined, structured and limited bycertain rules designed to achieve specific goals. Thus, within a company managers ought to

be obeyed because they occupy the office) of a manager, and there are restrictions to theextent of their authority, which has been rationally determined. This would be a differentsituation from, for example, a young child who obeys the parents purely because they are the

parents and because parents are traditionally obeyed. Begal0rational authority tends to co0exist within certain types of organi+ations referred to by Weber as having bureaucraticadministration). What he means by this is that organisations develop robust processes,structure and rules for workers to follow. -t is these features that, when they are put togetherin an organisation, we refer to as bureaucracy. Weber then goes on to say that organisationsadopting the bureaucratic administration) type are superior to any other form in precision, instability, in the stringency of its discipline, and in its reliability) (Weber 'KJL, pMML.$oreover, he suggests that the capturing of technological knowledge is the source) of the

bureaucratic administration. -n other words, following industrialisation, developingorganisations increased the number of managerial workers who were responsible forcapturing, measuring and evaluating work practices. This new knowledge needed to beformulated in a structured way so that organisational processes could be followed, measuredand understood. This in turn facilitated an element of control, which in Weber)s viewcontributes to the efficiency of the organisation. Organisational 3esign Meffective design foran organisation is one where its structure is bureaucratic. -t is this structure that allows greatercontrol of the organisation and in turn leads to greater efficiencies


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'.(i) *ey %le"ents in Organizational Design

Organi+ational design is engaged when managers develop or change an organi+ation=s

structure. Organi+ational 3esign is a process that involves decisions about the following sixkey elements

Wor+ (pecialization

3escribes the degree to which tasks in an organi+ation are divided into separate5obs. The main idea of this organi+ational design is that an entire 5ob is not doneby one individual. -t is broken down into steps, and a different person completeseach step. -ndividual employees speciali+e in doing part of an activity rather thanthe entire activity.

Depart"entalization

-t is the basis by which 5obs are grouped together. ?or instance every organi+ationhas its own specific way of classifying and grouping work activities.

There are five common forms of departmentali+ation

,unctional Depart"entalization. s shown in the ?igure %0', it groups 5obs by

functions performed. -t can be used in all kinds of organi+ationsN it depends on the

goals each of them wants to achieve.

?igure %0'?unctional 3epartmentali+ation example

3ifferent aspects on this type of departmentali+ation

Aositive spects #egative spects

;fficiencies from putting togethersimilar specialties and people with

common skills, knowledge, and

Aoor communication acrossfunctional areas


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orientations

Coordination within functionalarea

-n0depth speciali+ation

Bimited view of organi+ationalgoals

-roduct Depart"entalization. -t groups 5obs by product line. ;ach manager is

responsible of an area within the organi+ation depending of his


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eographical Depart"entalization. -t groups 5obs on the basis of territory or

geography.

?igure %0M 7eographical 3epartmentali+ation example



$ore effective and efficienthandling of specific regionalissues that arise

9erve needs of unique geographicmarkets better

3uplication of functions

Can feel isolated from otherorgani+ational areas

-rocess Depart"entalization. -t groups on the basis of product or customer flow.

?igure %0J Arocess 3epartmentali+ation example



$ore efficient flow of work

activities

Can only be used with certain

types of products


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Custo"er Depart"entalization. -t groups 5obs on the basis of common customers

?igure %0F Customer 3epartmentali+ation example



Customers= needs and problemscan be met by specialists

3uplication of functions

Bimited view of organi+ationalgoals

Chain of co""and

-t is defined as a continuous line of authority that extends from upper organi+ational levels tothe lowest levels and clarifies who reports to whom. There are three important conceptsattached to this theory

uthority @efers to the rights inherent in a managerial position to tell people what to do andto expect them to do it.

@esponsibility The obligation to perform any assigned duties.

Enity of command The management principle that each person should report to only onemanager.


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(pan of Control

-t is important to a large degree because it determines the number of levels and managers an

organi+ation has. lso, determines the number of employees a manager can efficiently andeffectively manage.

Centralization and Decentralization

$ore Centrali+ation $ore 3ecentrali+ation

;nvironment is stable

Bower0level managers are not ascapable or experienced at makingdecisions as upper0level managers.

Bower0level managers do not wantto have say in decisions

3ecisions are significant.

Organi+ation is facing a crisis or therisk of company failure.

Company is large.

;ffective implementation ofcompany strategies depends onmanagers retaining say over whathappens.

;nvironment is complex, uncertain.

Bower0level managers are capableand experienced at makingdecisions.

Bower0level managers want a voicein decisions.

3ecisions are relatively minor.

Corporate culture is open toallowing managers to have a say inwhat happens.

Company is geographicallydispersed.

;ffective implementation ofcompany strategies depends onmanagers having involvement andflexibility to make decisions

,or"alization

-t refers to the degree to which 5obs within the organi+ation are standardi+ed and the extent towhich employee behavior is guided by rules and procedures.

/.$ypes of Organisational Design


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/.1.What are the co""on types of Organisational Designs?

There are two main types of Organisational 3esign :

Traditional

Contemporary

$raditional

(i"ple

Bow departmentalisation

Wide spans of control

Centralised authority

Bittle formalisation

$ost commonly used by small businesses

?ast, flexible, inexpensive to maintain

#ot appropriate as organisation grows and relying on one person is risky

,unctional

n organisational design that groups similar or related occupational specialities

together

Cost saving advantages from specialisation

;mployees are grouped with others who have similar tasks

?unctional specialists become insulated and unaware of what other units are doing

Aursuing functional goals can lead to manager losing sight of what is best overall for

the organisation

$any medium si+ed organisation use this design

;.g. 2@, finance, operations etc..


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Di&isional

n organisation made up of separate, semi0autonomous units or divisions

?ocuses on results : division managers are responsible for what happens to their

products and services

3uplication of activities and resources increases cost and reduces efficiency

Conte"porary

$ea"

n organisational structure in which the entire organisation is made up of work groups or

teams

Ad&antages

;mployees are empowered

;mployees are more involved

@educes barriers among functional areas

Disad&antages

#o clear chain of command

Aressure on team to perform

Matri)

$atrix is a structure that assigns specialists from different functional areas to work onpro5ects, but who returns to their areas when the pro5ect is completed.

