Intel Corporation and Otellini’s Management

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Table of Contents

Introduction
New Mission, Vision, Goals, and Objectives
Strategic Choices
Organizational Strategies, Strategic Controls and Culture
References

Introduction

Intel Corporation is one of the largest semiconductor companies in the world and is the inventor of x86 processor, the processors used in most personal computers today. It was founded on July 18^th 1968 by Robert Noyce and Gordon Moore. The period from 1990 saw its largest unprecedented growth as the primary and also the most profitable hardware supplier to the personal computer (PC) industry. Today Intel Corporation, which has its headquarters in Santa Clara, California and is incorporated in Mobile, Alabama, still maintains its reputation as a global giant in the semiconductor industry and also cuts a niche for itself as a business success.

Intel’s products include microprocessors, flash memory, motherboard chipsets, and Bluetooth chipsets. The company boasts of annual revenue of $38.3 billion USD (2007), an operating income of $8.2 billion USD. Its net income is estimated to be in the regions of $7.0 billion USD. It also boasts of a work force of 86,300 employees (Business Week, July 31, 2006)

Intel’s current CEO is Paul S. Otellini, the first non-engineer CEO in the company. Otellini studied economics in college at the University of San Francisco and then joined Intel in 1974. From 1998 to 2002, he was executive vice president and general manager of the Intel Architecture Group, a group responsible for microprocessor and chipset businesses for desktop, mobile and enterprise computing. He also served as executive vice president of sales and marketing from 1996 to 1998, and as senior vice president and general manager of sales and marketing from 1994 to 1996. During his tenure as general manager of the Microprocessor Products Group, he led to the introduction of the Pentium microprocessor that followed in 1993. He was also charged with managing Intel’s business with IBM Corporation.

Otellini was appointed as vice president in 1988, elected as an Intel corporate officer in 1991, made senior vice president in 1993, and promoted to executive vice president in 1996. In 2002, he was elected to the board of directors and became President and Chief Operating Officer at the company. He was elected as CEO on May 18, 2005 to replaced Craig Barrett. He becomes the 5th CEO of Intel (McConnon, 2007).

New Mission, Vision, Goals, and Objectives

When Otellini took over the leadership of Intel, the strategic plan encompassing the mission, the vision and the objectives/ goals of the company was that: the company will engage in research, development, and manufacture and sales of integrated electronic structures to fulfill the needs of electronic systems manufacturers………. A variety of processes will be established, both at a laboratory and production level……. Products may include dioded transistors……. Principal customers for these products are expected to be the manufacturers of advanced electronic systems….. It is anticipated that many of these customers will be located outsideCalifornia (McConnon, 2007). He has however transformed the company’s core mission and pushed the values of values of risk-taking, discipline, and results orientation a notch higher. Some of the new goals he has brought to the company include: pushing Intel to play a key technological role in many other fields, including consumer electronics, wireless communications, and health care rather than focusing on just PCs.

He also intends to progressively phase out the famous Pentium brand. Also in his management overhaul portfolio is the plan to shake things up throughout the company by making big changes in the way products are developed this will shift development from engineers-base to a team based approach. This development team includes: chip engineers, software developers, marketers, and market specialists who all work together (McConnon, 2007).

Otellini unveiled his new strategies and products on Jan. 5, of 2006 at the Consumer Electronics Show in Las Vegas. Among the things he unveiled were a new corporate logo and a $2.5 billion USD advertising and marketing blitz.

Strategic Choices

Some of the strategic choices which have been taken by Otellini and his team of administrators have done more to improve the reputation of the company. For example one of Otellini’s key steps in restructuring Intel’s management hiring Eric B. Kim away from Samsung Group. Kim had led Samsung’s marketing since 1999 and helped build Samsung into a global brand. He also being the first non-engineer to run the company, he has brought with him many new employees who aren’t typical Intel hires. They include software developers, sociologists, ethnographers, even doctors to help develop products. He lays particular emphasis on marketing expertise because he thinks the only way Intel can succeed in new markets is by developing products which make it easy for technology to work for people.

