Fedex Corporation Is Well Known Commerce Essay


FedEx Corporation is a well-known transportation company located in Memphis, which ranked as the world's largest express transportation company with the $42.7 billion of annual revenue. In the year of 1971, before FedEx Corporation been created, FedEx Express was pioneered the express industry with their founding. Hence, the corporation was established as FDX Corporation in the year of 1998; and became FedEx Corporation in January, 2000. Till today, FedEx is providing their express services in more than 220 countries around the world, including Malaysia. Not only that, the workforce of FedEx around the world has reached more than 300,000 employees; and there are daily 9 million shipments for express, ground, freight, and expedited delivery services are provided to their customers. Furthermore, FedEx Corporation won both the ranking of No.6 among "World's Most Admired Companies" by Fortune Magazine, and the Top 40 "Best Companies for Diversity" by Black Enterprise Magazine in this year, 2012.

On the other hand, Armstrong and Baron (2005, p.7) stated that performance management is a strategy of an organisation which relating to their business activities in the context of their human resources policies, culture and style, and communication systems; and it communicated the organisational objectives to all the employees. As the following, performance management is defined by Waggoner et al. (1999, as cited in Verweire and Berghe, 2005, p.6) in general as the process of quantifying the efficiency and effectiveness of purposeful action and decision making. The purpose of performance management is to achieve and improve the organisational effectiveness to get better results through setting the right goals, developing strategies then take the corrective action.

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Additionally, there are few performance management tools often used by the organisations to improve their performance. The Balanced Scorecard (BSC) is one of the performance management tools used by the organisations often. According to Kaplan and Norton (as cited in Armstrong, 2001, p.685), the Balance Scorecard (BSC) provides the suitable missions and strategy into a set of performance or corrective action for the organisations. Therefore, FedEx used the BSC to evaluate their current performance and to determine appropriate strategies in order to improve their performance. Since the BSC able to provide the organisations the useful information via different perspectives, thus the BSC been used by FedEx to evaluate and improve their performance, and determine appropriate strategies.

FedEx has their global logistics network in 215 countries and 365 airports adding in >43,000 of vehicle fleet also employees of >138,000 around the world. Therefore, there are necessarily of huge number of customs authorities and manpower need to be taken into account when FedEx setting up this global logistics network. Compared to other companies (DHL/UPS - competitors of FedEx), FedEx has a benefit of there are over 138,000 employees teams around the world; this has become a HR competency of FedEx in the express logistics industry. Thus in the process of building the global logistics network, FedEx has effectively used its HR competitive advantage of >138,000 employees around the world effectively as a huge number of manpower are needed. For instance, in >138,000 employees around the globe FedEx selected 6,500 IT people to develop a team of operating FedEx IT technology in their global logistics network. In addition, this HR competitive advantage of FedEx is closely relating to the internal business processes perspective and the learning and growth perspective in the BSC; due to in these two perspectives, HR is an important issue need to be considered both in operation of FedEx to improve and create value chain. And, FedEx had to be people-oriented in order to operate their global logistics network around the globe well and enhance it.

According to Rob Carter (executive vice president & chief information officer of FedEx) said that "what works well in Europe and US might not have the same effects in parts of beyond Europe and US such as Asia". Thus, FedEx deploys the culture (cultural) flexibility which is complex and requires a lot of investment capital and manpower. In the process of deploying the cultural flexibility, there will be a lot of investments FedEx needs to be taken into account when setting up this cultural flexibility due to the core business environment of FedEx is global express logistics. And there are over 138,000 employees around the globe FedEx needs to be considered to deploy this cultural flexibility due to FedEx is a multinational corporate; so this worldwide manpower are useful for FedEx to implement this cultural flexibility. Therefore, this implementation of cultural flexibility of FedEx can be considered as an innovation as it is a multinational corporate compared to other companies. Hence, it is time consuming for all the employees to really understand the concept of this cultural flexibility; but subsequently this cultural flexibility can be effectively as a staff motivation. This is due to there will be different cultural habits of authorities around the world, thus the employees have a chance to absorb extra layers of information and knowledge they might need via this innovation. Further, the cultural flexibility structure can allows the employee growth as linking with the learning and growth perspective in the BSC that HR is always the main issue to be considered when an organisation thinks to improve and create value. Via those extra information and knowledge of this cultural flexibility, the employees might apply their gained information into work FedEx better and create better communication between employees around FedEx worldwide. Automatically, this innovation of cultural flexibility will be another strong competency without losing sight of FedEx goals compared to other companies; due to this cultural flexibility can be a strategy that FedEx deploys their global logistics network and systems are work well through the teamwork and cooperation of their employees adding with investments they contributed into it are sound.

