Fedex Organizational Structure
ORGANIZATION STRUCTURE MBA 640: Organizational Behavior Nicholaus R. McNeal April 26, 2011 INTRODUCTION Organizational behavior is vital to the success of any organization. When the organization’s behavior is not effective, there is a chance the company will suffer. This paper will evaluate the organizational structure of Federal Express, in particular FedEx Express (FedEx, 2011). ORGANIZATIONAL CULTURE (FORMATION AND EFFECTS) FedEx has acquired a reputation for possessing a strong customer-service organizational culture.
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The textbook states, “Organizational culture is what the employees perceive and how this perception creates a pattern of beliefs, values, and expectations” (Ivancevich, Konopaske, & Matteson, 2011, p. 40). Since its inception in the 1970s, FedEx’s culture has centered on the customer. “If employees are to transform to be customer-focused, the idea must first begin with the leadership team and filter through the organization. As the idea trickles downward, employees make a conscious decision to modify self to align with the established culture” (Morrow, 2003, p. ). This, along with other concepts has helped form FedEx’s culture and continues to do so today. Another concept that has shape FedEx’s culture is “specifying and reinforcing the behavior employees are expected to deliver, both with external customers and coworkers” (Morrow, 2003, p. 1). Employees receive daily reminders of expectations via video messages from executive management on televisions scattered throughout the corridors of FedEx. The messages cover a wide range of information that illustrates how an employee remains in compliance with “The FedEx Way. Reinforcements play a great role in the effects of FedEx’s culture, outcome, and effectiveness. The textbook states, “If quality customer service is important in the culture, then individuals are expected to adopt this behavior, and if adhering to a specific set of procedures in dealing with customers is the norm, then this type of behavior would be expected, recognized, and rewarded” (Ivancevich, Konopaske, & Matteson, 2011, p. 42). This statement is exemplified in FedEx’s culture. “The rewards and recognition system is used to encourage employees who exhibit a “FedEx Attitude” and sends a message to non-performers” (Morrow, 2003, p. ). Examples of reinforcements at FedEx include Bravo Zulu awards, Purple Promise awards, and Five-Star awards just to name a few. Each award is accompanied with an innovative styled trophy, the employee getting his or her name mentioned in the company newsletter, and money. FedEx’s reward and recognition system successfully motivates employees to exhibit the desired behaviors to improve the business. The aforementioned items, formation of FedEx’s culture, rewards and recognition, along with diversity and promotion from within has guided the FedEx into awesome outcomes.
Fortune 500 reports, “FedEx has a seven percent voluntary turnover rate” (CNN, 2011). In addition, FedEx was named the Best Cargo Hub for 2010. Employees receive reminders of these things daily as they enter the facilities and see banners hung wall to wall of numerous FedEx awards. PROCESSES (Communication, Decision-Making, and Leadership) The communication process at FedEx is a fundamental process. The organization relies heavily on the communication process to organize employees into a unified team focused on achieving company goals.
The company’s communication philosophy integrates electronic media with the person-to-person communication process inside each organization code and work group. This creates synonymous dialogue globally. FedEx depicts communication as a two-way process. The two-way describes the transporting of information. In the process, an individual sends information and feedback while another individual receives the information and dialogues concerning feedback. This process results in shared information and understanding.
FedEx puts forth great effort in training employees to apply correct judgment and decision-making skills. When faced with a situation, employees are encouraged to apply the F. A. D. E. process. F stands for focus. In this stage, employees identify the situation or issue. A stands for analyze. In this stage, employees investigate the situation to determine the root cause of the situation. D stands for develop a solution. Based on the information from the investigation, the employee makes a sound decision based on facts and applies good judgment. E stands for execute the process.
Once a decision is made, the employee is to implement the solution. When it comes to leadership, FedEx is one of the best. FedEx’s leadership team has guided the organization through tough times, especially, within recent years. Quality leadership is essential to success at any organization. Quality leadership involves expressing a vision, mission, values, goals, and strategies; supporting business plans and policies. FedEx encourages every leader to coach and develop employees by modeling behavior that demonstrates the leader’s commitment. ORGANIZATION STRUCTURE (DESIGN)
An organization’s design is pertinent to the well-being of the entire organization. “Organizational design is the decisions and actions that result in an organizational structure” (Ivancevich, Konopaske, & Matteson, 2011, p. 482). These decisions include, but are not limited to determining goals, mission, operational plans, job functions, and salary. FedEx’s organization structure is compromised of seven subsidiary organizations. The subsidiary organizations are FedEx Corporation, FedEx Services, FedEx Express, FedEx Ground, FedEx Freight, FedEx Custom Critical, and FedEx Trade Networks (FedEx, 2011, p. ). Each subsidiary organization has values and ideas that represent the entire organization; however, the objective of each subsidiary is to ensure: 1. The organization’s values and strategy is consistent with the division’s function 2. Invent and inspire innovation 3. Survey employees to gauge satisfaction 4. Improve workgroup performance 5. Develop and retain employees 6. Select and promote best employees 7. Determine organization direction (FedEx, 2011, p. 1) The remainder of the paper will discuss a main point from each of the aforementioned objectives.
