John Chambers-Cisco's Driving Force

            
 
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Case Details:

Case Code : LDEN016
Case Length : 11 Pages
Period : 1991-2002
Pub Date : 2002
Teaching Note :Not Available
Organization : Cisco Systems Incorporated Industry : Computer Networking
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Excerpts Contd...

The Crisis Manager

In the financial year 2000-01, due to the global economic slowdown and reduced IT spending by organizations all over the world, Cisco posted its worst-ever financial performance. Though the company's revenues increased by 17%, for the first time in its history, it reported a net loss of $1 billion.

Moreover, the market capitalization of Cisco came down to $135 billion in March 2001, compared to $531 billion in March 2000. Chambers was quick to spot the impending problem and realized that the immediate objective for Cisco was to focus on profitability. In order to achieve this objective, he announced a six-point plan (Refer Table I) on January 15, 2001...

Leadership and Entrepreneurship Case Studies | Case Study in Management, Operations, Strategies, Leadership and Entrepreneurship, Case Studies

The Leadership Style

Chambers was well recognized for his oratory skills. During his early years at Cisco, while addressing a gathering of employees, Chambers said, "The hallmark of a great company is not that you don't hit potholes, because every good company does, but how quickly you adjust and move out of that so that you don't let the pothole consume you"16...

The Criticisms

Chambers was always optimistic about Cisco's performance and never hesitated in voicing his optimism by making statements that were grossly exaggerated. He made statements such as "We want to create the greatest company in history" and "We want to change the world."19 In 2000, he predicted that within the next couple of years, Cisco would earn revenues amounting to $50 billion and its market capitalization would be worth trillions of dollars. Industry analysts criticized Chambers for misleading them about the performance of Cisco despite the fact that its orders had started falling in December 2000...

Exhibits

Exhibit I: Cisco - The E-Company
Exhibit II: Cisco's Financial Performance
Exhibit III: Elements of Cisco's Culture
Exhibit IV: Major Acquisitions by Chambers


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16]  A learning disorder marked by impairment of the ability to recognize and comprehend written words.

19]  As quoted in the article, "There's something about Cisco," by Andy Serwer in Fortune, May 2000.

 

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