Chipping away at Intel

QUESTION 1
a)Define the meaning of the term ‘culture’.
Culture describes patterns of behaviors that from a durable template by which ideas and images can be transferred from one generation to another, or from one group to another.  (Haggett, 1975:238)

b)List Deal and Kennedy’s four (4) types of culture. Provide an example for each type.

Terrence Deal and Allan Kennedy defined four types of organisational culture:

Tough-Guy, Macho Culture
Work hard and Play Hard Culture
Bet-Your-Company High-stakes Culture
Process Culture

The four cultures
1.Work-hard, play-hard culture
This has rapid feedback/reward and low risk, leading to:
Stress coming from quantity of work rather than uncertainty. High-speed action leading to high-speed recreation.
Eg. Restaurants, software companies.

2.Tough-guy macho culture
This has rapid feedback/reward and high risk, leading to:
Stress coming from high risk and potential loss/gain of reward. Focus on the present rather than the longer-term future.
Eg. police, surgeons, sports.
3.Process culture
This has slow feedback/reward and low risk, leading to:
Low stress, plodding work, comfort and security. Stress may come from internal politics and stupidity of the system. Development of bureaucracies and other ways of maintaining the status quo. Focus on security of the past and of the future.

Eg. banks, insurance companies.
4.Bet-the-company culture
This has slow feedback/reward and high risk, leading to:
Stress coming from high risk and delay before knowing if actions have paid off. The long view is taken, but then much work is put into making sure things happen as planned. Eg. aircraft manufacturers, oil companies.

According to Robert E. Quinn and Kim S. Cameron at the University of Michigan at Ann Arbor, there are four types of organizational culture: Clan, Adhocracy, Market, and Hierarchy. Clan oriented cultures are family-like, with a focus on mentoring, nurturing, and “doing things together.” Adhocracy oriented cultures are dynamic and entrepreneurial, with a focus on risk-taking, innovation, and “doing things first.” Market oriented cultures are results oriented, with a focus on competition, achievement, and “getting the job done.” Hierarchy oriented cultures are structured and controlled, with a focus on efficiency, stability and “doing things right.”

QUESTION 2
Briefly explain with five (5) reasons why do people resist to change in an organization.
1. Fear of the unknown/surprise: This type of resistance occurs mainly when
change is implemented without warning the affected stakeholders before the change occurs. When change (especially what is perceived as negative change) is pushed onto people without giving them adequate warning and without helping them through the process of understanding what the change will include and how their jobs/work will be affected, it can cause people to push back against the change due to their fear of the unknown.

2. Mistrust: If the individuals in a department highly respect their manager because the manager has built up trust over a period of time, the team will be more accepting of any changes. If the manager is new and has not yet earned the trust of their employees (like my client), then mistrust can manifest itself into resistance to change.

3. Loss of job security/control: This type of resistance often occurs when companies announce they will be restructuring or downsizing. This causes fear among employees that they will lose their jobs or be moved into other positions without their input.

4. Bad timing: As the old saying goes, “Timing is everything”. Heaping too much change on employees over a short period of time can cause resistance. If change is not implemented at the right time or with the right level of tact or empathy, it usually won’t work.

5. An individual’s predisposition toward change: Differences exist in people’s overall tolerance for change. Some people enjoy change because it provides them with an opportunity to learn new things and grow personally and professionally. Others abhor change because they prefer a set routine – these are usually the people who become suspicious of change and are more likely to resist.

QUESTION 3
a)Briefly explain three (3) dictinct types of power by Etzioni (1975).
1. Alienative involvement- An intense negative reaction to the system based on coercive power
2. Calculative involvement- A negative or positive orientation of low intensity based on instrumental exchanges and remunerative power
3. Moral involvement- Positive orientation of high intensity based on reaction or normative power.

b)Provide two (2) benefits of Robinson’s (1986) addition of knowledge power to Etzioni (1975).
1. Social moral involvement- Based on the sensitivity to pressures or primary group members
2. Pure moral involvement- Based on internalization of norms and identification with authority figures and their objective

