In large, widely diversified firms, decision making can become slow and remote to market conditions thus creating potential difficulties for successful mergers as evidenced by the Cisco-Flip failure.

Question

Quizplus · Accepted Answer

Cisco was unable to avoid failure with Flip for two reasons. One of these is that its nearly 60 decision-making groups with many layers of responsibility made it difficult for Cisco to be responsive to market pressures on the Flip product. This just was not a priority since the Flip division had a mere 400 million USD in annual sales, representing only 1 percent of the overall sales of Cisco.

In Large, Widely Diversified Firms, Decision Making Can Become Slow