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On the other hand, FedEx also deploys a two-way communication to give their teams autonomy to meet the market needs and deliver technology that make sense as the cultural flexibility gives FedEx an innovation and competitive advantage compared to other companies. In this two-way communication, FedEx always welcomes the feedback from both the employees and customers to suggest what and how could them to improve the performance. From time to time, this two-way communication could be another staff motivation for FedEx employees around the globe; due to when FedEx accepts the useable suggestions from employees, means that FedEx is step into more people-oriented corporate. And, this acceptance of employees' feedback is a kind of confirmation towards the job performance of FedEx employees; thus the employees will be put more their efforts in their job with the confirmation from FedEx. Therefore, FedEx will able to achieve its performance objectives through their performance support with the confirmation; due to the employees always the important asset of an organisation because the employees are always the front-line whom first communicate with customers rather than the employer. Hence, the market needs could be satisfied more effectively through their own technology as the two-way communication makes the communication between FedEx and customers more direct as the culture flexibility brings out the two-way communication. Moreover, the two-way communication between FedEx and their employees can encourages the knowledge sharing among the employees as their current knowledge to be improved. This provides a chance which can lead FedEx to an innovation that its knowledge management become more diversify along their business environment of involving different personality of authorities. Subsequently, this chance can lead FedEx to another innovation that becomes a learning organisation that other firms are difficult to occur as the diversification of knowledge management of FedEx brings a great staff development for FedEx teams learning with each other. Beneficially, the worldwide employees of >138,000 of FedEx has become an absolute great bridge for FedEx to apply the two-way communication. This is due to among the over 138,000 employees of FedEx are involving different countries, races, languages, and social culture; thus there will be different authorities style among those worldwide FedEx teams. Then, layers of extra knowledge and information from these different worldwide authorities will be provided to the employees and encourages them for their continuous performance improvement to meet FedEx performance objectives. And meanwhile, this two-way communication will another innovative staff motivation and competitive advantage of FedEx towards achieve their performance and quality goals. In the learning and growth perspective of BSC, this two-way communication adding with the cultural flexibility is an important combination to boost the FedEx employee growth for long-term strategy also improvement.

Therefore, FedEx focused on their staff development through the combination of the cultural flexibility and two-way communication as mentioned as their worldwide authorities culture provide the employees the extra knowledge and information for them continuously to improve their performance. However, it is very difficult to apply this combination because there will be a lot of management of change are necessarily for the firms to implement. Not only the management of change, the invest capital and infrastructure intensive are taken into a high commitment level to implement this combination of the cultural flexibility and two-way communication. To achieve the effective global logistics systems, it is very important for FedEx to be a technology oriented logistics corporate. This is due to the technology framework is cohesive around the world nowadays, while the global logistics has slowly become an IT-based industry. Thus, it is important for FedEx to use their IT technology to communicate with their worldwide customers in 215 countries also their >138,000 employees around the world. In addition, every business parts of FedEx are closely dependent on IT just because of the IT technology can be applied flexibly in different markets nowadays. Relating with the commitment levels of manpower, FedEx runs its IT operations with a large team of IT people of around 6,500 IT people out of >138,000 employees. Via these around 6,500 IT people, the millions of FedEx customers are using the FedEx technology and they have been trained to use the FedEx technology effectively on their premises from time to time. For instance, FedEx Corporation developed entities in order to serve the diverse needs of customers more effectively, which including FedEx Kinkos, FedEx Ground, and FedEx Freight etc. FedEx Kinkos is purposed to deliver the digital and physical documents services and business services; then FedEx Ground is located in North America, which purposed to provide the services that moving the packages as a unit to the same destination on the same day; then FedEx Freight is purposed for the fast transit needs and economical LTL (less-than-truckload) delivery for the basic freight shipping needs of customers. These entities have effectively played a critical role that increase the service quality of FedEx and effectively satisfy the customers' expectations that they need reliable services via FedEx own IT technology.

