WELCOME

to the session of
Case Presentation
 Participants
Name ID
• Taneen Mustafa 3-07-13-006
• Md. Rakibul Qaiyum 3-09-15-044
• Syful Islam Sumon 3-09-15-054
• Md. Ashfaq Hossain Bhuiyan 3-09-15-029
• Rupan Kanti Das 3-09-15-046
Taneen Mustafa
ID: 3-07-13-006
 Introduction
Case:

Federal Express Inc. (A)

Source:

The case was written by Professor David Lewin with collaboration of Ms Debra Dalle
(MBA student) of Anderson School at UCLA and Mr Charles, Vice President of FedEx
corporation.

Objectives:

Company History of FedEx

Operations
Competition
Human Resource Policies
Expansion Opportunities & Issues
 Company History
What is Federal Express?

  A Company that provides rapid delivery of packages, letters, and other shipments within the United States and
worldwide. Federal Express Corporation, also called FedEx, virtually invented the overnight-delivery industry.

Who is the Creator of FedEx?

Fredrick W. Smith, son of a Southern entrepreneur, a student of Yale University established FedEx in 1971

What Special in FedEx?

• Largest International Cargo Company in the world.

• FedEx Express is the largest operating company in the FedEx family, handling about 3.3 million packages
and documents every business day.
• First transportation company dedicated to overnight package delivery
• Strongly dedicated to their customers
• Using standard policies and modern technologies
Company History(Cont.)
 Company History (Cont.)
Today's FedEx is led by FedEx Corporation, which provides
strategic direction and consolidated financial reporting for nine
independent operating companies that compete collectively under
the FedEx name worldwide
 The Central Components of the company

FedEx primarily started as a service company and

secondarily as a transportation company. The
central components of the new system were

• Ownership of the airplanes

• Computerized tracking of Packages
• 100 Percent Quality
• Commitment to Employees
The Central Components of the company

Ownership of the airplanes

Ownership of airplanes allowed Smith to develop a hub and spoke
system to easily control the operation from beginning to end

Computerized tracking of Packages

By using computerized tracking system FedEx can provide the
information to the customer where the package is at that time
during their shifting operations. But no other courier services are
able to provide this security to their customers.
 The Central Components of the company

100 Percent Quality

For FedEx this 100 percent quality means
1. Every package must be delivered on time
2. Every customer inquiry had to be handled in such a way that
the information would satisfy the customer fully
3. The commitment should be providing 100 percent quality not 98
or 99 percent.
 The Central Components of the company

Commitment to Employees
• Smith recruited and trained employee in such a way that they can use their
individual effort fully
• He provided them attractive compensation packages and substantial
opportunities for promotion and lifetime employment
• Unlike other courier services FedEx don’t use contract employees to perform
their workforce
• He was close to bankruptcy more than once but still he keeps the business
going on
• Smith was lobbied the U.S. Congress hard to change FAA regulations which
prohibited FedEx from flying the large airplanes and finally he became
successful
 ….…to be continued by

Md. Rakibul Qaiyum

ID: 3-09-15-044
 Operations
FedEx to institute overnight delivery and passing packages up to 70 pounds in weight to
all over the world. System was based on a hub and spoke configuration.
The operation conducts through the flowing steps:
1. Packages are tracked by the bar codes imprinted on their labels.
 
2. Individual counters carried bar code readers with which they checked
packages  
 
3. Computer got the barcode and other package related information and store
them secretly and correctly
 
4. customer service representatives then inform customers about where their
respective packages were in the in the system at virtually any point in the time.
 Operations(Cont.)

To make the operation more efficient and effective FedEx took

several initiatives so that customer will not feel unsecured
about its functions
1. Employees are encouraged to offer their suggestions
2. Individual customer service representatives and couriers are
free to make on-the-spot decisions during problem occurs.
3. The company establishes standardized policies, employee
training program, performance evaluation procedures and
operating process.
4. And finally company’s slogan of “Make it Purple!” (a reference
to FedEx’s unusual purple and orange color scheme),
exemplified FedEx’s emphasis on company wide adherence to
standardized operating policies and practices.
 ….…to be continued by

Md. Ashfaq Hossain Bhuiyan

ID: 3-09-15-029
 Competition
FedEx has run in the market with some difficulties and
hard competition with the renowned international
delivery companies.

