Chipping Away at Intel

Due Date: May 29, 2016 23:59:59 Max Points:125

Details:

Read the “Chipping Away at Intel” case at the end of chapter 3 in the text. In a paper of 750-1,000 words, address the following questions that relate to why organizations change.

1. Of the environmental pressures for change (fashion, mandated, geopolitical, market decline, hyper competition, reputation and credibility), which one(s) was/were experienced by Intel, and what facts from the case support your choice(s)?
2. Of the internalpressures for change (growth, integration, collaboration, reestablishment of organizational identities, new broom, and power and political pressures), which one(s) was/were experienced at Intel, and what facts from the case support your choice(s)?
3. Are there limits to the changes that can be accomplished at Intel? Why or why not?
4. Describe why it is important for change managers to have a clear, personal understanding about the pressures that lead to change.

Prepare this assignment according to the APA guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.

Directly quoted source material may not exceed 10% of the paper’s content.

Due to its inherent unreliability, Wikipedia is not considered an acceptable source for use in academic writing.

Please refer to "AMP-492: Module 2 Pressures for Change Grading Rubric" for this assignment. Instructors will be using the rubric to grade the assignment; therefore, students should review the grading rubric prior to beginning the assignment to become familiar with the assignment criteria and expectations for successful completion of the assignment.

AMP-492: Module 2 Pressures for Change Grading Rubric

REQUIREMENTS:	POSSIBLE	ACTUAL
Discusses environmental pressures for change.	17
Describes one attribute or capacity of servant leadership.	17
Discusses internal pressures for change.	17
Describes the limits to changes.	17
Describes the importance for change managers to have a clear, personal understanding of pressures that lead to change.	17
Student prepares all answers and comments according to the APA guidelines found in the APA Style Guide, located in the Student Success Center. An abstract was not required.	10
Paragraph Development and Transitions Student’s work has a sophisticated construction of paragraphs and transitions. Ideas universally progress and relate to each other. The student is careful to use paragraph and transition construction to guide the reader. Paragraph structure is seamless. Individually and collectively, paragraphs are coherent and cohesive.	10
Mechanics of Writing a) Student is clearly in control of standard, written academic English. b) All work includes correct spelling, punctuation, and grammar. c) Similarity Index is less than or equal to 10%. *Instructor discretion advisable	10
Language Use and Audience Awareness d) Student uses correct sentence construction, word choice, etc. e) Student uses a variety of sentence constructions, figures of speech, and word choice in unique and creative ways that are appropriate to the purpose, discipline, and scope. f) Assignment is within the required word count.	10
TOTAL	125

Case Study Chipping Away at Intel

Case StudyChipping Away at Intel

PART 1139

Craig R. Barrett sat reflecting on the fact that he was halfway through his tenure as the fourth CEO of Intel—only another three more years to go until his mandatory retirement age would be reached. He had come into an organization that Andrew S. Grove, chairman of Intel, had shaped into a major global technology company. He had replaced Gordon E. More but retained his principle of doubling microprocessor performance every 18 months while at the same time making it progressively cheaper. In this context, what would be Barrett’s legacy? When Barrett came in three years ago, he took some bold moves, taking Intel beyond chip making for PCs into the production of information and communication appliances as well as services related to the Internet. Trouble is, the company was now in the worst shape that it had been for many years. Of course, every technology company had been affected by September 11, 2001; the slowing economy; and the potential threat of war with Iraq. But in Intel’s case this had been compounded with problems such as product delays and shortages, recalls, overpricing, and even bugs in its systems. Analysts were predicting that by the end of the year, Intel’s share of the PC chip market would be 9 percent worse than when Barrett had taken over three years earlier. He had ploughed money into new markets—but then had to withdraw from these. For example, Intel withdrew from the production of network servers and routers after copping flak from Dell and Cisco, its biggest customers for its chips, for directly competing with them in these other markets. He also closed down iCat, which was an e-commerce service for small businesses, providing Web broadcasting of shareholder meetings, and cut back on Web-surfing applications except in Spain. In Barrett’s mind, most of these withdrawals were a direct result of the downturn in economic conditions generally. There were also weak demand and overcapacity in the semiconductor industry with some researchers expecting a 34 percent fall in global sales of chips. Moreover, long-time rival Advanced Micro Devices had produced its Athlon processor chip, which turned out to be faster than Intel’s Pentium III chip. At the same time, people seemed to be more interested in how fast their modem connection was than in the speed of their computer chip. And September 11, 2001, hadn’t helped; before this catastrophe, Intel’s shares, at $26, were down 60 percent compared to their highest over the previous year. After September 11 they fell further— by October they were only $20. Barrett felt that in this competitive—and segmented—market, Intel needed to be reorganized to make it more nimble. It also needed to be reorganized to avoid duplication and create better coordination. For example, the network operations group and the communications unit sometimes were in competition with each other, selling similar products to the same customers. Barrett engaged in a series of reorganizations during his first three years. In 1999 he created a new wireless unit that combined new acquisitions such as DSP Communications Inc. (a chipset supplier for digital communications) with Intel’s flash memory operations. In his second year, Barrett created the Architecture

Group, which combined development and manufacturing of core processors. In his third year, he reorganized the Architecture Group and created a new unit consisting of a merger of communications and networking operations. For Barrett, these reorganizations were needed to enable decentralization and delegation of decision making—all designed to make the company better coordinated and more nimble. But there was so much reorganization over these years, trying to get the structure to work, that some commentators saw it as “shuffling execs like cards in a deck.” Following the March 2001 restructuring, with up to 80 percent of the staff in the microprocessing unit being given new jobs, one customer thought that cope with these change pressures?

people seemed to be moved around a lot without them really knowing where they were going. A former general manager saw Intel as now “dabbling in everything and overwhelming nothing.” Other commentators claimed that another

Part 2140

In May 2005 Craig Barrett reached Intel’s mandatory retirement age as CEO and moved on to become chairman of the company. He was replaced as CEO by Paul Otellini. In reflecting back on his tenure as CEO, Barrett felt proud that he had managed to keep his company profitable following the 2001 IT collapse. Intel also had kept its position as a leading

chip maker. But things had not always been easy for Barrett. Intel had thought that its Itanium processor was going to be the future of the server business, but the market thought otherwise. The chip was used in high-end servers, but the market was much smaller than had originally been hoped for. He also had expanded the company’s expertise in designing chips for mobile communications. This had mixed results. The Centrino mobile technology, used for accessing wireless networks, had taken off and its flash memory business was robust, but despite a great deal of hype around communications silicon

and its Manitoba processor, no mobile phone manufacturer had yet used this processor. In 2004 in what was referred to internally as “the right-hand turn,” Barrett engaged in strategy shifts, moving toward dual core architectures rather than

simply producing faster and faster chip speeds. Canceling the 4-GHz Pentium 4 symbolized this shift.

At the same time, he engaged in a reorganization of the company, putting in place new business units such as the Mobility Group, focusing on mobile devices, along with a Digital Enterprise Group, a Digital Home Group, a Digital Health Group, and a Channel Products Group. The future challenge was to make sure that work was coordinated across these different groups to enable the company to deliver high-quality products. Barrett knew that this was going to be a big challenge for Paul Otellini over the coming decade.

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