Communication in Business 100: Cisco Company - Case Study Example

Communication in Business 100 Cisco Company Cisco Company offers a wide array of internet and networking solutions to consumers, companies, broadcasting houses and government agencies around the world. Cisco Company has changed the face of networking across the world through its products and services. The company connects people, computing devices and computer networks through its networking solutions. The networking solutions allow people to transfer or access information regardless of the time, place or the kind of computer system. The consumers are able to build their own unified information infrastructure or connect to another person’s network through Cisco’s end-to-end networking solutions. It also deals with the sale of routers, hubs and switches; local area network (LAN) and wide area network switches (WAN)1. Performance of Cisco Company in Society Cisco Company offers networking solutions to many people around the world. Other than offering networking solutions, the company has several networking academies and charity foundations around the world. The company has collaboration technologies that are geared towards conserving the environment. The company engages in public-private partnerships and their main focus is on economic development, healthcare, education, and critical human needs2. In offering network solutions, the company provides switches and routers that are used for directing data around communication networks. It is the leader of most internet equipments and in 1999, it supplied over 80 percent of internet equipments around the world. The sale of these equipments go to corporate network firms, internet service providers, small and medium businesses and consumer networking. The company provides internet communication equipments and these equipments are able to offer voice, data and video services.3 Cisco Systems operation is found in the company’s website and it is updated on a daily basis by the Cisco engineers. There are different products that are provided on this site and the customers can choose product lines of their convenience. On-line advice and support is provided by this company but at higher price. Its networking extends to its employees who are spread around the globe. The employees are networked through Cisco Employee Connection, an Intranet that enables instant communication to the Cisco employees. This connection allows fast passage of information and services and helps to fulfill the needs of the employees and the department4. Cisco Company products and services are offered in the following five segments around the world; European markets, United States and Canada, Japan, Asia Pacific, and the emerging markets such as Latin America, Africa, Russia, Eastern Europe and the Commonwealth of Independent States. ICT applications of networking products are offered to these segments and they include security, storage, optical, datacenter, telephony and multilayer switching. The services are further extended to management of global telecom service providers (SPs), consumer electronics and international governments. Although the regions require different approaches due to their nature of development, economy, technology and society, the Cisco Company has been able to enter international markets through stages of internationalization. The company has extended its services to a new customer type in the technology market. These customers are entrepreneurs, students, small business people, technophobes and workers-from-homes5. There are areas in Cisco Company that require improvement. One such area is the equitable distribution of shareholder return and the CEO’s compensation package. For example, in the year 2002 the CEO of Cisco Company received a compensation package of approximately 55 million US dollars while the shareholder return at the same period was -27.7 percent. The compensation is significantly large when the performance of the company is taken into account. This unfairness can greatly affect the people’s perception of the company and can block away potential customers6. Cisco’s continued lack of growth can greatly affect its performance. Improvement is very much needed in the Cisco Systems’ Human Resources. Many candidates want to join companies that can enhance their career and if the company’s revenue growth is stagnant, the possibilities of joining that company are null. Thus Cisco’s Company lack of revenue growth can push away many potential candidates7. Fall in the stock share price of Cisco Company has been attributed to competition and reduced orders from its customers. Government agencies and cable television operators have reduced their spending as reported by Cisco Company in its first quarter that ended October 31st 2010. Orders from government agencies and cable operators fell by 25 percent and 35 percent respectively from a year ago. Fall in these orders may be due to stiff competition from other companies that offer network solutions like Juniper Networks and Hewlett-Packard. These companies are also offering efficient networking solution products and services. Revenue growth of Cisco Company slightly increased during the same period ending October 31st 20108. Cisco Company needs to improve on its business strategy in order to retain and attract new customers. Corporate Social Responsibility of Cisco Company The company works to maximize positive impacts of its business to the world. Its corporate social responsibility programs are designed in a way that they can provide long-term benefits to its