Pressures for Change - Essay Example

? Pressures for Change Intel was at the brink of collapse even way before Craig Barrett moved in to become the chief executive officer. The problems and challenges that he faced at the helm of this corporation were unique. However, the way that he made and effected decisions to go through the problems that the firm encountered was indeed to blame for some of the negative results the firm registered. This was despite the same leadership decisions instigating occasional positive results. Of the several environmental factors, the firm faced multiple challenges, geopolitical being one and a key determinant of how the market played out. This greatly affected the sale of the firm’s products. Barrett was barely a year old at the organization when America started the war on Iraq. This was in 2001. The war was solely a political move that had dire consequences on different aspects of the American economy. It strained the economy as more money was needed to fund the fight. In this case, the money could only be sourced from public fund which is tax collected. This resulted in a shift in the purchasing forms of most the American market. The war also affected international markets. For instance, sympathizers of the Iraqi government started discriminating against American products and Intel was one of the companies that felt the consequence of the discrimination. Intel manufactures computer chips and sells them off to other companies some of which are situated overseas (Palmer, Dunford & Akin, 2009). The poor performance following this had detrimental consequences on the firms’ standings at the stocks market since low sales meant lower profits resulting to low dividends to its share holders. As a result, investors began shying off from Intel’s shares and this was to blame for the poorest price of twenty dollars that the company’s share got to by September 2001. This poor performance caused by the geopolitical factor needed effective change to reverse. It was a trend that could have seen this leading market player liquidated within the shortest period and the chief executive office Craig Barrett could not have known what would have hit him. Being the aggressive individual he was, he noticed the need initiate change and introduce a brand into the market that could sustain the buying trends at the time. It is with this in mind that he launched faster and smaller processors at lower prices. With this type of product, the firm shifted its market target from the high end citizens to the middle and low class who coincidentally formed the majority of the population. He also was forced to diversify the firm’s operation. He transformed the company from merely making the microprocessors to a manufacturer of other information and communication appliances. In as much as the move to begin manufacturing other communication and information appliances was a good one, it was bound to impact negatively on the general sale of the firm’s products. Intel initially manufactured these micro chips and sold them to other manufacturers of ICT products such as Toshiba, Acer, and Hewlett Packer (HP). This meant that these other secondary firms would buy these chips in bulk and use them to manufacture their products. But since Intel would still reserve the copyright laws, they would always indicate that their products had Intel chips. This acted as a platform for further advertisement for Intel’s products. It is, therefore, only logical that when Intel began manufacturing such appliances as computers and mobile phones, it started competing for the very limited market with its former customers. This would not have been received positively by these companies as they started treating Intel as a competitor and not a supplier. This further reduced the sales of the firm’s products and contributed to the poor price of the firm in the year 2001 and early 2002. With a poor performance, and the changes that the chief executive officer was making in the firm, the company was most definitely taking a newer shape. The inflation that saw to the increase in the cost of production led to massive job cuts in the firm. The company was forced to lay off a significant number of their employees, a figure that got to an all time high of five thousand. This, as was expected, drew sharp criticism from different persons within its management. With such massive job cuts, its operations reduced thus it induced internal pressures as well (Jeffery, 2006). The firm faced pressure from different sources. There was the overriding need to restructure the company since it was making less profit as time progressed. Besides, the value of the firm’s shares were depreciating and every move that the chief executive officer made always appeared to impact negatively on the firm’s books of account. This compelled the company to undergo restructuring. First, there was the need to lay off some employees. Most of those who were laid off were those that were classified as redundant. These employees had become irrelevant to the firm’s course yet they were still on its payroll. Power and political pressures also contributed to the firm’s pressures. Barrett was overwhelmed by the forces around him and he needed assistance in making managerial decisions. To him, changing the culture of the firm was important. In his mind, he wanted to transform Intel to adopt better customer relations. This could only be achieved by a willing workforce. While he invested in market research and tried to venture into newer markets for the diverse products that the firm produced, it never had the results he anticipated. Besides, there were internal complaints and oppositions from his employees. The internal wrangles generated opposition thus the strategy was bound to face challenges which would later lead to negative performance of the firm. In brief, the tenure of Craig Barrett at Intel was never a peaceful one, but as he sits down in retirement, the old man is still useful as the chairman of the board. Besides, in his tenure, he worked hard to protect the firm’s reputation As they are now tasked with the management roles of the firm, there are a number of changes that they can effect in the firm (Palmer, Dunford & Akin, 2009). The firm needs to invest more on market research. This is an endeavor that Barrett engaged himself in and bore positive results for the firm. Each and every market is unique in its demands; Intel’s products are used all over the world. In the manufacture of their products, there is need to understand that each and every region presents unique challenges. For instance, the developing world is defined by power fluctuations. Consequently, developing chips that would resist such challenges would make the firm the preferred manufacturer in such markets. Advertising is also of essence in improving the sales and presence of the products that Intel manufactures. Brand visibility is one factor that influences how customers buy products from the market. In positioning its brands, Intel should come up with an effective brand positioning statement that singles out one segment of the market. It is hard to convince buyers that one is offering high quality products at cheaper prices. The confusion in brand positioning accounted for the poor performance of the faster chips that Barrett launched at cheaper prices. With quality, a firm should set prices that reflect the very quality that it runs in its adverts. There is a section of the market that would appreciate that and be loyal customers. Changes in the management of the firm would be one way to remedy the pressures that firms face in their daily operation. Promotions and demotions would always be used as motivators to make employees put in more effort. Furthermore, trends change daily and should one stay in a position for long, there is normally a tendency for complacency and one would stick to the old conventional ways of doing things which in most cases would be expensive, slow, and untimely. References Jeffery, F. B. (2006). Introduction to Business Law 3rd Edition. Boston: Boston University Press. Palmer, I., Dunford, R., & Akin, G. (2009). Managing organizational change: A multiple perspectives approach. Boston: McGraw-Hill/Irwin. ISBN-13:9780073404998 Read More