Creates a dual chain of command (unlike a unity of command

%"ployees ha&e 2 "anagers 0 a product "anager and a functional "anager

!oth managers need to Communicate regularly

Coordinate work demands

@esolve conflicts together


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Aro5ect is a structure in which employees continuously work on pro5ects

s one pro5ect is completed employees move on to the next

#o formal department that employees return to on completion of a pro5ect

#o departmentalisation or rigid organisational hierarchy

$anagers serve as mentors, facilitators, and coaches

Ad&antages

?luid and flexible design that can respond to environmental changes

?aster decision making

Disad&antages

Complexity of assigning people to pro5ects

Task and personality conflicts

oundaryless

structure that is not defined or limited to artificial hori+ontal, vertical or externalboundaries

@emains flexible and unstructured

Can respond quickly to fast0moving marketplace

;liminates chain of command

@eplace departments with empowered teams

irtual

n organisation that consists of small core full0time employees and that hires outsidespecialists temporarily as needed to work on pro5ects

et!or+

Eses its own employees to do some work activities and networks of outside suppliers

to provide other needed product components or work processes

9ometimes known as $odular organisation

llows organisations to concentrate on what they do best


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nd to contract out other activities to companies that can do those activities best

dvantages

2ighly flexible

3raws on talent wherever it is found

3isadvantages

Back of control

Communication difficulties

Design Challenges Managers ,ace $oday

*eeping e"ployees connected

?inding a way to keep widely dispersed and mobile employees connected to the

organisation

Organisational design issues in relation to sustainability

The si+e of the organisation affects the implementation of sustainability operations

large company needs more elaborate strategies, policies and structures

#eed to engage employees to be able to successfully implement and integrate

sustainable practices

uilding a learning organisation

Bearning organisation an organisation that has developed the capacity to

continuously learn, adapt and change

-t describes an organisational mindset

@evolves around4

Organisational 3esign

-nformation 9haring

9hare information and collaborate


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@equires minimal structure and physical barriers

Teams are an important feature and empowered employees

9hare information OA;#BD, CCE@T;BD, T-$;BD $##;@

4eadership

Creating a shared vision for the future and keeping employees working towards that

vision

Culture

Create a sense of community

$anaging global structural issues

@elevant because of the global nature of modern business

9tructures and strategies worldwide are similar (the behaviour within them is unique

though

2ave to consider the cultural implications of certain design elements

;.g. ?ormalisation (rules and bureaucratic mechanisms may be more important in

less economically developed countries because they have lower levels of professionaleducation and skills.

5.What is Organizational structure?


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n organi+ational structure defines how activities such as task allocation, coordination andsupervision are directed towards the achievement of organi+ational aims. -t can also be

considered as the viewing glass or perspective through which individuals see theirorgani+ation and its environment.

Organi+ationsare a variant ofclustered entities. n organi+ation can be structured in manydifferent ways, depending on their ob5ectives. The structure of an organi+ation will determinethe modes in which it operates and performs.

Organi+ational structure allows the expressed allocation of responsibilities for differentfunctions and processes to different entities such asthebranch,department,workgroupand individual

Organi+ational structure affects organi+ational action in two big ways. ?irst, it provides the

foundation on which standard operating procedures and routines rest. 9econd, it determineswhich individuals get to participate in which decision0making processes, and thus to whatextent their views shape the organi+ation)s actions.

5.1 6istory

Organi+ational structures developed from the ancient times of hunters and collectors in tribalorgani+ations through highly royal and clerical power structures to industrial structures andtoday=s post0industrial structures.

s pointed out by B. !. $ohr, the early theorists of organi+ational structure, Taylor, ?ayol,and Weber *saw the importance of structure for effectiveness and efficiency and assumedwithout the slightest question that whatever structure was needed, people could fashionaccordingly. Organi+ational structure was considered a matter of choice... When in the 'KM&s,the rebellion began that came to be known as human relations theory, there was still not adenial of the idea of structure as an artifact, but rather an advocacy of the creation of adifferent sort of structure, one in which the needs, knowledge, and opinions of employeesmight be given greater recognition.* 2owever, a different view arose in the 'KI&s, suggestingthat the organi+ational structure is *an externally caused phenomenon, an outcome rather thanan artifact.* -n the %'st century, organi+ational theorists such as Bim, 7riffiths, and 9ambrook

(%&'& are once again proposing that organi+ational structure development is very muchdependent on the expression of the strategies and behavior of the management and theworkers as constrained by the power distribution between them, and influenced by theirenvironment and the outcome.

Operational organizations and infor"al organizations

Infor"al organizationand ,or"al organization

The set organi+ational structure may not coincide with facts, evolving in operational action.9uch divergence decreases performance, when growing. ;.g., a wrong organi+ationalstructure may hamper cooperation and thus hinder the completion of orders in due time andwithin limits of resources and budgets. Organi+ational structures shall be adaptive to processrequirements, aiming to optimi+e the ratio of effort and input to output.
http://en.wikipedia.org/wiki/Organizationshttp://en.wikipedia.org/w/index.php?title=Clustered_entities&action=edit&redlink=1http://en.wikipedia.org/wiki/Branch_(banking)http://en.wikipedia.org/wiki/Departmentalizationhttp://en.wikipedia.org/wiki/Working_grouphttp://en.wikipedia.org/wiki/Employeehttp://en.wikipedia.org/wiki/Informal_organizationhttp://en.wikipedia.org/wiki/Formal_organizationhttp://en.wikipedia.org/wiki/Organizationshttp://en.wikipedia.org/w/index.php?title=Clustered_entities&action=edit&redlink=1http://en.wikipedia.org/wiki/Branch_(banking)http://en.wikipedia.org/wiki/Departmentalizationhttp://en.wikipedia.org/wiki/Working_grouphttp://en.wikipedia.org/wiki/Employeehttp://en.wikipedia.org/wiki/Informal_organizationhttp://en.wikipedia.org/wiki/Formal_organization


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5.2 $ypes

6ierarchical organizationand,lat organization

-re7ureaucratic structures

Are0bureaucratic (entrepreneurial structures lackstandardi+ationof tasks. This structure ismost common in smaller organi+ations and is best used to solve simple tasks. The structure istotally centrali+ed. The strategic leader makes all key decisions and most communication isdone by one on one conversations. -t is particularly useful for new (entrepreneurial businessas it enables the founder to control growth and development.

