Assignmentweek 3-Discussion Exercise (Ch.3)

Assignmentweek - Phil Le 1 Phil Le Dr Mansour Sharifzadeh MHR 301 21 October 2010 DISCUSSION ASSIGNMENT Ch 3 1 Discuss Xerox Corporation in terms

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Phil Le 1 Phil Le Dr. Mansour Sharifzadeh MHR 301 21 October 2010 DISCUSSION ASSIGNMENT Ch. 3 1. Discuss Xerox Corporation in terms of risk, uncertainty, and how its managers handled the company’s problems. As a new CEO of Xerox Corporation, Anne Mulcahy faced so many problems ($18 billion in debt, exhaustion of $7 billion credit line, revenue’s double-digit falling, stock price decrease, losing market share to competitors, investigation from SEC). Under such a high uncertainty and risk, Anne Mulcahy did not make her hurried decision because she did not have sufficient information to make the best decision (filing bankruptcy or fighting for Xerox survival). Instead, she started identifying and diagnosing her company’s true problems to discover that her company was total disarray with an outdated business plan (Xerox had lots of terrific technology, but it was not as customer-connected as it needed to be. It was over-engineered, tons of functionality. Xerox was renowned for sophistication beyond anybody's requirements, and people stopped wanting to pay for it). After identifying the true problems , she generated alternative solutions by asking many people, including Warren Buffett, for their advices because she never had prior personal experiences in such a crisis. In spite of receiving many pieces of advice ( such as caving to angry shareholders, killing the famed Xeros culture,
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Phil Le 2 shutting down research and development, filing for bankruptcy and so on), she followed Warren’s advice: She got on planes for 90 days and circled the globe, listening to her company’s employees and customers (not her investors, bankers or regulators as many CEO typically did) what they thought had gone wrong. Then she visited each of Xerox’s top 100 executives to ask for their support and cooperation after informing them about the real situation of Xerox. She believed when they were better informed, they would be more committed, more highly motivated to support and contribute to her strategic decision . By doing so, Anne Mulcahy successfully collaborated with her company’s key stakeholders, who are employee groups (sales persons and executives) and Xerox’s customers, to help her develop and implement her strategic plan. What is more, as a leader during Xerox crisis, Anne did not pretend nothing happened . She spoke directly and honestly with shareholders about the reality of Xerox. By giving people the bad news straight, she gained credibility. She communicated and reinforced her company’s values by trying to find ways for internal and external people to support her: She did not ignore the problems or downplayed them or reassured too much. She was honest about Xerox’s true problems but optimistic about its future, not creating false hopes. Notably, she generated her custom-made solution which was initially based on
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This note was uploaded on 02/11/2011 for the course MHR 301 taught by Professor Jue during the Spring '11 term at East Los Angeles College.

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Assignmentweek - Phil Le 1 Phil Le Dr Mansour Sharifzadeh MHR 301 21 October 2010 DISCUSSION ASSIGNMENT Ch 3 1 Discuss Xerox Corporation in terms

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