Intel Costa Rica free essay sample

Managing Across Borders: Intel in Costa Rica Under the tough and demanding Andrew S. Grove, Intel drove employees to higher and higher levels of motivation and performance†¦. Bizarrely, but quite typically, Grove instigated a much-hated system called the late list. He got irritated by early morning meetings that didnt begin on time and insisted on security staff getting signatures from anybody who arrived after eight oclock†¦. Yet this was the same company where open argument and confrontation, often vigorous in the extreme, were an operating principle. And it was the same company in which relatively lowly engineers, acting on their own initiative, created a magical innovation, the allconquering microprocessor. DeBono and Heller Most of the (native Costa Rican) Ticos are very conservative individuals who dont usually welcome strange or different ideas. The countrys economy has grown incredibly in the past years, but the culture still retains conservative tendencies. We will write a custom essay sample on Intel Costa Rica or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page A lot of foreigners view the Ticos as lacking initiative and as being passive. They also complain of the lack of punctuality and of quick decision-making. However, the positive aspects of the Tico identity are the friendliness and hospitality that most people transmit. Costa Ricans are extremely social. Infocostarica Intel Corporation in the late 1990’s faced the immense challenge of building an assembly and test facility in Costa Rica from the ground up within a year. The start-up would be led by a small group of ex-patriot managers, who were counting on timely operations so that Intel could meet customer demand and achieve its revenue targets. However, there were substantial concerns. Could the steepest manufacturing ramp ever demanded of an Intel assembly and test facility be achieved by a relatively young and inexperienced workforce with distinctive social norms? Could the company attract the engineering talent that it would need to sustain operations, and, if not, what should it do to compensate? Above all, should Intel rely on the corporate-wide management philosophies and operating principles which drove its success globally? Or, should it seek ways to accommodate local customs and market conditions? Project Background Intel Corporation aimed to be the world’s leading supplier to the Internet economy. Semiconductor manufacturing is a highly competitive global industry, where companies compete on the basis of price, quality, and product availability. Intel is a manufacturing intensive company, in which fabricated wafers manufactured primarily in the United States are sent to overseas assembly and test facilities, then shipped to customers. The Costa Rica facility would complement highly successful assembly operations in Malaysia, the Philippines, and China. The primary driver of this strategy was labor cost containment. A senior planner outlined the criteria Costa Rica satisfied in order to be selected for the project, which was expected to add over $500 million in investment to the local economy (Intel and its local suppliers):  © 2005 Hult International Business School. Prepared by Robert Anthony for class discussion only. Based on library sources. First and foremost, we look for good infrastructure: air-cargo capacity, surface transportation systems, the water and water treatment systems, the electrical power system, and stable telecommunications. That is the first tier. The second tier involves evaluating the business operating environment. What are the permitting requirements? Are they able to do fast-track permitting? Since our manufacturing process often changes, do they have flexible procedures that govern reconfiguration or expansion of a plant? What type of investment programs are available for the capital intensive type of production that we typically bring to our host countries. Finally, a factor that is very important to us is the capability of the local educational institutions to develop, and maintain over time, a technical workforce in the numbers that this facility will require. Production targets for the first quarter of operation had been raised on several occasions by Intel corporate management, moving over time from 150 thousand units to 1 million units. The Costa Rica site was ultimately expected to employ 4,000 engineers, technicians, and supervisors, spread through 4 factories. About 2,000 employees would be hired by start-up. Management Challenges Intel was a demanding company to work for, and this was an important and highly visible project. Cost, volume, and quality pressures would only increase as the start-up date approached. The ex-patriot managers were challenged to hire and train a workforce, purchase tools, and commence operations, while working in a local cultural environment with differences from their own which were perhaps greater than they bargained for. Staffing Intel rapidly developed contact with local recruiters, colleges, and universities. Much of the work at the site required a high level of technical expertise and problem solving skill, and, previously, high tech manufacturing had been almost non-existent in Costa Rica. Certain requirements were obvious; the company needed employees with engineering degrees and, preferably, some relevant experience. Beyond that, however, ex-patriot debated what other knowledge, skills, and abilities might constitute the ideal profile they would be searching for. In addition, while it was probable that Intel would be seen as a preferred employer in the country, at least initially, it was wondered whether the company would need to put together a premium compensation package to secure all the talent it would require. Training Intel planned for nine months between the hire date for most workers and the start-up. How should the company ensure that employees understood its complex manufacturing processes, their specific job roles, and expectations for working at Intel? With time so short, should the company make use of its Asian sites in the training strategy? Should it adopt, or modify, the standard corporate training calendar for new employees, much of which was aimed at acculturation, or would such training ultimately prove to be a distraction? In other locations, employees were given a formal Orientation on their first day of work, they would 2 attend Working at Intel, which was delivered by a local senior manager, within three months of employment, they would attend Performing to Values within 12 months, and within 12 months they would attend two courses from the list of Effective Meetings, Constructive Confrontation, and Structured Problem Solving. Execution Ex-patriot managers were challenged to consider the potential application of Intel’s corporate-wide approaches to company management.