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Less than two years later, many considered Xerox a has-been, destined to fade into history. Consider the following events: Twenty-two thousand Xerox workers lost their jobs, further weakening the morale and loyalty of remaining employees. Major customers were alienated, too, by a restructuring that threw salespeople into unfamiliar territories and tied billing up in knots, leading to mass confusion and billing errors.
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What went wrong at Xerox? Without a doubt, the copier was a money-making machine. By the time it was retired in the early s, the was the best-selling industrial product of all time, and the new name of the company, Xerox, was listed in the dictionary as a synonym for photocopying.
Wilson wrote the following for early recruiting materials: Leaders no doubt knew that the company needed to move beyond copiers to sustain its growth, but they found it difficult to look beyond the 70 percent gross profit margins of the copier.
But the copier bureaucracy, or Burox as it came to be known, blinded Xerox leaders to the enormous potential of these innovations. While Xerox was plodding along selling copy machines, younger, smaller, and hungrier companies were developing PARC technologies into tremendous moneymaking products and services.
Suddenly, Japanese rivals such as Canon and Ricoh were selling copiers at the cost it took Xerox to make them. Market share declined from 95 percent to 13 percent by And with no new products to make up the difference, the company had to fight hard to cut costs and reclaim market share by committing to Japanese-style techniques and total quality management.
Through the strength of his leadership, CEO Kearns was able to rally the troops and rejuvenate the company by However, he also set Xerox on a path to future disaster.
Seeing a need to diversify, Kearns moved the company into insurance and financial services on a large scale. At the same time, he initiated a mixed strategy of cost cutting and new-product introductions to get the stodgy company moving again.
Xerox had success with a line of digital presses and new high-speed digital copiers, but it fumbled again by underestimating the threat of the inkjet printer. By the time Xerox introduced its own line of desktop printers, the game was already over. Thoman came to Xerox as president, chief operating officer, and eventually CEO, amid high hopes that the company could regain the stature of its glory years.
Only 13 months later, as revenues and the stock price continued to slide, he was fired by Allaire, who had remained as Xerox chairman.
The culture was already slow to adapt, and some say that under Allaire it became almost totally paralyzed by politics. Thoman was brought in to shake things up, but when he tried, the old guard rebelled. A management struggle developed, with the outsider Thoman and a few allies on one side lined up against Allaire and his group of insiders who were accustomed to doing things the Xeroid way.
Recognized for his knowledge, business experience, and intensity, Thoman was also considered to be somewhat haughty Chapter 1: Organizations and Organization Theory and unapproachable. He was never able to exert substantial influence with key managers and employees, nor to gain the support of board members, who continued to rally behind Allaire.
The failed CEO succession illustrates the massive challenge of reinventing a century-old company. By the time Thoman arrived, Xerox had been going through various rounds of restructuring, cost cutting, rejuvenating, and reinventing for nearly two decades, but little had really changed.
Many believe Thoman tried to do too much too soon. He saw the urgency for change but was unable to convey that urgency to others within the company and inspire them to take the difficult journey real transformation requires.
Others doubted that anyone could fix Xerox, because the culture had become too dysfunctional and politicized. In AugustAllaire turned over the CEO reins to the popular twentyfour-year veteran, who had started at Xerox as a copier saleswoman and worked her way up the hierarchy.
Despite her insider status, Mulcahy proved that she was more than willing to challenge the status quo at Xerox. Since she took over, Mulcahy has surprised skeptical analysts, stockholders, and employees by engineering one of the most extraordinary business turnarounds in recent history.
How did she do it? One key success factor was giving people vision and hope. Mulcahy wrote a fictitious Wall Street Journal article describing Xerox five years in the future, outlining the things Xerox wanted to accomplish as if they had already been achieved and presenting the company as a thriving, forward-thinking organization.
And although few people thought Mulcahy would take the tough actions Xerox needed to survive, she turned out to be a strong decision maker. She quickly launched a turnaround plan that included massive cost cutting and closing of several money-losing operations, including the division she had previously headed.
After major layoffs, she walked the halls to tell people she was sorry and let them vent their anger.Gentile The Dynamics of Taking Charge By John J. Marianne Waldenmaier Foundations for a Disequilibrium Theory of the Business Cycle: Qualitative Analysis and Quantitative Assessment By .
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Sun Tzu’s The Art of War: Industry Analysis Exercise (A) Sun Tzu’s The Art of War, written 2, years ago holds powerful lessons for running businesses, managing people, honing leadership abilities, motivating the employees, preparing for a battle, etc.
In theory, this market for corporate control accumulates the economy's resources under the stewardship of the most efficient managers. The Takeover Rule undermines pyramids in two ways. First, raiders, or controlling shareholders preempting raiders, trigger mandatory % bids.