A business structure sets the foundational base of an organization and there are different approaches of organizational structure available for them. These are selected based on business requirements and preferences. The level to which a business lays emphasis either on organic or mechanistic system can have substantial variations. There can be relatively mechanistic systems in context with dimensions such as period of control, command chain, impersonality, procedures, rules, centralization and authoritative hierarchy. On the other hand, the organic system lays emphasis on the competence of individual employees, instead of their formal position across the hierarchical level. This involves the empowerment of employees for specifically dealing with major uncertainties involved.
During its initial operations, Cisco followed a mechanistic structure which lacked significant effectiveness. In the current scenario, Cisco has an organic structure in which the innovative ideas of lower management are strongly considered. Cisco has taken over an approach of organic structure in which there is involvement of lower managers in the process of decision making. This helps various business divisions and teams in implementing their innovations and ideas aligned with the long-term strategies. In the case of Cisco, there are multiple working groups, boards, councils and teams involved for the creation of vast internal integrated structures. This is allowing the company to make decisions at a faster speed referring to the right personnel for ensuring the agility of Cisco. This complex structure of Cisco supports it for entering new markets at a quicker rate. The key emphasis of Cisco is laid upon cross functional teaming and horizontal integration for enhancing the scope of agility.
Suitability of the Organizational Structure
The organic approach of organizational structure can be considered suitable for Cisco as the company grows from this structure in terms of direction, delegation, collaboration and coordination. In following a mechanistic structure, top ten corporate managers of Cisco worked collaboratively for developing strategies of new product design. Further ahead, orders were sent down by top management to lower hierarchy work force for implementing the main ideas. As a result of the organic approach, all of the top divisional managers do not have to compete for obtaining rightful resources and authority. With the approach of organic structure, Cisco enjoys the ability of sharing responsibilities and taking credit for the success of one another. Further ahead, the company is able to maintain strong social control instead of formal control. By the provision of more authorities and responsibilities for different divisions and teams in an organization, the creation of faster responses is possible in the case of decision making. This further supported the quicker establishment of new products related to an organization. As a result, the company successfully enjoys the benefits of increased agility and enhanced innovation (Galbraith, 2014). The most common attribute of mechanistic system is centralization while shared decision making and decentralization is crucially embedded in the case of organic system. There is distribution and better organization of regulations and rules from the headquarters to each and every department and office while reporting on individual basis across the hierarchy. Hence, it can be concluded that the organic structure is highly suitable perceiving the vast global operations of Cisco.
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