Cases

Xerox Corporation

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

Condition at Xerox in the 1970 era:

* Accuracy and rigid systems were more important than listening to the customer.

* Setting Unrealistic targets, the chairman decided to grow the company as rapidly as possible.

* Never enough data or analysis

* The Corporate reporting & planning process was very long and bureaucratic.

Problem  raised during 1970 –  1980

* The original patent for the plain paper copier expired in 1970, sending an invitation to potential competitors.

* High attrition rate.

* The market share decrease from 96% to 45%.

* Low price offered by competitors.

* The reporting format were not even consistent between divisions.

Solution  derived 

* Leadership Through Quality.

1. Employee Involvement

2. Competitive Benchmarking

3. The Quality Improvement Process

* Finance Executive Council as the central focal point for the finance function at Xerox

* Standard Reporting with Informal Trust and Freedom.

* Proper Goal Setting.

* Technological Innovations.

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 level that linkages markets and technology.

There are three elements which make the system works:

1. Way of the measurements established.

The measurements are the combination of financial and operational targets.

Xerox Corporation apply Leadership through Quality (LTQ) and competitive benchmarking as main tools to measure operational efficiency. LTQ used in order to make sure that the products meets the world class quality requirements while competitive benchmarking helps the operational...