VALUES / STRATEGY Objective one is to ensure FedEx’s values and strategy lines up with the organization. Values and a strong strategy can guide an organization in all economic situations. FedEx has a proven background of being an organization being dedicated to its values and strategy. FedEx Express’s values have made it a top organization in today’s society. The values also contribute positively to the organization’s overall goal. The values are people, service, innovation, integrity, responsibility, and loyalty. Each value carries its own objective. 1.
People – Values people and promotes diversity in the workplace and thinking 2. Service – A positive spirit puts the customer at the heart of everything 3. Innovation – Invent and inspire services and technologies that improve work 4. Integrity – Manage operations and finances with honesty and efficiency 5. Responsibility – Champion safe and healthy environments for communities 6. Loyalty – Earn the respect and confidence of employees, customers, and investors in everything (FedEx, 2011, p. 1). FedEx’s strategy is simple. It works seamlessly and simultaneously on all levels.
FedEx’s strategy is “compete collectively, operate independently, and manage collaboratively” (FedEx, 2011, p. 1). INNOVATION Objective two is to invent and inspire innovation. “Creativity produces innovation and innovation is the lifeblood of a growing number of organizations” (Ivancevich, Konopaske, & Matteson, 2011, p. 87). FedEx’s innovation properly aligns with the organization because it helps the organization stay ahead of other organizations. Innovation is a trademark that has garnered FedEx top ratings around the world. FedEx’s innovation can be contributed to several reasons.
First, is the avoidance of reinventing existing solutions. Everyone is expected not to waste time or money on reinventing something that has already been discovered and tested. The second reason is setting stretch goals. Inaction and past success lead many organizations to plan for the future in similar patterns. Without some outside incentives, the goals for improvement are likely to improve by a minimum margin. This does not cut it in FedEx’s world. The company believes in order to be the best; the best must be put forth in every effort.
The third reason is to anticipate and head off competitors. If goals are set based on current industry standards, any competitor can take the helm at any time. EMPLOYEE SATISFACTION Objective three is to gauge employee satisfaction. This objective aligns with the organization because it gives leadership the opportunity to hear the voice of employees, which can ultimately aid in retaining employees. Employees at FedEx are given the opportunity to voice whether he or she is satisfied or dissatisfied with the organization. Employee satisfaction is a component of an employee psychological contract. Psychological contracts were introduced by Argyris (1960) to refer to employer and employee expectations of the employment relationship, i. e. mutual obligations, values, expectations and aspirations that operate over and above the formal contract of employment” (Smithson, & Lewis, 2003, p. 1). Employee opinion on decisions concerning employee jobs is another factor in the psychological contract. When an employee feels their opinion is counted it engages and motivates the employee to put forth the utmost effort. FedEx applies this concept in its Survey-Feedback-Action (SFA) process.
In this process, FedEx surveys all employees to classify strong points and areas to improve. The survey guarantees leadership is aware of concerns and provides avenues for improvement. The process is broken into three (3) parts. The first part of the process is survey. The survey is an unidentified questionnaire given to all employees. The survey items were created to collect information about what assists and hold back employees at work. Survey results are tallied and returned to management. The manager, then, shares the results with employees. The second part is feedback.
Management schedules a meeting with employees to dialogue about survey results. The aim of the meeting is to point out concerns, determine causes, and formulate a plan to tackle concerns. The final part of the SFA is action. All suggestions made in the meeting become the action plan. The plan was created to address employee concerns and provide a direction to improvement. The aim of the action plan is to act as a link of communication and steer the implementation process. In order for the SFA process to be a success, employee must work towards resolution.
CHANGE MANAGEMENT Objective four is improving workgroup performance. This objective aligns with the organization because it continually gives management and employees a higher level, in which to aspire. This is a reason why FedEx changes frequently. A commonly used FedEx phrase is “The only thing constant is change. ” Employees know never get accustomed to one way of doing things because it will change. Influencing change transpires in several ways at FedEx. One way is every employee is encouraged to embrace the idea of change management.