They are usually based ontraditional dominationor charismatic domination in the senseof $ax Weber=s tripartite classification of authority.

ureaucratic structures

Weber ('KJH, p. %'J gives the analogy that /the fully developed bureaucratic mechanismcompares with other organi+ations exactly as does the machine compare with the non0mechanical modes of production. Arecision, speed, unambiguity, 4 strict subordination,reduction of friction and of material and personal costs0 these are raised to the optimum pointin the strictly bureaucratic administration.1 !ureaucratic structures have a certain degree ofstandardi+ation. They are better suited for more complex or larger scale organi+ations, usuallyadopting a tall structure. The tension between bureaucratic structures and non0bureaucratic isechoed in !urns and 9talker=s distinction between mechanistic and organic structures.

The Weberian characteristics of bureaucracy are

Clear defined roles and responsibilities

A hierarchical structure

@espect for merit

!ureaucratic 9tructures have many levels of management ranging from senior executives toregional managers, all the way to department store managers. 9ince there are many levels,decision0making authority has to pass through more layers than flatter organi+ations.!ureaucratic organi+ation has rigid and tight procedures, policies and constraints. These kindof structure is reluctant to adapt or change what they have been doing since the company

started. Organi+ational charts exist for every department, and everyone understands who is incharge and what his responsibilities are for every situation. 3ecisions are made through anorgani+ed process, and a strict command and control structure is present at all times.-n

bureaucratic structures, the authority is at the top and information is then flowed from top tobottom. This causes for more rules and standards for the company which operational processis watched with close supervision. 9ome advantages for bureaucratic structures for top0levelmanagers are they have a tremendous control over organi+ational structure decisions. Thisworks best for managers who have a command and control style of managing. 9trategic0decision making is also faster because there are fewer people it has to go through to approve.9ome disadvantages in bureaucratic structures are it can discourage creativity and innovationin the organi+ation. This can make it hard for a company to adapt to changing conditions inthe marketplace.
http://en.wikipedia.org/wiki/Organizational_hierarchyhttp://en.wikipedia.org/wiki/Flat_organizationhttp://en.wikipedia.org/wiki/Flat_organizationhttp://en.wikipedia.org/wiki/Standardizationhttp://en.wikipedia.org/wiki/Traditional_dominationhttp://en.wikipedia.org/wiki/Charismatic_dominationhttp://en.wikipedia.org/wiki/Max_Weberhttp://en.wikipedia.org/wiki/Tripartite_classification_of_authorityhttp://en.wikipedia.org/wiki/Bureaucratichttp://en.wikipedia.org/wiki/Organizational_hierarchyhttp://en.wikipedia.org/wiki/Flat_organizationhttp://en.wikipedia.org/wiki/Standardizationhttp://en.wikipedia.org/wiki/Traditional_dominationhttp://en.wikipedia.org/wiki/Charismatic_dominationhttp://en.wikipedia.org/wiki/Max_Weberhttp://en.wikipedia.org/wiki/Tripartite_classification_of_authorityhttp://en.wikipedia.org/wiki/Bureaucratic


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-ost7ureaucratic

The term of post bureaucratic is used in two senses in the organi+ational literature onegeneric and one much more specific. -n the generic sense the term post bureaucratic is often

used to describe a range of ideas developed since the 'KH&s that specifically contrastthemselves with Weber=s ideal typebureaucracy. This may includetotal quality management,culture management and matrix management, amongst others. #one of these however has left

behind the core tenets of !ureaucracy. 2ierarchies still exist, authority is still Weber=srational, legal type, and the organi+ation is still rule bound. 2eckscher, arguing along theselines, describes them as cleaned up bureaucracies, rather than a fundamental shift away from

bureaucracy. 7ideon unda, in his classic study of culture management at =Tech= argued that=the essence of bureaucratic control 0 the formalisation, codification and enforcement of rulesand regulations 0 does not change in principle.....it shifts focus from organi+ational structureto the organi+ation=s culture=.

nother smaller group of theorists have developed the theory of the Aost0!ureaucraticOrgani+ation., provide a detailed discussion which attempts to describe an organi+ation that isfundamentally not bureaucratic.Charles 2eckscherhas developed an ideal type, the post0

bureaucratic organi+ation, in which decisions are based on dialogue and consensus rather thanauthority and command, the organi+ation is a network rather than a hierarchy, open at the

boundaries (in direct contrast to culture managementN there is an emphasis on meta0decisionmaking rules rather than decision making rules. This sort of hori+ontal decision making

byconsensusmodel is often used in housing cooperatives, othercooperatives and whenrunning anon0profitor community organi+ation. -t is used in order toencourageparticipationand help to empowerpeople who normally experience oppressioningroups.

9till other theorists are developing a resurgence of interest incomplexity theory andorgani+ations, and have focused on how simple structures can be used to engenderorgani+ational adaptations. ?or instance, $iner et al. (%&&& studied how simple structurescould be used to generate improvisational outcomes in product development. Their studymakes links to simple structures and improviser learning. Other scholars such as 6an @ivkinand 9igglekow, and #elson @epenning revive an older interest in how structure and strategyrelate in dynamic environments.

,unctional structure

functional organi+ational structure is a structure that consists of activities such ascoordination, supervision and task allocation. The organi+ational structure determines howthe organi+ation performs or operates. The term organi+ational structure refers to how the

people in an organi+ation are grouped and to whom they report. One traditional way oforgani+ing people is by function. 9ome common functions within an organi+ation include

production, marketing, human resources, and accounting.

