Cypress, being a $600 million dollar firm, was founded by J. Rodgers and other partners in 1982. The firms first headquarter was in San Jose, California. The company specializes in niche markets of sophisticated integrated circuits such as, programmable devices, chips, micro controllers, etc. It is a fast growing electronics company of America. Even in the current times the company is among top ten companies of U.S. semiconductor firms and employees about 2000 employees.
The reason for the competitive edge of the company is due to their continuous improvement in relation to cost efficiency and productivity of their operations, the implementation of cycle times and inventory management programs and constant introduction of innovative products.
The company got public in 1986 and focused on highly profitable markets and successfully approached to billion dollars. However in 1992, the company’s recession time came and dragged it downwards which resulted in losses for the company. The company then planned to revise its strategy and design by observing that having only a niche strategy is not enough for the company. In this regard the company changed its strategy to target high volume markets as well.
The vision of the company is ‘Winning is what matters and if it means being tough, demanding, impatient, then what you have to be’ and this act as a basis for the core value of the company.
Core Values of the Company
Rodgers’ senior team spent a year developing five core values for Cypress. The vision, core values and systems were designed to attain company’s goal to become a monument company. In this regard, its five main core values were;
Firstly, ‘Cypress is about winning’ which depicts the company’s focus on being successful at any cost. This further elaborates that company would not be tolerating any factor that may act as a downward force to company’s success. The company thrives to compete with the world’s best companies in related and other industries. In order to achieve success as the most important objective of the company individuals have been given rights to compete within the business at Cypress.
Secondly, ‘Cypress people are only the best’ portrays that in order to become successful the company seeks to hire the best possible employees that are hardworking, tough and smart at their jobs. Furthermore, the company’s employees are to be honest in their dealings and should be knowledgeable and logical with their decisions. The company also discourage politics in their operations and when any problem arises the management would take aggressive actions in order to get the solutions.
Thirdly, ‘We do what’s right for Cypress’ which describes that everyone within the company is given the opportunity to think as entrepreneur in order to take strong decisions in company’s first objective. New initiative were rewarded and the management would be fair to all of its human resource. The company is also very concerned about the commitments to its customers, which is the main basis for its success.
Fourth, ‘We make our numbers’ considers the company’s values in terms of financial and market share which company seeks to maintain profitably. Aggressive quantitative goals are set in order to achieve them and to constantly improve by reducing the wastages.
Finally, ‘we invent and make state-of-the-art products’ promotes innovative culture at Cypress as a result of which the company competes with world’s best organizations in technology. The process are tend to be cost effective and high quality is still maintained.
Statement of the Problem
Although the company is operating in very aggressive and prosperous manner in achieving the strategic objective of Cypress, as per its core values under the leadership of J. Rodgers. There are still some problems that are faced by the company which may lead to further consequences if not solved at earlier stages.
Firstly, the corporate culture of the company which seems to be highly competitive and individual oriented. Moreover, the corporate culture at Cypress focuses more on result oriented culture as in line with the core values of the company discussed before.
Secondly, the thought of Rodgers to make the employees of cypress think like entrepreneurs leaded to another idea that is to make perpetual subsidiaries with its own shares and value depending on its performance. However, if a subsidiary were to be unhappy with HR services of Cypress or any of its style of management, etc. the managers of subsidiary tend to adopt different cultures and hire other services which were not effective for the overall company.
The problems identified in the problem statement above are now to be analyzed the nature of problem they are to the company. It will also determine whether the problem can be solved or not which will later be followed by the recommendations for the possible solutions that might help in catering these problems.
Analyzing the first problem, that is, the corporate culture of the company which seems to have more individual performance orientation rather than a team, making the culture a highly competitive environment for the employees in order to get the best results which will align with the success of the company.
Although this culture was formulated by Rodgers in order to achieve highest performance standards and the company’s values of always winning and doing the right things. However, this culture will lead to less freedom for employees as they are continuously expected to perform well, while realistically it might not be possible as employees cannot work continuously at same level of performance and are subjected to various different factors that can affect their performance. And if the management were to expect performances to such a level may further lead to demotivating forces for the employees.
The culture is also focuses on no failure acceptance, which means that whatever the task given to the employees must be done perfectly as per company’s policy of always winning which this further elaborates that company would not be tolerating any factor that may act as a downward force to company’s success. Such a level of standard where perfection is demanded will eventually lead to unwanted consequences for the company in the long term in terms of de-morale of the employees.
As a result of such policies of the company, the employees working will tend to follow more risk averse approach in order to avoid maximum risks from their work so as to achieve their target easily. This portrays that the company’s employees will not be taking any risks for making new innovations and process that may contribute towards the success of the company.
Coming towards the second problem identified which relates to the formation of perpetual subsidiaries which has resulted in several subsidiaries of Cypress, each having separate management, board, and procedures and capital structure. This has diversified the business to much larger extent and has been a successful strategy of Rodger. However, this have also resulted in problems for the company and its overall strategy.
The lack of communication between the subsidiaries is one of the major problem that is arising due to diversified subsidiaries operating in different segments and operation of the company. This lack of communication will lead to deterioration of company’s operations and may tend to shift the objectives of these subsidiaries with that of the company’s objectives due to differences that will arise in relation to the opinions and styles adopted by the board and management of the subsidiaries.
