xerox corporation case study answers

Want to create or adapt books like this? Learn more about how Pressbooks supports open publishing practices.

4.2 Case in Point: Xerox Motivates Employees for Success

Anne Mulcahy, Former Xerox Chairman of the Board (left), and Ursula Burns, Xerox CEO (right)

Fortune Live Media – Fortune Most Powerful Women 2012 – CC BY-NC-ND 2.0; Fortune Live Media – Fortune Most Powerful Women – CC BY-NC-ND 2.0.

As of 2010, Xerox Corporation (NYSE: XRX) is a $22 billion, multinational company founded in 1906 and operating in 160 countries. Xerox is headquartered in Norwalk, Connecticut, and employs 130,000 people. How does a company of such size and magnitude effectively manage and motivate employees from diverse backgrounds and experiences? Such companies depend on the productivity and performance of their employees. The journey over the last 100 years has withstood many successes and failures. In 2000, Xerox was facing bankruptcy after years of mismanagement, piles of debt, and mounting questions about its accounting practices.

Anne Mulcahy turned Xerox around. Mulcahy joined Xerox as an employee in 1976 and moved up the corporate ladder, holding several management positions until she became CEO in 2001. In 2005, Mulcahy was named by Fortune magazine as the second most powerful woman in business. Based on a lifetime of experience with Xerox, she knew that the company had powerful employees who were not motivated when she took over. Mulcahy believed that among other key businesses changes, motivating employees at Xerox was a key way to pull the company back from the brink of failure. One of her guiding principles was a belief that in order to achieve customer satisfaction, employees must be treated as key stakeholders and become interested and motivated in their work. Mulcahy not only successfully saw the company through this difficult time but also was able to create a stronger and more focused company.

In 2009, Mulcahy became the chairman of Xerox’s board of directors and passed the torch to Ursula Burns, who became the new CEO of Xerox. Burns became not only the first African American woman CEO to head a Standard & Poor’s (S&P) company but also the first woman to succeed another woman as the head of an S&P 100 company. Burns is also a lifetime Xerox employee who has been with the company for over 30 years. She began as a graduate intern and was hired full time after graduation. Because of her tenure with Xerox, she has close relationships with many of the employees, which provides a level of comfort and teamwork. She describes Xerox as a nice family. She maintains that Mulcahy created a strong and successful business but encouraged individuals to speak their mind, to not worry about hurting one another’s feelings, and to be more critical.

Burns explains that she learned early on in her career, from her mentors at Xerox, the importance of managing individuals in different ways and not intentionally intimidating people but rather relating to them and their individual perspectives. As CEO, she wants to encourage people to get things done, take risks, and not be afraid of those risks. She motivates her teams by letting them know what her intentions and priorities are. The correlation between a manager’s leadership style and the productivity and motivation of employees is apparent at Xerox, where employees feel a sense of importance and a part of the process necessary to maintain a successful and profitable business. In 2010, Anne Mulcahy retired from her position on the board of directors to pursue new projects.

Case written based on information from Tompkins, N. C. (1992, November 1). Employee satisfaction leads to customer service. AllBusiness . Retrieved April 5, 2010, from http://www.allbusiness.com/marketing/market-research/341288-1.html ; 50 most powerful women. (2006). Fortune . Retrieved April 5, 2010, from http://money.cnn.com/popups/2006/fortune/mostpowerfulwomen/2.html ; Profile: Anne M. Mulcahy. (2010). Forbes . Retrieved April 5, 2010, from http://people.forbes.com/profile/anne-m-mulcahy/19732 ; Whitney, L. (2010, March 30). Anne Mulcahy to retire as Xerox chairman. CNET News . Retrieved April 5, 2010, from http://news.cnet.com/8301-1001_3-20001412-92.html ; Bryant, A. (2010, February 20). Xerox’s new chief tries to redefine its culture. New York Times . Retrieved April 5, 2010, from http://www.nytimes.com/2010/02/21/business/21xerox.html?pagewanted=18dpc .

Discussion Questions

• In terms of the P-O-L-C framework, what values do the promotion and retention of Mulcahy and Burns suggest are important at Xerox? How might these values be reflected in its vision and mission statements?
• How do you think Xerox was able to motivate its employees through the crisis it faced in 2000?
• How do CEOs with large numbers of employees communicate priorities to a worldwide workforce?
• How might Ursula Burns motivate employees to take calculated risks?
• Both Anne Mulcahy and Ursula Burns were lifetime employees of Xerox. How does an organization attract and keep individuals for such a long period of time?

Principles of Management Copyright © 2015 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

Module 6: Designing a Motivating Work Environment

6.7 optional case study: motivation at xerox.

Figure 6.11 Anne Mulcahy, Former Xerox Chairman of the Board (left), and Ursula Burns, Xerox CEO (right) Source: Photo courtesy of Xerox Corporation.

