Cisco Internal Governance Case Study

Their current organizational culture is establishing a leadership that leads to shareholder value. The (LSV) is the key lever for Verizon’s culture change. This illustrates on having a goal to increase shareholder value and the Individual Action Plan (IAP) just as well as the sales force being evaluated on more than one metrics over some time (Kinicki & Williams, 2013, p. 258). In extinction, by forcing the organizational systems and procedures, it also caused a change in Verizon’s corporate culture. Mentioning before the senior leaders submit (IAP), has well-established a system in which it put a place of procedure that it can complete the organization goal to increase shareholder value and accomplish a performance criterion, in which it can hold the senior leader accountable (Kinicki & Williams, 2013). Additionally, the corporate goal to make more subject matter experts is a great example of implementing an organizational structure with the intent of achieving the corporate goal (Kinicki & Williams, 2013). Verizon’s goal of this leading for shareholder value can be rewarding for its

Peter Solvik joined the Cisco team in January 1993 as their new CIO. He saw that there were two challenges that needed to be addressed in the company. First, Cisco’s Information Technology department was too traditional in the sense that it was viewed as a cost center that reported through the Finance department, and it was too internally oriented. There were three ways that he approached this: The IT-reporting relationship was changed from Accounting to Customer Advocacy, the IT budget pertaining to the functions were returned to the functions leaving just a small portion left in General and Administrative expense, and the central IT steering committee was disbanded and replaced with a structure where IT investment decisions on application projects were pushed out to the

In 1993, when Peter Solvik took over as CIO of Cisco, he reallocated the IT budget to each individual department. He also took the power away from an IT steering committee and gave it to departments. This gave each department the ability to function independent of each other. There was no need for them to communicate with other departments in order to achieve similar objectives and goals.

All in all, the cross-functional structure allows employees to create the set of functions they need in order to scan and monitor the competitive environment and obtain information about the way it is changing. With the right set of functions in place, Morgan Stanley’s managers are then in a good position to develop a strategy that allows the organization to respond to its changing situation quickly. Employees in the first line work level would communicate more with the customers. Under the cross-functional structure, the group can decide every aspect of a business. For example, the group formed to deal with real estate investment can make decision to set the price by themselves instead of the Morgan Stanley Marketing department. It will let the service firm keep itself closer to the market and customers.

When the CEO launches two new strategic initiatives requiring integration across all business units, the organization – whose IT decisions have been largely delegated to its business units in proportion to their revenue generating capacity – now faces the dilemma of how to prioritize its IT projects in order to support the new strategic “enterprise” vision.

As Thompson (2015) has discussed, the world is changing fast and organizations must be flexible in handling changes to be able to thrive well or they may experience dilemmas. In 1997, Apple Company, which almost reached bankruptcy ousted its that time CEO, Gil Amelio, where Steve Jobs replaced him and declared himself interim CEO. Apple that time is experiencing a disruptive change, a change that is radical and immediately happening, in other words unexpected. However, they were able to response to it quickly and prevented the company to hit the very bottom by bringing back Steve Jobs. Jobs had so much idea with him, which the company needed most at that time (Time, 2016).

The company transformation from private equity ownership with an immediate shift of CEO marked new challenges for the company. The company has been going through rigorous changes to keep up with the strong

Changing the IT infrastructure however would prove problematic. Cisco had a policy of centralized IT yet the company had several legacy systems that had become siloed, and lack of integration to them was slowing down sourcing, supply chain integration to manufacturing and also drastically slowing down revenue recognition as exemplified with the many problems with general ledger and other core transaction processing applications. Making matters worse, Cisco has deliberately created system workarounds to circumvent their legacy systems that had been causing the slow-down in core manufacturing and accounting system.

As companies today strive for success in the market place, it is the efficiency of the top management in the company, which usually determines whether or not they are able to achieve their goals. Many of these goals and values incorporate concepts surrounding quality products and services, innovation, team spirit, and efficient management, just to name a few. However, many times a disconnect in one or more of these areas can cause communication barriers, leading to various organizational conflicts and problems. In the case of Donna Dubinsky and Apple Computer, Inc. a sudden unexpected change has contributed to such organizational conflict and a break down in many of the necessary communication

“Internal controls are policies and procedures put in place to ensure the continued reliability of accounting systems” (Ingram 2017). WorldCom’s attempts at maintaining internal controls are less than favorable. Segregation of duties enables the division responsibilities to ensure that no employee completes two similar tasks. The CEO’s monitoring of WorldCom’s financial processes shows that the company has a lax segregation of duties, which makes it easier to commit fraud. Access controls protect financial data from unauthorized access, however, WorldCom’s extent is password-protected computers. No access inventories are taken to monitor employee usage, so there is no trail of when employees are doing during work.

It did so in order to better focus its resources on changing customer needs as well as emphasize its strengths in the market place. The organizational structure now consists of centralized engineering and marketing organizations. This way the company has the ability to prevent product and resource overlaps and more effectively allocate its resources to areas yielding optimum profitability. The engineering side has eleven technology groups with people heading multiple groups and reporting to one person who then reports to the CEO. The marketing side has one head who reports to the CEO as well.

Since it was critical to Cisco’s strategic commitment of advancing, the company had to pick the best option to implement quickly. The two alternatives were know as: create knowledge and expand the community. With key decision criteria , this report carefully examines both of the options that can quickly be implemented and yet help Cisco integrate into IoE era.

Recent economic recession and federal budget cut has significantly impacted SAIC’s core business and affected its revenue and growth. Its stock price fell 25% since last September because the shareholders were disappointed with the operation and worried about the future revenue growth and earning. The SAIC management realized that the market has changed; the company’s strategy and focus have to change accordingly. The leadership established a sense of urgency by creating a compelling reason for why changes are needed (stage 1). In July 2009, the board of directors hired a new CEO, Walt Havenstein, to carry out the change process. In the summer of 2010, Hevenstein (the change agent), made a strategy-based change in the corporate leadership structure and personnel (Stage 2). The new strategies had been formulated: to provide mission-oriented solutions for national security, energy, health and other major enterprises serving critical infrastructure needs. The company planned to shift its customer based structure to market reoriented structure, and shift resources to focus on high-growth areas (Havenstein, July 22, 2010). The current organization structures is under regrouping (four groups to three); some units is being dismantled; duplicated departments is being eliminated (Stage 3). In October, 2010, Hevenstein wrote a letter to all SAIC employees stating that “SAIC's

Our current IT governance structure takes a top-down approach, centralized in nature. Upper echelons decide what innovative hardware should be manufactured. They develop strategies to market the prospective product and delegate the actual innovative processes to our company’s divisions, such as R&D and production. Our company fosters an adhocracy culture which implies rewards for individual initiatives, but since our core product is to deliver high performance home entertainment systems to our consumers any initiatives made by lower level staff members are only rewarded if they supplement the platform. The innovative ideas that drive our business are engendered by visionaries that make up our senior managers. There is little autonomy designated to the lower echelons in terms of IT decision making at Sony Computer Entertainment, Inc. Mark Cerny, our lead system architect,

It was only then that Rio Bravo used all their learning curves that they decided to turn their company around to meet the customer demands. This meant that a strategic operational management strategy be implemented which was customer focused.