Outline the management control system at Xerox. What are the key elements that make the system work?
During 1970s, the management system of the company was rigid and accuracy was emphasized, which compromised the management control quality and also lead to unnecessary bureaucracies. In addition, customers’ satisfactions were also neglected due to the bureaucracy occurred. Then, the company’s targets were set unrealistically by the numbers people i.e. the managers who set the goals. To make it worse, the targets made were based on inadequate data and analysis which ignores the internal and external factors of the company. Besides, the reporting and planning process were very long and bureaucratic.
Then, due to the negative factors stated, Xerox began to face some problems. They began to shaken as they were starting to lose a significant amount of share market in the industry from 96% on the year of 1970 to 45% on the year of 1980. Besides, Xerox’s original patent for the plain paper copier expired in 1970, thus, flagged a potential threats from the competitors. For example, the competitions arise from IBM, Kodak and Japanese firms that were competing for the large and small copy machine market share in the industry. In addition, the cumbersome management process among the business divisions and inconsistencies in reporting process occurred which may lead to the problem. Maybe due to the burdensome of the management control, many good and skilled employees had left the company which lead to a higher rate of attrition problem.
Due to this, several solutions have been derived by Xerox in order to overcome the drawbacks. Leadership through Quality (LTQ) has been developed in order to revitalize the company’s competitive factor for gaining the market share again. The LTQ was built upon the competitive benchmarking and employee involvement, plus the improvement within the management process among the business divisions. In... [continues]
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