Cisco Systems Company Organisational Changes

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Introduction

Information about Author

I am a business and economics student at (enter your university’s name here). I choose to write this report to fulfil my academic requirements for the above-mentioned study area.

Authorisation for the Report

In this report, I investigate organisational changes at Cisco systems. In partial fulfilment of my degree requirements, my faculty approved this report.

Company Background

Established in 1984, Cisco has grown to become among the world’s leading information technology companies (Wylie 2009). The company’s headquarter is in San Jose, California, but it serves several markets around the world, including North America, Europe, Asia, and Africa. Globally, Cisco has more than 65,000 employees (Wylie 2009). They are located in 300 offices around the world and serve more than 46 data centres in 90 countries (CSI 2008).

The company’s main product group is IP-based networking products, which the company manufactures, designs, and sells as networking equipment (the company designs its products to improve how most people communicate and collaborate) (CSI 2008). Besides providing these products, the company also offers technical services to its consumers, such as internet routing, VoIP services, and network emergency responses (among others) (Wylie 2009).

Its main customers include institutions (universities, colleges, and governments), corporate bodies, small businesses, and private citizens. The California-based company commands a dominant market share in the global data centre and global on-demand web browsing markets.

In both segments, the company commands more than a 50% market share (the company has a 51.1% market share in the global on-demand web browsing market and a 54% market share in the global data centre market) (Reece 2013). The diagram below shows its dominance in these markets.

Figure 1: Cisco’s Market Share (source: Reece 2013).

The diagram above shows that Cisco is a leader in the global data centre market. Based on its dominance, this paper focuses on some of the operational challenges facing the technology giant.

Purpose of this Report

Similar to most organisations around the world, Cisco experiences several types of resistances to change (Wylie 2009). In 2008, the company’s management realised that its operational structures were inefficient. Particularly, the managers realised that its traditional operational structure caused redundant employee activities (CSI 2008). This structure required employees to design and perform different tasks (dual roles).

For example, the regional network teams and the regional voice teams often completed both implementation and operational activities. Therefore, they had to stop one task to complete another (because they could not do both tasks at once). This operational structure caused confusion among the employees (regarding their task allocations).

For example, one employee could duplicate the work of another employee because organisational activities were uncoordinated (CSI 2008). Based on this challenge, the management decided to dismantle the traditional work structure for a more efficient one. However, the employees did not welcome this change.

Reasons for Resisting Change

Many researchers explain the different reasons why employees resist change. Some say employees resist change because of job uncertainties, loss of control, increased workloads, and the fear of diminished competencies (Dawson 2003). Others say the wrong execution of change management strategies and past resentments towards managers cause the same outcome (Gabarro 1992).

Overall, Belluz (2008) says that resistance characterises all change processes, and since managers are accountable for organisational activities, they are bound to experience three types of change – rational, political and emotional resistances. Nonetheless, at Cisco, employees resisted change because of the following reasons.

Blind Resistance

Blind resistance to change refers to opposing change unjustifiably. Indeed, Gabarro (1992) says some people often resist change because it is their nature to do so. Such people also have a “knee-jerk” reaction to change because they only do so when they do not have any other option. Although Cisco is a modern organisation, with many young employees, some employees opposed the proposed changes to organisational processes because they could destabilise their operational habits (CSI 2008).

Political Resistance

Some people may oppose change because of their interests in an organisation (Dawson 2003). Many managers experience this challenge when they want to introduce organisational changes that shift power structures. Relative to this assertion Belluz (2008) says “If the impending change could shift the organisation’s power structure, you can count on fierce resistance from people who stand to lose power or are uncertain about keeping or gaining power” (p. 4).

This fear emerged at Cisco because some employees believed that they had something to lose if a change occurred in the organisation. They also believed that such changes could reorganise organisational processes and eliminate some powerful positions, which they enjoyed (CSI 2008).

Ideological Resistance

Some Cisco employees differed with their managers regarding the logic behind the organisational change. Some of them believed that the changes should not occur immediately, while others believed that the company’s management would not achieve its goals (CSI 2008).

Based on the belief that the change process could erode the beliefs and values of the organisation, they saw the change process as a wrong approach for improving the organisation’s process. Often, such employees provided logical reasons why they believed the change process would not work.

Job Insecurity

Cisco already established that the traditional operational model was redundant and wasteful. Based on the need to adopt a new operational model, employees were unsure about how their skills would fit in this new structure. This fear prompted them to oppose the change, selfishly, because they did not believe the company would accommodate their skills in the proposed work framework (CSI 2008).

For example, many employees expressed their concerns about introducing new technologies to improve the company’s operational processes. They believed that the new technology would make their skills redundant (CSI 2008).

Comfort

Although Cisco’s managers understood the need to change the existing operational patterns, some employees did not support this process because they were comfortable with how things worked. Many of them felt the need to maintain their personal rewards and accomplishments, which they derived from the existing system (CSI 2008).

Similarly, they did not want an employee reshuffle because they did not want to work with “unfamiliar” colleagues. Others believed that the company’s management exaggerated the inefficiencies created by the traditional work model. Through these sentiments, they were comfortable with how the organisation operated and did not see the need for change.

