Communication and Decision-Making Processes in FedEx - Case Study Example

Communication and Decision-Making Processes in FedEx AFFILIATION: Communication and Decision-Making Processes in FedEx Introduction Effective communication and sound decision-making are important not only for the success of an organization but for career advancement as well. Studies carried out over the past few years have found out that employer prefers people who have good communication skills which are utilized in a plethora of activities from business presentations and interviews, to leading groups and effecting change (O’Hair, Friedrich, & Dixon, 2008). Communication skills have become an imperative trait in the modern business profession primarily due to the influx of information technology. Technological advancements have brought with them a nouvelle organizational structure that makes many traditional communication strategies obsolete. Decision-making is also a critical variable of success. Many established organizations are unable to accomplish their goals because they fail to utilize their resources effectively. This is where the art of decision-making comes in. It forms the epicenter of planning and necessitates that the most appropriate course of action be followed for the success of the organization (Koontz & Weihrich, 2006). Having highlighted the importance of communication and decision-making processes to an organization, the following paragraphs will explore the communication and decision-making processes at FedEx. Communication Processes at FedEx Federal Express, or FedEx as it is popularly known, was the pioneer of overnight international and national courier services. The organization started in 1973 and has now grown into a centralized group of companies. According to the founder and chairman of FedEx, Frederick W. Smith, communication processes are the core of this courier service and thereby it is imperative for managers at the company to be expert at it. Managers learn how to effectively make use of the corporate strategies of the organization to formulate and implement communication processes. The process works the other way round too whereby managers are able to use their communication processes either to buttress existing corporate strategies or to implement new strategies (Argenti, Howell, & Beck, 2005). At FedEx, managers dedicate a significant part of their time to communications as part of the philosophy of Frederick W. Smith: “shoot, move, communicate” (Argenti, Howell, & Beck, 2005). The effective implementation of a strategy depends on how well it is communicated. Since communications forms an integral part of the corporate strategy, managers are well-grounded in their objectives and philosophy. They are expected to be keenly aware of their role as messengers of information. For this purpose, they are required to undergo training at the FedEx Leadership Institute, located in Tennessee. The training covers a number of areas such as how to make employees understand their responsibilities and to effectively carry them out. They are also taught to be receptive to employees, responding to their problems. Managers are required to create a sound two-way communication channel between senior level managers and employees working at lower levels of hierarchy. They are also responsible for instilling the philosophy and ideals of the business in the employees and to keep them informed about the progress of relevant projects (O’Hair, Friedrich, & Dixon, 2008). An example of its effective communication processes can be cited at the time of the downfall in economy in the late 2000s. FedEx largely follows a no lay-off policy in order to earn the trust of its employees. When economic situation looked bleak in 2001 and 2002, instead of laying-off people from its 144000 workforce, it reduced its costs by selling old airplanes and decreasing the bonuses of its managers (Samson & Daft, 2011). However, after a few years, as economy took a dip and a number of companies started laying-off its workers, FedEx also decided to follow the same approach. The atmosphere created by laying-off employees was against the interests and philosophy of the organization since the business required a full-time interaction of its employees with the customers. This meant that it needed its employees to be loyal to the company and necessitated that their support and goodwill is not charred in any way. Therefore, when laying-off its employees, it gave them large severance packages covering pay and benefits. Furthermore, it communicated the changes both externally and internally using a variety of channels (Argenti, Howell, & Beck, 2005). With laying-off, the company revised its organizational structure and introduced several major changes. These changes were communicated across to thousands of employees in different stages. Human Resources and external suppliers came together to negotiate a number of communication strategies that reached across to individual employees. Many of them were tailored for those who would be interested in voluntary severance or early retirement. Moreover, the organization developed a number of Websites and hotlines for its employee; their purpose was to generate a two-way communication mechanism where employees were free to ask questions; replies by the company were made public so that everyone could read them (Argenti, Howell, & Beck, 2005). To make information freely available to its employees, FedEx also makes use of its very own internal broadcasting company, known as FXTV. The channel provides information regarding the day’s services, current market situation etc and hosts friendly call-in shows (Singh & Kumar, 2011). The company boasts of a top-down communications strategy. According to the employee communications director at FedEx, one of the ways it achieves this is by generating a friendly two-way communication with the employees. Any piece of information that an