All these factors contributed to the fall of Xerox, however Xerox management also played a role in the loss of 38 billion dollars in shareholders wealth in two years according o a Bloomberg Businesslike article (Businesslike 1). For starters both of the leaders at Xerox were in fault, Paul A. Allure who had started at Xerox in the mid sass eventually moving up in command to CEO, in 1991. Allure failures as a leader was not leaving the company in 1999 when a new CEO was hired G. Richard Thomas.
Allure never lost power in the company, because he only changed his title to Chairman, running the board of directors, and according to a Bloomberg Businesslike article “Allure never left, breaking one of the cardinal rules of succession” (Business Week 1). This was a failure by Allure because e broke the rule of consistency that Cropland talks about in the article The Management of Organizational Justice. The normal practice would have been for Allure to leave the company, and Thomas to take his position as CEO.
By Allure staying in the company, it was unfair to Thomas who never really had a chance to succeed or have complete power of Xerox. This lack of Organizational Justice also lead to employees being confused to who was really in charge, leaving breaks in the communication process. However the fault can’t completely fall just on Allure shoulders, Thomas was hired because he had experience as a deader, and he should have made sure that Allure was leaving before taking the position.
In Gary Lethal article The motivational benefits of goal setting, under conditions for effectiveness, barriers must be removed in order to accomplish the objective, and if Allure was in the way Thomas should have never accepted the position under those circumstances. Another management problem Xerox encountered was accuracy, another aspect of Cropland article about organizational justice. When Thomas took over in 1999 and started looking over the data about competitors he was surprised by the old data Xerox was using room 1994.
The ex CEO Allure, was basing company decision from the old data of 1994, which according to Businesslike article written by Bianca Xerox didn’t even have all the current competitors in the market. This was a definite failure by Allure, because it gave the competition an advantage of being under the radar; by Allure using inaccurate data his decisions as a leader were also inaccurate (Bianca 2001). Another management problem at Xerox was the morale. Richard Thomas believed that if Xerox reinvented themselves they would be better prepared and ready for the upcoming digital age which would have lead the many to future success.
However Thomas and Xerox did not succeed and the reason they did not succeed was because the strategic plan Richard implemented was unsuccessful. Furthermore, when Thomas took over as CEO the whole organization was demoralized, so he then was let go and the organization and Richard Thomas was pronounced a failure. When Allure was replaced by Thomas, he never had the full support from the board of directors or the employees to take over as CEO, and this led to Thomas being frustrated and eventually the whole organization was demoralized.
Thomas felt as if he had o control of the organization according to a Bloomberg Businesslike article “Thomas contends that he never had the authority he needed to be an effective leader because Xerox’ board, dominated by Allure, denied him the crucial prerogative of assembling a full management team of his own (Businesslike 1). ” Basically, Allure was not able to understand that there should have been only one leader. Thomas was brought in the organization because of his energy, his intensity and his experience so Xerox thought he could bring them a different perspective.
Thomas also was knowledgeable about what it takes to run an organization. However he was unable to bring that same energy into the organization because of Allure. Thomas biggest mistake was when he let Allure remain on the board, as chairman. Allure then let his best buddies Bubbler and Roomier join the board as well. According to a Bloomberg Businesslike article, Thomas said “l felt I couldn’t say no. I really thought this was Pall’s way of making sure everyone felt O. K. With my promotion. Of course, it straight-jacketed my ability to make changes. (Businesslike 1). Allure start treating Thomas as a puppet because he had him doing things that he wanted to do when he was he CEO of Xerox. Paul Allure was able to make a lot of decision because he had control over the board. One major thing Thomas did that made him lose his employees was when he cut staff. Unfortunately out of that, 10 percent of Xerox workforce was let go, which led to 9,000 jobs being eliminated (Deutsche 1998). This very event was the main cause that led to the company low morale, which led to the employee not being productive and effective in the workplace.
If organization morale is low the employees begin to lack belief in the organization which leads to employees not achieving their company’s goals. Job security is a major factor in enhancing company morale and creating organization morale and since Xerox cutting staff the company was unable to pull together consistently and persistently towards the company’s goals. Once the low morale was established in the organization the environment the employees were in was not conscientiousness and therefore not motivated.
