Fed Ex Case Brief

Ever since its establishment, FedEx has committed itself to total quality service and had consistently been ranked on Fortune magazine’s industry lists, including “Worlds Most Admired Companies”, “100 Best Companies to Work For” among other accolades. FedEx has expanded far beyond what its Founder Frederick W. Smith has started back in 1971 and continued to strengthen its position as the market leader in its industry over the past 40 years. Their astounding achievements can be credited to the beginning high standards set by Fred Smith and these well-defined goals are communicated clearly and timely to the employees through its integrated business units. The standards were then periodically reinforced to ensure that they stay relevant, effective and efficient. Today, the rapid and continuous growth in the increasingly volatile and competitive business environment has inevitably contributed to FedEx’s key issues such as coordination, efficiency, customer expectations and employees’ management. As such, Fred Smith has to set new standards and constantly reinforces them in order to maintain all those achievements that gained the company much success over the years.

Firstly, Fred Smith changed the way on how it manages employees in the business units. Instead of a rigid hierarchical organizational structure, he focused on employee empowerment and involvement, and emphasized the team approach to getting work done. Through this implementation, the leadership roles were shared between the managers and team members. The decision-making authority was placed on every single team member instead of solely on the manager which also led to an increased team accountability and responsibility. These changes also encouraged the employees to be innovative, to make important decisions and be proactive in discovering new solutions for existing problems. Nonetheless, he provided employees with the information and technology needed to continuously improve organizational performance and created a “job-secure environment” for employees. An example of this successful implementation of team approach is the Quality Action Team, which was the key in improving business processes such as halving the number of packages FedEx delivered late. These self-managed Quality Action teams opened up more leadership opportunities for different employees to take up, leading to improved employee morale and strengthened leadership skills. It also strengthened the relationship between employees and management due to open communication between management and employees as everyone is on an “equal hierarchy”. The team performance was continuously reinforced through the monthly presentation of Circle of Excellence award to the best FedEx station, hence motivating employees to be more task-oriented, innovative, driven and increases teamwork within the business unit.

Next, FedEx philosophy has leaned towards a team-centered leadership approach instead of the traditional leader-centered approach. Managers’ roles were redefined to act as facilitators and to encourage employees to offer up ideas and then act on the most suitable idea so as to enhance productivity and achieve organizational goals. For example, Fred Smith spearheaded the “golden package” concept where it focused on the use of team-centered leadership approach in achieving the critical need to deliver the customers’ package on time. This concept motivated employees to constantly figure on how to make delivery on time, even during crisis due to competitive pressure or natural disaster, so as to enhance customer satisfaction and significantly reduce the number of late deliveries.

Lastly, FedEx’s open, flexible team-based organizational structure such as QAT, “golden package” concept and team-centered leadership has indeed proven to be a great success in allowing FedEx to achieve their outstanding organizational performance, keep in pace with competitors such as United Parcel Service and to retain its status as the market leader in its industry.