Change management is the planning and delivery of tactics to bring about the desired change. Employees take several courses aiding in accepting change in different situations. Another method of influencing change is leadership exemplifying and driving the change into the organizations’ cultural. As employees see management embrace and adjust to the idea of change, they (employees) will also. Sustaining organization change can be a challenge but with effort, it can be done. FedEx leadership maintains a positive outlook on change, whether the idea is agreed upon or not.
From a personal viewpoint, management has undergone several major changes within recent years and employees have never seen management in the dumps about any of the changes. The day leadership downplays change the employees will follow. DEVELOP AND RETAIN EMPLOYEES Objective five is develop and retain employees. This objective aligns with the organization because it aids the organization in cultivating and maintaining talent. New hires undergo what is called the process of organizational socialization. Starting work at a new organization can be exciting for a new hire.
The textbook states, “The process model of organizational socialization illustrates how a new employee, through a combination of seeking information and experiencing socialization tactics from the organization, can adjust to his or her role and gain social acceptance” (Ivancevich, Konopaske, & Matteson, 2011, p. 48). The process has five stages. Stages one and two are “New employee joins organization” and “Employee is exposed to socialization tactics” (Ivancevich, Konopaske, & Matteson, 2011, p. 48). FedEx has an engaging process to socialize new employees.
The textbook states, “Socialization is the process by which organizations bring new employees into their culture. There is a transmittal of values, assumptions, and attitudes from older employees to new hires” (Ivancevich, Konopaske, & Matteson, 2011, p. 47). The socialization process begins with new hire orientation. In orientation, “new hires are given the employee handbook, the Purple Path manual, and the Workplace Violence Prevention pamphlet” (FedEx, 2011, p. 1). Each of these sheds light on how FedEx operates. Second, the new hire receives information on FedEx’s benefit package. FedEx offers benefits for health, life insurance, disability, vision, and more” (FedEx, 2011, p. 1). Third, the new hire is shown a short video of momentous FedEx moments in FedEx history. Employees view the hub in Memphis, the global map of all FedEx airplane routes, clips of FedEx shipping high profile packages such as the Titanic exhibit and the Gulf Turtle Rescue mission. Each of these items helps paint a picture to the new hire that he or she does not work for a mom-and-pop shop, but for a high-profiled organization. After orientation, the new hire attends FedEx’s Code of Business Conduct and Ethics class (COE). This class offers guidelines to ensure employee behavior on the job supports the reputation FedEx has earned as one of the most respected brands in the world“ (FedEx, 2011, p. 1). In addition to the COE, the company’s alert phone number is given to new hires in case he or she has a question(s) about his or her role in the company or the company itself. The alert line fits into stage three of the Process of Organizational Socialization. Stage three is “New employee seeks information about role and culture” (Ivancevich, Konopaske, & Matteson, 2011, p. 48). Stage four is “New employee adjusts to role and is accepted ocially” (Ivancevich, Konopaske, & Matteson, 2011, p. 48). In this stage, the new hire attempts to sprout his or her wings and fly solo. This stage also finds the new hire being socially accepted and bonding with other employees in the organization. Stage five is similar to the adult phase in life. The new hire claims his or her share of responsibility in the organization. In addition, the new hire grasps the concept of the job and possibly finds ways to do the job better. Lastly, this stage finds the new hire becoming a better fit in the organization as he or she become more satisfied with the job.
FedEx even has programs for employees that desire to further his or her professional career. One program is called eCompetencies. In this program, “employees provide personal perception on how well he or she displays certain behaviors listed in 150 categories. Employees are encouraged to be honest and use the full range of the rating scale. The scale starts at one (substantial development is required) through five (highly effective)” (FedEx, 2011, p. 1). All ratings will be disclosed with management and the employee will be placed within the correct program to develop areas needing development.
