I would like to start by saying that the United Parcel Service (UPS) company is one of the largest US package delivery company that provides specialized transportation, delivery and logistics services not only in the USA but also around the world. The UPS offers numerous supply chain solutions that would meet the needs of most demanding customers starting with freight forwarding, customs brokerage, delivery fulfillment, financial transactions and repairs. The UPS currently possesses the following three major strategic departments:
US domestic package department. This department works primarily with the delivery of letters, important documents, and packages around the USA. Client across the land can use customized package distribution solutions. This is currently considered to be the most important department which is a flagman of all other departments. This department gets the heaviest investments, and consolidates the greatest amount of power to be subsequently delegated to other departments around the globe.
International package department. This department does basically the same things that the US domestic package department does, yet on an international arena serving over 200 countries and territories around the world. The International package department deals with the import and export operations as well as customs clearance services. The UPS management understands that in the next several years the importance of international package operations will become greater than the importance of domestic operations simply because foreign operations offer much greater opportunities and levels of risk.
Supply Chain and Freight department. This department is engaged in the forwarding services and logistics operations that would provide customized supply chain design and management as well as freight distribution and customs brokerage services. I will note that the Supply Chain and Freight department provides consulting and professional services to the customers around the world. This department also engages in electronic services such as UPS online solutions for automated shipping and tracking. The USP Supply Chain and freight department also provides financial advise and consulting and oftentimes provides customers with short-term and rarely long-term financing, secured money lending, Letters of Credit, Global trade financing, credit cards and equipment leasing.
In 2004, the UPS owned more than 96 thousand package cars, vans, mobiles, motorcycles and other vehicles and 570 aircraft units. The company had been created in 1907 and ever since would grow in size and expand around the world.
United Parcel Service engages in international business operations through its international package department and the supply chain and freight department. The international business had been deemed as one of the most important elements of corporate operations simply because globalization of economy nowadays is the difference between economic leadership of a corporation and its complete bankruptcy and default. United Parcel Service ever since its creation would strive to spread its activity abroad by employing novel policies and practices that would contribute to the economies of scale, efficiency of operations and benefit for global customers. UPS currently strives to penetrate the new emerging economies of the Eastern Europe, China and South Asia, the places not much served by other parcel services that provide quick delivery of packages as UPS does.
Legal, Ethical and Social Responsibilities
United Parcel Service operates legally both in the USA and around the world adhering to both the domestic and international laws as well as a stringent internal code of ethics. The United Parcel Service prior to entering any foreign country with its services and operations starts exploring its legal framework. Once the legal framework had been understood, the United Parcel Service planning department would develop the ways to most effectively work in the country within its legal framework (Johnston, 2004).
The ethical issues at United Parcel Service are taken seriously simply because it had been understood that doing business ethically and legally guarantees the long term survival of United Parcel Service as well as its acceptance around the world and support from its clients.
General Planning and Strategic Planning
United Parcel Service takes the issues of planning as important elements of daily operations. The major strategic planning takes place in the headquarters of United Parcel Service while the short term and country-specific tactical planning takes place at each of the United Parcel Service international branches. The planning is defined in the employee manual and in most cases, as based on the funds requested and employees involved requires the formal approval from the regional offices of United Parcel Service, which in turn are accountable before the headquarters of United Parcel Service (Eskew, 2004).
Operations Management and Plans
United Parcel Service creates all operations plans and management strategies in the USA and once they get developed, tested and approved there, they would be applied to all foreign branches of United Parcel Service. Local branches in order to alter the pre-established operations management and plan need to obtain a formal approval from the regional headquarters as well as central headquarters of United Parcel Service. As one can observe the United Parcel Service management committee strives remain resistant to changes especially when they deal with the management and operations matters.
Organizing Work and Structure
United Parcel Service’s work organization and structure certainly are worth noting and can serve as examples to most companies around the world. The company since its inception strived to develop the most ergonomic workplace and the most streamlined operations. It is for this reason at present the workplace of each employee is organized in accordance with the corporate standards that promote efficiency and effectiveness of operations, and employee personal satisfaction. The headquarters approve everything starting with what computers to place in the office, to what air conditioners to be used in the offices to what printer brands are to be used in what offices. By the same token, the company headquarters approves different cars, vans and planes to be used in different branches (Robbins, 2004).
Work Team Utilization
United Parcel Service understands the importance of teamwork and synergy and therefore does everything possible to assure that people work effectively in teams as well as on their own. Working in teams provides another control for United Parcel Service simply because in the presence of other people one is unlikely to commit a fraud and steal something. The presence of peers and the need to fill out the peer evaluation forms at the end of each team project assures that everyone works as hard as possible simply because they understand that their performance is constantly being assessed by others. Most of the assignments at United Parcel Service require teamwork participation.
