Arguably, the United Parcel Company has been a force to reckon with for most part of the century. The history of this company is one that is ideally suited with the American dream. In 1907, Jim Casey, the founder of UPS borrowed $100 from friends to kick-start a business that later become one the major united states driving force over a century. Today, the company has grown into $37 billion dollar empire. It is arguably the world’s largest package delivery company as well as the leading global provider of specialized transportation and logistics services. Through advanced technology, access to global resources, human assets, and an integrated physical and technological network, the multi-billion dollar company is involved with the flow of goods, funds, and information around the world.
Since its foundation, Garvin and Levesque (2) state that the company has transformed itself severally. First, it changes from being a message delivery company to a package delivery company after its owners realized that the market for that had deteriorated. The company then transformed itself into an international air transportation company. Finally, in the 1990’s it changed into a logistics company. Because of these successful changes, the company went public in the largest corporate initial public offering (IPO) in the history of America. The company serves over 200 countries worldwide serving them in areas of specialized transportation, and logistics services. In 2005, it was among the top ten airlines fleet in the United States.
UPS has acquired a reputation of being focused on efficiency and execution. Even in the beginning, Jim Casey trained his workers to have the highest etiquette and decorum while delivering parcels. The UPS operation was also run like a military operation requiring the employees to have the highest speed and efficiency to increase customer satisfaction. The company also used tested policies and procedures leading to UPS having a reputation for low cost and highly predictable customer service. Overall, Garvin and Levesque (3) argue that the company has resulted in having a highly efficient crew with an extremely low turnover of the workforce due to the company’s management procedures.
Context (learning objectives)
Garvin and Levesque (2006) write this article to reveal the level of strategic planning that has been part of the UPS culture over the years. The article reveals the type of management that is embraces at UPS and the results that it attracts as a result. Different individuals have been top management at UPS and Garvin and Levesque (2006) reveal the type of risks that they took and what it resulted to in the end of the day. Through this article, we will be able to understand the reason behind some of UPS strategies and the type of leadership the company is invested on.
Strategy in UPS has been the responsibility of the Strategic Technology Group, which was formed to identify major gaps in technology. It was given the responsibility of overseeing the investment of $11 billion in investing in technology in 1991. The then CEO Oz Nelson and his senior managers introduced a corporate mission and strategy statement that immortalized the values of Jim Casey and refocused the four areas that the company was bound to serve. This included the customers, UPS people, shareholders, and the community (Garvin and Levesque 5).
However, the company stated facing competition from private companies like Federal Express and other government supported agencies, which threatened UPS position. In 1996, Garvin and Levesque (7) state that Jim Kelly, the soon-to-be CEO began to address these changes. He established a staff organization of twenty managers and employees who would meet once a month to develop strategic processes of planning for the future through key strategic development.
In 1997, the groups responsible for strategic planning reviewed alternative long-range planning approaches. This process was called the first scenario planning process. Through using the help and prowess of the global business network, they were able to facilitate a scenario-planning workshop this portrayed the types of challenges that managers might be faced with in the future. The outcomes of these sessions were both tangible and intangible.
In 1999, the company also engaged in more strategic planning process through changing the corporate charter from serving the package-delivery needs of our customers to enabling global commerce. This prompted the company to go public and then develop a five-year plan that lead to a proactive shift directly to the end consumer, eliminating usage barriers among other themes (Garvin and Levesque 10).
In 2002, the company created a management committee off-site, which led to a centennial plan. Through this, a strategy road map that would usher the company into the 100th year of existence was developed (Garvin and Levesque 13). The company top bosses still engaged in further strategic planning like the second scenario-planning session in 2002 and the update of the strategy road map in 2005.
In conclusion, this company has excelled in using the strategic planning process as its guideline for the future, which has helped it, secure huge profits as a result (Garvin and Levesque 17). However, the company will need more that strategic planning to correct the ongoing battles with Federal express its ultimate rival lest all that work and legacy will end up as history if the company falls.
Garvin, David. & Levesque, Lynne. Strategic planning at United Parcel Service, 2006, 1-25.