Difficulties:
1. FedEx has to face the varied environmental and cultural
characteristics and work practices in those countries in which
it operates.
2. Sharp competition for the services which FedEx provided.
 Competition(Cont.)

The major competitors of FedEx

 
1. United Parcel Service (UPS)
2. United States Postal Service (USPS)
3. Emery Air Freight
4. Airborne Freight, Inc.
5. Commercial Airlines
 Competition(Cont.)
UNITED PARCEL SERVICE:
 UPS was a privately held company and it’s employees had been unionized since 1927.
 Company Strengths:
• Oldest and largest private delivery company in United States.
• In 1986, its average daily volume of delivered packages was 8.3 million.
• Cover every location of United States
• Local operation in many countries
• Offered its two-day “Blue Level Service” in 1953
Company Weaknesses:
• To get service sender had to established a UPS account and had to pay a weekly fee for
regular site pickups
• It was slow to integrate computerized tracking system and company owned company
owned air craft into its operation
• Until 1970 it did not aggressively market this service
• Until 1982 it did not offer overnight delivery service
 Competition(Cont.)
UNITED STATES POSTAL SERVICE:
It stated its operation and instituted its overnight “Express Mail”
service in 1978.
Company Strengths:
• Overnight delivery service
• In 1986, handled 40 million pieces per day
• Offered attractive prices
• Regular mail carrier for next day delivery
• Provide service from local post office and special post office boxes
located in many commercial area
Company Weaknesses:
• Employees were civil servants were subject to government
regulations and compensation program
 Competition(Cont.)
EMERY AIR-FREIGHT:  
Company Strengths:
• Leading air-freight forwarder in 1973.
• Most of Emery’s shipments were handled through contracts with airlines,
freight companies and local delivery services
• To get service no prior account was required
• Overnight service with competitive pricing started from 1978
• Delivery volume was 42000 pieces per day
• Merged with Purolator (specialized in ground package delivery) and cover 12
percent of the total overnight delivery market in United States
Company Weaknesses:
• Was dependent on other delivery service companies
• Had limited international exposure
• Relatively expensive
• Provide minimum tracking system
 Competition(Cont.)
AIRBORNE FREIGHT, Inc.:
It began as a traditional freight forwarder, much like
Emery.
 Company Strengths:
• It was quicker than Emery
• Used computerized tracking system
• Used own aircraft for delivery
• Offered on call package pick-up
• Provide domestic and international delivery services
• In 1986, it handled 105,000 pieces per day
 
 Competition(Cont.)
Commercial Airlines:
Most U.S. commercial airlines offered such services.
Strengths:
• Offered some form of next-plane-out

• Shipped packages from airport to airport on regular

scheduled flights
• Sold cargo space on commercial flights
• Often took several hours or days to shipped
• With coordination of local delivery service, they provide
door to door service
Weaknesses:
• small package delivery

• expensive
• limited package tracking capabilities
 ….…to be continued by

Syful Islam Sumon

3-09-15-054
Human Resource Policies
What are HR Policies?
Human resources are a term used to refer to how people are managed
by organizations. The field has moved from a traditionally
administrative function to a strategic one that recognizes the link
between talented and engaged people and organizational success.

HR policies allow an organization to be clear with employees on:

 The nature of the organization

 What they should expect from the company

 What the company expects of them

 How policies and procedures work at your company

 What is acceptable and unacceptable behavior

 The consequences of unacceptable behavior

 Human Resource Policies (Cont.)
 Recruitment and Training
 No Lay-off Policy
 Promotion from within the organization
 Grievance Procedure & Voice
 Compensation and financial participation
 Performance appraisal
 Recognition
 Communication
 Recruitment and Training

 They searched the labor market for energetic recruit

which is true for all type of new hiring.
 They made three months of orientation training for
almost all the new employees
 Training is subjective with both job-specific skill and
company policies & procedures
 Most employees received several weeks of formal
training each year to learn about new procedure and
technology
 Leadership training for supervisors, managers and
executives was provided on a regular basis.
 No Lay-off Policy

 They applied lifetime employment into their company

 They followed this policy to retain its experienced

workforce, to increase employee loyalty and reduce the
incentives for employees to become unionized.

