GRADUATE SCHOOL OF MANAGEMENT (GSM)

Master of Business Administration (MBA)

MGT 6253: Management Control System
Assignment: Xerox Corporation.
Submitted for:
Dr. Nor Hafizah Zainal Abidin
Group Members:
Muhammed Shefeeque G1336325
Adeeb Mutalif Majeed G1337613
Ermin Smajlovic G1325983
Mohd Haniff bin Mohd Akbar G1327241

1. Outline the management control system at XEROX. What are the elements that
makes the system work ?
Xerox the document company which was incorporated in 1906 was a
multinational corporation serving the global document processing and financial service
markets . They manufactured and marketed copied and duplicators, facsimile products,
scanners, workstations, computer softwares, suppliers and other related products in over
130 countries.
Now coming to the question before outlining the current management control system in
will first have a look to the previous MCS at Xerox, so the management control system at
Xerox before the patent for plane paper copier expired. At this time Xerox was putting
more emphasis on accuracy and rigid system compare to listening to the customers,
setting unrealistic targets and inadequate data collection and analysis was one of the
problems faced by Xerox on over that they were no standard and healthy informal
reporting and planning system existing at Xerox.
Now coming to the second phase were when there patent for the plain copier expired
after that Xerox faced many problems as there were many other competitors who entered
the business such as the local businesses in Japan which led to a sudden fall of market
shares from 96% to 45%. low price offered by the competitors was also a bigger threat to
Xerox this also created a high attrition rate in the employees. As mentioned before the
reporting there was no change in the reporting and planning system which made the
situation even worst.
Coming to the third phase which took place after 1980 where the new chairman of Xerox
took the necessary step to revive the situation, the first and the most important thing was
to introduce leadership through quality (LTQ). Through this change and with other
important changes such as continues benchmarking system was introduced with
technological advancement according to the market played a vital role in the uplifment of

the Xerox condition. Financial executive council was accepted as a focal function for
financial function at Xerox as these were the experience people who gave their opinions
and expert suggestions for the problems faced by Xerox. The chairman have also
introduced standard reporting with informal trust and freedom , this led in removing the
barriers of smooth and fast communication flow in between the divisions.
Element which played a vital role in changing the Xerox condition are as follows:
o Open communication
o Training
Regular interaction with line managers
2. What recent TRENDS in Xerox do you see influencing the management control proc
ess ?
For knowing the recent trends at Xerox we have to go back to the history which
will help us in knowing how the current trends were derived.
In the first section we will be seeing the trends at Xerox in the beginning of the
incorporation till 1970 when the patent of copier get expired in this Era the company was
putting more efforts on the accuracy of the system which led to a rigid system where
product accuracy is given more importance than listening to the customers so this
represent the culture where accuracy is important
The second section starts after 1970 when the patent of original copier get expired giving
a sign to the competitors to enter into the business which led to the sudden down fall of
market shares of Xerox (96% to 45%) which created a stressful condition among the
employees of Xerox when the competitors where able to sell their products in the Xerox
manufacturing price
The third section is the most important as from this time Xerox started to improve itself
by changing the culture and environment in the organization by introducing LTQ with the

continuous benchmarking system in which the trend was changed from accuracy to
customer satisfaction which also leads in increasing the market shares.
With LTQ other trends also played a very important role some of them are:
o Making A Global Market through Joint Ventures with:
o Rank organization PLC, forming RANK XEROX Ltd. (Market access to Europe,
Africa & Middle East).
o Partnership with FUJI Photo Film Co. in JAPAN to create FUJI XEROX (Market
access to Japan & Asia).
o Monthly Reports were replaced by Quarterly Reports.
o An Informal Reporting System evolved, which was not hammer but rather an
Open Discussion of issues.
o Also they maintained standards of NO SURPRISES and prompted trust among
the controllers.
o Leasing Contracts rather than Equipment Sale.
o Working with Line Management.
o Always looking World Class Organization for IDEAS.
o Continuous Benchmarking.

3. In your opinion, how important are organizational culture and individual personalit
ies in the Xerox Control Process?

Organizational culture and individual personalities plays a vital role in bringing

revolution in the environment of the organization.
First talking about the organizational culture at Xerox which plays a crucial role in the
uplifment of Xerox condition they are:
Open communication:

As this type of communication which help in fast and smooth movement of

information from or within the divisions.
o Active participation:
At this type of environment which is a contribution of all the employees in the
organization which led to quick decision making and brainstorming on any
problem.
o LTQ:
This was the main element which bring the change in the environment of Xerox
which is the concern of quality in all the aspects without just concentrating on
quantity
o Accepting changes :
For making a change, planning of the change is important and more important is
to accept the change when it is made as there will be many resistant to change
from all the stakeholders let it be employees, shareholders, or the managers etc.
o Business Division:
Dividing the work accordingly by the product nature and giving all the authority
and responsibility to the division head and asking for the accountability for the

result by the division and making a standard and informal communication within
an in-between the divisions, which was done rightly by the Xerox.
Individual Personalities
Individual personalities have a very important roles as the planning and
implementing of positive change is done by the individuals as the organization is
just an entity made by the group of individuals and one of the most important and
influential personalities in Xerox who led the positive change happens are as
follows:

David Kearns approach helped to achieve following results:o Customer satisfaction increased.
o Revenue rose by 9% to record $13.6 billion.
o Profits increase by 23% to $599 millions.
o

Returns on assets increased.