Nama : Mardiyah Isma Hidayati

NIM : 1101002026

Case 1-3 Xerox Corporation

Question 1
Management Control Systems outlining at XEROX:
Xeroxs conditions prior to 1970:
Rigid system applied in the company and emphasis on accuracy.
Setting unrealistic targets.
Inadequate data analysis.
The corporate reporting and planning process was very long and bureaucratic, with more detail than
most managers could absorb.

Problem raised during 1970 1980:
The original patent for the plain paper copier expired in 1970, sending an invitation to potential
competitors.
High attrition rate.
Decrease in market share in 1970-1980. Based on US copier revenue, Xerox market share fell from
96% to 45%.
Low price offered by competitors. Japanese attacked the low and medium range of copier market,
while the domestic competitors made inroads in the high-end equipment market.
The reporting formats were not even consistent between divisions.

Solution derived by Xerox to solve the problems:
Leadership through quality. It is the corporate revitalization plan developed by Xerox that was
built upon the early work in competitive benchmarking and employee involvement.
Finance Executive Council (FEC) as the central focal point for the finance function at Xerox. The FEC
evolved in the 1980s in response to the senior financial managers goal of further improving the
finance operations and obtaining a greater involvement by the Finance Executives.
Standard reporting applied, with monthly reporting limited data (consisting sales, profits, and key
operational statistics) and quarterly reporting process included a complete financial package. An
informal reporting system had also evolved with trust and freedom.
Competitive Benchmarking:
The continuous process of measuring Xeroxs products, services, and business practices
against the toughest competitors or those companies renowned as the leaders.
The goal is superiority in all areas quality, product reliability, and cost.
Proper Goal Setting.
Technological Innovations.

Key elements that make the system at Xerox work:
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
Comparison through benchmarking.

Question 2
Recent trends in Xerox that is influencing the management control process:
Earlier in the analytical era in 1970s, Xerox had a culture where accuracy and rigid system were
more important than listening to the customers. The controllers were the numbers people, and
there was never enough data or analysis.
Unrealistic target setting developed by Xerox.

Why new trends:
Xerox must enter new trends and leave the traditional trends due to the market condition that the
original patent for the plain paper copier expired in 1970. This condition brings an invitation to
potential competitors.

New trends developed by Xerox:
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).
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 standards of NO SURPRISES and prompted trust among the controllers.
Leasing Contracts rather than Equipment Sale.
Working with Line Management.
Always looking World Class Organization for IDEAS.
Continuous Benchmarking.

Question 3
The importance of 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)
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 to prove the importance of organizational culture and individual personality in Xerox
Control Process.