CASE STUDY: XEROX CORPORATION
TOTAL QUALITY MANAGEMENT
INTRODUCTION
Xerox Holdings Corporation is an American multinational corporation that provides document
processing and financial services. They designed, manufactured, and marketed copiers and
duplicators, scanners, software, and other associated equipment.
Xerox began more than a half-century ago by harnessing evolving technology to establish a
completely new business-photocopying and dominated the market for years. However, Xerox was
on the verge of bankruptcy only a decade ago, demonstrating that in today's globalized market,
being competitive demands constant adaptation to the competition and continuous improvement
on the side of the corporation.
BACKGROUND INFORMATION
With the release of the Xerox 914, "the most successful single product of all time" in 1959, the
firm rose to fame. It became very successful that Xerox had about $60 million in revenue by
the end of 1961; by 1965, revenue had risen to more than $500 million. Its simplicity served as
the basis for Xerox products and user interfaces.
In the 1970s, Xerox concentrated on developing new and more efficient models with the goal
to sustain its share of the reprographic market and compete with US and Japanese firms.
Profits more than fivefold increased from $83 million in 1966 to $407 million in 1977, while
revenues increased from $698 million in 1966 to $4.4 billion in 1976.
BACKGROUND INFORMATION
During the 1970s, as Xerox expanded fast, a number of controls and procedures were
implemented, and the number of organizational layers was raised as well. However, it slowed
down decision-making and resulted in major delays in product development. Xerox suffered
from its highly centralized decision-making process.
Centralized business models are more typical in smaller companies; as a company grows, it
becomes increasingly difficult for the top management level to properly control all operations.
Since employees have limited decision-making capabilities in a centralized firm, there is less
possibility for employee input, ideas, or initiatives to influence operations and workplace
culture. (See figure 1 - The Difference between Decentralization and Centralization)
Figure 1. The Difference between Decentralization and Centralization
Decentralization Centralization
VS
A firm structure in which decisions are made at several levels of the
It refers to an organizational system in which the top management has
organization. It ensures greater performance and easier decision-making for
complete decision-making authority.
the company's success.
Quick decision and response times Delays decision - making
Breeds innovation Limited creativity
Strengthens leadership skills Uniformity in action
More expensive Less expensive
BACKGROUND INFORMATION
Being dominant in the photocopying industry, Xerox has focused on enhancing their copier machines and
has failed to react to changes in market demand, which has begun to shift toward digital technology.
In the early 1980s, Xerox found itself increasingly faced with intense competition from both US and
Japanese companies. It failed to take into account emerging competitors (Ricoh, Canon, and Sevin) who
were strengthening their positions in the lower-end market. The company's operating costs (and thus its
product pricing) were high as well, and its products were of substantially worse quality in compared to its
competitors.
According to analysts, Xerox's management failed to convey strategic direction to the company.
Strategic direction refers to actions taken to achieve the goals of an organization. It consists of
determining the core processes and values that position an organization to succeed- their mission, vision,
daily operations, how they bring their team into alignment, and what they do to generate positive morale.
As a result, return on assets fell below 8%, and market share in copiers decreased from 86% in 1974 to 17%
in 1984. Between 1980 and 1990, Xerox's income fell from $1.15 billion to $290 million.
MAIN PROBLEM
LACK OF STRATEGIC MANAGEMENT
Strategic planning is the process of determining an organization's direction (for
example, its vision, mission, and priorities).
Unlike once-and-done strategic plans , Strategic management involves continuous
assessments of critical components, such as external and internal environments, short-term
and long-term objectives, organizational structure and strategic control.
ALTERNATIVE SOLUTIONS
1 2
Create a strategic
Workplace structure management plan and
redesign ensure effective
execution
3
Continually collect and
analyze data to enhance
decision-making
accuracy
ALTERNATIVE SOLUTION #1:
WORKPLACE STRUCTURE REDESIGN
PROS CONS
Increased Effectiveness An expensive process
Smoother Operations Resistance to Change
Improved Relationships More Chances of Failure
Competitive Advantage
ALTERNATIVE SOLUTION #2:
CREATE A STRATEGIC MANAGEMENT PLAN AND ENSURE EFFECTIVE EXECUTION
PROS CONS
Leads to sustainable competitive
advantage
Costly
Makes organization proactive
Instills a shared sense of Time-consuming
responsibility Difficult to Implement
Increases operational efficiency
among leadership
ALTERNATIVE SOLUTION #3:
CONTINUALLY COLLECT AND ANALYZE DATA TO ENHANCE DECISION MAKING ACCURACY
PROS CONS
Can slow decision-making
Make More Confident Decisions
Not everything can be measured
Become More Proactive
When misused, it can hamper
Realize Cost Savings
innovation and limit product
growth
Legend:
Decision Matrix Highest = 3
Lowest = 1
ALTERNATIVE ALTERNATIVE ALTERNATIVE
CRITERIA SOLUTION #1 SOLUTION #2 SOLUTION #3
1
Workplace
EMPLOYEE
2 3 1 structure
INVOLVEMENT
redesign
COMPETITIVE
ADVANTAGE 2 3 1
2
SUSTAINABILITY 2 3 1 Create a strategic
management plan
and ensure effective
EASE OF
IMPLEMENTATION 2 1 3 execution
COST EFFICIENCY 3 1 2
3
Continually collect
MINIMAL RISK 1 2 3 and analyze data to
enhance decision-
making accuracy
TOTAL 12 13 11
RECOMMENDATION
As illustrated in the Decision Matrix, the best alternative solution for the problem is to build a strategic
management plan and assure its effective execution. It has been demonstrated that implementing it results in long-
term competitive advantage, makes organizations more proactive, and promotes operational efficiency among
leaders. To outperform the competition and prevent failure when faced with setbacks, developing a strategic
management plan is vital. It only takes adequate planning and the right individuals to implement them in the
organization.
Strategic Management Plan
It is important to note
that building a strategic
management plan is a
continual process that
the company must
undertake. Mission and
vision might need to
change over time; an
annual evaluation is a
great opportunity to
examine those changes,
create a new strategy,
and implement it again.
SOURCE: https://onstrategyhq.com/resources/strategic-planning-
process-basics/
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