XEROX-People Problems

STRUCTURE

Introduction on Company Background People Problem 1 People Problem 2

AN INTRODUCTION

The word "xerox" is commonly

used as a synonym for "photocopy"

For e.g. "I xeroxed the document and placed it on your desk."

HISTORY TO PRESENT

o 1938: Chester Carlson, a patent attorney and part-time inventor, made the first xerographic image

o He spent years trying to sell his invention without success (to IBM, General Electric etc)

Chester Carlson’s first Xerographic Apparatus

Contd.

1944: The Battelle Memorial Institute in Columbus, Ohio, contracted with Carlson to refine his new process, which Carlson called "electrophotography."

1947:The Haloid Company (Founded in 1906),manufacturing photographic paper, approached Battelle and obtained a license to develop and market a copying machine based on Carlson's technology.

Contd.

Since electrophotography seemed a cumbersome word decided on the word "xerography" derived from the Greek words for "dry" and "writing.“

1948-58:Haloid coined the word "Xerox" for the new copiers.

o First Manually operated commercial xerographic copier(1949)

o Changed its name in 1958 to Haloid Xerox Inc

1959: Came out with First photocopier, the Xerox 914 which sold more than 200000 units between 1959 and 1976.

First Desktop plain copier(1963)

Contd.

1961: The company became Xerox Corporation after wide acceptance of the Xerox 914

1963:First desktop plain copier is introduced

1973:First Colour copier introduced

First colour copier (1973)

o 1970: The Xerox Palo Alto Research Center opened (For R&D)

o 1977:First laser printer introduced by Xerox

1990’s - turned its product into a service, providing a complete "document service" to companies

Supply, Maintenance, Configuration, and User Support

TODAY

Xerox today manufactures and sells a wide variety of office and production equipment

Products:

Office printers Office copiers Multifunction printers and copiers Fax machines High volume production printers and copiers Workflow solutions Software Scanners and projectors Computer monitors

NAME JOB TITLE BOARD

Anne Mulcahy Chairman and chief executive officer

Executive board

Glenn Britt Director Non executive board

Richard Harington Director Non executive board

William curt hunter Director Non executive board

Quincy Allen President, production systems group

Senior management

Ursula Burns President, Business GroupOperations

Senior Management

James Firestone President, Xerox North America

Senior Management

Jean-Noël Machon President, Developing MarketsOperations

Senior Management

Armando Zagalo de Lima President, Xerox Europe Senior Management

Lawrence Zimmerman Chief Financial Officer Senior Management

Gary Kabureck Chief Accounting Officer Senior Management

FACTS

Offices in Europe,Africa,Middle East,India and parts of Asia

In over 130 countries worldwide

A $16 billion company

Contd.

53,700 employees worldwide

No. 142 in the Fortune 500 companies.

DIVERSITY

At the end of 2006, Xerox's U.S. work force was 14.4 % African-American, 6 % Asian and 0.8 % Native American.

Women made up 31.5 % of the total U.S. work force.

SOCIAL RESPONSIBILITY

Assists more than 400 social, civic and cultural organizations

Provided more than 40 grants to university research programs

Contd.

o Designing and building "waste-free" products

o Scholarship support at more than 140 colleges and universities to prepare students for careers in business, science and technology

Quality

Rated among the world's best by independent testing organizations

Won 25 national quality awards in 20 countries

Top Competitors

Canon Inc. Hewlett-Packard Company Konica Minolta Holdings, Inc. Lexmark International, Inc. Pitney Bowes Inc. Ricoh Company, Ltd.

Loopholes

Ignored new entrants like Canon, Ricoh

Operating cost was high Products of relatively inferior quality

compared to its competitors Return on assets came down to less

than 8% and market share in copier came down sharply from 86% in 1974 to just 17% in 1984

In 1982,David T. Kearns took over as the CEO

Average cost of Japanese machines was 40-50% of that of Xerox

Measures taken

Launching a program referred to as ‘Leadership through Quality’

Management layers were cut Greater authority delegated to

lower levels Employees were allowed to

participate in decision making

In 1980’s Xerox bought Kurzweil, Datacopy and Ventura companies that specialized in optical character recognition, scanning and fax machines

It also diversified into financial services, insurance and investment banking

Allaire succeeded Kearns as the new CEO in 1990

In 1992 Xerox entered into various tie-ups with Dell Computer Corporation and Microsoft

Company announced a major restructuring program including a 10% reduction in the workforce

In 1993 Xerox announced a company wide initiative to reduce costs drastically and improve productivity