Otellini also has done a lot to win over Steve Jobs, whose company Apple, is way ahead in innovation in the PC industry. Consequently, the two companies announced that Apple would begin shipping Macs and other products with Intel chips inside. Otellini aims to use the Apple relationship to force PC makers to step up their innovation so as to “drive a trend toward smaller, cheaper, cooler PC.”(Business Week, January 9, 2006).

Intel executives also seem to be looking ahead and looking for other partners in the OS production a trend they weren’t used to. Before Otellini’s take over, Intel was synonymous with Microsoft however the giant PC maker is now opening the doors to machines with the Linux open-source operating system or even Apple’s. They expect some PC companies to ship some microprocessors, without Microsoft’s Windows.

Organizational Strategies, Strategic Controls and Culture

Organization design can be looked at in the broad sense as the process of synchronizing the structures of an organization’s so that they meet its mission. This means looking at the relationship between tasks, workflow, responsibility and authority, and making sure all these support the objectives of the business. Strategic control can be said to be the critical evaluation of plans, activities, and results, thereby providing information for the future actions. Organization culture is the organization’s tradition, or leaning towards the handling of organizations decisions and resolutions.

Intel’s core values of risk-taking, discipline, and results orientation can best be seen in Otellini’s management team. To start with, due to his management shift from being a primary PC hardware maker to an all round consumer electronics maker he has had to employ more people. It is estimated that he has employed about 20,000 new people and also laid off about 10,000 people. His employ also takes into consideration the marketing and likely effect of the introduction of the products to the consumers. His typical employ includes software developers, sociologists, ethnographers, even doctors to help develop products.

Otellini’s administration has also brought about a change in the products development process. Before, it was primarily the chip designers and engineers who initiated the development process. But when Otellini took over, the first job he did was to stop the engineers who were working on the remodeling of Pentium 4 processor. He argues that the development process should be consumer oriented in that the process should be due to consumer demand and not engineer oriented approach which may unveil products that an average consumer may not appreciate. A case in time is the development of PCs for the Chinese over 100,000 cyber cafés which was as a result of surveying the China’s cyber cafés.

There is a definite fit in Otellini’s approach to how he aims to tackle his new mission, strategy and implementation. In changing his strategies from production oriented to marketing oriented. He knows he needs marketing gurus so he gets Eric B. Kim. Kim is credited for having sold Samsung to the world. Otellini also has tried to woo Apple’s Steve Jobs, whose company is a forerunner in the PC industry. This is in aims with Otellini’s mission of making Intel a choice of most consumers due to its innovative products that cuts across all consumer needs from gamming to public health electronics. Ottelini says it like this “All of us want [technology] to be more powerful and to be simpler, to do stuff for us without us having to think about it.”

Some of the organizations achievements that bear testimony to the synchronization of implementation and mission include the striking of the biggest content deal to date with major players in Hollywood and music services by Intel’s Digital Home team. This is to entice both customers and consumers to the Viiv platform (the new Intel product). It also has unveiled a $2billion USD worth of advertisement which will be done together with partners like Sony and Philips Electronics (PHG) salivating (Business Week, January 9, 2006).

References

Anonymous. (2007). Intel Corporation: ADDING MULTIMEDIA Intel Technology Allows Nurses to Spend More Time with Patients Physician Business Week: Atlanta: page 110.

Edwards, C. (2006). Inside Intel. Business Week, New York, Issue 3966, page 46.

McConnon, A. (2007). The Mind-Bending New World of Work; Motion-capture technology burst out of Hollywood and into business from aerospace to advertising. Business Week. New York: Issue 4028, page 46. s.

Edwards, C. (2006). Intel sharpens its offensive. Business Week. New York, Issue 3995, page 60.

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Intel Corporation and Otellini’s Management

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