Introduction
This paper is going to elaborate on analysing the case study- “UPS in India- Time to Shift Gears?” UPS (United Parcel Service) is a popular package delivery global company but its services have not always been much far-reaching. It was established in the year 1907 by two teenagers- Jim Casey and Claude Ryan (Rothaermel, pp. 2). The leadership of the company has efficiently driving it towards success throughout the years. However, in the year 1997, the firm faced huge losses of about 650 million dollars because of transition in the delivery services and all that took place after the 15days strike by Teamsters Unions. The strike engaged about 2, 00,000 employees of UPS. The paper would shed light on UPS’s organisational culture and its organisational structure and would assess whether its culture and structure are aligned with its organisational strategy. A total of four findings of fact shall also be presented from four functional areas of business namely- management, marketing, finance and International Business. Finally, recommendations shall be provided for each of the finding of fact.
Organisational Culture
From the case study it is clear that the organisational culture of UPS is like a building block, where striving for achieving competitive edge is of utmost priority for every individual (Rothaermel, pp. 3). This culture offers high level of ethical standards, reliability, courtesy and tardiness. Artifacts, norms and values that are set by the pioneers of the company guide the employees. It is due to its organisational culture that UPS is successfully doing business in both domestic and international borders.
In terms of Artifacts, it is to mention that the artifacts of UPS are its logo, uniforms of its employees, the brown delivery trucks, its business slogan- “What can brown do for you?” and its UPS Airlines planes. All these artifacts are tangible and visible symbols of the norms and values of the company and they make the company to be highly regarded throughout the nations.
In terms of norms, it is to note that the norms of UPS are the rewards and incentives that it gives to the employees, the safe working environment, equipment safety, its rules, procedures and policies that allow it to sustain its high quality services for outperforming its competitors. All these provide a competitive edge to the company.
Furthermore, the values of UPS comprise of the engagement level, satisfaction level, sense of responsibility, truthfulness, honesty and prompt delivery that it provides to its employees and customers. The company believes in fair treatments and loyalty and they are employee specific.
Hence, it can be states that UPS has a strong organisational culture and is an important asset for the company. However, it is also to mention that UPS must not completely depend on this as it might limit down its growth and innovation. The core competency of the company could end up in being core rigidity if not refined and upgraded. UPS must to allow its organisational culture to determine its corporate decisions.
Organisational Structure
Throughout its existence ever since the year 1907, UPS has adopted different organisational structure. According to the case study, the functional structure of the company was a top-down and bottom-up communication chain, which was led by the then CEO David Abney in the year 2014 (Rothaermel, pp.4). The organisational structure of UPS follows the “hub and spoke” model, which is centralised around hierarchy and that reduce the unneeded leaders who do the same thing. Having a merged hierarchy, the hub model centralised management and the UPS Company got advantage from notable cost savings. The company has formalised and improved their culture by means of laying emphasis on their employees, who are also the partners and owners in the success of the company. For further cultivating loyalty in the organisation, the company follows the concept of “promote from within” and this further results in the promotion of delivery workers and mail sorters to the positions in the management department.
Furthermore, after analysing the case study, it is also clear that the hierarchy at the company seems to follow a flat structure with wide span of control. This further allows a manager to supervise employees and allow them more power, independence and opportunities of decision making that needs less guidance and supervision. This also makes them able of passing on the knowledge during the regular interactions with the other employees, which make a continuous learning environment.
Alignment of Organisational Culture and Structure with Organisational Strategy
UPS is one of the most recognised companies in delivery industry of America. It is ranked at sixth position in the list of top packing and delivery service companies in United States. It can be said that there is a solid and complete alignment in between the organisational strategy and its culture and structure that help the firm in generating more revenue from both the domestic and International Business (IB) operations (Rothaermel, pp.5). UPS seeks being efficient and a revenue generation firm, which ends with maximisation of profit. However, the appreciation and respect of employees do not go hand in hand for creating a healthy working environment where the ownership is given to the employees for using their knowledge, skills and talents for success and growth of the firm.
