Chipping Away at Intel

Changes at Intel Within the First Three Years of Barrett’s Leadership

During the first three years of Barrett’s tenure as the CEO of Intel, he transformed Intel from a mere chip making for PC’s into an information and communication appliances producer. He also introduced the production of other internet-related services. Because of the more competitive environment, Barrett also came up with a number of internal reorganizations so as to make the firm more nimble and avoid duplication of work among the departments. Additionally, in 1999, he also launched a wireless unit that integrated the new acquisitions such as the DSP Communications Inc (O’Grady, 2009).

In his second year, Barrett came up with an Architecture Group that carried out the development and manufacturing of the core processors with a view to improving the quality of the products. During his third year, Barrett also reorganized the Architecture Group and came up with a new unit which merged the communications and networking operations. In order to have a proper team structure to handle the work dynamics, he further moved eighty percent of the micro processing unit staff into new jobs and put the chip managers’ in charge of the new markets and products (O’Grady, 2009).

Additionally, Barrett decided to seek the help of outside consultants to assist in the company’s activities. This was unlike the earlier occasions when the company only depended on its employees for decision-making. He also decided to invest in research and development, which was meant to come up with more cost-effective chip production (O’Grady, 2009).

Environmental Factors that Caused Pressure for Change

Under Barrett’s leadership, a number of environmental factors also caused the pressure for change. First, there was the slowing economy that led to poor business performance for the Intel Company. There was also a threat that there could be war with Iraq causing fears which further discouraged development activities and expansion into new markets. It is further noted that there was also a declining demand of the company’s products due to the increased competition from the many companies that produced substitute products. One of these companies was the Advanced Micro Devices Company which had been a great rival of Intel. It produced a faster chip, which ended up shifting demand from Intel’s chip (Christensen, 2012).

Internal Factors that Caused Pressure for Change

Internal organizational factors that caused pressure for change included the problems of product delay and shortages which led to lesser sales as the demand could not be met at times. There were also problems of recalls, overpricing, and bugs in the systems which further contributed to the poor returns. Another factor that caused pressure was the financial analysts’ prediction that by the end of year, Intel’s PC’s share market would be nine percent worse than the time when Barrett took over (Narula, 2008).

The fact that the organization was facing duplication and poor coordination among the departments also enhanced the need for change. This also caused pressure since it was done through the alteration of the staff responsibilities. The ineffective production methods which were not cost-effective enough to ensure proper returns especially with the prevailing economic circumstances were also a source of internal pressure. The situation, therefore, called for research and development of new production technologies (Narula, 2008).

Evaluation of Barrett’s Performance

Under these internal and external pressures, there was a need for proper reorganization and reconstruction of the firm. Barrett achieved this to the certain extent by diversifying the organization’s products, internally reorganizing the staff responsibilities and by hiring outside consultants. However, he ought not to have cut some of the company’s services such as the iCat and the production of network servers which were additional sources of income. Also, he ought not to have put the chip managers in charge of the new markets and products since some of them could be incompetent in their new jobs.

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