Moreover, the problems arising due to formation of the perpetual subsidiaries is also leading to the discipline and leadership problem within the subsidiaries and the overall company. This will further create the issues of mismanagement and differing values and policies which may deteriorate the always win objective of Cypress and also lead to performance worsening.
Analyzing the problems cumulatively in relation to overall impact on the company will further provide a view to evaluate the possible solutions for these problems. Considering the highly competitive environment, individual oriented environment and no tolerance or failure in the tasks done by the employees, etc. which may lead to overall company problems affecting the entire group.
The lack of team based thinking will be the major consequence of this problem as individual based culture and their performance evaluation in likewise manner will isolate the employees of the company from each other. This will lead to more problems like, demotivated employees which will directly impact the quality of their work. For example, if a problem arises with an employee and he is to find solutions on his own without having assistance from other members majorly due to employees focusing on meeting their individual targets as compared to looking forward towards combined solutions. This will result in demoralizing factors for the employees and eventually may lead to employee turnover.
Apart from this there will be mismatch of values and strategy of the overall company and its subsidiaries. The employees having their own thinking in order to cater their working requirements and meeting performance targets along with the division of company into several different subsidiaries isolating the operations of the company to a larger extent. This will be leading to diversion from the original values of the company that were set by Rodgers as well as the corporate strategy of Cypress.
Analyzing the actual values and culture of Cypress and its corporate strategy will further assist in the complete analysis of the problems faced by the company.
Firstly, the strategy of the company to its newly entered market of mass production which involves high volume of production and sales with the lower margin of profits. Comparing this strategy with the values of the company of being highly competitive, individual oriented, no tolerance culture, and lack of team based thinking, etc.
The company matches its values with its strategy in this particular segment of their operations. As mass production follows pre formulated patterns and similar activities and continual basis which does not require team working majorly. Therefore, in terms of mass production strategy current culture the two are aligned.
However, in relation to the niche segment of the company, the current culture seems to be not aligned with the company’s strategy of being innovative and producing highly technical products, which are the core business segments of Cypress.
The innovative and technical area of the business would not adjust with the current culture of the company of being highly competitive and individual oriented with no tolerance for failure. High technical areas require very effective and efficient team work with people coming up with new ideas and through brain storming. Existing culture would act as a hurdle for such strategy of the business. Therefore the company’s culture does not match with the innovative strategy of Cypress and this may lead to deterioration of market position of Cypress was unable to provide its high profitable markets.
Identification of Root Causes
After the problem analysis of the identified problems of the company, it is now important to identify the root cause problems in order to find solutions for these problems and to eliminate them from theirs roots which will help in avoiding such problems in the future. Basically, the root cause analysis is a joint term that defines a wide range of methods, tools, and techniques used to reveal causes of problems.
One root cause of the problem can be identified as the leadership style of J. Rodgers in Cypress. The leadership style of Rodgers seems to be more of autocratic style, where he gives directions without involvement of any other members to whom the policy would be imposed, etc. This can be a root cause that might be contributing to the most of Cypress’s culture.
Other than this the core values of the company of always winning and employing only the best as well as zero tolerance for mistakes can be one of the major root causes of the problems faced by Cypress. This is due to having values that are unrealistic or ideal and cannot be easily achieved by normal individual working within the company. Such basis of formulating a culture will eventually put pressure on the employees of the company that will make them more conservative in what they are doing without taking any new steps that can lead to innovative culture.
Generation of Alternatives / Evaluation of Alternatives
In order to cater the problems faced by Cypress it is now feasible to evaluate alternatives to eliminate the root causes identified earlier. These alternatives will then become the basis for the recommendations that will help Rodgers to mitigate the problems faced within Cypress.
Firstly, the leadership style of Rodger should be changed and he should analyze different possible leadership styles and evaluate their possible consequences of them and to the corporate strategy of Cypress. Adopting a democratic or an authoritative participative leadership style may work well with the company’s culture requirements. This will encourage other people within the company to have their say in the policies and values of the working environment they are working in.
Moreover, the company’s core values should be re-evaluated in terms of their relevance to the company’s corporate strategies. As with the two strategies of operating in mass production markets as well as in niche markets in which the company was working previously. The company may separate its divisions formulating separate values and culture in relation to their relative target market requirements.
Finally, the recommendations that would help in catering the problems of Cypress culture and strategy. As the core area of operations of Cypress was the niche market of its innovative products, therefore the company should have a culture integrated with its core business.
It is recommendable that Rodger should rethink the approach of perpetual subsidiaries that have been formed in order to exercise the idea of making employees think like entrepreneurs. This has been a very crucial reason for the problems.
Another recommendation for Rodger is to formulate policies that will distinguish between good and bad failures. As in the high tech companies that are continuously making innovations and research and developments, there are very high chances of failures due to the risk involved. Therefore, evaluating the failure in terms of good and bad will solve the issues to much greater extent.
Furthermore, its is also recommendable evaluation of employees should be based not only on the result they are giving but also the attitude, behavior and cooperation with other people around the company which are also important for a healthy and collaborative working environment and culture.
Reinforcing team tasks is also recommendable and changing the compensation system based on ranking teams together, which will help in growth of all members of the team and will keep the team motivated.