Intel: Undermining the conflict Mineral Industry Case study link: https://drive.

Question

Intel: Undermining the conflict Mineral Industry Case study link: https://drive.google.com/file/d/11V_d8aQ9NoSHJY0EGZh7EEUsyLuiXP64/view

Questions: 1.Are human rights and social issues areas for competitive advantage or are they to be addressed strictly as noncompetitive? Identify the pros and cons of each side of the argument.

2.Describe why Intel would engage with competitors when it can gain a competitive advantage under current SEC regulations with its head start in supply chain transparency and auditing.

Explanation / Answer

Are human rights and social issues areas for competitive advantage or are they to be addressed strictly as noncompetitive? Identify the pros and cons of each side of the argument?

The case indicate that how the mineral supply chain had contribute in financing the deadliest conflict since world war II. The four main minerals were tantalum. tin, tungsten and gold. the DRC conflict was a major issue that interrupted the mineral operations of major technology companies that rely heavily on these minerals in their operations and one of these companies was INTEL

The Consumer Electronics Show (CES) was the world’s premier technology exhibition. It acted as the main forum for companies seeking attention within the industry. Held annually in January in Las Vegas, the event attracted more than 100,000 attendees interested in learning about the latest products and ideas in the consumer electronics industry.

2 Of those in attendance, more than 40% were senior-level executives of electronics companies.

3 In fact, more journalists covered the 2014 CES than that year’s Super Bowl in New York City.4,

5 Intel’s CEO, Brian Krzanich, was slated to give the conference’s 2014 opening keynote address.

6 The eyes of the entire consumer electronics industry would focus on him. Since assuming the role in May 2013, this was his first opportunity to speak to the entire industry about Intel’s vision for the future of the consumer electronics market.

7 Krzanich began his address by announcing the company’s significant move into wearable technologies by demonstrating a new smart watch and ear buds with a built-in heart rate monitor.

8 He went on to talk about new digital security initiatives and a dual-OS platform that would allow customers to run Windows and Android. Cranach’s final revelation was “…to think about the impact of the supply chain and the potential issue [the industry] causes. This [was] not an issue Intel would normally be talking about at CES conflict minerals.”

9 Krzanich was passionate about opening an industry-wide discussion of conflict minerals. “Every Intel microprocessor…manufactured in 2014 will be conflict-free. [Intel is] inviting the entire industry to join [Intel] in this journey.”10 Sitting in the audience, Gary Niekerk, Intel’s director of corporate citizenship, couldn’t help but reflect. Cranach was commenting to the entire consumer electronics industry and its global audience about conflict minerals in technology supply chains, which reflected the value Intel placed on social responsibility.

2. Describe why Intel would engage with competitors when it can gain a competitive advantage under current SEC regulations with its head start in supply chain transparency and auditing.

The new disclosure requirement appears to be relatively low cost for most firms. Schwartz (2015) argues that ‘‘due diligence essentially boiled down to sending out a survey created by a third party and checking certain results against a third-party-generated list.’’ Although companies will have incurred additional internal control costs, the compliance costs were likely immaterial. Initial reports on the actual costs of the new provision indicate that the costs are much lower than initially estimated (Cohn 2014; Payson 2014). In addition, few companies have filed an audited CMR thus far and the penalties for non-compliance are relatively low.

Furthermore, Kristen Sullivan, a partner with Deloitte, asserts that there are many considerations that point to an increase in future IPSAs of conflict mineral reports (Sullivan 2015), including: Benchmarking against peers; Greater credibility in disclosures; Expectations by non-governmental organizations (NGOs); Demonstration of performance improvements; and Reducing reputation risk.

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