Экономические науки/10. Экономика предприятия

Master of management, doctoral candidate Davidenko L.M.

Innovative University of Eurasia, Pavlodar City, Republic of Kazakhstan

Research of the international experience of corporate governance by integration processes

The economy of the enterprise is based on the balanced system of development. Research of the best practices of expansion of borders of business - the main objective of corporate governance in the conditions of globalization and the growing competition.

A striking example of a corporate culture based on development of business, is a corporation “Cisco” - hi-tech industry representative. Cisco is the world leader in the manufacture of equipment for the Internet. Integrated solutions of Cisco based on the IP protocol, underlie the network and internal networks of most commercial, educational and government organizations worldwide.

The corporation “Cisco” has 25- year history, for the period of 1993-2009 the company acquired 129 companies and 85% of the employees of the acquired companies kept jobs in acquired structure. “Cisco”, being the product of venture investment, controls the venture capital of more than two billion dollars. As the exchange of innovative experience one can focus on the following positions of integration policy “Cisco” (see figure 1).

According to the vice-president of corporate development Hilton Romanski, corporate development strategy serves the aims of the corporate strategy “Cisco” - to improve the world, to make it more convenient for people [1].

The basis of the strategy of corporate growth is an innovative approach based on the use of mechanisms of mergers and acquisitions entities of large, medium and small businesses, directly or indirectly related to the product line of the corporation “Cisco”.

Transactions of M & A allowed carrying out the external growth of corporation that is to receive divisions which helped to occupy an additional market niche.

Figure 1. Characteristic of strategy of corporate development of Cisco Corporation

(It is made by the author on [1])

Let’s stop at the positions of the growth strategy of “Cisco” by means of the business combination:

1) the quality criteria for a positive decision on the question of new acquisition:

- the target company has to create the best conditions for business and technical innovation;

- the target company must have a solid business and share strategic views on business and technology “Cisco”;

- compatibility of core corporate values and corporate culture of the acquired company and “Cisco”;

2) the quantitative criteria of a positive decision on the question of new acquisition:

- the prospect of getting the revenue from a newly acquired company of the amount of $ 1 billion a year;

- the resource-saving policy, preference to the companies operating in close proximity to areas of “Cisco” functioning;

3) geography of active market investments and acquisitions ( technological markets on a global scale; potential sources of innovative revenue in developing countries (Skolkovo Innovation Center, Russia);

4) the composition of the investment portfolio:

- direct investment: China Communications Services ($ 100 million), VMware (U.S. $ 150 million), Nimbus Communications ($ 20 million), Alibaba (17,5 million), and others;

- venture capital funds: Softbank Asia Infrastructure Funds I, II and III, Bodhi (China and India), CoreOptics (Italy, India, USA), 3TS-Cisco Growth Fund III (Central and Eastern Europe), CXC (China), Almaz Capital Partners (Russia), etc.

The “Cisco” partnership programs are of great interest in IT industry. In late 2009 for the first time in CIS in Kazakhstan, the IP project - new generation network based on optical networking solutions of «Cisco» has been implemented. When implementing the project “Cisco Systems” actively cooperates with “Kazakhtelecom”.

The corporation “Cisco” uses financial mechanisms to maintain profitability of partners and companies entered the corporation. For example, the employees of the company developed a financial program “Cisco Capital”, which allows purchasing the equipment “Cisco” on credit on reasonable terms. The users of the program are companies with high reputation, good credit history, expanding business with “Cisco”.

Harmonizing business relations can serve as a basis for conducting mutually beneficial transactions in the near future connected not only with the realization of assets but also the integration of corporate business - structures of new generation with participation of Kazakhstan’s firms.

Literature

1. Hilton Romanski “We paid special attention to the acquisition of companies which could bring 1, 0 billion dollars a year”// Journal “Merger and Acquisition” №3 (73) 2009.