shareholders, customers, partners, employees and individuals in the societies around the world. The company focuses on three areas that are environment, employees and social investments. In conserving the environment, the company produces products and services that have the potential to assist businesses and individuals in reducing their carbon usage. The company is using its own technology to give an example of how their products and services can transform the world into a low-carbon society. They are working on technologies such as Cisco WebEx and Cisco TelePresence to reduce more than 47, 000 tonnes of carbon emissions per year. These technologies will reduce the carbon emissions by cutting down commuting and instead use virtual face-to-face communication to do work. The company is at the forefront in ensuring that its employees work in the best conditions. The employees are offered support such as collaborative technologies that enable efficient and flexible working at any place and at any time. More than 95 percent of the employees use flextime. The company emphasizes on collaboration among different cultures thus giving them a competitive edge against their competitors. Other things that the company offers to its employees are safe and healthy workplace, and development and training to enhance the employees’ skills. The company is involved in transforming the shape of the society through engagements in public-private partnerships. Their main focus on the community is healthcare, education, economic development and critical human needs. The company has a Networking Academy that boosts its education initiative. Cisco is involved in collaboration technologies that are meant to assist in the transformation of health services delivery, for example, virtual connection between a patient and the physician9. Cisco Company Equity The company strives to treat all employees and the communities in which they work with respect and dignity. In order to achieve this, the company is a supporter of the United Nations Universal Declaration of Human Rights and Global Impact. Its code of conduct, employee policies and guidelines integrate laws and ethical principles that pertain to the freedom of association, privacy, nondiscrimination, collective bargaining, immigration, compulsory and child labor, and wages and hours10. The company ensures that is there is equitable distribution of the CEO’s compensation package and the shareholders returns. The company believes that the packages are vital in keeping and attracting new executives who are responsible for the success of the company. Among its objectives is to strike a balance between the financial interests of the executive officers with those of the shareholders by providing the required long-term equity-based incentives11. However, the company’s unfairness in distributing the shareholders returns and the CEO’s compensation package was witnessed in the year 2002. The CEO was given a compensation package of approximately 55 million US dollars while the shareholders returns were -27.7 percent. Conclusion Cisco Company is relatively performing well in the society. The company offers majority of the networks solutions around the world. Its dominance in the market has been long and its customer base quite big. The company offers several products and services that are meant to reduce carbon emissions associated with commuting and other carbon emitters. Such an initiative is profitable to the society and its success will have a great impact to the society. The company has several Networking Academies around the world. These academies offer networking lessons and such an initiative is very important for the developing nations. The company has integrated within the society through collaborative technologies that are meant to improve the lives of these communities. However, the company is faced with a lot of challenges such as fall in the share price, reduction in the number of orders and stiff competition from other network solution companies. The performance has been affected by these challenges, for example, the revenue growth is increasing by a very slight margin. Better and efficient networking products and services are being offered by emerging network solutions companies such as Hewlett-Packard and Jupiter Networks, thus the competition is very stiff. Despite the challenges, the company has a lot to offer and many opportunities are available. References Berger Nancy O. and Marquardt Michael J. Global Leaders for the Twenty First Century. Albany, NY: SUNY Press, 2000. Cisco. “Together We Are the Human Network.” Viewed on 20th November, 2010 http://www.cisco.com/web/about/ac227/csr2010/assets/pdfs/CSR2010_Highlights.pdf. Castells Manuel. The Rise of the Network Society: The Information Age: Economy, Society And Culture. West Sussex, UK: John Wiley and Sons, 2009. Kahawatte Uddika. Marketing and Customer Orientation of Cisco Systems Inc 2009. Germany: GRIN Verlag, 2010. Wylie Kimberley. SWOT Analysis of Cisco Systems, Inc. Germany: GRIN Verlag, 2009. Kopytoff Verne G. “Cisco Reports Higher Profits but sees some weaknesses.” Viewed on 20th November, 2010 http://www.blueridgenow.com/article/20101111/ZNYT05/11113006/1008/sports%3fp%3d1%26tc%3dpg%26tc%3dar&type=dns&ISN=8361AF8DDE934084A5EDDB7B3EF62A62&ccv=131&cnid=937811&cco=US&ct=3. Cisco. “Corporate Social Responsibility.” Viewed on 20th November, 2010 http://www.cisco.com/web/about/citizenship/index.html. Cisco. “Cisco Corporate Citizenship Report.” Viewed on 20th November, 2010 http://www.cisco.com/web/about/ac227/ac111/pdf/ccmigration_09186a0080536144.pdf. Read More