Craig Barrett made several changes within the first three years of his tenure as the CEO of Intel. In 1999, he created a new wireless unit that combined new acquisition such as DSP Communications Inc. with Intels flash memory operations (Palmer, Dunford, and Akins, 2009). In his second year, he 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 (Palmer, Dunford, and Akins, 2009). 2. Identify three significant environmental pressures for change faced by Intel under CEO Barretts leadership. (fashion, mandates, geopolitical, declining markets, hyper-competition and corporate reputation).
Environmental pressures often occurs when an organizations resource base decreases as a result of reduced demand for products and sales, decrease in market and bad investment decisions (Palmer et. al, 2009). There are several environmental pressures for changes such as hyper competition, market decline, and corporate reputation pressures that Barrett faced as the CEO of Intel. Hyper-competition pressures organizations to deliver goods and services more quickly, more customized, and more flexibly (Palmer et. al, 2009). Hyper-competition pressures for change may not always be easy to anticipate. In this case, Intel was not aware of the sudden and unpredictable moves made by Advanced Micro Devices. Intels competitor Advanced Micro Devices produced Athlon processor which turned out to be faster than Intels Pentium III chip.
Second, the declining market for products and services placed Intel under pressure to remain relevant in the competitive market. For example, due to the weak demand and the overcapacities in the semiconductor industry, some researchers were expecting a 34% fall in global sales of chips (Palmer et. al, 2009). Next, maintaining and enhancing corporate reputation is an important part of managing an organization. Corporate reputation can be positive or negative images of an organization.
Corporate reputation is defined as a collective representation of a firms past actions and results that describes the firms ability to deliver valued outcomes to multiple stakeholders (Palmer et. al, 2009). Intels experienced problems such as product delays and shortages, recalls, overpricing, and even bugs in its systems which ruined their reputation. 3. Identify three significant internal organizational pressure for change faced by Intel under CEO Barretts leadership. (growth, integration and collaboration, reestablishment of organizational identities, new broom, and power and political pressure).
Intel was faced with several internal organization pressures such as pressures related to the need for integration and collaboration, pressures around establishing and reestablishing organizational identities in the new eras, new broom pressures associated with the appointment of new CEOs and a variety of power and political pressures (Palmer et. al, 2009). First, integration and collaboration work together as a team. As the CEO of Intel, Barrett thought that the company needed to be reorganized to avoid duplication and to create better coordination (Palmer et. al, 2009).
For example, the network operations and communication unit sometimes were in competition with each other selling similar products to same customers. Next, reestablishment of organizational change is the process of planning and implementing change in an organization. Barrett wanted to reestablish a new identity for Intel through organizational change such as job promotion in order to enhance job satisfaction. Finally, Intel was affected by the new broom pressures. The new broom pressure acts as a signal that the old ways are about to change is when an organization hires a new CEO or manager. For example, Barrett wanted to change the culture and move Intel toward better customer relations.
4. Evaluate CEO Barretts performance under these pressures and discuss what he may have done differently. As the CEO of Intel, Barrett was faced with many challenges during his tenure. Barretts performance under hyper-competition pressures really needs improvement. Barrett decision to create dual core architectures rather than producing faster and faster chip speeds and canceling the 4-GHz Pentium was not a good decision (Palmer, Dunford, and Akins, 2009). Perhaps if Barrett had conducted the market research, he would have found that people were more interested in how fast their modern connection was than in the speed of their computer chip. Next, Barretts decision to expand the companys expertise in designing chips for mobile communications was not a good idea.
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 (Palmer, Dunford, and Akins, 2009). Third, Barretts performance under the identity pressures should have been researched thoroughly before implementation. Placing chip managers in charge of new markets and products with little knowledge created serious problems for the company.
In my opinion, the quality of leadership that the organization provides determines whether the organization succeed or fail. Barrett did not communicate effectively with his staff about the need for change and what this change seeks to achieve. Without an appropriate vision, a transformation effort can easily dissolve into a list of confusing, incompatible, and time consuming projects that go in the wrong direction or nowhere at all (Kotter, 1996).
Palmer, I., Dunford, R., & Akin, G. (2009). Managing organizational change: A multiple perspectives approach (2nd ed.). New York: McGraw-Hill.
Kotter, J. (1996). Leading change. Boston: Harvard Business School Press.