And as stated in the Murray Barrack and Michael Mount article if one is high on conscientiousness they will perform better on the job and if one is Conscientious they tend to be achievement oriented ,hard working, dependable, persistent, responsible, organized, careful and reliable. And these traits are what the employees at Xerox were beginning to lack and those very traits are fundamentally related to motivation at work. The moral at Xerox was not only low but the atmospheres of teams were also affected.
At Xerox, upper management did not work effectively in teams which also led to decline of the company. Everyone in upper management including the CEO knew that change was needed but the lack of willingness to work effectively in the team got in the way of change. As things got worse and worse for the company, Richard Thomas and Paul All instantly spent more time blaming each other instead of working together to fix the issues at hand and lead the company to success. (Anthony ;. Moore 4th paragraph).
This throw each other under the bus type behavior counterproductive and led to nothing but a negative impact on the company The executives needed to focus on the main goal which was to lead the com to success. Xerox was not able to work effectively in a team because they did not feel like they were in a team. Many people in the company did not even have confidence or trust in Richard Thomas (CEO) and wanted him to resigns one point (Anthony ;. Moore 1st paragraph). Xerox continued to go in decline because of “accounting irregularities” (Business All).
There was also huge amount of currency losses that were left in Brazil, which was a mistake should have never happened. (Anthony ;. Moore paragraph 9). Pup management basically wanted to show high earning anyway they could eve meant inflating sales figures. This all continued until the US Securities Exec commission charged the top executives working for Xerox including CEO Rich Thomas , Paul Allure, Barry Roomier, Philip Fishcake , Daniel Maraschinos , and Gregory Taller with fraud which definitely was not good for the comma n any way.
The complaint stated that the top executive ordered others in company to, overstate profits anyway they could including using undisclosed accounting devices (SEC) This had a major negative impact on everybody in in the company from the employees, stock holders and even customers. T accounting irregularities were a huge sign that something was not right but employees really could not do anything because of the fact that they did no feel psychologically safe. People working at Xerox’s accounting department j did what they were told and did not question anything.
They most likely ha ailing that if they said anything to anyone, they would lose their job which probably were not willing to risk. The main problem that led to people include the CEO not being psychologically safe is the fact that the former CEO Paul was still really in control of everything and even influenced the decisions of Richard Thomas the current CEO. Richard Thomas in particular wanted to rid of Roomier who had an ongoing negative impact on the company but WA not successful in doing so. (Anthony &. Moore paragraph 9).
The main reason for this is because of former CEO Paul Allure told him the board wow to even approve of it which probably made feel like he was not psychotically safe. (Anthony &. Moore paragraph 9). If people are psychologically safe they will learn faster, encourage innovation, and things will get done. Xerox, there was a lack of innovation, and communication which led to issue never being resolved. This resulted directly from the fact that people did not feel psychologically safe to question, or communicate with others about their concerns. (Edmondson, Piazza, & Boomer p. 0). Overall Richard Thomas was a poor leader and should have never been CEO. He lacked ma heartsickness a successful leader would have. As we discussed in class a g leader is trustworthy, leads by example, communicates effectively, and is observant. The fact that Richard Thomas got fined by the SEC for fraud set bad example for everybody working under him. He failed to lead by example because he was doing things wrong. (McNally, Eric p. 2) Nobody really cool trust him any longer which really made everybody feel like they were not re in a team.
He was not trust worthy from employees or stockholder because he lost all trust when he got in legal troubles with the SEC. He lacked effects immunization skills because he knew there was a problem but instead of t steps to lead to company upward, he spent most of his time blaming others Another major reason Xerox failed was distrust between management team their employees and also among top management. Once Xerox tried to move forward and succeed in their business, all plans and strategies were made b top management, ignoring employee’s opinions.
Xerox was highly centralize hierarchical levels of control, formalization, and boundary roles were few. It important that this kind of giant company has few boundary roles. Manage names should deal with these parts to make all department run smoother and integrate better with each other, but since management team were in conflict due to having the ex-CEO in the company, employees get confused who is in charged so that it didn’t go around correctly. It is true that these m production company needs high level of hierarchical levels of control, but n CEO in Xerox tried to make decision without discussion with their employee. An assume that it is highly related with organization’s culture. Before, Too hired ex-CEO Allure was respected and had confidence to revamp organization structure. After Thomas become CEO in Xerox, he had low credibility and acceptance in Xerox corporate culture. His leadership was arrogant and ma employees think that he is unpleasant person. One of example is that he fir employees to make up company’s deficit which should be implemented in Larder’s era. In my experience, there was distrust relationship between my and his employees include me.
