Case: XEROX WORKS TO MEET ENVIRONMENTAL

CHALLENGES
GROUP #6
Members:
Usman Ilyas
Kamran Athar
Muhammad Mudassir Iqbal
Faizan e Elahi
Waleed Nadeem Butt
Mubashir Hussain
Date:
30th January, 2014

1- How have major elements of the mega environment and task environment impacted
Xerox?
Following elements of Macro environment that have impacted Xerox, the following PEST
analysis will tell the impact of the mega environment on Xerox.
Political\legal
During the era where demand of the low-level copiers was high, company was unable to develop
a copier with new technology which made it lose market share in that market. This was due to
the legal and political issues associated with the import of technology of its Japanese partner,
Fuji.
Economic
The economic conditions surrounding Xerox were very dynamic at the time of McColough. The
markets demands were much diversified that ranged from the demand from lower end market
cop to mid- and high- volume printer. The delay in the development of lower end copying
machine and refusal to bring the form its Japanese partner, Fuji gave its competitors like
Canon, an opportunity to develop strong foothold in the market. However, McColoughs
commitment to high and mid volume copiers enabled Xerox to maintain 40% of their market
share. The booming market of computers embarked McColough on a journey of acquisitions
which led to friction between different sections of the company. However, when Kearns took
over, the economic conditions were different and the company faced rising raw material costs
and was forced to sell at lower price due to competition. Kearns, sensing the problem,
immediately worked to minimize costs and encouraged entrepreneurial thinking. He also focused
on customer satisfaction and quality was their main objective. This earned him the prestigious
Malcolm Bridge Quality Award. When Alaire took over, instantaneously sensing the changing
market trend, he changed the mission of the company from copying to complete document
solutions which made the company successfully launch two new products known as DocuTech
and DocuSP. They are diversifying their market with product development and market
development in order to penetrate low level and day to day market as well.

Socio-culture
The society shifted from the paper environment where it heavily needed copies to arrange and
keep date records in their files to entirely digital document solutions. Xerox had to constantly
innovate in order to sustain itself in the dynamic and changing market situation. The company
had shifted to a centralized culture with hierarchy under McColough but in order to curb the
competition with their Japanese rivals. The company shifted to entrepreneurial and quality and
customer focused culture under Kearns. Moreover, company shifted its culture from developing
photocopying machines to bring innovations and provide complete document solutions to its
customers.
Technological
The technological elements had great impact on Xerox. They were working in the industry that is
innovating every six months. They had to work hard on research and development to cope with
it. They started off by buying the patent for the photocopiers but afterwards they switched to
color copiers and other document solutions. McColough, who favored bureaucratic style and
centralized environment choked creativity which pushed it back from its growth and decreased
its market share in the photocopier industry while its competitors like canon, Konica and other
Japanese manufactures outgrew them in terms of innovation. With Kearns coming in with much
more creative and quality focused approach, Xerox headed towards a positive direction and saw
growth. They reacted towards the markets technological advances and produced innovative the
products like DocuTech and DocuSP and realigned itself from not only a photocopying company
to a company driven to provide complete document solution.
The following elements of Task Environment have impacted Xerox
Customers
In order to achieve customer satisfaction in the market, Xerox Company shifted to
entrepreneurial culture and in 1980 they began Quality program in which more than 100,000
employees learned the importance of emphasizing quality and meeting customers requirement,
so they received Malcolm Bridge National quality award in 1989. This was required as

customers were shifting towards more economical products from competitors. They also required
digital document solutions as they were shifting towards paper-less environment.
Competitors
Xerox faced stiff competition from its Japanese competitors such as Canon which captured low
end to market. They also faced competition from Kodak and IBM. They noticed that Japanese
competitors have lowered the cost of their machined from 40 to 50% less than their own costs.
Suppliers
The company couldnt get a supply from their Japanese partner, Fuji due to government import
laws and policies. This not only caused Fuji drawback as they did not get benefit from
partnership. It also had a problem in developing technology onshore.

2- What are major methods has Xerox used in attempting to manage environment
influences?
Following are the methods which Xerox adopted to manage environmental influences:
Cost Cutting
Xerox Company substituted costly components with economical components that satisfy the
requirements and the designs that would allow less material. It focused on cost cutting to
increase profit margins and compete with Japanese competitors that have low component cost.
Employee Training
Xerox believed that training the employees would help them understand their role in reducing the
cost of production and to meet the customer need and quality requirements and this could be the
solution of problems. Xerox Company started Quality program in 1980 and more than 100,000
employees were trained.

Dynamic Approach
Xerox reacted at the right time to manage the competition given to them by their competitors.
They took the right decisions at the right time and adapted well to the changes in their
environment. They were Effective and Efficient under Kearns leadership that embarked them
on the right direction.
3- Compare and contrast the organizational cultures at Xerox during the McColough and
Kearns eras. What direction does Allaire seem to be encouraging?
At the time of McColough, the company acted upon managing growth in the company by adding
layers of hierarchy and it also tend to focus on the products for the mid and high volume
customers. Moreover, due to the long hierarchies, the product development had to move long
way up and faced lots of delays. However, the companys sales and service groups were among
their bests. McColough also focused on acquisitions of technological firms, which caused a
conflicted culture between east and west coast wings of the company.
Kearns era caused the organizational culture to change substantially. He was more focused on
output, product development, quality and cost-cutting initiatives. He encouraged entrepreneurial
thinking and drove the employees to reach the goals of quality and customer satisfaction. The
management layers were cut and the authority structure was decentralized.
Allaire moved forward with the foundations laid down by Kearns and further drove the company
to new dimensions. However, Allaire reacted sensibly by sensing the changing environment of
the market and changing its focus towards the document solutions rather than just being a copier
company. This has enable Xerox to survive. Furthermore, Allaire has focused on the product
development to cater the dynamic environment and surviving in the technological whirlpool of
innovations.