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Xerox Corporation

Xerox Product

Company Background
Xerox, the document company, was a multinational
corporation serving the global document-processing
and financial services markets in over 130 countries.
Xerox was one of the outstanding business success
stories in the world. From 1946 to 1973, their annual
sales growth exceeded 25%, while the annual growth
of earnings exceeded 35%.
During this rapid growth period, Xerox built its
worldwide business network. Joe Wilson decided to
grow the company as rapidly as possible. The swift
growth, proprietary technology and sales methods also
joint venture with the Rank Organization PLC.
Xerox operation managers, however began to feel the
competitive pressure. Between 1970 and 1980, Xeroxs
market share as measured by US copier revenues, fell
from 96% to 45%. David Kearns became chairman in
1982, and was aware of significant market share
losses. Xerox managers started to improve the
cumbersome management process. Xerox improved its
management information system and standardized
reporting format to address of these problem. The
strategy change the culture of Xerox and gave it the
competitive muscle to regain market share and market
improvement in the company operation.

Organization
Xerox Building

The primary focus for the management of Xerox was


the business management level, which promoted more
effective linkages between market and technologies.

Finance and Control Function


The central focal point for the finance function at Xerox
was the Financial Executive Council (FEC). The
membership consisted of the senior Corporate

Financial Staff and the chief financial officers from the


major Xerox operation organization.

Note, the FEC evolved in parallel with the start of the LTQ and Benchmarking
activities. The new Xerox LTQ culture demanded an involved and proactive
finance group. The key to the value added concept was in helping line managers
make more enlightened business decisions. In addition, the FEC was the central
developer of the companys financial human resource talent.

Financial Organization
They had a dotted line relationship to corporate finance for their fiduciary roles,
financial reporting, and professional development. The document processing
financial organization of Xerox was a modified matrix, multinational organization
with the business unit controller having both solid and dotted line reporting
responsibility. The business divisions, with responsibility for product development
and manufacturing, managed their business throughout the world. The customer
operation divisions were organized geographically and managed customer
relationships. The management control system concentrated on the
responsibility and performance of the 12 business divisions.

Development and Manufacturing


In 1992 the function of this organization (to develop and manufacture Xerox
document processing product, were integrated into the 9 business divisions
wherever possible. In general, if the development or manufacturing facility
product at least 90% of their output for a specific business, they were placed in
that business group. If these facilities supported multiple business group, they
were placed in the corporate strategic service group.
For performance measurement, venray results were reported through their
business divisions. The operational management accounting reports, or
performance reporting, focused on business division result. Management wanted
to match accountability and responsibility by operation unit within a business
area. Both the financial and management control reporting system functioned in
parallel.

Management Control
The management system began with the planning process. Each operating unit
within a business division or customer operation division developed its annual
and long-range plans. The overriding principle was that the division general
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managers were responsible for managing and controlling their environment to


deliver the committed results.
With leadership through quality, management utilized operational measure, such
as market share, customer satisfactions, and various quality statistics as a major
part of their measurement scheme. These data augmented the traditional
financial based performance measures, such as return on investment.