 Moreover FedEx makes some modification through

mixing up this policy. FedEx employed temporary as well
as casual “on-call” employees for peripheral workforce.
 Promotion from within

 Most supervisory and managerial positions were

filled from the existing workforce.

 They thought that it was especially helpful in

attracting high quality recruits.

 Another advantage was that the promoted person would

understand the problems of their subordinates and would be
familiar with the company’s culture.
 Grievance Procedure & Voice

Fedex adopted two types of Grievance measures as a formal

procedure to seek for justice and raise voice from
employees of all level. The procedures are as follows.

 
1) Guaranteed Fair Treatment (GFT)

2) Survey-Feed-Back-Action (SFA).
 Grievance Procedure & Voice (cont.)
1.      Guaranteed Fair Treatment(GFT)

       STEP:1: Submitting the file of complain to the Immediate

supervisor
       STEP:2: Management Committee

       Step:3: International appeal Board

 
2.      Survey-Feed-Back-Action(SFA).

       More Structured method.

       Area of complain

       Participation of employee

       Employee reaction type

….…to be continued by

Rupan Kanti Das

3-09-15-046
Human Resource Policies (Cont.)

• Compensation and financial participation

• Performance appraisal
• Recognition
• Communication
 COMPENSATION & FINANCIAL PARTICIPATION
FedEx uses to follow competitive compensation rate. FedEx’s
Compensation levels were competitive with other firms though it
attempted to stay bit ahead of median pay rate in the labor market and
communities.
 
FedEx pays two types of compensation annually:
1. Fixed compensation - without judging the performance while
2. variable compensation - determined as per performance.
 
Salary increment based on two factors and these are for:
a) Changes in labor market rate
b) Individual merit through annual performance appraisals.

In case of financial participation FedEx facilitated some opportunities

like the entire full time employee will be eligible to company’s profit
sharing plan.
 Performance Appraisal

FedEx’s employee job performance was evaluated twice annually.

Mainly his or her supervisors do the task. The performance
evaluation procedure contains the following rules:
1. An employee who received a negative performance evaluation or
violated company policy must follow a “Performance improvement
program” to enhance employee job performance and/or correct
standard behavior.
2. In the last stage of one day paid leave during which time the
employee stayed home and considered whether or not to remain with
the company.
3. If the employee decided to stay with FedEx, he or she present a
plan to appropriate supervisor outlining the steps to be taken
improve job performance.
FedEx’s also maintain a Leadership Evaluation Awareness process
(LEAP) to identify candidates for management position.
 Recognition
• FedEx recognized outstanding employees through
such programs as the “Bravo Zulu” base on U.S.
Navy flag, which mean “Well-done” this award,
was given to employees in recognitions of their
special efforts in the areas of teamwork and
cooperation.

• The award included “Bravo Zulu” certificates,

small cash payments and voucher that could be
used for restaurants and tickets to theatrical or
sporting events
 Communication
•FedEx employees were distributed through numerous
locations in the United States.  

•FedEx maintain its own television network and

transmitted daily broadcast to each of its distribution
center in the United States.

•The broad cast was also video taped and played back
in employee cafeterias during work beak.Broadcast
messages included the previous night’s service record,
the company’s stock performance, workplace safety
updates and other items.
Expansion Opportunities and Issues
Opportunities
FedEx got some opportunities to expand its services all over
the world.
• In 1984 through the acquisition of several small international
courier companies
• In 1988 through acquisition of the world’s largest Freight
Company named Flying Tigers

Issues
The issues to be considered to adapt with the new extended business are as
follows
• Working in the diverse environment
• absorbing unionized people who worked in decentralized environment