This organi+ing of speciali+ation leads to operational efficiency where employees becomespecialists within their own realm of expertise. The most typical problem with a functionalorgani+ational structure is however that communication within the company can be ratherrigid, making the organi+ation slow and inflexible. Therefore, lateral communication between

functions become very important, so that information is disseminated, not only vertically, butalso hori+ontally within the organi+ation. Communication in organi+ations with functional
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organi+ational structures can be rigid because of the standardi+ed ways of operation and thehigh degree of formali+ation.

s a whole, a functional organi+ationis best suited as a producer of standardi+ed goods and

services at large volume and low cost. Coordination and speciali+ation of tasks arecentrali+ed in a functional structure, which makes producing a limited amount of products orservices efficient and predictable. $oreover, efficiencies can further be reali+ed as functionalorgani+ations integrate their activities vertically so that products are sold and distributedquickly and at low cost. ?or instance, a small business could make components used in

production of its products instead of buying them.

;ven though functional units often perform with a high level of efficiency, their level ofcooperation with each other is sometimes compromised. 9uch groups may have difficultyworking well with each other as they may be territorial and unwilling to cooperate. Theoccurrence of infighting among units may cause delays, reduced commitment due to

competing interests, and wasted time, making pro5ects fall behind schedule. This ultimatelycan bring down production levels overall, and the company0wide employee commitmenttoward meeting organi+ational goals.

Di&isional structure

The 3ivisional structure or product structure is a configuration of an organi+ation, whichbreaks down the company into divisions that are self0contained. division is self0containedand consists of a collections of functions which work to produce a product. -t also utili+es a

plan to compete and operate as a separate business or profit center. ccording toPainbooks.com, divisional structure in merica is seen as the second most common structure

for organi+ation today.;mployees who are responsible for certain market services of types of products, are placed indivisional structure in order to increase their flexibility. The process can be further brokendown into geographic (for example a E.9 3ivision and an ;E division, and product servicesfor different consumers (for example companies or households. nother example ofdivisional structure would be an automobile company which utili+es a divisional structure.The company would have one division for trucks, another for 9EQ9, and another for cars.The divisions may also have their own departments such as marketing, sales, andengineering.

The advantage of divisional structure is that it uses delegated authority so the performance

can be directly measured with each group. This results in managers performing better andhigh employee morale. nother advantage of using divisional structure is that it is moreefficient in coordinating work between different divisions, and there is more flexibility torespond when there is a change in the market. lso, a company will have a simpler process ifthey need to change the si+e of the business by either adding or removing divisions. Whendivisional structure is utili+ed more speciali+ation can occur within the groups. Whendivisional structure is organi+ed by product, the customer has their own advantages especiallywhen only a few services or products are offered which differs greatly. When using divisionalstructures that are organi+ed by either markets or geographic areas they generally havesimilar function and are located in different regions or markets. This allows business

decisions and activities coordinated locally.
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The disadvantages of the divisional structure is that it can support unhealthy rivalries amongdivisions. This type of structure may increase costs by requiring more qualified managers foreach division. lso, there is usually an over0emphasis on divisional more than organi+ationalgoals which results in duplication of resources and efforts like staff services, facilities, and

personnel.

Matri) structure

The matrix structuregroups employees by both function and product. This structure cancombine the best of both separate structures. matrix organi+ation frequently uses teams ofemployees to accomplish work, in order to take advantage of the strengths, as well as makeup for the weaknesses, of functional and decentrali+ed forms. n example would be acompany that produces two products, *product a* and *product b*. Esing the matrix structure,this company would organi+e functions within the company as follows *product a* salesdepartment, *product a* customer service department, *product a* accounting, *product b*

sales department, *product b* customer service department, *product b* accountingdepartment. $atrix structure is amongst the purest of organi+ational structures, a simplelattice emulating order and regularity demonstrated in nature.

Weak


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Organizationalcircle8 "o&ing ac+ to flat

The flat structureis common in small companies (entrepreneurial start0ups, university spinoffs. s companies grow they tend to become more complex and hierarchical, which leads toan expanded structure, with more levels and departments.

2owever, in rare cases, such as the examples ofQalve Corporation,7it2ub,-nc.and MLsignals, the organi+ation remains very flat as it grows, eschewing middlemanagers. ll of the aforementioned organi+ations operate in the field of technology, whichmay be significant, as software developers are highly skilledprofessionals, muchlike lawyers. 9enior lawyers also en5oy a relatively high degree of autonomy within atypical law firm, which is typically structured as apartnership rather than a hierarchical

bureaucracy. 9ome other types of professional organisations are also commonly structured as

partnerships, such as accountancycompanies and 7A surgeries.

Often, growth would result inbureaucracy, the most prevalent structure in the past. -t is still,however, relevant in former 9oviet @epublics, China, and most governmental organi+ationsall over the world.9hell 7roupused to represent the typical bureaucracy top0heavy andhierarchical. -t featured multiple levels of command and duplicate service companies existingin different regions. ll this made 9hell apprehensive to market changes, S'Mleading to itsincapacity to grow and develop further. The failure of this structure became the main reasonfor the company restructuring into a matrix.

9tarbucksis one of the numerous large organi+ations that successfully developed the matrixstructure supporting their focused strategy. -ts design combines functional and product baseddivisions, with employees reporting to two heads. Creating a team spirit, the companyempowers employees to make their own decisions and train them to develop both hard andsoft skills.

9ome experts also mention the multinational design, common in global companies, suchas Arocter R 7amble, Toyotaand Enilever.This structure can be seen as a complex form ofthe matrix, as it maintains coordination among products, functions and geographic areas.

-n general, over the last decade, it has become increasingly clear that through the forces ofglobali+ation, competition and more demanding customers, the structure of many companieshas become flatter, less hierarchical, more fluid and even virtual.

