The XEROX Corporation

Organisational Design and Change

Submitted to Professor Abinash Panda

(A) What are the symptoms of Xerox not doing well?

Xerox company went through a massive slump due to the following factors: -

● The sales and earnings took a hit: This was one of the major symptoms of xerox not doing
well. The competitors caught up with the digital machines of Xerox and even offered
comparable products at lower prices thus taking the market share.

● The losses for the opening year of the 21st century were $384 million, and the company
continued to bear further losses. The company also had a high debt equal to about $18
million.

● The value of the stock fell from $64 to $4. This was because the stockholders feared that
the company would file for federal bankruptcy protection.

● Job losses: 22,000 workers lost their jobs, the employee morale and loyalty were also low.
Major customers were alienated because of the restructuring of the salespeople into
different territories. This led to mass confusion and billing errors.

● The company was fined $10 million by the Securities and Exchange Commission (SEC) for
accounting irregularities and alleged accounting fraud.

(B) What are the problems with Xerox?

The problems faced by Xerox Corporation which lead to their issues are as follows: -

● Poor management
While the new CEO, Allaire, extricated the company from old domains, it was late in entering
new domains. Tensions arose, even more, when Thoman was appointed as the CEO. He
didn’t try to gain the support of board members and was unapproachable.

● Overconfidence in self capability

The company was over-relied on the profits of the Copier machines and technologies which
were matched by its Japanese competitors.
 ● Nearsighted in terms of non monetary resources
They had a well funded and functional research and development department which gave
them new ideas and technologies but not accepted or implemented by the management.

● Undiversified income source

Because of the high sales of the copying machines, Xerox did not give the required attention
to other innovations at the Palo Alto Research Lab and other smaller players took advantage
of them better.

● Reluctance to adapt and change

The management and the employees were slow in adopting changes. The aim to bring
Thoman on board was to make strong decisions, but the management was not in the mood
of receiving end.

● Internal power struggle

The politicization of work culture - The creation of a wedge between the employees and
having a culture of inner employee and outer employee, resulted in losing trust and synergies
among them.

● Not paying heed to the competitive landscape

Competitors were catching up with their existing technologies which the company ignored
and then once they launched a more cutting edge technology/product, Xerox did not have
any replacement product or strategy.

● Entering into non-core markets

Xerox entered new and completely unrelated sectors like finance and insurance which
proved to be disastrous and eventually had to be shut down.

(C) How were they addressed?

After having faced multiple issues and a much downtrodden company, Xerox corporation thought to
re-establish itself after a massive fall which brought the company to its knees. It employed
everything from changing administration to completely shifting the way the company does business.
The following points elaborate upon the steps the company took in order to bring itself back up in
the ranks of the technology sector: -

● Change in leadership
 Ms Anne Mulcahy , who has started at Xerox as a copier saleswoman worked up to the
hierarchy , working for almost 24 years in the company has been appointed as the CEO,
successor of Allaire

● Formation of vision and hope

Mulcahy has made sure of outlining the things that the Xerox wanted to accomplish and
presented the company as a thriving, forward-thinking organization.

● Restructuring
Departments which were not profitable (including Anne’s old department) were closed down
which resulted in cost cutting and enabled Xerox to fight off its Japanese rivals.

● Outsourcing
Anne made sure that Xerox focussed on its core strengths of innovation and service and all
other functions were outsourced to make the organisation leaner.

● Reinforcing confidence
Anne laid emphasis on human rights, ethical business practices and personally participated
in the accounting fraud investigation. This helped assure global stakeholders of the
significance of the change in the company’s values and increased their confidence in its
future.

Prepared By:
Group 05
Alankriti Gulati 20P006
Obed Daruwala 20P016
Keshav Gupta 20P026
Nikhil Kumar Putchakayala 20P036
Sachin Heda 20P047
Shubham Kumar 20P057