How to Reduce Unproductive Resistance

Gabarro (1992) says the greatest mistake managers make is underestimating employee resistance to change. This way, they do not know how to reduce unproductive resistance.

This section of the report uses the Lewin’s change model to highlight how Cisco could reduce unproductive resistance to change (theories and models of organisational change are important in understanding how change occurs at a macro-level). In the 1950s, Kurt Lewin developed this model after seeing how ice changes its shape. As shown below, he said change often undergoes three phases – unfreeze, change, and refreeze (Karwowski 2000).

Using the above diagram, Lewin said if a person wants to change the shape of a block of ice, he must first unfreeze it, “mould” it, and then freeze it again. Experts have used this model to explain how managers implement successful change processes (Karwowski 2000). This paper uses the same approach to explain how the change model could eliminate unproductive resistance at Cisco.

Education and Communication

The Lewin’s change model suggests that all managers should first make their employees understand why the organisation needs to change, before embarking on the process (Karwowski 2000). This strategy is useful in eliminating blind resistance to change. Particularly, it could change the minds of employees who may resist the proposed changes because they do not understand what they entail.

Furthermore, employees who are comfortable with how things work may learn new information about the need to change (through this strategy). Here, managers should inform them about why the current situation is unsustainable. This way, they would have more clarity about the change process and support it.

Participation and Involvement

After Cisco’s managers inform their employees about the need to change, they should include them in redesigning and planning the new work framework. This step is useful in realising employee “buy-in” (especially from employees who may have ideological differences with the management). By allowing this group of employees to participate in the transition, they would contribute their ideas to the change management process. Therefore, they would feel part of the process.

Karwowski (2000) says this strategy belongs to the unfreezing phase of Lewin’s model because it prepares organisations (mostly employees) for change. It also involves dismantling organisational structures, as they are, to create room for new processes. Web-Books (2014) believe the key to being successful in this stage is letting the employees understand why the current situation cannot go on.

Managers should understand that this step is the most difficult part of the change process because it destabilises the organisation. However, it creates a controlled crisis that most managers could easily influence to provide a seamless change process.

Facilitation and Support

Instead of ignoring resistant employees, managers of Cisco company should support their inclusion in the new organisational structure (managers should provide emotional and material support to these employees).

Consequently, they would be willing to work within the new organisational structure. Providing material and emotional support to employees is part of the second phase of Lewin’s change management process. Indeed, after dismantling the traditional work structures, people find new ways of doing things in the organisation. At this point, employees develop new attitudes and beliefs about the new direction that the organisation follows.

Negotiations and Agreement

The negotiation and agreement strategy is useful in reducing political resistance to change. Gabarro (1992) highlights the need for managers to negotiate with their employees and give them a valuable trade-off for their support.

It is important for managers to adopt this strategy because they make a common mistake of assuming that everybody will accept the change. Furthermore, managers always assume that such changes will occur overnight. However, this is not the case. Time and patience are required for the process to occur (Gabarro 1992).

Manipulation and Co-optation

Although the above strategies are necessary in reducing unproductive resistance to change, managers commonly use co-optation strategies to realise the desired change. However, this strategy is a last resort (if all other strategies fail to work).

By executing this strategy, Cisco’s managers should reach the last stage of the change management process – refreezing stage. Karwowski (2000) says this phase only occurs when the management knows that all employees have embraced the new operational processes. Based on a new sense of stability, employees should learn to conform to the new organisational processes.

Conclusion

Resistance to change is a common problem that faces many organisations, at institutional and personal levels. This paper contextualises this problem at Cisco Systems. It shows that political reasons, ideological reasons, blind resistance to change, comfort, and job insecurities are the main reasons why employees resist change. Based on these different classifications of change resistance, this paper identifies unique solutions that address each type of challenge.

For example, it shows that management-employee negotiations overcome ideological resistance to change. Similarly, increased employee participation (in designing new work systems) reduces the same type of resistance. This paper also shows that education and communication should eliminate blind resistance to change.

However, when all these strategies fail, managers could adopt coercive techniques to eliminate unproductive resistance. Executing these strategies should reduce unproductive resistance to change. However, managers should understand that their success depends on the proper execution of the Lewin’s change model because it outlines what they need to do, at different stages of the change process.

References

Belluz, D. 2008, Overcoming Resistance Part 1: Know Who and What You’re Up Against. Web.

CSI 2008, How Cisco IT Implemented Organizational Change and Advanced Services for Operational Success. Web.

Dawson, P. 2003, Understanding Organizational Change: The Contemporary Experience of People at Work, SAGE, London.

Gabarro, J. 1992, Managing People and Organizations, Harvard Business Press, Boston.

Karwowski, W. 2000, International Encyclopedia of Ergonomics and Human Factors, CRC Press, New York.

Reece, B. 2013, Cisco’s Losing Market Share In 3 Major Data Center Segments. Web.

Web-Books 2014, Planning and Executing Change Effectively. Web.

Wylie, K. 2009, SWOT Analysis of Cisco Systems, Inc. GRIN Verlag, New York.

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