Read the case study below and do the activity described to you.

CASE STUDY: THE CHANGING ROLE OF HR AT INTEL

Intel designs and manufactures advanced integrated digital technology platforms which are used in a wide range of applications, such as PCs, tablets, smartphones, automobiles, automated factory systems, and medical devices. In 1971 Intel produced the worlds first microprocessor and today employs over 100,000 people worldwide (at 31st December 2011). Net revenue for 2011 was $54 billion. In terms of corporate strategy the firm has been shifting its primary focus from the design and manufacture of semiconductor chips for PCs and servers to the delivery of solutions consisting of hardware and software platforms and that sales would be sharply lower than forecast as consumers and businesses ditch the desktop computer in favour of other mobile platforms (Hewlett-Packard is also experiencing similar difficulties). This strategic change can be traced back to 2005 when Intel announced its decision to reshape its image as a consumer-friendly supplier of technology for a wide range of products, moving beyond its traditional business of powering personal computers. In 2012 it was ranked as the 8th most valuable brand in the world. Today Intel describes its core assets as comprising its: silicon and process technology, architecture and platforms, global presence, strong relationships across the industry, and brand recognition. Intel operates in a highly competitive market that is prone to rapid technological and market developments, changes in industry standards, changes in customer needs, and frequent product introductions and improvements. Firms like Intel (e.g. Samsung, Microsoft, and Cisco) innovate year after year, albeit in narrow, technologically oriented domains. They spend billions of dollars on research and development and employ super-smart boffins (Hamel, 2012: 48).

By 1999 Intel was the dominant microchip manufacturer in the world and was experiencing both significant organic growth and expansion through acquisition. Business needs were evolving rapidly, and employee expectations were high and constantly increasing. Additionally technology capabilities were rapidly evolvingand Intels operation capabilities were not keeping pace with technology or needs (Taylor & Murray, 2009: 198). The HR function was struggling to keep pace with changing business needs. By late 2000 Intel had seen its share value fall significantly in the wake the bursting of the dot.com bubble. An internal analysis revealed inefficiencies in a range of HR systems and processes including reward (systems were too complex and difficult to administer). Metrics revealed that the function was delivering poor quality at a high cost and with low satisfaction from internal customers. Within the HR function there was a silo mentality (reflecting how the function was structured across the firm) and a culture that was reactive rather than proactive. It was felt that there were gaps in management capabilities within the function (especially in terms of the depth of expertise, business acumen, and technical skills).

Following limited progress in changing the HR culture it was decided that a return to basics was needed and this essentially underpinned change within the HR function between 2001 and 2006. Changes included the creation of a single HR service organisation which had a comprehensive global strategy. Core processes were re-engineered and standardized. Some services were outsourced. By 2006 all HR systems and processes were working efficiently and effectively and the HR culture had been transformed although the focus remained on the operational, or tactical, rather than the strategic. Structurally HR and Training remained separate functions. In 2006 Intel experience a drop in share value of over 30 per cent. To counter this the firm announced a new chip for network servers and divested part of its operations in a $600 million deal as part of a major restructuring plan that also involved over 10,000 job losses. The aim was to generate $3 billion per annum. There was now a clear business case for HR to transform from a high-performing transactional organisation to a highly strategic organisation.

Activity

Imagine you are head of the HR Department at Intel.

a. What would be your plan for making the HR function more strategic? Provide elaborate explanations on your plans for making the HR functions more strategic.

b. Using Ulrich and Brockbanks (2005) role typology how would you describe the changing roles of HR in Intel?