Case-Study

Question No.1

Outline the management control system at XEROX.

What Are the elements that makes the system work ?

Management Control System at XEROX

Conditions prior to 1970.

• Rigid System

• Emphasis on Accuracy

• Setting Unrealistic targets

• Inadequate data analysis

• Reporting & planning process was very long and bureaucratic.

Management Control System at XEROX

Problem raised during 1970 – 1980

• Patent for the plain paper copier expired, inviting potential competitors.

• High attrition rate.

• Decrease in market share (96% to 45%).

• Low price offered by competitors.

• Reporting format were not consistent between divisions.

Management Control System at XEROX

Solution derived

• Leadership Through Quality.

• Finance Executive Council.

• Standard Reporting with Informal Trust and Freedom.

• Competitive Benchmarking.

• Proper Goal Setting.

• Technological Innovations.

Elements of Control System

Detector: Informationabout what is happening

ControlDevice

Entitybeing

controlled

Assessor: Comparisonwith standards

Effector: BehaviorAlteration, if needed

Key Elements

• Open Communication.

• Active Participation.

• Regular Interaction with line management.

• Training.

• Up to date Information Technology.

Key Elements

• Value Addition– As per Al Senter

“If we can’t add value, then we don’t belong to XEROX”.

• Continuous Improvement– Comparison through Benchmarking.

Question No.2

What recent TRENDS in Xerox do you see influencing the

management control process ?

• Earlier in 1970s Xerox had a culture where accuracy and rigid system were more important than listening to the customers.

• Unrealistic Target Setting.

WHY NEW TRENDS?WHY NEW TRENDS?• The original patent for the plain paper

copier expired in 1970 – sending an invitation to potential competitors.

NEW TRENDS

• XEROX Developed Quality Strategy - Leadership Through Quality –

Competitive Employee Quality ImprovementBenchmarking Involvement Process

• With LTQ, management utilized operational measures such as : Market Share

Customer Satisfaction Various Quality Statistics

NEW TRENDS

• Making A Global Market through Joint Ventures with :-– Rank organization PLC, forming RANK

XEROX Ltd. (Market access to Europe, Africa & Middle East).

– Partnership with FUJI Photo Film Co. in JAPAN to create FUJI XEROX (Market access to Japan & Asia).

NEW TRENDS

• Monthly Reports were replaced by Quarterly Reports.

• An Informal Reporting System evolved, which was not hammer but rather an Open Discussion of issues.

• Also they maintained a standards of “NO SURPRISES” and prompted trust among the controllers.

NEW TRENDS

• Leasing Contracts rather than Equipment Sale.

• Working with Line Management.

• Always looking World Class Organization for IDEAS.

• Continuous Benchmarking.

Question No.3

In your opinion, how important are organizational culture and individual personalities in the

Xerox Control Process?

Organizational Culture

• Open Communication.

• Active Participation.

• Adv. Of LTQ.

• Accepting Changes.

• Business Division.

Individual Personalities

• Individual personality plays a very vital role in any organizations growth.

For Xerox–Al Senter

»(Financial Executive Council)–David Kearns

»(Leadership Through Quality)

Individual Personalities• David Kearns approach helped to achieve

following results:-– Customer satisfaction increased.– Revenue rose by 9% to record $13.6 billions.– Profits increase by 23% to $599 millions.– Returns on assets increased.

• Which help us to prove importance of Organizational Culture and Individual Personality in Xerox Control Process.