Whose Competence Should Support of Royal Mail Be in - Assignment Example

An undeniable aspect of the way in which the current governance is affected is with regards to the continual driving need to avert cost and provide the continuation of effective services that governments have long sponsored. Many times, the weighted this is affected is merely by cutting down on the overall level of expenses that a particular agency, entity, or program entails. With this in and of itself is no longer possible, other options, such as the combination of different entities, programs, or agencies, or the privatization of specific agencies, entities, or programs is considered. Naturally, the latter is a fundamental deviation from the way in which public services are provided to the population. For purposes of this brief analysis, the author will consider the case of the Royal Mail with regards to its upcoming privatized nation. Rather than delineating whether or not this is a positive or negative in, per se, the analysis will be contingent upon the activities and obligations that the Royal Mail engenders, how privatized nation might impact this industry, a discussion and analysis of what privatized nation actually entails, a discussion of the market structure of the parcel and packet delivery industry, and analysis of the way that this might impact upon performance, business, industry, and the consumer, and finally a discussion and analysis of whether such a level of privatization might in fact be in the best interests of these respective stakeholders or not (Houghton et al., 2013). It is the hope of this author that such a level of analysis will help to elucidate a further level of understanding in the mind of the reader with regards to the Royal mail and how it is likely to be defined and evolved within the coming years (Whyman, 2009). Q1: As it stands today, the Royal Mail is responsible for delivering and processing tens of millions of pieces of mail, both domestic and international, that transit within the United Kingdom. Tracing its origins back as far as Henry VIII, the Royal Mail service has existed and evolved with the needs of the United Kingdom throughout the years. Currently, the Royal Mail is the primary and most prolific provider of posts and parcel service within the United Kingdom and its territories (The Guardian, 2012). As with many other nationalized entities, the Royal Mail has not operated with ultimate profitability as the core contingent. Although solvency and a level of profitability has been considered, the main driving force that denotes business interactions within the world has not, at least up until this time, then a prescient concern. One of the defining compliments of the Royal Mail is what is known as the “universal service”. This “universal service” regards the compunction that the Royal Mail has to service all corners of the United Kingdom and provide post and parcel service, as well as a litany of other services, to these individuals; regardless of whether they live in far-flung reaches of the UK (Yarker, 2013). Naturally, privatization threatens to fundamentally redefine the way in which the Royal Mail operates. Consequently, before delving too deeply into the process of privatization itself, or seeking to analyze the means by which privatization will impact upon the Royal Mail, it is necessary seek to understand privatization itself as well as the core fundamentals of what it entails for any operation that engages with such a model of production. As has briefly been referenced above, the Royal Mail has not previously operated within the bounds of seeking to maximize a level of profitability. However, by very definition, privatization is a process through which singular or joint ownership of a given entity/business seeks to exploit the overall level of profitability that can be realized. As a function of this, privatization threatens to fundamentally shift the way in which such an industry as the Royal Mail might be evidenced within the future. Q2: Whereas the Royal Mail had a near monopoly upon the United Kingdom for almost its entire lifespan, a liberalization of government control of the Royal Mail in 2006 saw a situation in which private competition was not only allowed but in fact fostered within the postal service sector. This is not to say that parcel service within the United Kingdom was also dominated by the Royal Mail. Rather, parcel service have long seen competing firms, to include some of the most well-known and multinational parcel services around the world, operate freely within a competitive market in the United Kingdom (Slocombe, 2013). That being said, the shift, discussed above, in 2006 allowed for a fundamental level of privatization and rethinking with regards to the way in which post service within the United Kingdom might be carried out within the near future. Interestingly, as compared to other market structures, there are few similarities with respect to the way in which the Royal Mail currently operates. When one considers a wholly public entity, such as the NHS, there is little if any room for a level of privatization; by very virtue of the way that it is chartered and run. This makes the Royal Mail unique and ultimately non-comparable with regards to other markets and the way it is structured. Naturally, a level of comparison will be able to be drawn once a level of privatization is in fact affected; however with respect to the current dynamic, nationalization does not lend itself readily to a comparison of existing markets within the United Kingdom or indeed elsewhere for that matter. Naturally, perhaps the most salient question to ask with regards to this future privatization is with respect to the impact