One of the newest organi+ational structures developed in the %&th century is teamand therelated concept of team development or team building.-n small businesses, the team structurecan define the entire organi+ation. Teams can be both hori+ontal and vertical. While anorgani+ation is constituted as a set of people who synergi+e individual competencies toachieve newer dimensions, the quality of organi+ational structure revolves around thecompetencies of teams in totality. ?or example, every one of theWhole ?oods $arket stores,the largest natural0foods grocer in the E9 developing a focused strategy, is anautonomousprofit centrecomposed of an average of '& self0managed teams, while team

leaders in each store and each region are also a team. Barger bureaucratic organi+ations can
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benefit from the flexibility of teams as well.Uerox, $otorola, and 3aimlerChryslerare allamong the companies that actively use teams to perform tasks.

et!or+

nother modern structure is network. While business giants risk becoming too clumsy toproact (such as, act and react efficiently, the new network organi+ations contract out anybusiness function, that can be done better or more cheaply. -n essence, managers in networkstructures spend most of their time coordinating and controlling external relations, usually byelectronic means. 2R$is outsourcing its clothing to a network of L&& suppliers, more thantwo0thirds of which are based in low0cost sian countries. #ot owning any factories, 2R$can be more flexible than many other retailers in lowering its costs, which aligns with its low0cost strategy. The potential management opportunities offered by recent advances in complex

networks theory have been demonstrated including applications to product design anddevelopment, and innovation problem in markets and industries.

irtual

Qirtual organi+ation is defined as being closely coupled upstream with its suppliers anddownstream with its customers such that where one begins and the other ends means little tothose who manage the business processes within the entire organi+ation. special form of

boundaryless organi+ation is virtual. 2edberg, 3ahlgren, 2ansson, and Olve ('KKK considerthe virtual organi+ation as not physically existing as such, but enabled by software toexist. The virtual organi+ation exists within a network of alliances, using the -nternet. Thismeans while the core of the organi+ation can be small but still the company can operateglobally be a market leader in its niche. ccording to nderson, because of the unlimitedshelf space of the Web, the cost of reaching niche goods is falling dramatically. lthoughnone sell in huge numbers, there are so many niche products that collectively they make asignificant profit, and that is what made highly innovative ma+on.com so successful.

2ierarchy0Community Ahenotype $odel of Organi+ational 9tructure

2ierarchy0Community Ahenotype $odel of Organi+ational 9tructure
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-n the %'st century, even though most, if not all, organi+ations are not of a pure hierarchicalstructure, many managers are still blind to the existence of the flat community structurewithin their organi+ations.

The business is no longer 5ust a place where people come to work. ?or most of theemployees, the firm confers on them that sense of belonging and identity :: the firm has

become their /village1, their community. The firm of the %'st century is not 5ust a hierarchywhich ensures maximum efficiency and profitN it is also the community where people belongto and grow together, where their affective and innovative needs are met.

Bim, 7riffiths, and 9ambrook (%&'& developed the 2ierarchy0Community Ahenotype $odelof Organi+ational 9tructure borrowing from the concept of Ahenotype from genetics. *

phenotype refers to the observable characteristics of an organism. -t results from theexpression of an organism)s genes and the influence of the environment. The expression of anorganism)s genes is usually determined by pairs of alleles. lleles are different forms of a

gene. -n our model, each employee)s formal, hierarchical participation and informal,community participation within the organi+ation, as influenced by his or her environment,contributes to the overall observable characteristics (phenotype of the organi+ation. -n otherwords, 5ust as all the pair of alleles within the genetic material of an organism determines the

physical characteristics of the organism, the combined expressions of all the employees)formal hierarchical and informal community participation within an organi+ation give rise tothe organi+ational structure. 3ue to the vast potentially different combination of theemployees) formal hierarchical and informal community participation, each organi+ation istherefore a unique phenotype along a spectrum between a pure hierarchy and a purecommunity (flat organi+ational structure.

9.Organizational Designs and %"ployee eha&ior

#ot everyone prefers the freedom and flexibility of organic structures. 9ome people are mostproductive and satisfied when work tasks are standardi+ed and ambiguity is minimi+ed that

is, in mechanistic structure. 9o any discussion of the effect of organi+ational design onemployee behavior has to address individual differences. To illustrate the point, let usconsider employee preferences for work speciali+ation span of control and centrali+ation.

The evidence generally indicates that work speciali+ation contributes to higher employeeproductivity, but at the price of reduced 5ob satisfaction. 2owever, this statement ignoresindividual differences and the type of 5ob tasks people do. Work speciali+ation is not anunending source of higher productivity. Aroblems start to surface and productivity begins tosuffer, when the human diseconomies of doing repetitive and narrow tasks overtake theeconomies of speciali+ation. s the workforce has become more highly educated anddesirous of 5obs that are intrinsically rewarding, the point at which productivity begins to

decline seems to be reached more quickly than in the past decades.


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lthough more people today are undoubtedly turned off by overly speciali+ed 5obs than weretheir parents or grandparents, it would be naive to ignore the reality that there is still asegment of the workforce that prefers the routine and repetitiveness of high 5obs. 9omeindividuals want work that makes minimal intellectual demands and provides the security of

routine. ?or these people high work speciali+ation is a source of 5ob satisfaction. Theempirical question, of course, is whether this represents % per cent of the workforce or F% percent. 7iven that there is some self selection operating in the choice of careers it might includethat negative behavioral outcomes from high speciali+ation are most likely to surface in

professional 5obs occupied by individuals with high needs for personal growth and diversity.

review of the research indicates that it is probably safe to say there is no evidence tosupport a relationship between span of control and employee performance. lthough it isintuitively attractive to argue large spans might lead to higher employee performance becausethey provide more distant supervision and more opportunity for personal initiatives, theresearch fails to support this notion. t his point, it)s impossible to state that any particular

span of control is best for producing high performance or high satisfaction among employees.gain, the reason is probably individual differences. That is, some people like to be leftalone, while others prefer the security of a boss who is quickly available at all times.Consistent with several of the contingency theories of leadership it is expected that factorssuch as employee experiences and abilities and the degree of structure in their tasks toexplain when wide or narrow spans of control are likely to contribute to their performanceand 5ob satisfaction. 2owever, there is some evidence indicating that in a manager)s 5ob a 5obsatisfaction increases as the number of employees supervised increases.

