Part 1
Principle of Barrett: Doubling micro-processor performance every 18 months while at the same time making it progressively cheaper.
Problems that Intel had (because of the September 11):
- product delays
- shortages (escassez)
- recalls (devoluções)
- overpricing (preços excessivos)
- bugs in the systems (erros no Sistema)
- advanced Micro Devices (competitor) had produced its Athlon processor chip (faster than Intel’s Pentium III chip)
With these problems, analysts predict that Intel’s share of market would be 9% worse than 3 years later.
Causes of BARRETT’S WITHDRAWALS:
- The downturn (crise) in economic conditions;
- Weak demand (fraca procura) and over-capacity (supercapacidade) – Fall in global sales of chips.
BARRETT’S OBJECTIVES:
- Reorganize Intel to make it more nimble (ágil), to avoid duplication, to create better coordination and to enable (possibilitar) decentralization and delegation of decision making.
Another problem: (intern) The network operations group and the communications unit sometimes were in competition with each other, selling similar products to the same customers.
BARRET’S REORGANIZATIONS DURING THE FIRST 3 YEARS: 1) He created a new wireless unit (1999); 2) He created the Architecture Group (2000); 3) He reorganized the Architecture Group and created a new unit consisting of a merger of communications and network operations (2001).
Reorganization consequences:
- “shuffling execs like cards in a deck”;
- people moved around a lot without really knowing where they were going ( and costumers realize that);
- Intel was “dabbling in everything and overwhelming nothing” (meteu-se em tudo mas não foi impressionante em nada);
- chip managers were put in charge of new markets and products about they knew very little;
- job cuts (5000 people lost their jobs).
ANOTHER OBJECTIVE: Change the culture and the mindset (mentalidade) of Intel with the help of outside consultants.
- He want to change the culture in order to improve the relations with the costumers;
- He invest in research and development into new production technologies in order to cut chip-making costs.
- ICREASE SALES!

Questions: 1) In the first 3 years Barrett wanted to reorganize Intel to make it more nimble (ágil), to avoid duplication, to create better coordination and to enable (possibilitar) decentralization and delegation of decision making.
To that happen:
1) He created a new wireless unit (1999);
2) He created the Architecture Group (2000);
3) He reorganized the Architecture Group and created a new unit consisting of a merger of communications and network operations (2001).

2) Geopolitical – The September 11;
- The downturn (crise) in economic conditions;
- Weak demand (fraca procura) and over-capacity (supercapacidade) originate a fall in global sales of chips. – Market decline
Those are the macroeconomic changes (or crises) that place pressure on Intel to change the way it operate.

Hypercompetition - Advanced Micro Devices (competitor) had produced its Athlon processor chip (faster than Intel’s Pentium III chip) and that rapid response by this competitor produce pressure for change at the organizational level.

Reputation and credibility – The consequences of the Barrett’s reorganizations were in one way a “scandal” because people star to say that Intel was “shuffling execs like cards in a deck” and was “dabbling in everything and overwhelming nothing”. That increased the pressure to maintain a good reputation and high level of credibility.

3) Identity – They had an internal crisis - the network operations group and the communications unit sometimes were in competition with each other, selling similar products to the same customers.
That encouraged the change and Barrett also created a new unit consisting of a merger of communications and network operations (in 2001).

Growth
New broom
Power & Political
Collaboration

4) –

5) Barrett wanted to: - Change the culture and the mindset (mentalidade) of Intel with the help of outside consultants in order to improve the relations with the costumers;
- He invested in research and development into new production technologies in order to cut chip-making costs.
- ICREASE SALES!

6) Hypercompetition
Identity
Diversity market
Collaboration
HR – Training/Recruit

7)

Part 2

Barrett became chairman of Intel – 2005.

Problem: The Itanium processor hadn’t the success that they thought it would have – The market was much smaller than what they hoped for.

Barrett changed his strategy (2004)!!!!
- By canceling the 4-GHz Pentium 4.
- He didn’t want to produce faster and faster chips anymore.
- He REORGANIZED THE COMPANY AGAIN – He created new business units.

MAIN OBJECTIVE: Make sure that the work was coordinated across the different business units to enable the company to deliver high-quality products.

1) Smaller market;
Reputation;
Integration & Colaboration