employee wants to know is given to them as long as it “is not personal, privileged, or controlled by government regulation” (Grönstedt, 2000). The company maintains upward communication by ensuring that each employee actively participates in corporate activities so much so that they can even play an active role in the formulation of corporate strategies. Moreover, employees have the liberty to provide feedback regarding their managers. FedEx Express conducts a survey every year, known as SFA- Survey, Feedback, Action- which requires employees to give feedback on managers and the work environment (O’Hair, Friedrich, & Dixon, 2008). A leadership index is generated from the questions, which gives an insight into the opinions the employees hold regarding their managers. If a manager receives a poor feedback, he/she is required to undertake activities to improve communication and management (Caywood, 2004). The surveys allows for continual improvement in the work environment as well as building stronger communication between different hierarchal levels. Decision-making Processes at FedEx FedEx has a flat management structure, meaning that senior managers are approachable by front-line employees (Singh & Kumar, 2011). The practice of effective decision-making at FedEx and the active engagement of its employees date back to its founder. Smith realized that in order to meet the expectations of its customers, he needed to manage its employees and make them an active participant in the decision-making process. He came to the conclusion that a strict command-and-control organizational structure only impeded service delivery. So to make employees accomplish the objective of delivering in a few hours, he opted for the implementation of group structure to provide services. This meant that he gave employees the liberty to bring about changes in package delivery to improve the service. An example can be cited in the center in Springfield, Virginia. A group of employees created the Quality Action Team that served to revamp package processing methods. This allowed the package to be in the delivery process 12 minutes earlier, reducing late delivery of packages by more than 50%. Thereby, teams started to function more by themselves, with limited interference from managers (Lussier & Achua, 2010). The philosophy of FedEx is People, Services, and Profits. It functions as a people’s organization, with the view that if it satisfies the people, services and profits will tow behind automatically (Singh & Kumar, 2011). Therefore, the company puts a great deal of emphasis in engaging its employees and expecting them to be equally driven for creating customers as are higher level managers. There are various strategies that are employed at FedEx to increase the participation of employees in the managerial process. Weekly meetings are held where employees and managers come together to exchange their perspectives regarding the market, to provide recommendations for improvements and to discuss the corporate strategy of the company. The company’s value propositions are effectively instilled in the work philosophy of employees by repeated reminders. For example, the CEO sends a letter to individual employees periodically where they are apprised of the company’s progress and customer value propositions are explained to them (Birla, 2005). Whatever decision is taken by the company and required implementation, it makes use of effective communication channels to inform its employees and to get their feedback on it. In order to bring about organizational change swiftly, it is important to communicate the decision to its employees through a versatile and comprehensive way and to earn their trust. For instance, if the company makes a decision to formulate a new pledge with its customers, a strategy needs to be worked up that connects the employees to the pledge. Senior managers endeavor to develop a connection between the employees and the new pledge since employees are the bridge between the pledge and the customers. It is important for this bridge to support and bolster the new pledge since the success of the pledge depends on how well the employees deliver it. The effected change is modified according to the feedback of employees. When the company decides to implement a new strategy, it links it up with its employees as comprehensively as possible (Argenti & Forman, 2002). Thus, decision-making and communication processes are intertwined at FedEx, allowing the company not only to improve its services and satisfy customers but also to earn the trust and loyalty of its employees. Reference List Argenti, P. A., & Forman, J. (2002). The power of corporate communication: crafting the voice and image of your business. New York: McGraw-Hill Professional. Argenti, P. A., Howell, R. A., & Beck, K. A. (2005). The Strategic Communication Imperative. MITSloan Management Review, 46 (3), pp. 83-89. Birla, M. (2005). FedEx delivers: how the worlds leading shipping company keeps innovating and outperforming the competition. New Jersey: John Wiley and Sons. Caywood, C. L. (Ed.). (2004). The Handbook Of Strategic Public Relations & Integrated Communications. New Delhi: Tata McGraw-Hill Education. Grönstedt, A. (2000). The customer century: lessons from world class companies in integrated marketing and communications. New York: Routledge. Koontz, H., & Weihrich, H. (2006). Essentials Of Management (7th ed.). New Delhi: Tata McGraw-Hill Education. Lussier, R. N., & Achua, C. F. (2010). Leadership: Theory, Application, & Skill Development. Mason: Cengage Learning. O’Hair, D., Friedrich, G. D., & Dixon, L. D. (2008). Strategic Communication in Business and the Professions (6th ed.). New Delhi: Pearson Education India. Samson, D., & Daft, R. L. (2011). Management: Asia Pacific Edition. Cengage Learning. Singh, P. N., & Kumar, N. (2011). Employee Relations Management. 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