-t is found fairly strong evidence linking centrali+ation and 5ob satisfaction. -n general,organi+ations that are less centrali+ed have a greater amount of participative decision making.

nd the evidence suggests that participative decision making is positively related to 5obsatisfaction. !ut again individual differences may surface. The decentrali+ation satisfactionrelationship is strongest with employees who have low self esteem. !ecause individuals withlow self0esteem have less confidence in their abilities, they place a higher value on shareddecision making which means that they are not held solely responsible for decision outcomes.


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9.1 Organizational Designs and %"ployee eha&ior

-mpossible to generali+e due to individual differences in the employees

@esearch findings

: Work speciali+ation contributes to higher employee productivity, but it reduces 5obsatisfaction.

: The benefits of speciali+ation have decreased rapidly as employees seek more intrinsicallyrewarding 5obs.

: The effect of span of control on employee performance is contingent upon individualdifferences and abilities, task structures, and other organi+ational factors.

: Aarticipative decision making in decentrali+ed organi+ations is positively related to 5obsatisfaction.

Aeople seek and stay at organi+ations that match their needs.


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:.Aout Cisco (yste"s

Cisco 9ystems, -nc.

Type Aublic

Traded as #93VC9CO3ow 6ones -ndustrial verageComponent9RA F&& Component

#93V0'&& Component

-ndustry #etworking equipment

?ounded 9an ?rancisco, California, E.9.('KHJ

?ounders Beonard !osack 9andy Berner @ichard Troiano

2eadquarters 9an 6ose, California, E.9.

rea served Worldwide
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ey people 6ohn Chambers(Chairman R C;O7ary $oore(Aresident and COO

Aroducts #etworking 3evice#etwork $anagementCisco -O9 and #U0O9 9oftware-nterfaceand $oduleOptical networking9torage area networksWireless, Telepresence, QO-A,9ecurity3atacenter

Bist of Cisco Aroducts

@evenue E9 JH.I&L billion (%&'M

E9 JI.&I' billion (%&'%

Operatingincome

E9 ''.'KI billion (%&'M

E9 '&.&IF billion (%&'%

#et income E9 K.KHM billion (%&'M

E9 H.&J' billion (%&'%

Total assets E9 '&'.'K' billion (%&'M

E9 K'.LFK billion (%&'%

Total equity E9 FK.'%H billion (%&'M E9F'.M&' billion (%&'%

;mployees LF,&JK (%&'J

9ubsidiaries Bist of acquisitions

Website Cisco.com

Cisco is an merican multinational corporation that designs and sells consumer electronic,networking, voice and communications technology services. The company was one of thefirst to sell commercially successful routers that supports multiple network protocols.

Cisco 9ystems, -nc. is an merican multinational corporationheadquartered in 9an 6ose,California, that designs, manufactures, and sells networking equipment. The stock was addedto the 3ow 6ones -ndustrial verageon 6une H, %&&K, and is also included in the9RA
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F&&-ndex, the@ussell '&&&-ndex,#93V0'&&-ndex and the @ussell '&&& 7rowth 9tock-ndex.

:.1 6istory

One of the many buildings on the Cisco 9ystems campus in 9an 6ose

'KHJ:'KKF early years

Cisco 9ystems was founded in 3ecember 'KHJ by Beonard !osack, who was in charge ofthe 9tanford Eniversitycomputer science department=s computers, 9andy Berner, whomanaged the 7raduate 9chool of !usiness= computers, and @ichard Troiano. 3espitefounding Cisco in 'KHJ, !osack, along with irk Bougheed, continued to work at 9tanfordon Cisco=s first product which consisted of exact replicas of 9tanford=s *!lue !ox* router anda stolen copy of the Eniversity=s multiple0protocol routersoftware, originally written someyears earlier at 9tanford medical school by William Deager> a 9tanford research engineer >which they adapted into what became the foundation for Cisco -O9. On 6uly '', 'KHI,!osack and irk Bougheed were forced to resign from 9tanford and the universitycontemplated filing criminal complaints against Cisco and its founders for the theft of itssoftware, hardware designs and other intellectual properties. -n 'KHL, 9tanford licensed therouter software and two computer boards to Cisco.

-n addition to !osack, Berner and Bougheed, 7reg 9at+, a programmer, and @ichard Troiano,who handled sales, completed the early Cisco team. The company=s first C;O was !ill7raves, who held the position from 'KHL to 'KHH. -n 'KHH,6ohn $orgridgewas appointedC;O.

The name *Cisco* was derived from the city name, 9an ?rancisco, which is why thecompany=s engineers insisted on using the lower case *cisco* in its early years. The logo isintended to depict the two towers of the 7olden 7ate !ridge.

On ?ebruary 'I, 'KK&, Cisco 9ystems went public (with a market capitali+ation of%%J million and was listed on the#93Vstock exchange. On ugust %H, 'KK&, Bernerwas firedN upon hearing the news, her husband !osack resigned in protest. The couple walkedaway from Cisco with 'L& million, L&G of which was committed to their own charity.

lthough Cisco was not the first company to develop and sell dedicated network nodes, it

was one of the first to sell commercially successful routers supporting multiple networkprotocols. Classical, CAE0based architecture of early Cisco devices coupled with flexibility
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of operating system -O9allowed for keeping up with evolving technology needs by means offrequent software upgrades. 9ome popular models of that time (such as Cisco %F&& managedto stay in production for almost a decade virtually unchanged>a rarity in high0tech industry.lthough Cisco was strongly rooted in the enterprise environment, the company was quick to

capture the emerging service provider environment, entering the 9A market with new, high0capacity product lines such as Cisco L&&& and Cisco LF&&.

!etween 'KK% and 'KKJ, Cisco acquired several companies in ;thernet switching, suchas alpana, 7rand 6unction, and most notably, $ario $a++ola=s Crescendo Communicationswhich together formed the Catalystbusiness unit. t the time, the company envisioned layerMrouting andlayer %(;thernet, Token @ing switching as complementary functions ofdifferent intelligence and architecture>the former was slow and complex, the latter was fast

but simple. This philosophy dominated the company=s product lines throughout the 'KK&s.

