Cypress Semiconductors

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#1) Cypress’ strategy in 1993 was competition in high-volume memory chip markets through competitive cost structure, rapid introduction of new products and re-positioning the firm for ‘growth’. Based on this new strategy, Cypress was determined to ‘compete in any market, with any competitor, at any price, and still make a good profit.’ The overall company structure was mostly mechanistic rather than organic. It was extremely formalized, focusing on people and performance management. In terms of complexity, while the structure was lean, it appeared vertical, rather than flat. According to Rodgers, the structure supported both main strategic elements, focusing on accuracy and product development. It seems that the “Killer Software” which tied people to goals across all functional elements was detrimental to the company’s performance in terms of innovation. Cypress’ extremely strong culture was consistent with the core values outlined by the company, which emphasized aggressiveness, victory, speed, and intolerance of failure. Besides focusing on technical expertise and excellent work history, Cypress closely scrutinized potential candidates to weed out cultural misfits. We detected an almost manipulative element to Cypress’ culture, such as the protocol that dealt with announced resignations, when managers had to follow specific instructions to prevent defections and retain other employees. There were a number of military-like symbols that defined Cypress’ culture, such as ‘making the grade’, raiding parties during hiring events, and sealing the company from competition. Also, a number of symbols, legends and rituals underline the military-style culture, such as signing ceremonies during acceptance of job offers. Some aspects of Cypress’ structure are well aligned with the two-pronged strategy, while other elements of design are misaligned with the strategy. The strategic goal to have a highly productive organization is well aligned with the current, centralized,...
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