that this will necessarily have upon business, industry, and the end consumers of this service. A litany of studies have indicated that privatization, although from as a way of ameliorating current pressures and insolvency within the Royal Mail will in fact increase cost that are passed along to the end consumer (Epples, 2013). Naturally, this privatization, along with changing the landscape of how the individual consumer integrates with such a service, will also invariably change the cost structure that has remained relatively static throughout the past several decades (Brown, 2013). What is meant by this is not the price is not increase within the national structure of the Royal Mail; rather, price has increased commensurate with inflation and other economic factors that the government has taken into account as a means of continuing to provide the service – factors that a private entity or group of stakeholders will not necessarily engage with (Defries, 2012). The ultimate impact will necessarily be felt with regards to the price increase and could, if proper regulation is not effected, impact upon the availability of service to many individuals within the economy. As price becomes the sole determinant in defining whether or not a given service will be available, the previously discussed “universal service” loses a great deal of its meaning and purpose. Q3: As a function of the analysis that is thus far been undertaken, the more salient issue that is presented to the reader is whether or not the privatization of the Royal Mail will in fact be a success. In seeking to answer this question, defining a measure of what should be termed as “success” is first required. From a previous level of analysis, the Royal Mail was placed in a situation in which continued austerity and the shifts in the market made it ultimately a burden which the government could no longer stand to support (Beirne, 2013). However, privatization might not be the answer. Ultimately, the reason why this author has come to such a unit of understanding is due to the fact that privatization ultimately places a fundamental focus upon profits over service provision. Naturally, there is a point of equilibrium to which the market will meet both supply and demand; however, it is highly doubtful that the Royal Mail will be able to continue to provide such a universal service to the litany of individuals within the United Kingdom as they once had in years past. From the standpoint of money generation, “success” can ultimately be achieved by the Royal Mail as a result of the privatization that will soon take place (Baker, 2012). Whereas years of government ownership and management had allowed this entity to develop a well recognized a widely appreciated brand name and image, the success that this soon to be privatized entity can realize as a result of this asset will be broad. Further, privatization is likely to experience a degree of success as a result of the fact that it will be able to more rapidly integrate with the needs of the market and reflect this level of implied profitability back to the stakeholders within society as well as the shareholders. Regardless of this fact, seeking to privatize an entity that is fundamentally helped develops one of the most complex economies and Western Europe is quite troublesome. Whereas it is understood by this author that the status quo was not able to be engaged further, due to the economic losses and hardship within the United Kingdom's economy, seeking to radically redefine the way in which post and parcel service is carried out could have far-reaching and possibly disastrous impacts upon not only the end consumer, but also the viability and efficiency of the entire system. Naturally, the focus of the shareholders will be specific to levels of profitability; whereas the focus upon quality of service and/or universal service will necessarily fall to a secondary or tertiary level of importance. References Baker, R 2012, 'Rise in 'junk mail' expected by Royal Mail', Marketing Week (Online Edition), p. 9, Business Source Complete, EBSCOhost, viewed 26 August 2013. Beirne, M 2013, 'Interpretations of management and modernisation at the UK Royal Mail: shifting boundaries and patterns of resistance?', New Technology, Work & Employment, 28, 2, pp. 116-129, Business Source Complete, EBSCOhost, viewed 26 August 2013. Brown, A 2013, 'Don't Expect The U.S. Post Office To Copy Britain's Royal Mail IPO', Forbes.Com, p. 10, Business Source Complete, EBSCOhost, viewed 26 August 2013. Defries, M 2012, 'Royal mail surcharges temporarily halted by DMA pressure', Printweek, pp. 8-9, Business Source Complete, EBSCOhost, viewed 26 August 2013. Epples, N 2013, 'COMPANY PROFILE: Royal Mail Holdings plc', Royal Mail Group Plc SWOT Analysis, pp. 1-7, Business Source Complete, EBSCOhost, viewed 26 August 2013. Houghton, D, Broadway, D, & Warner, N 2013, 'Will privatisation be good for Royal Mail and its customers?', Printweek, pp. 8-9, Business Source Complete, EBSCOhost, viewed 26 August 2013. The Guardian. 2012. Postal workers' union vows to step up resistance to Royal Mail privatisation. [online] Available at: http://www.theguardian.com/uk/2012/apr/22/cwu-campaigning-against-royal-mail-privatisation [Accessed: 26 Aug 2013]. Slocombe, K 2013, 'There are better means for taking Royal Mail forward', Printweek, p. 9, Business Source Complete, EBSCOhost, viewed 26 August 2013. Whyman, S 2009, 'A Passion for the Post', History Today, 59, 12, pp. 33-39, Academic Search Complete, EBSCOhost, viewed 26 August 2013. Yarker, J 2013, 'Banks hired to lead £2.5bn Royal Mail IPO', Money Marketing (Online Edition), p. 5, Business Source Complete, EBSCOhost, viewed 26 August 2013. Read More