Tuesday, December 09, 2008

Economics: Tech firm Cisco pioneers new internal business structure

Under the bizarre headline, "Is Republican John Chambers Turning Socialist?," Sarah Lacey (Yahoo!Finance, Dec8,2k8), almost manages to report a major change going on at the Cisco corporation in regard to its internal business structure. This is what happens when reporters and general public are ignorant of the different types of business structures that are possible, including especially, those types more likely to be assisted in a successful differentiation under presentday tech-innovative digital-info conditions. Such conditions characterize much contemporary business and organizational existence.

Better than the snapshot textual report, Yahoo!Finance also carries a h+ly informative interview on video.

John Chamers, CEO, Cisco

Variant business structural models do not tell us anything about socialism vs capitalism. The term "socialism" has been bandied about much these days, by people who think a stark either/or explanation based on single possibles on each side of the binomial setup (vs.) is sufficient to gain quality knowledge of the subject at hand, and many other subjects as well. Using binomial logic here is strategy of (poor quality) reasoning that only covers-over an analysis of the several types of business structures. In this case, the types are either already extant or, thru historical innovation, are possible to be brawt into reality. For the purpose of an accurate typology, the existents must be mapped with more than two options among types. Differentiation of business-structure types is happening at Cisco (the macro-process of historical differentiation of spheres of society and human relationships has been argued well by philosopher Herman Dooyeweerd).

Today, sometimes the Bush-Obama bailouts are called "socialism," but the better word for the type of relation of government to enterprises, in this case, would rather be "corporatism" (where there are no free enterprises, and society as a whole thru the state is the overall body (corpus), while the non-free enterprises within it and thus are under state control (as, say, limbs of the body politic)--the kind of arrangements variously installed by Fascists and Nazis (think of Volkswagen).

But the present American experiment isn't anywhere near a full-fledged corporatism. It's, rather, quasi-corporatist, definitely not socialist, and in either case has nothing to do with the Cisco business internal-structure model or management approach. Cisco is a capitalist business enterprise; has not received any bailout; delivers a portion of its profits as dividends to stockholders; and evidences a good fit between its product line and its innovative management style. In comparison, much corporation leadership seems regressive, witness the banks and financial bandits today who are incapable of innovating sufficiently well to risk a transformation from one type of capitalist-management approach to another more-advanced capitalist-management approach.

That is not to say most American enterprises who use the more historical approaches are, therefore, regressive. Not so, by my estimates. But the leading mortgage, banking, insurance, investment houses, and native auto companies in the USA, receiving or begging for bailouts, are going the corporatist route. All this is due to their poor management as free enterprises, lack of appropriate regulation both internally and by govt agencies for that purpose, and resistance to the proper route toward restructuration--namely, bankruptcy.


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