As of 2010, Xerox Corporation (NYSE: XRX) is a $22 billion, multinational company founded in 1906 and operating in 160 countries. Xerox is headquartered in Norwalk, Connecticut, and employs 130,000 people. How does a company of such size and magnitude effectively manage and motivate employees from diverse backgrounds and experiences? Such companies depend on the productivity and performance of their employees. The journey over the last 100 years has withstood many successes and failures. In 2000, Xerox was facing bankruptcy after years of mismanagement, piles of debt, and mounting questions about its accounting practices.

Anne Mulcahy turned Xerox around. Mulcahy joined Xerox as an employee in 1976 and moved up the corporate ladder, holding several management positions until she became CEO in 2001. In 2005, Mulcahy was named by Fortune magazine as the second most powerful woman in business. Based on a lifetime of experience with Xerox, she knew that the company had powerful employees who were not motivated when she took over. Mulcahy believed that among other key businesses changes, motivating employees at Xerox was a key way to pull the company back from the brink of failure. One of her guiding principles was a belief that in order to achieve customer satisfaction, employees must be interested and motivated in their work. Mulcahy not only successfully saw the company through this difficult time but also was able to create a stronger and more focused company.

In 2009, Mulcahy became the chairman of Xerox’s board of directors and passed the torch to Ursula Burns, who became the new CEO of Xerox. Burns became not only the first African American woman CEO to head a Standard & Poor’s (S&P) company but also the first woman to succeed another woman as the head of an S&P 100 company. Burns is also a lifetime Xerox employee who has been with the company for over 30 years. She began as a graduate intern and was hired full time after graduation. Because of her tenure with Xerox, she has close relationships with many of the employees, which provides a level of comfort and teamwork. She describes Xerox as a nice family. She maintains that Mulcahy created a strong and successful business but encouraged individuals to speak their mind, to not worry about hurting one another’s feelings, and to be more critical.

Burns explains that she learned early on in her career, from her mentors at Xerox, the importance of managing individuals in different ways and not intentionally intimidating people but rather relating to them and their individual perspectives. As CEO, she wants to encourage people to get things done, take risks, and not be afraid of those risks. She motivates her teams by letting them know what her intentions and priorities are. The correlation between a manager’s leadership style and the productivity and motivation of employees is apparent at Xerox, where employees feel a sense of importance and a part of the process necessary to maintain a successful and profitable business. In 2010, Anne Mulcahy retired from her position on the board of directors to pursue new projects.

Discussion Questions

• How do you think Xerox was able to motivate its employees through the crisis it faced in 2000?
• How does a CEO with such a large number of employees communicate priorities to a worldwide workforce?
• How might Ursula Burns motivate employees to take calculated risks?
• Both Anne Mulcahy and Ursula Burns were lifetime employees of Xerox. How does an organization attract and keep individuals for such a long period of time?
• An Introduction to Organizational Behavior. Authored by : Anonymous. Provided by : Anonymous. Located at : http://2012books.lardbucket.org/books/an-introduction-to-organizational-behavior-v1.1/ . License : CC BY-NC-SA: Attribution-NonCommercial-ShareAlike

Privacy Policy

We’ll be at Compliance Week National 2024 in Washington, D.C., April 2-4. Learn more or schedule a time to meet with us at the show here.

• Resource Center

Xerox’s Accounting Scandal Recovery Tactics

Xerox's accounting scandal recovery tactics.

The Xerox scandal teaches us how to overcome a crisis and come out better.

The turn of the century was marked with a number of accounting and ethics scandals that would significantly alter the importance of corporate ethics and compliance. The Securities and Exchange Commission (SEC) began investigating the accounting practices at Xerox in 2000, which eventually led to Xerox agreeing to pay a $10 million settlement.

During Xerox's post-scandal transformation, Sarbanes-Oxley came into effect to improve financial and accounting compliance. Today, Xerox has turned its practices around and secured a spot on several lists of the most ethical companies. This post discusses the tactics deployed at Xerox to regain consumer confidence and improve the ethical culture of the company.

Want to know which other companies made the news for ethical lapses?

Download the free eBook "The Unlucky 13: Lessons Learned from Companies Caught in the Act."

Xerox Scandal: Accounting

In 2002, the SEC filed civil fraud charges against Xerox. The charges were filed after a two-year investigation into the company's accounting practices. The SEC charges came at a time when major fraud scandals - WorldCom and Enron - broke out.  The SEC alleged that Xerox's management accelerated the revenue recognition of leasing equipment by upwards of $3 billion over a four-year period and overstated the company's pre-tax earnings by $1.5 billion to alleviate pressure from Wall Street and to hide the company's true performance.

The accounting techniques used by Xerox violated the generally accepted accounting principles (GAAP) . Revenues were assigned to time periods in which they were not yet received. This resulted in inflated revenues, and also provided investors with inaccurate information on the company's income and assets. It was reported that management was aware of, and even approved, these accounting methods.