I used to work at Japanese restaurant, and w had meeting every time before starting each shift. Our boss mainly told us reserved customer supposed to come in today and what were the problems mistakes dealing with serving. He gave us time to express our ideas to make improvements in the restaurant, but our opinion never gets accepted. His replying was we didn’t understand Japanese culture, so it wouldn’t be help our business. First time he said that we didn’t feel much disappointment, buy once our opinion was rejected all the time, we lost morale and stopped giving our opinions to the organization.
We had to follow the direction that we were taught, and this was not appropriate in dealing with customer. Because of t the organization started seeing higher turnover rates, the main reason been that employees were dissatisfied with this work environment. This example my personal experience is very similar to the failure we seen in the Nut Islam case where employees told management about the problems, and manage ignored them, and after some time employees just didn’t say anything to management any more.
As I mentioned in my experience, having trust is really important part of an organization. If it fails, most employees lose their confidence, and also lose their motivation to contribute to the organization. Xerox should be more cooperate between their top management team and their coworkers. Their employees should follow top management’s direction toward placement of organization, but also top management team should listen and take some of their ideas to get improve their SUccess.
When many people hear about the lack of organizational justice, Xerox demoralized, the major factors that led to low morale and the legal troubles many people ask “What happened with Xerox’s after the CEO Richard Thomas resigned (fired) in May of 2000? ” In August 2001, Paul Allure gave the new CEO position to Anne Mullahs, a 24 year old veteran with Xerox and turned the company around. In 2004 “Business Week” included Ann Mullahs as one of the best managers that year. “Pushed for faster session making and instituted lean Six Sigma to improve efficiency.
Cut Debt and boosted cash flow, to an estimated $1. 5 billion in 2005, while maintaining research and development spending” (Business Week) When you look at Richard Ottoman’s credentials of having a doctorate in Economics with three masters (Marketing, Fiscal Affairs & Manufacturing) and was a prior CEO of Nabisco International and American Express and was the COO (2nd in command at IBM) and he was not able to turn the company around one may ask “What kind of credentials did this lady have that was able to turn this troubling company around?
Ann Mullahs received a BAA in English and Journalism from Martyrdom College in Tarrytown NY and started with Xerox in 1976 as a field sales rep and then continued to rise through the ranks to UP of HRS to chief staff of office. In fact many people believed her English and Journalism and her ability to communicate effectively is what contributed her success to turn the company around.
When you compare between the two leaders and by reading the articles in class, we immediately thought of the article of “Welcome Aboard (But Don’t Change a Thing” article by Eric McNally where you have a new CEO Cheryl History wanted o make some major changes at Alkaline Wonders and the past CEO Walter Swenson had to give her some advice of “you may need to pull people along more slowly to make sure you don’t end up tearing the place apart” That is exactly what Richard Thomas was doing. He was moving way too fast in a very short time frame.
He started to restructure how the sales force operated, he immediately started cutting jobs and people started to lose trust, morale went down, and he was ‘tearing the place apart” instead of building the place up. Another comparison between the two leaders is their communication style. When Thomas came in, he just started to make the changes without everyone knowing exactly on how he plans to restructure the company where Mullahs communicated a lot better for example “She talked about how together, they could fix the company’s problems, painting a picture of how the new Xerox would look like. When spoke with Xerox people, it was always about what the company was going to look like when we came through the turnaround”. (Susan Cincinnati NYSE) By communicating what the company was going to look like she was following the Cotter Model with phase one of getting started and create a Sino of what the organization will become. Phase two of involving everyone. She was meeting with customers and employees from one on one meetings to town hall meetings and communicated her vision often and in a variety of ways and third phase was Ongoing Improvement.
When many people were telling her not to invest in the R&D department she invested 5% of the company’s reeve and by doing this was keeping the interest and efforts on further improvement of the organizations. Also, in doing the research on Robert Thomas for when leaders fail to effectively Manage Behavior in their Organizations and why? I kook at Paul Allure as the main reason why Xerox was in such bad shape.