Intel's CSR Analysis

 CSR analysis: Group Intel

Intel’s social responsibility initiatives in the field of conflict minerals

1. Introduction

In this paper, we will discuss the corporate responsibility actions that Intel Corporation has taken to solve the problem of conflict minerals. First, we will present the data collection used for the analysis and evaluate the sources used. Then, we will introduce Intel as a whole and its sector of activity. Next, focus will be put on the overall strategy Intel used for its social responsibility and what the areas it specializes in are. In the second part of the essay, we will present the conflict minerals and its stakeholders in order to understand Intel’s implication in the conflict and how the company manages the sourcing of these minerals. Following this, we will go more broadly by presenting the public opinion about Intel’s initiative on conflict minerals. Finally, we will present our recommendations to the company on what should be its next steps in this specific corporate social responsibility area.

2. Data collection and analysis

The data collection for this paper was done exclusively online. A large part of the data and information used comes from the Corporate Responsibility Reports and other reports Intel publishes annually, but sources such as analyses of the company’s reports, newspapers articles, journals and websites were used as well. Our primary sources also included the Dodd-Frank Wall Street Reform and Consumer Protection Act that played a key role in establishing the US legislation on conflict minerals. These sources will now be analysed both in the general level of primary and secondary sources, but also individually.

Our data sources are a mix of primary and secondary sources. This allows the direct analysis of the primary sources, which eliminates the possibility of misunderstandings that can occur whilst getting information through a secondary source. However, the use of secondary sources allows the exploration of the ideas and analyses of other people and writers, thus allowing the adaptation of a wider perspective on the subject. Our primary sources included Intel’s CSR reports and other reports – which we consider primary sources since Intel does not publish the reports of their internal auditors – and the formal act document from the USA. Other sources are in the category of secondary sources as their authors rely their information on other sources rather than direct data collection on site.

The Corporate Responsibility Reports are annual reports published by the company. On top of that, the company publishes financial reports and its own research papers on the issue of conflict minerals. These reports are the closest to a primary source from the company that we can get to. Although the reports are required to contain only reliable information through legislation, they should still be read and analysed critically as they are published by the company itself. Thus, the phrasing and decisions of information to be shared is conducted by Intel and hence might intentionally lead the reader to get a more positive image of the company’s actions than what it is in reality. For this reason, comparison with the unavailable auditing reports written by the actual auditors conducting the research on Intel’s CSR actions would be necessary in order to establish a reliable image of the company.

Newspapers and articles often offer a critical analysis of the information. However, newspaper articles are frequently biased as the writer, and the newspaper as a whole, has its political and ethical views and biases. Thus, these sources are rarely objective. Journal articles, however, usually achieve a higher level of objectivity as they use multiple sources, data verification and a more educated way of writing. Therefore, they can be seen as reliable sources of information as they often mix both secondary and primary sources and analyse them together. Finally, the US legislative act is a formal document and thus reliable in its information on the law passed in the country.

In general, our data collection was done critically as we recognized the limitations of our sources. In order to create a better overall picture and achieve reliability on information, we used multiple sources and compared them to verify the pieces of information used.

3. Company description

Intel Corporation [INTC] is an American company based in the heart of Silicon Valley, alongside many of its business partners and other large technology-based firms. Since its creation in 1968, Intel has been one of the world’s leading microprocessing chips manufacturers, and has created a variety of business solutions, products and parts that make our computers work, but that can also be found in the creations of Apple, Dell, and many others. Ever since the inception of the x86 architecture in microprocessors (Nichols, 2016), Intel has innovated immensely and set quality standards in the industry, whilst also widely expanding its range of activities, which now includes cloud computing, data center technology, web security and encryption, as well as the Internet of things (Reuters, 2017), which are all the physical devices that interact with each other and send data. An example of this would be modern houses with thermostats that communicate with various other home appliances. In terms of the chip market, there are a few key players who have been giving Intel a shot at its money, including Samsung, AMD – with which Intel has a “Samsung-Apple” relationship, Qualcomm and Nvidia. After having been the leader in terms of sales since the early ‘90s, Samsung, the Korean electronics group, has been increasing its efforts to thwart Intel’s business by innovating mostly in mobile device chips for smartphones and tablets. As of the third quarter of 2017, Samsung dethroned Intel as the leader of microchips sales worldwide, with sales of almost 16 billion US$, compared to 14 for the California-based company (Lee, 2017). This isn’t the first time Intel has had problems surrounding the mobile device market; the company is still lagging behind in getting competitive-quality microchips manufactured for tablets and other mobile devices, leaving Samsung with plenty of room to spread its wings. Dating back to 2004, Intel has had difficulties in developing an adequate strategy and corporate vision for the mobile market, having refused Apple’s offer to have the company supply the future iPhones with microchips (Riggs, 2008).  Then-CEO Paul Otellini explained that it was a decision he regretted a lot, having been took “using spreadsheets and not my gut” (Riggs, 2008). Intel’s decision-making process and strategy has certainly been inspired by once founder and CEO, from 1979 to 1998, Andrew Grove. In the 1960s, ‘70s and ‘80s, his managerial style was described as “paranoid”, but his motto could be summarized as offering to clients today the technology solutions they will need in 5 years (Gaither, 2003). From there most likely stems the highly data-oriented decision-making and future-casting tendencies of Intel Corporation.  Going back to what we mentioned about AMD, another American-based microprocessor manufacturer – but also market leader for computer graphic cards –, lawsuits and different legal conflicts have been long-standing. This goes back to the early 2000s, when AMD had accused Intel of monopolistic and antitrust behaviours in the ways Intel tried to protect its market shares, by asking manufacturers to limit their purchase of AMD products, for example. Intel has since paid close to 2 billions US$ to AMD (Kawamoto, 2011).  

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