QUESTION 4

Explain the five (5) determinants of successful change.
1.A core driving force of creating happiness
Aristotle said, “Happiness is the meaning and the purpose of life, the whole aim and end of human existence.” Stephen Covey said, “Start with the end in mind.” These gentlemen were a strategic planner’s dream—they went right to 50,000 feet and set the number one priority right out of the gate. The research from the field of Positive Psychology tells us that after you meet your basic needs for food and shelter with a little left over for recreation (which only requires about $75,000 a year), there are 3 main determinants of happiness: Fulfilling relationships with others. We’re highly social beings. Among other benefits, at a very basic level this improves our chances of survival. Leaders, think “benefits of teamwork.” A “flow” experience in which you lose track of time because you’re engaged in the pursuit of challenging and meaningful goals. Leaders, think “engagement.” Making a difference in the world and in the lives of others. Leaders, think “empowerment and autonomy.”

My experience validates Peter Drucker’s observation that an organization and the people in it need more than a profit motivation alone to create sustained success. Too often I encounter leaders who snigger at these facts and maintain that they are “touchy feely fluff.” They do so due to their own fears, insecurities, and insufficient emotional intelligence. If you’re not valuing enjoyment over achievement and people over money, then you’ll never enjoy sustained success as an individual or as the leader of an organization. If you think managing people relationships is tough, try being a loner and a misanthrope for a while…

2.The right people in the right roles

Many leaders still don’t pay enough attention to this. If you have a team of “C Players” and you compete against a team of “A Players” we both know what’s going to happen. By the same token if you have your Center playing Wide Receiver we both know what’s going to happen. Jim Collins calls this “having the right people in the right seats on the bus.”

3.An effective strategic plan and implementation

You’d be surprised at how many leaders are still working from some form of “ad hoc” strategy that resides mostly in their heads. Others follow the once-a-year SPOTS (Strategic Plan On Top Shelf) approach. Getting senior leaders to commit to ongoing strategic planning and implementation can be challenging. Remember, leaders have two basic roles: a) running today’s business, and b) building tomorrow’s business.

4.Continuous improvement of leadership and management capabilities

Organizational success is all about leadership, and the bottom line is that an organization’s only real limitations are the limitations of its leader. This is the Trickle Down Law in action. Also, how can you have sustained success over time if you don’t have strong leadership and management bench strength?

Are your leaders competent in creating a proactive and ongoing strategic leadership system, or are they just moving from one crisis to another? For example, are they skilled in leadership and management competencies such as: strategic thinking and planning, project management, hiring the right people, emotional intelligence, communication skills, coaching and building talent, leadership and motivation, succession planning, innovation, change management, performance management, conflict resolution, financial management, sales and influencing skills, customer focus, presentation skills, meeting effectiveness, and facilitation skills?

5.Continuous improvement of business practices based on customer needs

There’s a name for organizations that aren’t customer focused—Chapter 13. Think Kodak. Peter Drucker said that any organization has two basic functions: a) marketing (creating and then serving customers), and b) innovation (continuous improvement).

Satisfying your customers’ needs is the lifeblood of your organization. As the world changes, your customers’ needs change, and so you need to be continuously improving your business practices to meet these new needs. As Jack Welch said, “If the rate of change outside of an organization is greater than the rate of change within it, the end is in sight.” Do you have a strategic leadership system in place to continuously improve your organization? Do your competitors?

QUESTION 5

a)Define Emergent change.
“Emergent change processes engage the diverse people of a system in focused yet open interactions that lead to unexpected and lasting shifts in perspective and behavior.” —Peggy Holman

Planned Versus Emergent Change

Planned Change
Controllable
There is a clear beginning, middle, and end
Driven by management
Promiss success and draw a line under the past
Slow
Time-consuming
Often resistance
Out-of-date by time implemented
Emergent Change
Continual process of experimentation and adaptation
Multi-level and cross-organizational change (messy)
Interation
Manager’s role is to keep culture so that good change can occur Messy, sometimes inefficient
Need to let go of management’s controlling behavior
Effects often unpredictable

b)Discuss four (4) model’s of change agent instituted by Caldwell (2003).
1. Leadership models – where change agents are senior managers responsible for identifying and delivering strategic/ transformational change. 2. Management models – where change agents are seen as middle-level managers/functional specialists who have responsibility for delivering or supporting specific elements of strategic change programmes or projects. 3. Consultancy models – where change agents are external or internal consultants who can be called on to operate at any level. 4. Team models – where change agents are seen as teams that operate at various levels in an organisation and which are composed of the requisite managers, employees and consultants necessary to accomplish the particular change project set them.