It is to note that UPS does not hire its staffs directly for the managerial positions. It promotes its own staffs based on their experience, talents, skill-sets and knowledge. The staffs that perform well are promoted internally. An example of such a case includes that of Michael Eskew who started his career with Ups in the year 1972 as a delivery worker. He has served the firm for above thirty years and in the year 2002, he became the CEO and spends five years in being the same position until 2007 (Rothaermel, pp.8) . All these demonstrate that the culture, ethics, morale and standards of UPS are great enough to make it a highly competitive delivery service firm in the business market. They take pride in whatever they do.
Findings of Fact and Recommendations
Management
In terms of Hofstede dimension, India has a high power distance index score, which is attributed by the culture of caste system and hierarchy where the citizens of India are placed in diverse social groups as per their position, norms and status that they hold in the society such as merchants, warriors and priests (Wallace et al. pp. 23). However, it is also to note that the country is a sea of people where the basic infrastructure is equal to none in terms of roads, which are very poorly constructed. Lack of infrastructure and transportation facilities is likely to make it hard for UPS to enter into Indian market. The company would not reach to the rural and urban areas effectively. However, India has a 2020 plan with a goal of improving its rail and airplane system. It indeed is attractive but UPS still need to have a working plan for addressing its issue of reaching the rural delivery areas as for that, improvements in roadways is highly required.
Marketing
UPS opened its first every store in Indian in the year 2007, in Mumbai city. The store used to offer shipping, packaging and other business related services. The service was widely admired as it gave the customers a convenience in terms of all shopping needs. Notwithstanding this fact, the company soon realised that doing business in this country has some serious issues to overcome and the most serious of all is the issue of competition. At that time, India had already over 2000 courier services companies who were also highly reliable. So, there was a need for differentiation.
Hence, it is recommended that UPS should make itself available in social media platform and must create awareness about its existence in the Indian market. As there is high competition in India, the company need to bring out buzz in between the brand and the potential customer base. It can do so through providing discount coups for its new customers and for the repeated customers.
Finance
Indian Government is one of the many competitors of UPS. The companies like IDP (Indian Department of Post) and Emergency Mail Services are operating in the country under Indian government and they are hindering its growth in the domestic market. Furthermore, the introduction of the Post Office Amendment Bill has also allowed the firm to develop its monopoly in delivery service industry, which further enabled the IDP to manage all the letters and packages virtually that are coming under the weight of sixty six pounds. Indian government has also limited down the FDI to 49percent and has directed all the privately owned delivery service firms to follow an expensive registration procedure.
In order to deal with this, UPS should pursue acquisitions or should create an alliance with other firms like Blue Dart that are already operating in India. This would help it in having proprietary knowledge about government rules and handing the logistics related issues especially that are related to rural areas.
International Business
UPS could acquire and improve its competitive advantage in the Indian market by revisiting its pricing strategy. It needs to bear a significant level of operational cost every year being a multinational organisation. It would increase when its entrance in Indian in the name of fees related to regulations and rules and innovative process of product delivery for reaching rural zones. The company is operating in many markets including Europe and North America, but it needs to understand that India is different from other countries. Infrastructure development is a basic difference in between its business operations in India and America. If UPS adopts a multidivisional pricing structure and resources influence, it can easily overcome these issues.
Conclusion
Hence, from the above analysis it is to conclude doing business in India is quite challenging for UPS due to its lack of proper transportation and infrastructure facilities, additional tariff laws and competition. Control, structure and culture of UPS are some of the important strategic tools that the leaders at UPS need to consider if they aim to take their firm at the height of growth and success that they want.
References:
Rothaermel, Frank T., and Srikanth Prabhu. ” UPS in India – Time to Shift Gears?” Cases for Strategic Management, 3rd ed., McGraw-Hill Education, 2017.
Wallace, Chelsea, et al. “Dimensions of national culture associated with different trajectories of male and female mean body mass index in countries over 25 years.” Obesity Reviews 20 (2019): 20-29.
