Xerox & Deutsche Telekom People and Organization Team 1 contents

Xerox & Deutsche Telekom

People and Organization Team 1

contents

• Major challenges of Xerox & Deutsche Telekom
• Leadership style of Anne Mulcahy & Rene Obermann.
• Action choice of three strategic options by Mulcahy
• Obermann's action to confronting employees’ negative reactions to his change efforts

Deutsche Telekom & Xerox challenges

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Deutsche Telekom challenges

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Xerox challenges

Deutsche Telekom

• Introduction: Deutsche Telekom is one of the largest telecommunications corporations in the world in Germany with tacit backing of the German government, they sell traditional landline services
• Challenges:
• Headcount
• Service quality is not commensurate with the high salary
• Sluggish with innovation

1, Headcount

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About 250,000 employees, the company was bloated beyond comparison with any of its competitors .They faced with the same need to cut costs and streamline services but were thwarted by the same inability to dispense with workers

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With the tacit backing of the German government, which was unwilling to sanctioned large-scale redundancies for electoral reasons, the unions had successfully protected their members' job security ever since DT's privatization in 1996

2, Service quality is not commensurate with the high salary Many other European state monopolies had suffered from profound customer dissatisfaction with their poor service ethic during the initial phase of their privatization. In 2006 a total of two million of DT's fixed line subscribers defected to other providers

3, Sluggish with innovation It was not until March 2006 that it first offered digital television services to subscribers; It had no combined mobile-fixed line package until that same summer, years after rivals had first offered such deals; and triple-play phone-internet-TV options were not announced until the final quarter of the year. Other suppliers had more, better and cheaper products on the market, and consumers voted with their feet.

Xerox Introduction

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Xerox was built on the foundation of one of the most successful product launches ever.

After a decade of development, Xerox had introduced the model 914 copier in 1959, leasing the refrigerator- sized office machine to customers in low-cost long-term agreements, under which Xerox collected a fixed price per page printed.

They established a research and development center - Palo Alto Research Center (PARC) PARC originated many technologies that launched the information revolution: the graphic user interface, computer mouse, Ethernet protocol, first laser printer, bit mapping, advancing in information theory, object oriented computer languages, and the idea of "windowing" computer applications

Xerox challenges

• Outside:

they have lost their monopoly to competitors. The next decade brought dizzying competition as new competitors Canon, Minolta, Ricoh and Sharp aggressively entered the US market.

Xerox's share of US copier installations fell from 80% to an estimated 13% by 1982. In addition, Unprepared for price competition, Xerox was unable to adapt to smaller margins and appeared to be headed for insolvency in the early 1980s

Xerox challenges

Inside:

• The sales reorganization so disrupted customer relationships that revenue and profits suffered. Sales team members lost client relationships they had cultivated over the years. Many of them took advantage of the strong job market and left the company
• Xerox customers not only lost their sales contact, but also began experiencing increased billing issues due, in part, to the customer administration changes and more complicated pricing plans. With the two strong customer ties to Xerox broken, competitors exploited the opening for new business and stole market share from Xerox
• As the Xerox sales team scrambled to find new business, it cut prices sharply and wound up closing fewer and fewer profitable contracts

Leadership style of Anne Mulchay

Weaknesses

• Slow and

inefficient improvement on

making revenues

Strengths

• Ability to make motivate and influence others
• Valuing people
• Forthright manner
• Let all members to participate in discussion
• Making a time to review a day for a better day

Leadership style of Rene Obermann.

Strengths

• Straightforward, efficient, and active leadership style

Weaknesses

• Making people work for income not for passion of its job
• Losing trust of people who work for a company

Xerox solutions

• Reinforce the financial indicators of the company
• Restructuring the company
• Focus on research and development new technology

I. Reinforce the financial indicators of the company

Reselling shares that are not available effectively and sign a new credit contract to raise capital

II/ Restructuring the company

• cutting down on administrative costs and applying outsourced services to those areas where the company is difficult to compete
• cutting 22,000 employees, putting all resources into markets where the company benefits outperforming competitors, thereby boosting revenue and profit. Within 5 years, the number of company employees decreased from 79,000 to 55,000

III/ Focus on research and development new technology

• Instead of manufacturing copiers and desktop printers, the company shift to focus on multi-function office equipment, including photocopiers and Printers, scanners and fax machines
• Xerox's renowned research centers work with admirable efficiency: in 2007 alone, up to 584 state patents were granted to the company's engineers.

=> As a result, in just over a year, Mulcahy reduced operating costs by $ 1.7 billion annually, selling about $ 2.3 billion worth of Xerox unnecessary assets and declining debt level from nearly 18 billion USD to 9.2 billion USD

The letter to the CEO

Over staff cost at DT was 25% of sales

About 18% at France Telecom

What should Rene Obermann. Do?

Work

Money Time And…

Q & A