Corporate Social Responsibility in High Technology Companies Thesis

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Corporate Social Responsibility in High Technology Companies

Cisco Systems

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Cisco Systems is the world leader in the development, design, manufacturing and selling of home, small business and enterprise networking, telecommunications and online security. The company's thousands of products are used for building networks that make the transmission of voice, data and video across offices, campuses, cities and continents possible. Founded in 1984 by a group of computer scientists who worked on the fundamentals of router technologies at Stanford, Cisco grew exponentially during the networking and Internet growth periods of the late 1980s and 1990s. During the 1990s specifically Cisco's Mergers and Acquisitions (M&A) Department was responsible for between 40 and 50 acquisitions per year, with only a fraction of them being publicly announced. The company's M&A activities were at one time so active that the Vice President of Business Development, who runs the M&A activity for the company is written about often in blogs and mainstream media including the article, Cisco's Connections (2006) a profile of the M&A activity and the growth-by acquisition strategy the company has had throughout the 90s. As the M&A strategies of the company has been mainly responsible for its growth, several other key announcements also led to the growth of Cisco. These include the strategic acquisitions of Grand Junction Networks and Stratacom in 1996, which gave Cisco Ethernet products that, would become the basis of interlinking companies to the Internet. The acquisition spree continued into 2001 and 2003 where Cisco began purchasing companies to p[penetrate the wireless and home networking markets, the most notable acquisition being Linksys Technologies, a wireless home networking provider. In 2005 Cisco and EMC announced plans to create enterprise storage systems that could span multiple locations globally, a technological achievement no other company has matched. Also in 2005 MCI and Cisco worked together on a series of joint marketing and development activities globally to increase bandwidth speeds for emerging markets including China.

Thesis on Corporate Social Responsibility in High Technology Companies Assignment

Cisco today has grown to employ over 39,000 professionals including 6,800 in manufacturing and service, 13,900 in engineering, 14,200 in Sales and Marketing, and 4,100 in Finance and Administration. The company is organized in five business segments that are categorized by product class. These include switches, routers, advanced technologies, services and other products. Switches are the majority of revenue at 40.7%, with routers contributing 22.2% followed by Advanced Technologies at 17.8% and other products and services contributing the remaining 3.4% and 15.9%. Cisco also has organized its sales operations into the Americas Region, Europe, Middle East and Africa (EMEA), and Asia-Pacific and Japan. The company further defines its four main categories of customers as large enterprise businesses, service providers, commercial customers, and consumers.

Financial Reports and Analysis

Throughout the last five years of Cisco's financial performance, the company has gotten the reputation of looking to continue its impressive growth rates through major acquisitions. The many smaller acquisitions that fueled their leadership position in the home and enterprise wireless markets did inflate revenues, yet John Chambers, CEO of Cisco, advises that the company does not necessarily need large acquisitions to continue its growth pace. Chambers contends that the Emerging Market sector will deliver significant growth over the long-term. The latest financial results reported by Cisco show this to be the case. Figure 1, Revenue and Gross Margin Breakdown by Major Geography, shows the strength of Emerging Markets in the latest financial quarter ended September 30, 2006. For purposes of this analysis Emerging Markets is defined by Cisco as Middle Eastern and Eurasian nations.

Figure 1, Revenue and Gross Margin Breakdown by Major Geography

Cisco is finding success in emerging global markets mainly as a result of its strong distribution channels and excellent partnerships in these areas of the world. Overall performance and year over year growth is strong globally with the exception of Japan.

In evaluating their overall financial performance, Figure 2, Financial Ratio Analysis of Cisco Systems, shows why this is considered one of the best-run companies in the tech sector of the U.S. economy today. While gross margins are typically very thin in networking products in general and more specifically in the wireless markets where pricing competition is fierce, Cisco has been able to deliver a 120% Return on Investment and a consistently stable level of Return on Equity and Gross Margin. For an Income Statement Analysis of Cisco Systems please see the Appendix.

Figure 2: Financial Ratio Analysis of Cisco Systems






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Internship Opportunities

In terms of hiring interns from local colleges and universities, Cisco is one of the few companies to actually post open positions in their open jobs database accessible by anyone on the Internet. Cisco Internship Positions (2006) shows twenty six positions open today, all of them paying jobs, where the interns receive a stipend, and if their performance on the job is strong enough, the chance to come back after they finish their degrees and work for Cisco full-time. Numerous senior managers and directors in the company have completed their internships and come back to work for years at Cisco, progressing through the ranks of the company. It is commonplace to find at least two or three Vice Presidents at Cisco who have had this career progression as well. The company seeks interns in San Jose, California, the Research Triangle area of North Carolina, and at smaller engineering locations throughout the world.

Social Responsibility and Corporate Citizenship

Cisco is considered to be one of the most ethically astute and well-run companies in the United States today, receiving many awards for their work on Social Responsibility Initiatives and Corporate Citizenship. The company employees well over 30 people to just manage their Corporate Citizenship Programs, which have won awards from all major cities in the Bay Area, including the economically disadvantaged areas of Oakland. Cisco Corporate Citizenship (2006) also has a report equal and scope and size as the entire corporations' annual report and details the company's major initiatives to the a world leader in the best practices of citizenship as a corporation globally. The company's code of conduct is 16 pages long and has grown as a result of the company's many mergers, acquisitions and moves into emerging markets, which are very successful according to the analysis completed earlier in this report. The Cisco Code of Business Conduct (2006) is designed to minimize the interruption and disruption Cisco would potentially make when entering a new market in an unfamiliar culture, and also strives for the highest levels of transparency and ethics possible. The fact that the ethics creed is on every employee badge at Cisco is a testament of how deeply John Chambers believes in this strategy of continually reinforcing ethical behavior. Not a single executive at Cisco has been indicted on insider trading or any other ethical lapses -- a rare feat given the rampant behavior of Enron and others in the late 90s and throughout the early 21st century

Cisco Charitable Giving Programs

Cisco leads all bay Area companies with charitable contribution programs, including a global initiative to take the lessons learned in the Bay Area and propagates them throughout the major geographies the company competes in. Cisco Community and Philanthropy (2006) shows the extent of the commitment at Cisco to these programs, as does the Cisco Grants and Donations Guidelines (2006) that also highlight how flexible it is for any nonprofit charity to gain valuable funding and support from Cisco. Cisco is considered a leader in this area and works to bring the role of charitable giving and volunteerism into their corporate governance strategies and global corporate citizenship. The overall effect of these strategies is enhance the company's reputation while serving others in the community who need support and funding to help those disadvantaged and needing assistance.

Corporate Social Responsibility at Blizzard

Executive Summary

Blizzard Entertainment is the world leader in the development, design, and selling of animated computer games, and is considered a leader in the development of new animation techniques. World of Warcraft (WoW) is one of the best-selling games of all time and has contributed to the company's growth from one of the many game developers to being the leader of the online games industry. As a result of this… [END OF PREVIEW] . . . READ MORE

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