Chipping Away at Intel

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  • Topic: Barrett, The Honors College, Advanced Micro Devices, Craig Barrett
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Chipping Away at Intel
Mabel Dawson
Managing Organizational Change – HRM 560
Professor Gordon
Oct 23, 2011

Abstract
Craig R. Barrett is the fourth CEO at Intel and has 3 more years until his mandatory retirement age. Upon his arrival he had a strategy and made some significant changes within the company. He made bold moves in the form of production of information, production of network servers, and reorganized the company. He is almost at the end of his tenure and is wondering what his legacy will be with Intel. A lot of the changes he made were during the time of September 11, 2001 and the entire market segment that Intel is a part of is feeling the effects of this day. Prior to September 11, Intel shares were trading at $26 per share and after that day Intel shares fell to $20.00. Craig Barrett has visualized many changes for Intel that would make them the top competitor in their market. Will he be able to capitalize on the changes he has made within the company and have an outstanding legacy to be proud of?

1. Discuss the different changes at Intel over the first 3 years of CEO Barrett’s tenure.
According to Palmer, Dunford, & Akin (2009), Barrett inaugurated changes within Intel that he envisioned would better suit the company and the organizational structure as a whole. He made changes in areas of production of information and communications appliances, and Internet services as he envisioned taking Intel into a different direction other than chip makers of PCs. Along with this change came problems of product delays, recalls, overpricing, and bugs in the software system. Stakeholders as well as everyday consumers were not thrilled with Intel during this time period and most analysts visualize a major drop in Intel stock price.

Barrett continued to make changes during his tenure with ventures on new market structure. Because he failed to do due diligence in the market arena he wanted to take Intel, the company had to withdraw from production of network servers and routers because it placed Intel into direct competition with Cisco and Dell who were Intel’s biggest customers for its chips. Barrett wasted a huge sum of Intel capital by going into this venture and not knowing beforehand the investment of external stakeholders in this market.

Barrett also attempted to make Intel more flexible by reorganizing the company and by avoiding duplicate responsibilities of its employees. Many people thought that the reorganizing caused most employees not to even know where they were going within the company. It was felt that Intel had their hands in everything with no concrete knowledge base about anything within the market. Many of the changes Barrett imagined placed Intel in worse shape than it had ever been in before. 2. Identify three significant environmental pressures for change faced by Intel under CEO Barrett’s leadership. (fashion, mandates, geopolitical, declining markets, hyper-competition and corporate reputation).

According to Palmer, Dunford, & Akin (2009), environmental pressures faced by Intel included the slowing economy; the affects of September 11; and the potential threat of war with Iraq. Also, Intel’s rival Advanced Micro Devices had produced its Athlon processor chip which was faster, cheaper, and better quality chip than anything Intel had. The reputation of Intel was also losing ground due to their product delays, recalls, overpricing, shortages, and bugs within their software system. One may be able to view Barrett’s image of managing the changes he envisioned at Intel as either a Director or a Navigator. It is easy to identify geopolitical pressures with Barrett’s reign as CEO of Intel as he was the top leader during the global crisis of September 11, 2001 which was experienced by all markets within the PC world. Barrett also can be associated with hypercompetion pressures as he was faced with competitive business such as Dell and Cisco. Intel under Barrett’s...
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