Question #1- Explain the changes at Intel during the first 3 years of Barrett’s tenure. Craig R. Barrett became the fourth CEO of Intel in 1998 proceeding Robert Noyce, Gordon More, and Andrew Grove (Lohr, 1998). Barrett began his mission as CEO with the plan to diversify and expand Intel by increasing the efficiency of the computer chip while giving the consumer a higher quality chip. Barrett’s focus was to expand Intel’s manufacturing capability while raising revenue (Advameg, Inc., 2012). Barrett faced many challenges during the first few years as CEO of Intel. Some of the challenges began with the slow economy, 9/11, and the probability that the U.S. may go to war with Iraq (Palmer, Dunford, & Akin, 2010, p. 72). Nonetheless, Barrett was determined to restructure Intel and make the company more competitive in the information and technology market (Advameg, Inc., 2012). During the course of Barrett implementing changes, he upset some of his major clients, and had to withdraw the changes previously made. This step caused Barrett to lose money because of bad business decisions (Palmer, Dunford, & Akin, 2010, p. 72).
As the information and technology, market grew; Barrett faced more internal and external pressures. The pressures included Barrett’s production of fabricated chips that were defective causing him to spend more time and money to perfect the product for marketing and distribution (Advameg, Inc., 2012). Question #2- Identify three environmental changes faced by Intel. Three environmental pressures that Intel faced, while under Barrett’s leadership is declining market, hypercompetition, and geopathical pressures (Palmer, Dunford, & Akin, 2010, p. 54-57). When Barrett took over as CEO his business plan was to make drastic changes in the system by reorganizing the company and offering new products to the consumers. The implementation of these changes was directly affected by 9/11, which caused Intel to lose millions of dollars (Palmer, Dunford, & Akin, 2010, p. 72). Intel’s failure to provide the consumer with a quality product caused some shareholders to sell, making the stock value plummet in the market. With the loss of revenue, and the reorganization of executives, Intel’s shareholders, employees, and stakeholders lost faith in Barrett’s plans to change Intel into a major competitor in the segmented market (Palmer, Dunford, & Akin, 2010, p. 72).
However, Barrett did take Intel into a hypercompetitive market with an improved product called dynamic random access memory (DRAM), and this product increased the speed of the microprocessors. Barrett marketed these products aggressively, and was able to sell the product in high volume. Barrett underestimated the demand for the DRAM, and the product was in such a high demand that the company began to sacrifice quality to meet quota (Advameg, Inc., 2012).Given Intel’s history of finances, Barrett should not have placed this type of pressure on the organization to remain relevant to the industry by producing massive quantities of a product that fell below standard expectations. The market for the product was too weak, and the industry had too many competitors (Scribd, Inc, 2012). Even though the market for this product expanded beyond belief, the economy was still faced with a declining market because of the recession. The final environmental pressure that Intel faced was geopolitical pressures. Prior to 9/11, the U.S. was in an economic recession. The economic recession began when the gross domestic product declined. The declination of the economy slowed down the manufacturing of products. Once production slowed down, this caused the employment rate to fall. Sales for Intel were directly affected by this process (Amadeo, 2012).
Question #3- Identify three internal pressures for change Intel faced. Three significant internal organizational pressures Intel faced under CEO Barrett’s leadership are; new broom, integration and collaboration, and reestablishment of organizational identities. When Barrett took over as CEO in 1998, he delved into his position by taking some major risks. Barrett wanted to reshape and reorganize the company into something more than making chips for pc’s. Barrett’s decision to change Intel led him to place executives in positions that would better serve the customers. The reorganization led to hiring new people and letting go of nearly 5,000 other positions throughout the organization. Barrett believed that these changes were needed because he wanted a cultural change for the organization. The cultural change would give customers a better experience with Intel, and build customer relations, while minimizing the competition in the industry. Barrett believed this investment of time, and staff would make him a leader in the marketplace (Palmer, Dunford, & Akin, 2010, p. 72).
The second of the three internal pressures is integration and collaboration. Barrett believed that some services were duplicated (Palmer, Dunford, & Akin, 2010, p. 72). Therefore Barrett began to create units and groups to manage certain aspects of customer service and products (Scribd, Inc, 2012). The final internal organization pressure for Intel is reestablishment of organizational identities. Barrett wanted to enhance the customer’s experience with Intel by creating a different cultural environment. The cultural environment Barrett created is the promotion or acceptance of change. Change meant reorganizing people, positions, number of positions created, and number of positions eliminated without affecting the consumer’s experience in doing business with Intel (Scribd, Inc, 2012).
Question #4- Evaluate Barrett’s performance and what he could have done differently. Barrett’s performance under environmental and external organizational pressures caused him to make frantic, drastic, and costly moves. Barrett was so focused on making Intel a leader in the marketplace that he overlooked proper business etiquettes. Barrett placed the drive for leadership above selling quality products with the Intel branding, customer satisfaction, and the fate of the organizations valued employees (Palmer, Dunford, & Akin, 2010, p. 72). One tool that Barrett should have used before making changes to the organization is six images framework. The six images framework tool would have allowed Barrett to foresee challenges before making his final decisions by giving him multiple perspectives about changes. The six images framework tool would have given him foresight, insight, and reflection about his decisions to make changes (Palmer, Dunford, & Akin, 2010, p. 34-38). I believe that Barrett’s decision to change was driven by personal ego, and the need for Intel to be number one in the marketplace under his leadership (Palmer, Dunford, & Akin, 2010, p. 72).
Advameg, Inc.. (2012). Reference for business. Retrieved from http://http://www.referenceforbusiness.com/history2/84/Intel-Corporation.html Amadeo, K. (2012, July 06). Causes of economic recession. Retrieved from http://http://useconomy.about.com/od/grossdomesticproduct/a/cause_recession.htm Lohr, S. (March, 1998). Intel’s chief steps down after 11 years. Retrieved from http://http://www.nytimes.com/1998/03/27/business/intel-s-chief-steps-down-after-11-years.html?ref=craigrbarrett Palmer, I., Dunford, R., & Akin, G. (2010, p. ). Managing organizational change (2nd ed.). New York, NY: McGraw-Hill/Irwin. Scribd, Inc. (2012). Managing change. Retrieved from http://http://www.scribd.com/doc/49629571/MANAGING-CHANGE-NOTES