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 board

executive officer
Glenn Britt Director Non executive board
Richard Harington Director Non executive board
William curt hunter Director Non executive board
Quincy Allen President, production Senior management
systems group
Ursula Burns President, Business Group Senior Management
Operations
James Firestone President, Xerox North Senior Management
America
Jean-Noël Machon President, Developing Senior Management
Markets
Operations
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.

mpany decided to opt total quality movement

t 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