By

Parth Purohit

Megha Jagtap

Dhwani Shah

Case study XEROX CORPORATION(A)

OVERVIEW

The document company.

The multinational corporation serving the global document processing & financial services markets

Products: manufacturing & developing the copiers,duplicators,FAX products,workstations,computer software,& other related equipments in over 130 countries

Financial Products:Insurance,Equipment financing, Investment & banking

THE SUCCESS HIGHLIGHTS:From year 1946 to 1973 annual sales growth exceeded 25%.

Annual growth of earning exceeds 35%.

The above achievements were in plain paper copier business.

In the year 1959 the company introduced 914 plain paper copiers that was early revolution in this business.

The copying equipment business achieved the growth from 20 million in 1959 to 9.5 billion in1965 just within 6 years

In 1990 the world copy business was over 900 billion copies.

US firms (IBM & KODAK) & Japanese firms(Canon, Minolta) entered.

50/50 JV with the Rank Org.PLC - market excess to Europe, Africa & Middle East.

The partnership with the Fuji Photo Film Company - access to Japan & Asia.

Concerned with US govt.antitrust suit than with the market entry with the domestic & foreign competition.

Between 1970-1980 market share & revenues fell from 96% to 45%.

The Japanese attacked the low & medium range of the copier market. They were selling the products at the Xerox’s manufacturing cost.

David Kearns became the chairman in 1982.

HURDLES:

ATTEMPTS FOR SURVIVAL:Xerox developed a corporate revitalization plan called

“Leadership through quality”.

Plan was developed to meet customers requirements.

Senior management drives this LTQ plan with the help of employees to focus on the process as well as products.

LTQ plan was fully integrated business process.

CHANGE LEADERSHIP & ITS IMPACT:In 1991 KEARNS passed the leadership of Xerox to PAUL

ALLAIRE.Customers satisfaction level increased in every market

served by company.Revenue rose by 9% to record $13.6 billion.Profit increased by 23% to $599 million.ROA improved by over 2 points to 14.6%.$1.1 billion in cash was generated.

ORGANIZATION OF XEROX:

9 business divisions. 3 geographic customers operation division. Primary focus was on BUSINESS MGT LEVEL. The divisions responsible for Xerox offering:-

research and technological development, manufacturing, sales, services & administration.

Dotted line relationship between business unit controllers and GM.Document processing financial organization was a modified matrix

organization.The business division engaged in product development & manufacturing.Customer operation division were organized geographically &manage

customer relationship.The MCS concentrated on responsibilities and performance of all 12

divisions.

FINANCE & CONTROL FUNCTIONS:

The central focal point for the finance function of Xerox was FEC.

The membership consisted of senior corporate finance staff & CFO’s from the major Xerox operating organizations.

FEC set the course for becoming a world class financial operation based on their benchmark study.

They felt controllers could contribute in the formulation of mgt. decisions at operating unit.

FEC evolved in parallel with the start of LTQ & benchmarking activities.

The key to value added concept was in helping line managers to make more perfect business decisions.

Building trust in Xerox finance community.Meet once a quarters for two days and discussions on wide range

of financial matters.

Question-Answer

1.  Outline the management control system at Xerox. What are the key elements that make the system work?

— Xerox's management control system concentrated and focused on the responsibility and performance of 12 units, which consisted of 9 business units and 3 geographic customer operations divisions supporting them. The main focus for Xerox’s management is the business management levels that linkages markets and technology.

Way of the measurements establishedThe culture in Xerox CorporationUnit controller of Xerox

 2. What recent trends at Xerox do you see influencing the management control process?

— Leadership through Quality (LTQ) is the recently trend that influencing the management control process. This strategy focuses on two aspects which are:Employee involvementCompetitive benchmarking and quality improvement

3. In your opinion, how important are organizational culture and individual personalities in the Xerox control process?

Organizational culture and individual personalities within company are crucial elements to determine the success and sustainability of the company itself.

It is very difficult to get employee acceptance to change. Thus, by having good culture within company, the needs of changing employees’ behavior minimize since employee’s objectives already meet with the company’s objectives. The result is goal congruence has been achieved.

THANK YOU