Use the Competing Values Framework to diagnose Cisco’s culture. To what extent does it possess characteristics associated with clan, adhocracy, market, and hierarchy cultures? Discuss.
The Competing Values Framework (CVF) provides a practical way for management to understand measure and change organizational culture. It was originally designed by a team of researchers who were trying to classify different ways to assess organizational effectiveness. This research showed that measures of organizational effectiveness vary along two fundamental dimensions or axes. One axis pertains to whether an organizational focuses its attention and efforts on internal dynamics and employees or outward toward its external environment and its customers and shareholders. The second is concerned with an organizations preference for flexibility and discretion or control and stability. Combining these two axes creates four types of organizational culture that are based on different core values and different sets of criteria for accessing organizational effectiveness. It is important to note than organizations can possess characteristics associated with each culture type, however, organizations tend to have one type of culture that is more dominant than the others (Kreitner & Kinicki, 2010, p. 71).
The four types of organizational culture are defined below:
A Clan Culture is a culture that has an internal focus and values flexibility rather than stability and control. It is similar to a family-type organization in which effectiveness is achieved by encouraging collaboration between employees. This type of culture is very employee-focused and strives to cohesion through consensus and job satisfaction and commitment through employee involvement. Clan organizations devote considerable resources to hiring and developing their employees and they view customers as partners (Kreitner & Kinicki, 2010, p. 72).
Cisco exhibits many of the attributes of a clan culture. Its main thrust is collaboration through teamwork. There is cohesion, participation, communication and empowerment. Cisco values its employees and strives to create an inclusive, balanced, and collaborative environment that enables employees to develop and utilize their talents, give back to their communities, and advance their careers. Cisco is committed to embedding a collaborative working culture, providing a safe and healthy work environment, promoting employees’ physical and mental well- being, engaging their employees, promoting diversity and inclusion for its employees as well as providing employees with opportunities through training and development (cisco.com). All of these attributes point to a clan culture.
An Adhocracy Culture has an external focus and values flexibility. This type of culture fosters the creation of innovative products and services by being adaptable, creative, and fast to respond to changes in the marketplace. Adhocracy cultures do not rely on the type of centralized power and authority relationships that are part of market and hierarchical cultures. They encourage employees to take risks, think outside the box and experiment with new ways of getting things done. This type of culture is well suited for start-up companies, those in industries undergoing constant change, and those in industries that are in need of innovation to enhance growth (Kreitner & Kinicki, 2010, p. 72).
Cisco also exhibits attributes of an adhocracy culture. Innovation and learning are values that permeate the company. Individuals are encouraged to think and respond in ways they consider appropriate and consistent with the company’s values. They are encouraged to take risks and think outside the box – to look for new ways of doing things to achieve Cisco’s strategic objectives. Micromanagement is rare and decentralization is encouraged. Because Cisco operates in an industry where technology is constantly changing and competition is brutal; innovation, creativity and adaptability are a must (AllBusiness.com).
A Market culture has a strong external focus and values stability and control. Organizations with this culture are driven by competition and a strong desire to deliver results and accomplish goals. Because this type of culture is focused on the external environment, customers and profits take precedence over employee development and satisfaction. The major goal of managers is to drive toward productivity, profits, and customer satisfaction. Employees are expected to react fast, work hard, and deliver quality work on time. Organizations with this type of culture tend to reward people who deliver results (Kreitner & Kinicki, 2010, p. 73).
At Cisco, customer satisfaction is a core value. Customer satisfaction drives the entire organization. It is a central part of Cisco’s culture and is tied to the bonus plan. Although market share, profitability, and goal achievement are an end product for Cisco, the means by which it gets there isn’t exclusively through customer focus, productivity, and enhancing competition. Its main focus remains collaboration (cisco.com).
A Hierarchy Culture has an internal focus which produces a more formalized and structure work environment and values stability and control over flexibility. This orientation leads to the development of reliable internal processes, extensive measurement, and the implementation of a variety of control mechanisms. Companies with a hierarchy culture are more likely to use total quality management programs. Effectiveness in a company with this type of culture is likely to be assessed with measures of efficiency, timeliness, and reliability of producing and delivering products and services (Kreitner & Kinicki, 2010, p. 73).
I don’t believe that Cisco has is a hierarchy culture. According to Kreitner & Kinicki, CEO Chambers realized that Cisco’s hierarchical structure precluded it from moving quickly into new markets so it began to group executives into cross-functional teams (p.89). This leads one to believe that Cisco once had this type of culture but doesn’t anymore. Its main thrust is not control and its end is not efficiency, timeliness and smooth functioning. It values flexibility over control and is collaborative and innovative.
If I had to choose only one type of culture that Cisco is, I would have to say it is a clan culture as its main focus is collaboration through teamwork. However, Cisco also exhibits many of the attributes of an adhocracy culture and some of the attributes of a market culture. Cisco website indicates that it has a culture that promotes cohesion, participation, communication, empowerment, inclusion, teamwork, innovation, and compensation based on the results of the teamwork (cisco.com).
Begin by looking up Cisco’s mission or visions statement on the company’s website. Now answer the following question: To what extent is the culture type you identified in question 2 consistent with the accomplishment of this mission or vision? Explain.
According to Cisco’s website, their mission is to “Shape the future of the Internet by creating unprecedented value and opportunity for our customers, employees, investors, and ecosystem partners”. Their vision is “Changing the Way We Work, Live, Play, and Learn” (Cisco.com).