It indicated that it would reduce the worldwide workforce by more than 10,000 and close a number of operations

This restructuring program achieved cost savings of $ 770 million in 1996

In 1998 Xerox announced another round of worldwide restructuring, including elimination of 9000 jobs through VRS, layoffs and closing of various facilities

This program included cutting costs by $ 1 billion, sale of $ 2-4 billion worth of assets

In the same year, Thoman replaced Allaire as the CEO though Allaire continued as chairman

Despite these restructuring efforts, poor market conditions resulted in the company reporting a loss of $ 257 million in 2000

In August 2000,Paul Allaire,Chairman of the leading document management company Xerox, fired the company’s CEO Rick Thoman

Allaire said," We are grateful for Rick’s contribution in leading the company through a period of major repositioning.However,both Rick and the board felt it best for the company to move forward with an experienced Xerox team that will lead Xerox people and efficiently execute the strategy

PEOPLE PROBLEMS - I

Chairman Joseph C. Wilson, his successor Kearns .

Wilson brought progressive HR people from outstanding institutions. They build a very people oriented tradition that became famous for its training, development and sales selection policies.

HR Policy

People would be treated with respect at all times.

People were treated fairly and generously.

Compensation was designed to be competitive.

Xerox could attract quality people.

Employee Motivation

1980, Xerox faced a stiff competition from Canon and Ricoh in the low end copier business.

Company decided to opt total quality movement and cut manufacturing costs

Fights back efficiently through employee participation

Developments in Xerox Allaire replaces Kearns as the CEO in

1990. Reid, an integral part of HR function for

three decades leaves the organisation. William F. Buehler , who had just 2

years of HR experience replaces Reid. Employees perceive Buehler’s

appointment as the decline in HR role in Xerox’s corporate setup.

Contd….. Many HR executives who were part of

Reid’s team left the company. The culture of employee involvement

seemed to be disappearing. The sense of dissatisfaction with the

top leaders kept moving good people out of the company.

Employees promotions were not carried out as per the company policies.

Contd..

People with good relations with the top management were being promoted.

Beuhler was promoted within two years of joining the HR department.

Xerox kept loosing its top employees and found hard to attract new as well.

The Change

Thomas took control of the company.

Found severe lapses in HR control systems for eg. No parameters to measure per employee income.

He observed that Xerox had lost its focus from customer service.

PEOPLE PROBLEMS – II

THOMAN’S REORGANIZATION

PLAN

FOCUS AREAS

Digital equipment

Digital solutions

Industry-based targets

RESULTS

Commissions reduced significantly.

Sales representatives began losing their accounts.

Sales staff attrition increased by 100%.

No proper training.

FURTHER DECISIONS…..

Large scale layoffs I. 12000 employees II. 4500 employees

Reactions – Strongly opposed. Thoman had to leave Xerox.

Claim of Media Reports Allaire had not been able to ‘let go’ of

the company’s control. Allaire’s ‘in circle’ consisting of Mulcahy

and Buelher threatened to resign if Thoman continued.

Reason of failure Employee involvement. Thoman’s responsibility.

MULCAHY’S EFFORTS…

Retention Programs - Increasing pay - Increasing incentives

Training and education - e-learning

Got in touch personally with employees

RESULTS

Attrition rate dropped to normal.

Fall in profitability continued.

Requirements – - Downsizing - Cost-cutting

Reported a loss of $384 million for the year 2000.

Loss of $94million in 2001.

By Jan 2001,stock dropped by 72%

Reported to be on the brink of bankruptcy.

A $345 million credit from GE capital helped.

Dec 2001, total revenues fell by 12% to $16.5 billion.

Net loss rose by 18% to $342 million.

Company sources attributed this to - global economic meltdown - higher income tax rate

TURNAROUND…

STATEGIES ADOPTED

Innovation - spending on R&D - 4 global research centres Pushing into services Adaptive and opportunistic Layoff Outsourcing Value to customers

RESULTS….

The company generated profit of $978 million in 2005.

Mulcahy became one of the world’s most respectable leaders.

She was named the fifth most powerful women in the world by Forbes magazine.

SWOT ANALYSIS

STRENGTHS Strong brand Strong product development capability Distribution channels Dominance on the copier market

WEAKNESSES Weak operating performance Dependence on third party manufacturers Stagnant revenues from the office segment

Opportunities The color market Launch of carbonless paper Outsourcing revenues

Threats Intense competition Paperless offices Economic slowdown

THANK YOU