-n 'KKF, 6ohn $orgridgewas succeeded by 6ohn Chambers.

'KKI:%&&K -nternet and silicon intelligence

The phenomenal growth of the -nternet in mid0to0late 'KK&s quickly changed the telecomlandscape. s the -nternet Arotocol(-A became widely adopted, the importance of multi0

protocol routing declined. #evertheless, Cisco managed to catch the -nternet wave, withproducts ranging from modem access shelves (9F%&& to core 79@ routers that quicklybecame vital to -nternet service providers and by 'KKH gave Cisco de facto monopoly in thiscritical segment.

-n late $arch %&&&, at the height of thedot0com bubble, Cisco became the most valuablecompany in the world, with a market capitali+ationof more than E9F&& billion. -n 6uly

%&'J, with a market cap of about E9'%K billion, it is still one of the most valuablecompanies.

$eanwhile, the growth of -nternet bandwidth requirements kept challenging traditional,software0based packet processing architectures.

The perceived complexity of programming routing functions in silicon, led to formation ofseveral startups determined to find new ways to process -Aand $AB9packets entirely inhardware and blur boundaries between routing and switching. One of them, 6uniper

#etworks, shipped their first product in 'KKK and by %&&& chipped away about M&G fromCisco 9A $arket share. Cisco answered the challenge with homegrown 9-Cs and fast

processing cards for 79@routers and Catalyst IF&&switches. -n %&&J, Cisco also startedmigration to new high0end hardware C@90'and software architecture -O90U@.

%&&I:%&'% The 2uman #etwork

s part of a massive rebranding campaign in %&&I, Cisco 9ystems adopted the shortenedname *Cisco* and created *The 2uman #etwork* advertising campaign.S%&These effortswere meant to make Cisco a *household* brand>a strategy designed to support the low0endBinksys products and future consumer products (such as ?lip Qideocamera acquired by Ciscoin %&&K.

On the more traditional business side, Cisco continued to develop its extensive enterprise0focused routing, switching and security portfolio. Vuickly growing importanceof ;thernetalso influenced the company=s product lines, prompting the company to morph
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the successful Catalyst IF&& ;thernet switch into all0purpose Cisco LI&& routing platform.S%'2owever, limits of -O9and aging Crescendo architecture also forced Cisco to look atmerchant silicon in the carrier ;thernet segment. This resulted in a new 9@K&&&productfamily intended to consolidate company=s carrier ethernet and subscriber management

business around ;PChip0based hardware and-O90U@. Cisco also expanded into new marketsby acquisition>one example being a %&&K purchase of mobile specialist9tarent#etworksthat resulted in 9@F&&& product line.

A Cisco facility inChennai;India. India is one of the co"pany


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commitment to startups focused on the emerging -nternet of ;verything (-o; marketopportunity.

Cisco 9ystems has seen a huge drop in export sales because of spying fears from the

merican#ational 9ecurity gency using backdoors in its products.

On ugust 'M, %&'J, the company announced it was laying off another I,&&& workers or HGof its global workforce, as part of a second restructuring.

:.2 Media and a!ards

Cisco products, most notably -A phones and Telepresence, are frequently sighted in moviesand TQ series. The company itself and its history was featured in the documentaryfilm 9omething Qenturedwhich premiered in %&''.

Cisco was a %&&%:&M recipient of the@on !rown ward, a E.9. presidential honor torecogni+e companies *for the exemplary quality of their relationships with employees andcommunities*. Cisco commonly stays on top of ?ortune *'&& !est Companies to work for*,with position #o. %& in %&''.

:.3 Ac=uisitions

$ain article Bist of acquisitions by Cisco 9ystems

Cisco acquired a variety of companies to spin products and talent into the company. -n 'KKF:'KKI the company completed '' acquisitions. 9everal acquisitions, such as 9tratacom, werethe biggest deals in the industry when they occurred. 3uring the -nternet boom in 'KKK, thecompany acquired Cerent Corporation, a start0up company located in Aetaluma, California,for about E9L billion. -t was the most expensive acquisition made by Cisco to that date, andonly the acquisition of 9cientific tlantahas been larger. -n 'KKK Cisco also acquired stakefor ' !illion in A$7 Consulting to enable establishing -nternet firm $etrius founded byeyur Aatel of ?use. 9everal acquired companies have grown into '!nX business units forCisco, including B# switching, ;nterprise Qoice over -nternet Arotocol(QO-A

platformWebex, andhome networking. The latter came as result of Cisco

acquiring Binksys in %&&M and in %&'& was supplemented with new product linedubbedCisco Qalet.

Cisco announced on 6anuary J, %&&L that it would buy-ronAortin a deal valued at E9HM&million and completed the acquisition on 6une %F, %&&L.SJJ-ronAortwas best known for its-ronAort nti9pam, its 9ender!ase email reputation service, and its email security appliances.ccordingly, -ronAort was integrated into the Cisco 9ecurity business unit. -ronport=s9enderbase was renamed as 9ensorbase to take account of the input into this database thatother Cisco devices provide. 9ensor!ase allows these devices to build a risk profile on -Aaddresses, therefore allowing risk profiles to be dynamically created on http sites and 9$TAemail sources.

Cisco announced on $arch 'F, %&'% that it would acquire#39 7roupfor F!. Thetransaction was completed on 6uly M&, %&'%.
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-n more recent merger deals, Cisco bought 9tarent #etworks (a mobile packet core companyand $oto 3evelopment 7roup, a product design consulting firm that helped develop Cisco=s?lip video camera. lso in %&'&, Cisco became a key stakeholder in e09kills Week. -n $arch%&'', Cisco completed the acquisition of privately held network configuration and change

management software company Aari #etworks.

lthough many buy0ins (such as Crescendo #etworks in 'KKM,Tandberg in %&'& resulted inacquisition of flagship technology to Cisco, many others have failed>partially or completely.?or instance, in %&'& Cisco occupied a meaningful share of the packet0opticalmarket, revenues were still not on par with E9L billion price tag paid in 'KKK for Cerent.9ome of acquired technologies (such as ?lip from Aure 3igital saw their product linesterminated.

