Textbook Chapter20 - bri75829_web_ch20.qxd 11:55 AM Page 1...

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Leadership: Motivating Change within Organizations C H A P T E R 2 0 C H A P T E R O U T L I N E Leadership Vision Setting Motivation Decision Making within Firms Incentive Problems and Organizational Politics Understanding Attitudes toward Change Changing Organizational Architecture Proposal Design Maintaining Flexibility Commitment Distributional Consequences Marketing a Proposal Careful Analysis and Groundwork Relying on Reputation Emphasizing a Crisis Organizational Power Sources of Power Tying the Proposal to Another Initiative Coalitions and Logrolling Is Organizational Power Bad? The Use of Symbols Summary Appendix: Strategic Value of Commitment and Crisis I n 1982, David Kearns was appointed CEO of Xerox Corporation, the leading producer of copy machines in the world. 1 At that time, the company faced serious problems. Between 1976 and 1982, Xerox’s share of installations of new copiers in the United States dropped from about 80 percent to 13 percent. Japanese companies—Canon, Minolta, Ricoh, and Sharp—had become major players in this 1 Details of this example are from D. Kearns and D. Nadler (1992), Prophets in the Dark (Harper Business Press: New York).
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20-2 Part 4 Applications of Organizational Architecture market. These companies were selling copiers at prices that at times were lower than Xerox’s costs for producing competing machines. A major reason for Xerox’s decline in market share was poor product quality. As Kearns put it, Our customer cancellations were rapidly on the rise, our response to the problem was to try to outrun them by pushing hard to get enough new orders to offset the customers we had lost. Customers were fed up with our copiers breaking down and our service response. Kearns reasoned that if something was not done, “Xerox was destined to have a fire sale and close down by 1990. [The] only hope for survival was to urgently commit the com- pany to vastly improving the quality of its products and services.” According to Kearns, most Xerox employees understood neither the extraordinary gravity of the problem nor the fundamental importance of improving product qual- ity. He realized that even as CEO, he could not implement his vision of increasing product quality simply by ordering thousands of employees to focus more on quality. First, employees did not necessarily possess all the skills required to produce quality products. Second, unless employees were convinced that it was in their individual in- terests to focus more on quality, it would be difficult to motivate them to alter their behavior. Certainly, Kearns did not have the time to monitor each employee to see if his vision was being implemented. Third, Kearns faced a difficult balancing act; he feared that painting too dismal a picture would induce some key people to leave the company.
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