A culture that is exclusively clan may have some difficulty accomplishing the goals of the mission/vision statements. Cisco places emphasis on collaboration, customers, employees and community which indicates to me that it is more than a clan culture. Cisco is collaborative but also innovative and competitive. While they value employees and emphasize getting work done through teamwork, they also must be innovative to address the ever changing environment in their industry. They also have a strong customer focus that significantly contributed to their market share, profitability and goal achievement. Although they possess more of the attributes of a clan culture than other cultures, they still possess some very important attributes of an adhocracy culture (innovation, creativity and agility) and a market culture (customer focus).
What techniques for changing organizational culture has Cisco used to form its culture? Discuss.
Changing organizational culture involves a teaching process which according to Edgar Schein involves one or more of the following mechanisms:
- Formal statements of organizational philosophy, mission, vision, values, and materials used for recruiting, selection, and socialization.
- The design of physical space, work environments, and buildings.
- Slogans, language, acronyms, and sayings.
- Deliberate role modeling, training programs, teaching, and coaching by managers and supervisors
- Explicit rewards, status symbols and promotion criteria.
- Stories, legends or myths about key people and events.
- The organizational activities, processes, or outcomes that leaders pay attention to, measure and control.
- Leader reactions to critical incidences and organizational crises.
- The workflow and organizational structure.
- Organizational systems and procedures.
- Organizational goals and the associated criteria used for recruitment, selection, development, promotion, layoffs, and retirement of people.
Cisco Systems changed their organizational culture over a seven year period. The first three years were very bumpy. According to CEO Chambers as many as twenty percent of executives couldn’t handle working with unfamiliar colleagues; some were irked by the new compensation system which was tied to teamwork (Kreitner & Kinicki, 2010, p. 89).
Cisco uses many of the mechanisms identified by Edgar Schein and are identified below.
- Cisco is committed to communication and collaboration and promotes cross-functional teams that work together to enhance new business opportunities. CEO Chambers ties compensation to a teams’ ability to meet revenue targets and collaborate. In the case of Senior Vice President Rivelo, some seventy percent of compensation from one council he was a member of was tied to revenues and collaboration (Kreitner & Kinicki, 2010, p. 89).
- CEO Chambers established formal statements of organizational philosophy, mission, visions and values which are shared with all staff at Cisco and are posted on Cisco’s website (cisco.com).
- Cisco holds various company events to provide opportunities for employees to engage with senior management and learn about the company’s strategy. These events include an annual virtual strategic leadership meeting and virtual sales meetings, quarterly companywide and leadership meetings, earnings announcements, videos and functional meetings, bimonthly question and answer sessions with CEO Chambers for employees whose birthdays fall with the two months, Cisco employee connection intranet site, and special events like Cisco’s 25th anniversary celebration (cisco.com).
- The Cisco Center for Collaborative Leadership focuses on organizational transformation, executive talent management, and leadership development (cisco.com).
- The Executive Action Learning Forum develops strategic and leadership qualities of high-potential leaders through hands-on experience (cisco.com).
- Cisco launched a new leadership channel for their leadership and management offering collaborative, technology based events, blogs, moderated chats, and discussion forums with both Cisco and external global thought leaders (cisco.com).
- Cisco uses collaborative and remote working technologies to offer their employees greater freedom and how, when, and where they work to help them balance work and personal responsibility (cisco.com).
- Cisco has adopted flexible work practices for their employees such as telecommuting and flextime opportunities, remote working such as from home, part-time working opportunities, and the off/on ramp program which allows eligible employees to take a career break for one to two years and then return to the company (cisco.com).
- Cisco has an annual survey which is called a pulse survey which gives employees the opportunity to rate the organization in various categories such as innovation and excellence, inclusion, collaboration, development, etc. The pulse survey is a very important tool which assists management in understanding the employee experience and assessing engagement (cisco.com).
- Cisco is building a culture of inclusion through 11 employee resource groups. In 2010, two new online communities were launched; the integrated workforce experience for women and the working moms intranet website (csico.com).
- Cisco promotes learning and development of its employees. It uses a variety of standard and customized courses covering management, technical, and professional development. In 2010, Cisco spent more than 90million on employee training and development (cisco.com).
- Cisco uses annual employee performance management reviews which allow employees to review their development and performance from the previous year and plan their needs for the upcoming year with management (cisco.com).
- Cisco continually reviews its hiring strategy to ensure that it supports its business goals, In 2010 it piloted “Talent Connection” which is an internal tool that allows recruitment teams, managers and employees to work together to match skill sets against internal job openings. During this pilot program, nearly eighty percent of positions were filled by internal candidates. Feedback from both candidates and mangers indicated a high level of satisfaction with this new process (cisco.com).
- Cisco provides competitive, performance-based pay and benefits that reward innovation, collaboration and profitability (cisco.com).
All of the techniques used above have worked together to change the culture at Cisco to what it is today.
Would you like to work at Cisco?
There are many aspects of Cisco’s culture that I find appealing such as cohesion, inclusion, employee development, commitment and collaboration however, I would have a difficult time working on so many teams and having my compensation based on collaboration. I believe that teamwork is important but having my compensation tied to collaboration and teamwork would be stressful. I have worked on many teams both in the working environment and at school. Some of them have been very effective others have been terrible. Often times, there was at least one weak team member causing the other team members to work harder and to carry more of the load. So I would have to say no to working at Cisco.
WORKS CITED
Cisco Systems Official Website. Retrieved 2/14/2012.
Kreitner, Robert and Kinicki, Angelo. Organizational Behavior, ninth edition. 2010 McGraw-Hill.
Pfeffer, Jeffrey. AllBusiness.com. Cisco Systems: Acquiring and Retaining Talent in Hypercompetitive Markets. Retrieved 2/12/2012.