QUESTION 6
a)In Kotter’s book entitled Leading Change, he identified eight key errors  that caused transformation efforts to fail. Discuss why the change initiatives fail.

1. Error 1 : Allowing too much complacency
2. Error 2 : Failing to create a sufficiently powerful guiding coalition
3. Error 3 : Underestimating the power of vision
4. Error 4 : Undercommunicating the vision by a factor of 10 (or 100 or even 1000)
5. Error 5 : Permitting obstacles to block the new vision
6. Error 6 : Failing to create short-term wins
7. Error 7 : Declaring victory too soon
8. Error 8 : Neglecting to anchor changes firmly in the corporate culture

b)In your opinion, what are the manager’s attributes that are essential in the
twenty-first century? Discuss five of them.( 6 marks)

1. First, like what you do. Management is a physically and emotionally draining profession, filled with many challenges and disappointments. The profession may not be for everyone, but if managing employees and an organization is what you like to do, it can be an exhilarating experience that allows you to have a greater role in the development and success of an employee and an organization. Few professions are more rewarding.

2. Second, knowledge. Managers with the greatest breadth and depth of knowledge simply have a better opportunity to make a more reasoned and intelligent decision on a wide range of organizational issues, from the hiring of an employee to the development of the organization’s strategic plan. This knowledge, gained through a broad education and diverse experiences, better prepares a manager to make the right decision, at the right time, and for the right reason.

3. Third, solid organizational skills. Today’s globally competitive environment dramatically increases the complexity of the managerial profession, requiring a relentless focus on quality and costs. Organizations are required to produce more at a lower cost, necessitating managers perfect the art of planning, delegating, and managing time. These are the basic building blocks of a manager’s competence; without this foundation very little in an organization can be accomplished.

4. Fourth, work hard. The world is replete with talented people who have done little to perfect and utilize their talent: superb painters who never market their paintings because they fear criticism, and phenomenal writers who do not publish their books because they fear failure. That’s a shame. Managers may have certain talents—say, for instance, the ability communicate well, or an ability to decipher complex mathematical computation—but unless they have the drive and determination to maximize and market their talents they become a cautionary tale for an unrealized promise and wasted lives.

5. Fifth, make work fun. I am convinced that people yearn for fun in their life, for a time and place where they feel comfortable and are welcomed regardless of their challenges and difficulties. If that place can be where they work, where their manager instills a sense of adventure and excitement in what they do and who they do it for, I believe the repercussions for such a work environment will lead to a level of loyalty, commitment, and productivity rarely seen in an organization.

CASE STUDY – CHIPPING AWAY AT INTEL
PART 1
Dato’ Ahmad Zaid sat reflecting on the fact that he was halfway through his tenure as the fourth CEO of Intel-only another three more years to go until his mandatory retirement age would be reached. He had come into an organization that Andrew S. Grove, Chairman of Intel, had shaped into a major global technology company. He had replaced Gordon E. More but retained his principle of doubling microprocessor performance every 18 month while at the same time making it progressively cheaper. In this context, what would be Dato’ Ahmad Zaid’s legacy?

When Dato’ came in three years ago, he took some bold moves, taking Intel beyond chip making for PCs into the production of information and communication appliances as well as services related to the Internet. Trouble is, the company was now in the worst shape that it had been for many years. Of course, every technology company had been affected by September 11, 2011; the slowing economy; and the potential threatof war with Iraq. But in Intel’s case this had been compunded with problems such as product delays and shortages, recalls, overpricing, and even bugs in its systems. Analysts were predicting that by the end of the year, Intel’s share of the PC chip market would be 9 percent worse than when Dato’ had taken over three years earlier.

He had ploughed money into new markets-but then had to withdraw from these. For example, Intel withdrew from the production of network servers and routers after copping flak from Dell and Cisco, its biggest customers for its chips, for directly competing with them in these other markets. He also closed down iCat, which was an e-commerce service for small business, providing Web broadcasting of shareholder meetings, and cut back on Web-surfing applications except in Spain. In the mind of Dato’ Ahmad Zaid, most of these withdrawals were a direct result of the downturn in economic conditions generally.