According to the initial complaint filed by the SEC:

"The allegations in the complaint center around seven different accounting actions used, in Xerox parlance, to "close the gap" between the company's operating results and the market's expectations from 1997 through 2000. Many of these actions had the purpose and effect of accelerating Xerox's recognition of revenue at the expense of future periods. According to the complaint, Xerox fraudulently disguised these actions so that investors remained unaware that the company was meeting earnings expectations only by using accounting maneuvers that could compromise future results."

Another interesting point to consider is the fact that, unlike Siemens, it was reported that during the Xerox scandal, they didn't fully cooperate with SEC investigators. The lack of cooperation lead to the stiff penalty handed down by the SEC. The $10 million fine was the largest fine administered by the SEC in a financial fraud case at that time.

RELATED: Corporate Accounting Fraud: Learn From the 10 Worst Scandals

Xerox's Response

Practices at Xerox are much different today, as the company - like many others that find themselves facing compromising charges - has learned its lesson. Before settling with the SEC, Xerox had already ousted executives who had participated in the accounting fraud schemes. Following the $10 million settlement with the SEC and the restatement of company financials from the 1997-2000 time period, Xerox began its transformation, lead by CEO Anne Mulcahy.

Mulcahy's first step was to replace the company's accounting team and begin cutting costs to reduce the company's large debts. Mulcahy's optimism in her role as CEO and the company's ability to achieve greatness was well documented and this optimism rubbed off on employees. Mulcahy managed to change the tone at the top at Xerox, which contributed to her ability to rebuild Xerox into the company it is today.

The case study From Goliath to Lazarus: Xerox is Revived by the Power of Customer-led Innovation , discusses how Mulcahy responded to feedback from both employees and customers to make positive changes. The case study also documented Mulcahy's efforts to open up the lines of communication within the company by traveling to speak with people who would provide her with constructive criticism to bring the company back to success.

Of course, turning the company around and working towards gaining a profit wasn't easy. Employees were laid off and various corporate functions were outsourced to save money.

RELATED: 41 Types of Employee Fraud and How to Detect and Prevent Them

Outsourcing Internal Audit

One of the processes selected for outsourcing was the company's internal audit. Many experts recommend outsourcing the internal audit function to maintain the objectivity that comes from an external auditor who doesn't have any direct relationship to the company.

Benefits of internal audit outsourcing include:

• An independent auditor can be more objective.
• Outsourced auditors tend to be efficient and focused, given the tools and methodologies they bring to the table.
• Costs are variable and can be lower than in-house.
• The supplier can usually provide access to better and more varied resources.

Companies can learn from the mistakes other organizations have made to avoid making similar ones. The Xerox scandal forced its company executives to reevaluate the way accounting matters were handled within the company, while new members were brought in to ensure that known inaccuracies were reported and corrected.

Related Resources

Lessons from a history of misconduct at koch industries, lessons learned from the imf’s unethical corporate culture, lessons from the las vegas sands fcpa violation investigation, recovering from ethical lapses and investigations: siemens, download these fraud investigation tools to protect your organization now, 4 risk management tools you need to protect your organization.

Search our collection of knowledge assets and quick facts to drive your research.

Enterprise Content Management

Pennsylvania Department of Human Services case study

See how the Pennsylvania Department of Human Services overhauled forms and claims processing with greater security using Xerox ® DocuShare ® , reducing claims processing time by 90%.

Feb 6, 2024

Managed Print Services

IESE Business School Case Study

Discover the strategic impact of Xerox Managed Print Services on a leading global business school, propelling the institution into a new era of digitization while enhancing the student experience.

Jan 4, 2024

Training provider innovates the delivery of learning, making content more accessible.

CRC Formation training staff use Xerox ® Workflow Central to offer students new ways to learn.

Jan 3, 2024

Production Print Workflow

Improved Student Engagement

See how using Xerox ® Baltoro ® HF Inkjet Press helps school DCMO BOCES deliver more-engaging educational content while saving significant costs.

Dec 18, 2023

Small and Medium Business

Bell Law Case Study

Discover how a leading employment law firm overcame document processing and sharing hurdles with the innovative solutions provided by Xerox ® Workflow Central.

Opportunities for Success with Gibraltar School District

Discover how Xerox technology helped the Gibraltar School district increase productivity and reliability while providing the best educational experience and equipping students with opportunities for success.

Aug 31, 2023

IT Services

Transforming Triumph Business Capital

Discover how Triumph Business Capital leveraged Xerox IT Services to streamline their operations and achieve business success.

Jul 26, 2023

Empowering Education to Virginia K-12 Schools

Explore how Xerox Services empowered Virginia K-12 Schools to achieve educational excellence through innovative solutions and support.

Jul 25, 2023

Production Print

Create “Print That Matters” with digital embellishments

Embellishments are no longer just for luxury brands. Learn how Print Panther use digital embellishments to create "Print that people keep".

Jul 13, 2023