Intel Corporation's budget assessment and financial operations

¶ … Intel Corporation Budget

Assessment of the Intel Corporation's Budget

The Intel Corporation celebrates four decades of successful operations this year. The company activates in the semiconductors industry and it is its undisputable leader. Since the organization is a private one, their detailed budgets are withheld from the public; however, the reader can form an opinion by studying the available materials.

Company Description

The Intel Corporation was founded in 1968 and it is currently headquartered in Santa Clara, California. The organization operates in the semiconductors industry and it is the undisputed international leader of the industry. However they produce various items, such as mother boards, memory sticks, chipsets or Bluetooth applications, the primary item is the microprocessor, most commonly found in the personal computers. The company is focused on developing high quality items that integrate the latest technological advancements. "Intel Corporation is a semiconductor chipmaker, supplying advanced technology solutions for the computing and communications industries" (CBR, 2008).

In conducting operations, the organization emphasizes on three major players, all of which are vital to achieving corporate success. These parties are the Intel employees, the Intel shareholders and finally, the Intel customers. The company's mission is to "delight our customers, employees, and shareholders by relentlessly delivering the platform and technology advancements that become essential to the way we work and live. (Their values are) customer orientation, results orientation, risk taking, great place to work, quality and discipline. (Intel's objectives are to) extend our silicon technology and manufacturing leadership, deliver unrivaled microprocessors and platforms, grow profitability worldwide and excel in customer orientation" (Official Website of the Intel Corporation, 2008).

Marketing manager - $110,000 (Vault, 2008)

The company officials have understood the need to be a competitive employer and to maintain this status, they offer various incentives and benefits, a primary one being the ability to purchase corporate stocks (at a price 15% lower than the traded value). As of 2007, 75% of the Intel employees were stock owners and the value of the shares was of $428 million; $38 million were withheld by the company for adherent tax payment (Intel 2007 Annual Report). This strategy increases employee motivation but also ensures the employer of the staff's high efforts.

4. Intel Budget

As of December 2007, Intel's sales revenues had grown to $38,334 million, with the exception of 2006, revealing an ascendant trend. The financial highlights of the past five years are presented below:

Source: Intel 2007 Annual Report

The increasing revenues registered by the semiconductor organization, in the background of general economic difficulties and a reduction in staff, only reveal a strong company, with a well defined budget and a capability to efficiently operate.

Source: Intel 2007 Annual Report

However the company's budgets are undisclosed to the general public, Intel emphasizes on the increasing value of the R&D Department. For instance, a decade ago, this budget had a value of $2.5 million; by 2008, the value had more than doubled, reaching $5.8 million

Source: Intel 2007 Annual Report

The process of budget planning within Intel is briefly explained in the following quotation. "The company's budget and planning process commences with a segment-level evaluation - which as noted above excludes share-based compensation - and culminates with the preparation of a consolidated annual and/or quarterly budget that includes these non-GAAP financial measures (gross margin, research and development expenses, marketing, general and administrative expenses, operating income, income tax expense, net income and EPS). This budget, once finalized and approved, serves as the basis for allocation of resources and management of operations. While share-based compensation is a significant expense affecting the company's results of operations, management excludes share-based compensation from the company's consolidated budget and planning process to facilitate period to period comparisons and to assess changes in gross margin dollar, net income and earnings per share targets in relation to changes in forecast revenue" (Edgar Online, 1995-2008).

Relative to their stakeholders, the Intel Corporation promotes intense efforts into the development of communities on numerous fields: they support the managerial development of specialists, they offer training programs to young software developers, they engage in developing higher and more advanced technologies that improve the quality of the educational and healthcare systems. Also, they allocate impressive sums of money into the preservation of the natural environment. They generally do this through sponsorship programs and direct involvement, but they also contribute to the well-being of communities to the payment of large taxes, which are then redistributed by the state budget. As a result of their efforts, in 2007 alone, the Intel Corporation has been the receiver of more than 50 international awards for environment, health and safety, education, community development and business. The wards include, but are not limited to, those from the Philippines Department of Education, the U.S. Environmental Protection Agency, the U.S. National Business Group on Health, the Ministry of Natural Resources and the Environment, the China Ministry of Education, the Brazilian Federal Government or the Corporate Responsibility Officer Magazine (Intel 2007 Corporate Responsibility Report).

5. Conclusions

The Intel Corporation was founded in 1968 and since its beginnings, it has never ceased its efforts to improve the semiconductors industry. The most renowned products are the Intel microprocessors, which are basically present in most personal computers. The company's operations revolve around three major players: the employees, the customers and the shareholders. The shareholders and the employees are one and the same party at times, mostly since 75% of the staff members own Intel stocks. The organization invests large sums of money into the complete satisfaction of their customers' needs and wants, into the development of communities, including education, healthcare and business entities, but also for the preservation of the natural environment. The primary efforts are concentrated towards the development and integration of cutting edge technologies, all with the ultimate purpose of registering higher revenues.