Xerox Case Study Summary

Xerox Corporation's Palo Alto Research Center has developed many technological breakthroughs such as the mouse, the graphical user interface, and the Macintosh computer. However, Xerox has faced several issues that has caused their capital to drop drastically. Despite their technology, several workers left the company, like Steve Jobs, to build multi billion dollar corporations using the foundations first developed at Xerox. In the 1980s, they lost their market in photocopiers to Canon. Many sales reps left the company to join other companies, which affected Xerox's relationships with customers. Xerox Corporation's stock price had dropped - being the same in late 2003 as it was in 1961. In 1999, Rick Thoman was assigned the role of CEO of Xerox Corporation. It was him who established "Creative Accounting" which made Xerox's Mexican subsidiary look excellent. It was a $119 million write off from a subsidiary with only $400 million in revenues. This discrepancy resulted in the Securities and Exchange Commission launching a lawsuit for overstating earnings by $3 billion in 3 years time. On top of this, Thoman wanted to restructure Xerox's global sales in order to compete with Japanese firms. All of these issues resulted in Xerox's stocks falling and almost declaring bankruptcy. In May 2001, Thoman was fired.

It was not the technological innovation that caused the company to soar down, but it was the organizational politics that happened at the top of the organization. This merely shows how important it is for a company to work on recruiting good quality employees so that they can succeed in their market.

"The Cost of Employee Turnover" Summary

Employee turnover has been a constant issue, especially in the hospitality industry. It can cause operating expenses to increase, as replacing staff requires hard costs, soft costs, and opportunity costs. All of these additional costs will eventually decrease profitability. The cost of turnover is divided into five steps. First is pre-departure, when the employee gives notices about his/her leave. Then there is recruitment, where the company has costs to do with promotional materials, advertising, and recruiting sources, in order to recruit a new member of the team. After is selection, where time is put into selecting a particular candidate through interviewing, background checks and reference checks. Once the candidate is selected, orientation and training is required to understand a company's particular procedures. Finally, there is productivity loss. In the hospitality industry, it was concluded that the higher the job complexity, the higher the cost of turnover. The amount of people for higher level jobs is smaller than of the people for low skill jobs. However, these higher level candidates are generally more qualified applicants. It was concluded that the cost of turnover is higher for complex jobs in larger hotels which run in high cost of living locations. Finally, the result of employee turnover affects revenue and expenses, which in turn reduces profit. With this issue, companies today can try to design better policies and procedures in recruiting and keeping quality employees.

Ashley Jang, Cathy Tran, Matthew Jiu