Essay on Intel Pentium Case Study

956 Words Sep 2nd, 2012 4 Pages
Memorandum
To: Andrew Grove, President & CEO, Intel Inc.
From: FT56212/0
Subject: The Intel Pentium Chip Controversy

Intel, the most popular micro-processing chip manufacturer in the early nineties had introduced the Pentium processor to improve speed of computer operations. The Pentium was the result of constant innovation and expensive research and development and yet was accused as being defective in solving particular mathematical calculations.
The primary question facing Intel was whether or not to recall the defective Pentium chip processors. I would recommend that Intel recall the chips from customers, both from an ethical and a strategic perspective (XYZ Goup Work, 2012).

Issues
Ethics: Intel’s engineers were
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(Narayanan, 2002)
Publicity: Negative reviews by the Internet news group “comp.sys.intel” & the American news media about the defective Pentium chip could affect the Intel brand and potentially reduce future revenues and profits. (Narayanan, 2002)
Human Resources: Engineers, otherwise working on technological processes and currently deployed to provide customer service could lose motivation; the decision finally taken by Intel could prove or disprove the “egalitarian culture” Intel was known for. Also, incentives were directly linked to the profits and stock value, which could change depending on the Company’s decision and hence affect payroll. (Narayanan, 2002)

Analysis
My analysis of the situation at Intel, keeping in mind the about issues and the period this happened, is as below.
A company’s success is directly proportional to the ethical standards it follows and my opinion is that the primary issues that Intel had to contend with during the controversy were Business Ethics, Strategic Management & Financial Loss
It was not the magnitude of the defect that was the problem, it was the fact that Intel had known about this mathematical calculation error before the product was released and yet had knowingly omitted to acknowledge this. The company had the corporate social responsibility of being accountable for its actions and encouraging a positive impact on all stakeholders including employees, customers,

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