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Motivation Studies of Cisco - the Changing World of Business

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The Changing World of Business

Globalization of business and the advancement of information technologies have brought enormous change to the world (Dockel 2003). The way business is done, how employees behave and the way managers manage their employees will also change. These had transformed the way organization operate and in turn, led to a change in employees characteristics and needs (Robbins, 2000). And Cisco is one such company that were subjected to this need for change

Cisco after the 2001 crisis, realized that the key to survival in the technology world is to embrace and be adaptable to changes. Cisco CEO John Chambers made major changes in its organization structure and how the business is manage (The Economist 2009). He believe that these changes, and capitalizing on the increasing need of information technology, will allow Cisco the agility to react to market changes and demands, thus ensuring sustainable growth in the company.

Motivation - Key to company success

It is inevitable that companies like Cisco need to adapt to changes in order to remain successful (Vercueil 2001). And we know that without employees, the company will not be able to flourish as their employees perform the most critical roles in the process towards success. The key component in the success of the entire organization is the element of motivation (Lindner J 1998). The changes in Cisco will have to take in to account the impact it has on their employees

In this report, we examine the following Cisco's organizational strategies:

 Matrix Organizational Structure

 Working Groups and Teams

 Replication Rules

 Cheap and Efficient Communication

 Aggressive Stretch Goals

 Cisco Hiring Policy

Applying the principles of motivational theories, we focus on what impact these strategies have on the employees', and offer recommendation for the enhancement of these strategies.


Cisco transforms its organization to its current matrix structure after the crisis in 2001 (The Economist 2001) (Fig.1). This approach, enable the company to increase its levels of productivity and profitability which fostered a greater impact on the effectiveness of the entire organization, specifically its employees.

In an article by Kucharvy, T. (2010), the author states that one of the biggest challenges that the Cisco Systems faced is their "highly-matrixed" organizational. Having a matrix structure does introduce some issues in the area of individual recognition and the aspiration of climbing the cooperate ladder. As mention in The Economist 2009, Reshaping Cisco, a 20% of Cisco's leadership has left the company due to the structure.

In Businessweek (The Debate Room: Matrix Is the Ladder to Success), Guido Quelle argued that a matrix organization structure do not have clear responsibility and accountability for success and failure. This may result in employees to feel unfair for the outcome of their work. Quelle further stated example such as ABB(ABB) and Unilever(UN) was nearly ruin by matrix structure that was not properly managed.

The dual/multiple reporting line does introduce conflicting priorities. It may result in employees serving the need of one who appraise him instead of the overall company goals. It introduces again silo effect and sub-optimization performance in the organization. In such situation, reference to Herzberg's Two-Factor theory, the hygiene factors may be met, but the motivators are affected due to job frustration.

Performance Measurement

In Vroom's Expectancy Theory assume s that employee thinks about what they are doing, what they are getting and its worth in order to reach a high level of outcome (Edwards, 1999).

Hence setting the right expectation is essential in order to achieve high performing employee

A clear appraisal system to gauge individual performance is essential, especially in a complexity reporting structure such as Cisco. With a matrix structure like Cisco of multiple reporting and interaction across function, implementation of 360 degree appraisal may be a more appropriate. System of regular feedback should be established to give employee better understanding of expectation and requirement for succeeding in his role. Application of Skinner Reinforcement Theory can be apply to direct the employee to desired results.

Strong Leadership

The Matrix structure has many advantages, like faster customer and market reaction, however, it need to be properly manage. The strong decentralization of decision does not downplay the importance of leadership. Its management must take time to define roles and to enforce the agreed allocation of roles.

One of the ways to establish this, as Dr Galbraith pointed out, is for implementation of tools for decision rights, such as RACI (Responsibility) chart or Bain's RAPID( Process), to define roles and responsibilities (The Debate Room: Matrix Is the Ladder to Success).

Cisco leadership is key. It not only streamline processes, and command & control, but also clarify roles, set priorities, reward collaboration to eliminate silos. Aligning everyone's expectation according to the organization goals


Cisco operates in work groups and teams. After the 2001 crisis, it form cross functional, inter departmental, and even international teams of executive volunteer, consisting of 10-15 managers, organize themselves around initiatives



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