Changes
Change within an organizational setup is natural and healthy. However, as revealed in Intel’s case, change can bring disastrous results if mishandled. Due to the nature of risks involved, many organizational changes fail in their attempt to accomplish their intended objectives. Craig R. Barett undertook rapid organizational changes for the first three years after ascending to the helm of Intel’s leadership. First, he ventured into new markets previously not known to Intel, that is, he started a production line for information and communication applications as well as internet-related services. Intel was traditionally known for producing computer microchips.
In an attempt to reorganize the organization, Barett also came up with other units that proved costly for the organization. For instance, he acquired DSP communications Inc. and combined it with Intel’s flash memory unit to develop a new wireless department.
Not only did he create the Architecture group aimed at combining the development and manufacturing processes of core processors, but also reorganized the same group in his third year at the helm to create a new unit after merging the communications and networking operations of the organization. Craig also undertook to change the organizational culture of Intel, choosing to rely on outside sources to assist him model a strategy that would see Intel’s employees focus more on customer relations.
Environmental Pressures for Change
Intel experienced a multiplicity of environmental pressures for change during Barett’s tenure at the helm. First, it was the September 11 2001 terrorist attack on the World Trade Centre, followed closely by the slowing down of economy. As such, Intel was forced by both mandated and geopolitical pressures to change its way of operations. In the former, change is demanded by external forces, while in the latter, the organization is forced to restructure due to emerging global crises.
During this time, there was a probable threat of war with Iraq, a scenario that further contributed to the soaring of markets for Intel’s chips, implying that geopolitical pressures pushed Intel’s further to reorganize its operations. Lastly, Intel was forced to withdraw from new markets for network servers and routers by fellow competitors, Dell and Cisco, implying that the organization had to reckon with hypercompetitive pressures.
Other Pressures for Change
Intel was also faced with a multiplicity of internal organizational pressures for change. First, the organization was experiencing product delays and shortages for its chips. There was also the issue of overpricing and recalls of products, factors that only helped to dent the good name and reputation of Intel.
The organization had to not only reckon with computer bugs affecting their systems, thereby causing huge losses, but also fight internal conflicts of interests to avoid duplication of services and resources. During this time, it was not surprising for two units within the organization to compete for the same customers by selling them similar products. As such, organizational change was inevitable to keep Intel’s core operations in perspective.
Overall Conclusions
It cannot escape mention that Barett’s intentions for the organizations were genuine and healthy, but they were implemented in a rapid and haphazard manner. Intel, by any standards, needed to reorganize its operations to make it more nibble and avoid duplication of operations.
Furthermore, external environmental factors such as stiff competition and dwindling markets for Intel’s products demanded action in the form of restructuring operations. In the light of this, Barrett was justified to carry out the changes. He had to create better conditions for the organization to remain competitive by coming up with new products to diversify its operations.
However, the pace by which these changes were implemented nearly left everyone, including customers, confused. The rapid reorganization never came close to enhancing the decentralization and delegation of decision making – Barrett’s pet project.
Instead, managers were being placed in charge of new and emerging markets, products and services about which they had very limited knowledge. To add on to these, Barrett enlisted the services of outside consultants to transform the culture of the organization. In this, Barrett failed to steer the organization to the right direction since organizational culture should transform itself from within.