ORGANIZATIONAL STRUCTURE: FEDERAL EXPRESS
This research examines the organizational structure at the Federal Express Corporation. The character of the organizational structure at Federal Express, and the effectiveness of the organizational structure are considered.
Federal Express employs almost 90,000 persons at more than 1,600 facilities globally (1990 winners, 1990, p. 19). The company is just 20 years old in 1993, yet commands a 40 percent share of the air express delivery service market.
Federal Express set out to provide high quality package service. The success of the company in attaining this goal has established the standards by which all other overnight courier services are evaluated (Hauss, 1993, pp. 22-26). In corporate America, it is a near maxim that "if it absolutely has to get there overnight, send it by Federal Express" (Fishkind, 1993, pp. 56-58).
To establish its marketing service quality program, Federal Express determined what was most important to overnight shippers. The company found that sureness of delivery and timeliness of delivery were of greatest concern to customers. While customers were concerned with costs, Federal Express found that they were willing to pay a higher fee to assure both delivery and time-liness. Thus, the marketing service quality program at Federal Express was born. To successfully implement this program and to maintain the effectiveness of the program, however, demanded that the organizational structure at Federal Express be revamped. At Federal Express, it was determined that the revised organizational structure must provide for greater employee empowerment.
Federal Express initiated its structural reorganization from a position of strength, as the firm since its inception had achieved high levels of customer satisfaction (Panchak, 1992, p. 27). Management at Federal Express realized, however, that the company's past accomplishments would not assure its future success. T...