Strong Reputation of FedEx Company - