The Evolution of Quality at Xerox
The Evolution of Quality at Xerox
Xerox is an American company founded in 1906 in Rochester, in the New York City of the United States of America. Its headquarters, previously in Stamford, are currently in Norwalk, Connecticut. Other constituents of Xerox include PARC, founded in 1970, incorporated in 2002 as an independent center. Another constituent, Fuji Xerox started in 1962 as a fifty-fifty partnership with Rank Xerox. Currently, Xerox is under Ursula Burns as the chief executive officer, and Anne M. Mulcahy as the chairperson. It has more than fifty thousand employees and is present in over one hundred and sixty companies. In the year 2000, Xerox was almost bankrupt, with a myriad of problems. Changes in management and strategies contributed greatly to the turnaround of Xerox with greater amounts in revenue and rising stock.
The etiology of the Xerox crisis lies in several aspects of the organization ranging from administrative decisions, financial difficulties and the economic recession among others. There were half-baked reorganizations in the company leaving employees unsure about their roles and skeptical about the direction taken by the company. Strategies put in place with the help of consultants in the business environment, seemed realistic only on paper but fell apart upon implementation. Some of these strategies included division of the business into product lines, industries and geographical categories. This strategy however, had bad outcomes for the organization. Accountability for various transactions implemented presented a challenge to some of the senior employees in the organization.
Another reason why Xerox faced a crisis is that the company had financial difficulties including dwindling of its cash reserve to about $100 million, which is extremely low for a company of its size. In addition to this, the debt of this organization inflated to about $19 billion, and there existed accounting improprieties in the Mexican subsidiary of this organization. This triggered investigation by the Commission for Securities and Exchange, and auditing by KPMGs. The company experienced a high turnover of employees and customers too, began to fall away. Unfortunately, these financial difficulties happened to the firm during times of a weak American economy.
Some of the problems experienced in Xerox are directly linked to individuals involved in management and administration at Xerox at the time. The chief executive officer at Xerox then, Peter McClough failed to ensure commercialization of the new technology. The consequences of this is that as the world moved to better and faster standards, Xerox lagged behind and customers sought better technology provided by other firms. This worsened the financial difficulties experienced by the firm. The chief executive officer at the time approved misguided priorities in addition to reduced focus on the firm, further expanding the problems at the firm.
Other factors that led to the Xerox crisis include failure by the firm to hire the right people for key positions. This is due to the poor hiring practices and failure to consider key issues in the hiring practices. In addition, the firm beat up on suppliers, violated the generally accepted accounting principles, and the rumors about the firm by Thompson Reuters worsened the situation for the ailing firm. The threats to the firm’s existence that further worsened the situation include the flourishing competitors including Hewlett-Packard, Canon Inc. and Ricoh Company, and the growing pressure on companies to go carbon-neutral.
A change in the management of Xerox and radical changes in terms of Staffing and procedures in the company instituted by the new management brought the turn-around for Xerox. The Performance excellence process was one of the strategies implemented to facilitate the re-birth of the firm. Other reforms included restructuring with the laying off employees, chopping rewards and shuttering plants. Top management managed to convince a few banks to lend loans to Xerox, and slowly, the company rose back to making great profits, from losing about $273 million to earning close to $91 million.
The performance excellence process was part of the Xerox Lean Six Sigma strategy. This was the strategy put in place in an attempt to ensure that Xerox was back at the top in the technology business. The performance excellence process describes how Xerox aligned strategies and performance objectives across the corporation. It was a way through which the firm managed performance to ensure quality service provision to customers. This led to delivery of improved and profitable business results, increasing stakeholder value.
The performance excellence process consists of three phases, with the first phase being that of setting direction, the second being that of deploying direction and the last phase involves delivering and inspecting results. The performance excellence process is applicable to all performance levels including the operating unit, Organization or function, department, team and the individual. The performance excellence process enabled the firm to document their objectives, measures and targets.
The corporation and business groups completed the phase that involved setting direction. The second phase of deploying direction involved creating an understanding on the direction set by the corporation. The key players in this phase include the manager and the employee. The final phase of delivering and inspecting results involved the employee and the manager and each management process of the organization provided structured opportunities for performance management. The manager provided coaching and feedback to the employees.
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