SELECT AND PROMOTE EMPLOYEES Objective six is select and promote employees. This objective aligns with the organization because, like, objective five, it aids the organization in cultivating and maintaining talent. Employees receive the opportunity to bid on jobs before outside talent is considered. FedEx sponsors a program called the ASPIRE to management program. ASPIRE stands for Assessment of Skills, Performance and Interest Required for Entry into Management. “Any employee interested in applying for a management level position must first go through this program“ (FedEx, 2011, p. ). In this program, employees must complete ten steps. The first four steps are only classes. The classes are management training, diversity, writing with intention, and peer Leadership. Step five is the employee must lead a 15-20 minute workgroup meeting. After the meeting, the employee must receive feedback from management and peers. Step six is serving as manager for one complete shift. Every task management completes in a shift, the employee must complete including all meetings, conference calls, etc. Step seven is complete an individual development plan (IDP). An IDP is a written plan that outlines what development goals an employee would like to accomplish and what steps he or she plans to use to meet the goals” (FedEx, 2001, p. 1). Step eight is complete the eCompetencies Assessment. Step nine is print all screens that provide proof all of the previous steps have been completed, which leads to step ten where the employee can apply for an open manager position. “Certain jobs on the open position board are catered just for ASPIRE candidates” (FedEx, 2011, p. 1) ORGANIZATION DIRECTION Objective seven is determining organization direction.
This objective aligns with the organization because it is a compass guiding the organization into the future. This objective is important to employees because it will give them a heads up on where the organization is headed. Under the objective, FedEx engages in a process called Analyzing the Gaps. “The Gap Analysis is a creative thinking process that identifies the major gaps between the current reality and the future state of the organization” (FedEx, 2011, p. 1). This process includes four steps. Step one is reflect on the current reality and the future state of the organization.
As an individual reflects, it gives him or her opportunity to perform step two. Step two is identifying the major gaps between the present and the future and determines what is needed to complete the gap. Step three is focus on the macro “big picture. ” As employees focus on the big picture, it will continually give employees something, in which to aspire. The last step is developing a list of the top ten Gap Areas. Potential gap areas include services, skills, technology, and processes (FedEx, 2001, p. 1). RECOMMENDATION FedEx is an extraordinary organization on the move doing extraordinary things.
While on this extraordinary move, constant improvement and innovation is necessary to remain in the forefront of the industry. Speaking from a personal viewpoint, one recommendation would be to discontinue the use of the FedEx Shuttle Bus service. Every day, all employees enter the employee parking lot, parked his or her vehicle, and wait for a shuttle bus to transport the employee to a security screening facility. After completing the security screen, employees must wait for another shuttle bus to transport to the employee’s workstation.
This has been an ongoing complaint of employees for years. If an employee is running late, the wait for a shuttle bus can seal the deal and ensure a late. IMPLEMENTATION To implement the recommendation, it is suggested to build an overhead employee walkway from the employee parking lot to the security screening facility. The walkway will tower over the adjacent streets to keep down on employees weaving in and out of traffic. This suggestion will rid FedEx of the bothersome shuttle buses and it will encourage employees to walk, which is an exercise needed in today’s obesity-filled country. In 9 states – Alabama, Arkansas, Kentucky, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee, and West Virginia – obesity affects over 30% of its population” (Somdatta, 2011, p. 1). As employees begin to walk to and from work, the idea will encourage a healthier lifestyle. A special ramp and escalator will be provided for workers who have a disability and are not able to climb the stairs to the overhead walkway. In order for this suggestion to come to fruition, some construction work must take place.
In order to build the overhead walkway, most of the construction work will have to take place at night when traffic is bare to minimal. The present security screening facility will have to relocate to a building across the street from the employee parking lot. This suggestion is doable. It is suggested FedEx gives the shuttle bus company a two – three month warning concerning discontinuing the bus contract as soon as the new security screening facility is completed and the overhead walkway is approaching completion. This will give all shuttle workers time to find other means of employment.
In the end, this suggestion is a win/win for FedEx and its employees. FedEx will save money from having to pay the shuttle bus company and this will promote a healthier lifestyle to FedEx employees. CHRISTIAN WORLDVIEW Genesis 2:15 reads, “And the Lord God took the man, and put him into the garden of Eden to dress it and to keep it. ” This scripture is indicative of an organization. Executive management puts leaders in charge of the organization and expects the leaders to monitor, manage, and maintain the organization. WORKS CITED Smithson, J. , & Lewis, S. (2003).
Psychological contract. Sloan work and family research network. Retrieved March 3, 2011, from http://wfnetwork. bc. edu/encyclopedia_entry. php? id=250 Kozlowski, SWJ. , & Ilgen, DR. (2006). Enhancing the effectiveness of. Unpublished manuscript, Michigan State University, Michigan. Retrieved from http://web. ebscohost. com/ehost/pdfviewer/pdfviewer? hid=17&sid=afde589e-7cc7-48d0-bfe0-c0218bec79a7%40sessionmgr15&vid=15 Ivancevich, J. , Konopaske, R. , & Matteson, M. (2011). Organizational culture. Organizational behavior and management (9th ed. , p. 40-48). Boston: McGraw-Hill Companies.
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