Staffing decisions are made in the United Parcel Service at each of its distinct branches not only in the USA but also around the world. The entry level jobs of drivers, assistants, guards, custodians etc are made individually at each of the branches regardless of be they located in the USA or around the world. The management within United Parcel Service typically gets promoted from within, up to a certain level in all of its branches. Therefore, all the entry level employees around the world get promoted from within to a managerial position which still will never allow one to become the CEO (Chief Executive Officer) of United Parcel Service or a member of the board of directors. The top positions are typically given to the US nationals who get sent abroad to manage different branches and individual departments (Shelton, 2003).
In foreign countries staffing starts with the employment ads placed in major newspapers read by business professionals. The potential candidates are requested to submit a resume and 2 letters of recommendation either electronically (via email), by post, or in person submitting the package to the reception/secretary. The Human Resource department of United Parcel Service selects successful candidates and contacts them on the phone inviting them to take entry tests. The tests concentrate on assessing the future employees’ English written skills, logic and rational thinking. During the test the employees are required to write two essays on different topics which show the candidate’s aspiration and motivation to work for the United Parcel Service. Those who successfully pass the test are urged to attend two interviews; one with the Human Resource manager and one with the department manager. The Human Resource manager assesses the overall qualifications of the future employees, while the department manager places an opinion as to whether or not this candidate will be able to work well in the team and carry out the assigned responsibilities. The successful applicants then have an informal salary interview and typically within a month start working. As noted earlier, United Parcel Service has key managerial positions reserved for the US nationals who supervise the work of locals.
The difference between staffing in the USA and abroad is that in the USA, United Parcel Service actively participates in job fairs run on college and university campuses. Also in the USA, United Parcel Service has different internship opportunities available for students who in the future want to work for the UPS. Also, sometimes UPS lures top executives and middle level managers to work for the UPS, something which is not done abroad. While in the USA, United Parcel Service needs to spend money or advertising and luring the employees with attractive salaries and bonuses, in most developing countries that UPS strives to penetrate, the job ad in a major newspaper is enough, the high unemployment rates make people actively seek for jobs in foreign companies.
Employee and Manager Development
Employees and managers get developed differently in the US and foreign United Parcel Service branches simply because United Parcel Service considers the domestic operations as more important than the global operations, which for still are considered to be riskier and less profitable. At the same time United Parcel Service understands that in the long run, it would be highly advisable to concentrate on the foreign operations especially in the Asian countries such as China, Taiwan, Hong Kong and countries in the Eastern and Central Europe. Due to the fact that United Parcel Service concentrates on the USA as on the place where the top leaders of United Parcel Service are nurtured, the employees and the managers of the organization are developed best in the USA. In foreign countries, the employee and manager development is limited to certain positions and levels and thus is not financed properly. United Parcel Service believes that since it is a US company with a US corporate culture, it should be the US top management who will lead the organization around the world. The local employees at the same time are developed through different company-sponsored seminars and trainings organized for communication-improving, and managerial purposes at a tactical level. The US employees get the strategic classes too (Berkun 2003).
Just like any rational organization United Parcel Service strives to keep the costs as low as possible while at the same time getting as much as possible from its workforce. It is for this reason, United Parcel Service would explore the country, the competition, its hiring and motivating principles and only then would develop a country-specific motivation package that would be different for different countries and would be focused on cost minimization. Thus, in the well-developed nations such as the USA, the European Union (EU), Great Britain, Japan, and Canada United Parcel Service would strictly follow and obey the law providing the compensation on par with the established standard or a benchmark. In the third world countries where the labor laws are undeveloped and the unemployment is high, United Parcel Service would on the other hand follow the lead and motivate the employees by threatening to fire them and hire other people just like other companies in these countries typically do (Benedict, 2004).
United Parcel Service leads the industry with its progressive policies, ways of doing business, cost minimization strategies, and efficiency improvement practices. Due to its large size and huge revenues, the company invests heavily in the Research and Development (R&D) and business reengineering and corporate improvements. As a result of such investment in the corporate improvements, United Parcel Service had managed to achieve unprecedented expansion and return on investment (effectiveness, efficiency and productivity ratios) being much higher than of its closes competitors such as the DHL, or FedEx. United Parcel Service has a patented business layout which guarantees United Parcel Service a long term cost minimization approach to doing business.