These were also weak demand and overcapacity in the semiconductor industry with some researchers expecting a 34 percent fall in global sales of chips. Moreover, long-time rival Advanced Micro Devices had produced its Athlon processor chip, which turned out to be faster than Intel’s Pentium III chip. At the same time, people seemed to be more interested in how fast their modem connection was than in the speed of their computer chip. And September 11, 2011, hadn’t helped; before this catastrophe, Intel’s share, at $26, were down 60 percent compared to their highest over the previous year. After September 11 they full further-by October they were only $20.

Dato’ felt that in this competitive-and segmented-market, Intel needed to be reorganized to make it more nimble. It also needed to be reorganized to avoid duplication and create better coordination. For example, the network operations group and the communication unit sometimes were in competition with each other, selling similar products to the same customers. Dato’ engaged in a series of reorganizations during his first three years. In 1999 he created a new wireless unit that combined new acquisitions such as DSP Communication Inc. (a chipset supplier for didgital communications) with Intel’s flash memory operations. In his second year, Dato’ 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 closing of a merger of communications and networking operations. For Dato’, these reorganizations were needed to enable decentralization and delegation of decision making-all designed to make the company better coordinated and more nimble.

However there was so much reorganization over these years, trying to get the structure to work, that some commentators saw it as “shuffling execs like card in a desk”. Following the March 2001 restructuring, with up to 80 percent of the staff in the microprocessing unit being given new jobs, one customer thought that people seemed to be moved around a lot without them really knowing where they were going. A former general manager saw Intel as now “dabbling in everything and overwhelming nothing”. Other commentators claimed that another problem was that chip managers were now being put in charge of new markets and products about which they knew very little-a charge denied by Dato’. There were also job cuts, with 5,000 jobs lost through attrition during 2001- and more expected.

At the same time, Dato’ wanted to change the culture of Intel, drawing on outside consultants to assist him in the process. He wanted to move the mindset of Intel towards better customer relations and away from a perspective of being the only real competition in the marketplace. Strategically he decided to invest in research and development into new production technologies in order to cut chip-making costs. Reflecting on his time ahead, Dato’ hoped that he would be able to increase sales and pull out in front of his competitors though these investments. But the jury still out at this point: What would be his legacy by the time he retired?

QUESTIONS
1.What were the different changes at Intel over the first three years of  Dato’ Ahmad Zaid’s tenure?

2.What overall conclusions do you draw about why Dato’ made the changes he did? Which issues were dominant? Why?

3.What pressure for change might Dato’ face in the future? How do you arrive at this assessment?

4.What advice would you give Dato’ for how to cope with these change pressure?

PART 2
In May 2005, Dato’ Ahmad Zaid reached Intel’s mandatory retirement age as CEO and moved on to become chairman of the company. The Board of Directors had unanimously agreed to appoint you as the new CEO. In reflecting back on his tenure as CEO, Dato’ felt proud that he had managed to keep his company profitable following the 2001 IT collapse. Intel also had kept its position as a leading chip maker. However, things had not always been easy for Dato’. Intel had thought that its Itanium processor was going to be the future of the server business, but the market thought otherwise. The chip was used in high-end servers, but the market was much smaller than had originally been hoped for. He also had expanded the company’s expertise in designing chips for mobile communications. This had mixed results.

The Centrino mobile technology, used for accessing wireless network, 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 manufacture had yet used this processor. In 2004 in what was referred to internally as “the right-hand turn”, Dato’ engaged in strategy shifts, moving toward dual core architectures rather than simply producing faster and faster chip speeds. Cancelling the 4-GHz Pentium 4 symbolized this shifts. At the same time, he engaged in a reorganization of the company, putting in place new business units such as the Mobility Group, focusing on mobile devices, along with a Digital Enterprise Group, a Channel Product Group. The future challenge was to make sure that work was coordinated across these different groups to enable the company to deliver high-quality products. Dato’ knew that this was going to be a big challenge for you as the new CEO over the coming decade. QUESTIONS

1. What new pressures for change did Dato’ faced in the last hour of this tenure?

2. How did he respond to these pressures?

3. In your appointment as the new CEO, would you change anything? Why?