Management Control System

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  • Topic: Controllers, Emerson Electric Company, Xerox
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  • Published : October 10, 2011
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Case Study 1: Nucor Corporationand New jersey Insurance co: Notes Case Study 2: Xerox Corporation:
Xerox Corporation
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 as the central focal point for the finance function at Xerox * Standard Reporting with Informal Trust and Freedom.
* Competitive Benchmarking.
* Proper Goal Setting.
* Technological Innovations.
Key  Elements 
* Open Communication.
* Active Participation.
* Regular Interaction with line management.
* Training.
* Up to date Information Technology.
* 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.
* 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 Improvement
Benchmarking  Involvement   Process 
* With LTQ, management  utilized operational measures such as   :  Market Share                    Customer Satisfaction
                   Various Quality Statistics  
* 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 ...
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