Managing Conflict and Stress
United Parcel Service just like any other company in the world strives to manage conflict and stress within organization effectively and on the spot. The employee manual defines the conflict and provides certain ways to mediate it. United Parcel Service in the first place strives to have the conflict resolved between the employees and once it cannot be resolved it will be resolved by the supervisors and upper level management in accordance with the United Parcel Service worker manual. It has been pointed out that professional employees are capable of resolving conflicts on their own, so in the situations when the conflict cannot be resolved between two employees and is resolved with the help of supervisors, it means that both people involved in the conflict are somewhat guilty. For the conflict situations that cannot be effectively resolved between the employees on their own, there is a developed grievance procedure. The employees need to fill out the proper grievance forms, provide their opinion on the matter and submit to the human resource department. Whenever needed, the human resource department will arrange the interview for all the parties involved in the conflict to decide on the matter. The apparent disadvantage of such method is that it is the Human Resource department which decides for all the parties involved. One can assume that those parties that can articulate well verbally and in writing has an advantage over those who cannot clearly point out to the human resource department the details of the conflict.
Stress is also defined and managed according to the employee workbook. One is given an opportunity to attend a gym, a swimming pool as well as a secluded room for a quick nap-all sponsored by United Parcel Service (Garton, 2004).
United Parcel Service just like many other companies is resistant to change especially if it originates in some foreign branch which for some reason the central branch/headquarters of United Parcel Service do not trust as much as the US based branches of United Parcel Service. The company still has a well-developed communication system which allows every employee around the world to contribute his/her opinion on some matters online via company sponsored message/discussion boards, or through organized two way communication channels with the headquarters.
The system of controls at United Parcel Service is used to contribute to better corporate efficiency, effectiveness and long-term survival and market leadership. United Parcel Service has controls at every level of management and at every step of operations. The financial controls assure that all the payments made by customers go where they need to go. Accounting controls assure that the corporate money are used properly and never get stolen, lost or wasted. Managerial controls assure that all employees get the proper compensation and promotion based on competence and skills rather than based on some agreement or conspiracy.
Appraising and Rewarding
United Parcel Service rewards its employees based on their contribution to the organization within the pre-established guidelines. Employees typically get promoted every 2 years, with some of the most active and productive employees getting promoted every 1.5 years. The rewarding comprises the set compensation package, insurance and social package as well as the bonuses in the form of free gym tickets, National Basketball Association (NBA) family tickets etc (Rutberg, 2003).
United Parcel Service takes operations control very seriously simply because effective and efficient operations represent the very nature of business of United Parcel Service. The company had a well established system of controls which assure that not only all packages effectively go where they are need to go, but also that all the payments, promotions, and corporate routines are undertaken in the desired manner.
In conclusion I would like to note that United Parcel Service is a truly unique, successful and profitable global company which manages to effectively operate in the presence of harsh competition on the global arena. The company owes its effectiveness to centralized planning and the need for approval of its operations, changes and other elements by the headquarters. This also might make United Parcel Service not quick to respond to the changes that take place in volatile economies of the third world countries, where decisions need to be made on a daily basis. One should remember that because of such structure, United Parcel Service does not operate in the truly volatile countries and always enters the country after competitors such as FedEx or DHL enter the country. The UPS in this case is shown as a rather conservative company which does not want to risk its resources on something that had not been tested by the competition yet. Still, the shortcoming of such approach is that the first mover is likely to capture the greatest market share, while UPS will have to incur unnecessary high levels of competition, although assurance by the competition that this market is attractive.
Eskew, Mike, (2004). Delivering in tough times: under CEO Mike Eskew, UPS, the venerable package deliverer, goes global and high tech. (2003 Route to the Top). Chief Executive (U.S.) 14, 133.
Rutberg, Sidney, (2003). Financing the supply chain by piggy-backing on the massive distribution clout of United Parcel Service, The Secured Lender, 90, 144-145.
Benedict, Bertram, (2004). The express companies of the United States;: A study of a public utility, McGraw Hill, pp. 56-57.
Johnston, C.E (2004). Railway and air express, parcel post, NY Random House, pp. 310-312.
Shelton, Mack, (2003). Circles of Management : A True Story of the Ins and Outs, Ups and Downs of Running a Camera Store: A Supplemental Reader for the Business Student, Wiley and sons press, pp. 274-275.
Robbins, Stephen, (2004). Management (8th Edition), Prentice Hall, pp. 70-71.
Berkun, Scott, (2003). The Art of Project Management, NY Random House, pp. 305-306.
Garton, Colleen, (2004). Fundamentals of Technology Project Management, Penguin books, pp. 155-163.
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