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 cant add value, then we dont belong to XEROX.

Continuous Improvement
o

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?

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

NEW TRENDS

Making A Global Market through Joint Ventures with :o

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:o

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.