-n 6anuary %&'M, Cisco 9ystems acquired -sraeli software maker -ntucell for around JLFmillion in cash, a move to expand its mobile network management offerings. -n the same

month, Cisco 9ystems acquired Cognitive 9ecurity, a company focused on Cyber ThreatArotection. Cisco also acquired 9olve3irect (cloud services in $arch %&'M and Ebiquisys(mobile software in pril %&'M.

Cisco acquired cyber0security firm 9ourcefire, in October %&'M.

On 6une 'I, %&'J, Cisco announced that it has completed the acquisition of threat7@-3, acompany that provided dynamic malware analysis and threat intelligence technology.

On 6une 'L, %&'J, Cisco announced its intent to acquire privately held Tail0f 9ystems, aleader in multi0vendor network service orchestration solutions for traditional and virtuali+ednetworks.

:.# -roducts and ser&ices

Cisco=s products and services focus upon three market segments>;nterprise and 9erviceArovider, 9mall !usiness and the 2ome.

:.' Corporate "ar+et

Corporate market refers to enterprise networking and service providers.

!orderless networks for their range of routers, switches, wireless systems, security systems,W# acceleration, energy and building management systems and media aware networks.

:./ Collaoration

-A video and phones, TeleAresence, 2ealthAresence, Enified Communications, Call Centersystems, ;nterprise social networks and $obile applications
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:.5 Datacenter and irtualization

Enified Computing, Enified ?abric, 3ata Centre 9witching, 9torage #etworking and CloudComputingservices.

-A #7# (#ext 7eneration #etworks

2igh0end routing and switching for fixed and mobile service provider networks, broadcastvideo contribution


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Aersistent people storage on networks, either in the traditional sense or in a cloud0like

manner.

2ome user

2ome user refers to individuals or families who require these kinds of services. SL'

!roadband

!roadband refers to cable modems.

?lip Qideo

With the acquisition of Aure 3igital Technologies, Cisco began to sell a line of videorecording devices called *?lip Qideo* that had been Aure 3igital=s only line of products. Thisline of products was not as popular as Cisco had thought it would have been, and on pril '%,%&'', Cisco announced they were discontinuing all ?lip cameraproduction. Cisco Ymi

product line>video conferencing for home also proved to be a short0lived bid for consumermultimedia market and did survive in Cisco product lineup.

2ardware

Cisco 9$


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Cisco EC9 blade servers

:.9 Cisco Career Certifications

Cisco 9ystems also sponsors a line of -T Arofessional certificationsfor Cisco products. Thereare five levels of certification ;ntry (CC;#T, ssociate (CC#< CC3, Arofessional

(CC#A < CC3A, ;xpert (CC-; < CC3;, and recently rchitect, as well as eight differentpaths, @outing R 9witching, 3esign, #etwork 9ecurity, 9ervice Arovider, 9ervice AroviderOperations, 9torage #etworking, Qoice, 3atacenter and Wireless.

number of specialist technician, sales and datacenter certifications are also available.

Cisco also provides training for these certifications via a portal called the Cisco #etworkingcademy. Vualifying schools can become members of the Cisco #etworking cademy andthen provide CC# level or other level courses. Cisco cademy -nstructors must be CC#certified to be a CC- certified instructor.

Cisco often finds itself involved with technical education. With over '&,&&& partnerships in

over IF countries Cisco cademy program operates in many exotic locations. ?or example, in$arch %&'M, Cisco announced its interest in $yanmarby investing in two Cisco #etworkingcademies in Dangonand $andalayand a channel partner network.

:.: Criticis"s and contro&ersy

(hareholder relations

class action lawsuit filed on pril %&, %&&' accused Cisco of making misleading statementsthat *were relied on by purchasers of Cisco stock* and of insider trading. While Cisco deniedall allegations in the suit, on ugust 'H, %&&I, Cisco=s liability insurers, its directors, and

officers paid the plaintiffs E9K'.LF million to settle the suit.

Intellectual property disputes

On 3ecember '', %&&H, the ?ree 9oftware ?oundationfiled suit against Cisco regardingCisco=s failure to comply with the7ABandB7ABlicense models and make the applicablesource code publicly available. On $ay %&, %&&K, Cisco settled this lawsuit by complyingwith ?9? licensing terms and making a monetary contribution to the ?9?.

Censorship in China

Cisco has been critici+ed for its involvement incensorship in the Aeople=s @epublic of China.ccording to author ;than 7utmann, Cisco and other telecommunications equipment

providers supplied the Chinese governmentwith surveillance and -nternet infrastructure
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equipment that is used to block -nternet websites and track Chinese online activities. Ciscosays that it does not customi+e or develop speciali+ed or unique filtering capabilities to enablegovernments to block access to information and that it sells the same equipment in China as itsells worldwide.

Wired #ewshad uncovered a leaked, confidential Cisco power point presentation that detailsthe commercial opportunities of the 7olden 9hield Aro5ectof -nternet control. -n her article,

5ournalist 9arah 9tirland accuses Cisco of marketing its technology *specifically as a tool ofrepression.*

$a) fraud in&estigation

On October 'I, %&&L, the !ra+ilian ?ederal Aoliceand !ra+ilian @eceita ?ederal (equivalentto the merican -@9, under the *Aersona Operation*, uncovered an alleged tax fraud scheme

employed by Cisco 9ystems !ra+il Chief Carlos @oberto Carnevali since %&&% that exemptedthe company from paying over @'.F billion (E9H%J million in taxes.

Antitrust la!suit

On 3ecember ', %&&H, $ultivenfiled an antitrustlawsuit against Cisco 9ystems, -nc. in aneffort to open up the network maintenance services marketplace for Cisco equipment,

p

Organisation Design - Cisco (OB)

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