In the early 2000s Xerox was facing stiff competition from its aggressive Japane
ID: 462247 • Letter: I
Question
In the early 2000s Xerox was facing stiff competition from its aggressive Japanese competitors selling low-priced digital copiers that made Xerox's products obsolete. It was at this time that Anne Mulcahy became their CEO and had to contend with the biggest organizational challenge: to find ways to reduce Xerox's high operating costs along with developing innovative new lines of copiers. She combined creative inputs from employees along with customer feedback and invested Xerox's shrinking R&D; funds to develop two new lines of digital copiers: a line of state-of-the-art digital color copying machines for use by large businesses, and a line of low-end copiers offering print quality, speed, and prices that even Japanese competitors could not match. Taking some tough decisions like cutting down 26% of her employees and by using employees like Ursula Bums, who showed potential, she saved the company. With Ursula Burns appointed as CEO in 2009, the company has acquired Affiliated Computer Services and seems set to achieve greater heights. Questions (Please copy the questions before providing your quality discussions, not a list or a simple answer): In what ways can (a) flattening the hierarchy and (b) centralizing and decentralizing authority help an organization like Xerox to improve its performance? What kinds of factors change the decision to centralize or decentralize authority over time in a fast-changing environment such as the digital document services industry?Explanation / Answer
1). In what ways can (a) flattening and (b) centralizing and decentralizing authority help an organization like Xerox to improve its performance?
When organizations like Xerox goes through tough time resulting in decrease of annual sales and tough competitors, it needs to re-innovate itself. Time and time it has proven that fresh perspectives and ideas pay off when everything stops working in favour and same happened with Xerox.
In this case we see that cost reduction is done by laying off employees that were financial burden to the company. Centralizing and keeping in perspective of customers, employees helped in understanding the needs of the market along with help of R&D to redesign the product. In this we see that flow of vital information and feedback which was earlier restrained were now doing its job and can only happen when an organization follows flattened hierarchy. With employee feedback the reduction in workforce also helped in reduction of unwanted employee without fear of firing useful workforce.
2).What kinds of factors change the decision to centralize or decentralize authority over time in a fast- changing environment such as the digital document services industry?
In case of fast changing business environment, we need to check the competitors and internal as well as external information flow across organization. Centralizing or decentralizing authority gives in the organization a new perspective to deal with market changes and bring in new ideas over time for improvement in services provided.