Page 114 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Strategic Management

Notes In 1982, David T. Kearns (Kearns) took over as the CEO. He discovered that the average
manufacturing cost of copiers in Japanese companies was 40-50% of that of Xerox. As a
result, Japanese companies were able to undercut Xerox's prices effortlessly. Kearns quickly
began emphasizing reduction of manufacturing costs and gave new thrust to quality
control by launching a program that was popularly referred to as 'Leadership Through
Quality.' As part of this quality program, Xerox implemented the benchmarking program.
These initiatives played a major role in pulling Xerox out of trouble in the years to come.
The company even went on to become one of the best examples of the successful
implementation of benchmarking.
Source: www.icmrindia.org

6.5 Summary

Culture is a powerful component of an organisation's success, laying the tracks for strategy
to roll out on.
It is the foundation for profit, productivity and progress. While it can accelerate getting to
the next level of performance, it can just as easily act as drag.
Culture-strategy Fit is a leading organisational culture consulting firm conducting ground
breaking culture diagnosis and change projects to help organisations leverage their culture
to drive strategy and performance.
It involves specifying the objective of the business venture or project and identifying the
internal and external factors that are favorable and unfavorable to achieving that objective.

A value chain is a chain of activities.
Products pass through all activities of the chain in order and at each activity the product
gains some value.
The chain of activities gives the products more added value than the sum of added values
of all activities.

It is important not to mix the concept of the value chain with the costs occurring throughout
the activities.

Benchmarking is an improvement tool whereby a company measures its performance or
process against other companies' best practices, determines how those companies achieved
their performance levels.
Benchmarking uses the information to improve its own performance.

6.6 Keywords

Assimilation: The acquired firm willingly surrenders its culture and adopts the culture of the
acquiring company.
Benchmarking: The concept of discovering what is the best performance being achieved, whether
in your company, by a competitor, or by an entirely different industry.
Cultural Fit: Compatibility of culture with other arenas.
Deculturation involves imposition of the acquiring firm's culture forcefully on the acquired
firm.

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