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Intel Case Study

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Intel Case Study

After reading the first part of the case study, Chipping Away at Intel an assessment can be made to answer the case study questions that include the changes at Intel in the first three years of the new CEO Craig R. Barrett tenure, the environmental pressures for change, and internal organizational pressures associated. Furthermore after reading the second part of the case study an examination of new pressures faced by Barrett, how he responded and what changes the new CEO might make and why. First off the case study reflects several changes at Intel over the first three years of Barrett’s tenure which included investing and then withdrawing from new markets, closing down iCat, an e-commerce service and job cuts. Barrett also engaged in several reorganizations. “At the same time, Barrett wanted to change the culture of Intel, drawing on outside consultants to assist him in the process.” He wanted to move towards better customer relations. Environmental pressures for change can be seen in some of the decisions made by Barrett. “A declining market experiences dropping values as part of the normal progression of life stages for financial markets or in reaction to specific financial events”(What Is a Declining Market?). Also Geopolitical pressures were faced. In the first three years Intel was affected by September 11, 2001, the sluggish economy and the potential of war. Corporate reputation is another factor that seemed to have a slight influence with job cuts and competitors making faster processor chips. The last environmental pressure mentioned in the study came from hyper competition. “There were also weak demand and over-capacity in the semiconductor industry with some researchers expecting a 34 percent fall in global sales of chips (Palmer et. al., 2009).” Internal organizational pressures for change experienced by Intel include growth pressures, integration and collaboration pressures, and new broom pressures. Intel was a major global technology company and Barrett wanted to make sure it continued to grow. Barrett worked to integrate by reorganizing Intel to make it more nimble. One of the biggest internal pressures seemed to be from new broom pressure. “Someone who has just started a new job and who is expected to make a lot of changes can be referred to as a new broom (new broom definition | English dictionary for learners | Reverso).” Barrett wanted to change the culture of Intel and worked to restructure with up to 80 percent of micro processing unit staff being given new jobs. As the new CEO he wanted to increase sales and advance from competitors through his new investments. In the second half of Barrett’s tenure a new pressure will be power and political pressures. The new CEO will have most of the same pressures that faced Barrett to overcome. Barrett responded to these pressures by staying firm to his position as leading chip maker and expanding the company’s expertise in designing chips for mobile communications. As Paul Otellini coming in as the new CEO changes will eventually need to be made but to start I would feel that it would be best to see how the new business units that Barrett put in place affect the overall performance of the company. Otellini will need to determine how to keep the company successful while defining his own path and goals for the company. “New CEOs face a critical strategic choice. Should they settle into the job, spend a year or more getting to know their businesses, and then start shifting the portfolio? Or is it better to act quickly and boldly early on to divert resources from mature activities to a new generation of corporate opportunities? (Hall & Kehoe, 2013).” In this case I would think he needs to go slower since many changes seemed to have been made by Barrett in the last six years but to not let Barrett’s changes stop him from making ones he believes will help Intel thrive. As CEO of Intel for six years Barrett made many changes due to environmental and internal organizational pressures. He worked to change the culture and the structure of the company in order to strengthen profit and market share. Not all of his changes were successful as seen from money he ploughed into new markets that then had to be withdrawn but overall was successful as CEO. One thing that was constant was changes that Barrett had to implement and react to in order to manage the organization.

References
Hall, S., & Kehoe, C. (2013, October). How quickly should a new CEO shift corporate resources? | McKinsey & Company. Retrieved from http://www.mckinsey.com/insights/strategy/how_quickly_should_a_new_ceo_shift_corporate_resources

new broom definition | English dictionary for learners | Reverso. (n.d.). Retrieved from http://dictionary.reverso.net/english-cobuild/new%20broom

Palmer, I., Dunford, R, & Akin, G. (2009). Managing Organizational Change: A Multiple Perspectives Approach (2nd ed.). McGraw Hill Boston, MA.

What Is a Declining Market? (n.d.). Retrieved from http://www.wisegeek.com/what-is-a-declining-market.htm

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