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Moreover, relating with the financial perspective, FedEx continues to invest about $1.5 billion a year in its IT technology in addition their revenues of about $42.7 billion in a year, as IT technology helps FedEx to improve their performance and communication with customers continuously. Now, the FedEx Corporation is not only a normal express logistics company but a well-known global logistics corporation that worth $27 billion. This is because FedEx believes that IT could be a strategic enabler for their worldwide business so FedEx decided to build their own technology; and FedEx want to do all their activities electrically even they installed their technology in every country that conducts their business activities. Since the global logistics industry is closely relating with the customs authorities of different countries involved, due to every single package must be authenticated by the customs before deliver it to the customers. Therefore, the BSC plays an integral role with its financial perspective in enhancing the FedEx capabilities to create and apply the IT technology in their global logistics networks around the globe. In the financial perspective, the annual revenues of FedEx already play an important role to support its investment on their IT; subsequently to satisfy the main objectives of their shareholders and stakeholders - profits. By using the 6,500 of IT manpower effectively, how FedEx manages the long-term improvements on their IT technology may become the main consideration of customers towards its services. However, this complex and expensive IT technology creation and implementation is an innovative competitive advantage for FedEx; but not other firms. This is due to a huge amount of invest capital is first needed for other firms want to set up an IT technology like FedEx IT technology, which is covering the whole global logistics network around the world. And the firm might be in risk of bad financial condition in contrast when the firm unable to effectively manage the capital in implementing the IT technology; addition it is time and manpower consuming to implement it. Other than invest capital, the manpower is another important issue to implement IT technology. In FedEx, there are 6,500 IT people to manage its IT technology; and this is definitely a competency that other firms unable to compete with. Due to FedEx is a multinational corporate, its >138,000 worldwide employees already become a perfect back-up for FedEx as other firms don't have such large amount of employees in the world.

As the following, in the customer perspective, FedEx focused on the customer satisfaction survey to measure their satisfaction towards FedEx services. This customer satisfaction survey not only captures the levels of service quality of FedEx also captures the changing expectations and needs of the customers. In addition, this customer satisfaction survey enables FedEx to determine the customers' requirements from time to time then update their technology and deliver it to their customers. Thus, FedEx is not only technology oriented but also customer oriented to drive their business. Therefore, the BSC plays an integral role with its customer perspective in enhancing the capabilities of FedEx to satisfy the customers' expectations that what the customers want and expect? Or whether the customers satisfied or not with the services they provided? As mentioned, FedEx used customer satisfaction survey to determine levels of satisfaction of customers towards their services. Besides it is a traditional method, this is also a useful and an effective way for FedEx to achieve long-term improvements on their understanding of the customers' requirements and expectations is changing fast from time to time. Then, adding with their IT technology improvements based on those sound from customers. Compared to other firms, the customer satisfaction survey is a normal procedure to determine their customers' satisfaction; but for FedEx, it is like a class for them on how to really improve their IT technology and increase their service quality levels in worldwide. Because FedEx collects information from the different culture of customers in the 215 countries that involve their business activities, means those collected information represent the different sound of expectations and needs of customers such as Europe and Asia. Therefore, it is very difficult for other firms to use customer satisfaction survey as their main consideration to improve.

Then, in the improvement side, FedEx used SQI (Service Quality Initiative) to measure the daily operations of FedEx and transmitted to the employees at all FedEx sites. Theoretically, the SQI is used to measure the internal process performance and directly linked to the corporate planning process. In order to achieve the high levels of quality goals, FedEx designated >1,000 employees to set up a cross-functional team for each service component to work on improvements based on the SQI analysis; and those service components simply including the front-line employees, support personnel, and all departmental managers. Generally, the employees always the asset of a firm and the customers are the main source of profits and revenues of a firm. Other than KPI and MBO, the SQI plays an integral role in enhancing FedEx capabilities to meet the fast changing expectations and needs of customers effectively by using its existing resources such as IT technology. Compared to other firms, the SQI within FedEx able to provide great information about their teams how operate in its global logistics system; then FedEx will easily captures how they need to improve their staff development or modify their IT technology in order to perform better. Thus, the information provided by the SQI can become another innovation that other firms hard to compete; due to FedEx itself already is a strong competitive advantage with its size, staff amount (teams), and it is multinational.


As a conclusion, FedEx itself is already a strong brand even a competency not only in the global logistics industry but also a good learning organisation among other corporations in the world due to its different cultural of authorities. And FedEx used the Balanced Scorecard (BSC) to measure their using strategy in their existing operation; then determine the more appropriate strategies for further long-term improvements. As mentioned, the BSC is functioned as a performance management tool for a firm (corporate) through the four perspectives - financial perspective, customer perspective, internal business processes perspective, and learning and growth perspective. Compared to other firms, FedEx captured their sense that IT would be a long-term and continuous strategy for them to enhance their capabilities of improving their performance. Thus, FedEx put their most effort on developing their own IT technology not only for enhancing their capabilities also for the convenience of customers around the world. This has plays an integral role in making FedEx to determine the more appropriate strategies for their future development as FedEx is a well-known multinational corporate in the world that other firms hard to be using their resources to develop like FedEx. And FedEx did well in its staff development and motivation along with its different cultural habits of authorities among >138,000 employees around the world via the knowledge management between them; this structured a great knowledge sharing between each other among the worldwide employees.