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Is the strategic decision below a case of behavioral control or clan control? . Please, explain why you respond to the question in one way or another.
Intel’s top management took a long time to finalize a decision that had been in the making since the early 80’s. Several managers pointed out that the decision could and should have been made sooner. The delay was, in part, caused by the fact that some managers sensed that the existing organizational strategy was no longer adequate and that there were competing views about what the new organizational strategy should be. There was still an important group of managers who believed that DRAM’s were critically important to Intel. Some of the top technologists saw DRAM’s as the technology driver of the corporation. Most managers mentioned emotional factors to explain why it had taken so long for Intel to get out of the DRAM business. It was kind of like Ford deciding to get out of cars. Moreover, as a result of adopting a resource allocation rule that shifted resources systematically to products that maximized margin-per-manufacturing activity, DRAM’s found it very difficult to continue to obtain capital investment. So even though most managers at Intel continued to believe the mythology of Intel as a memory company, the effect of these capital investment decisions was that Intel became a microprocessor company during the early 80’s. Grove realized that the PC market segment could be the new “big” market segment for Intel and was willing to bet on this opportunity. He observed the difficulty managers experience in dissociating themselves from the strategy that made Intel successful in the past. It reflected top management’s beliefs about the basis of the firm’s past and current success. Grove recalled going to see More and asking him what a new management would do if we were replaced. The answer was clear: Get out of DRAMs.
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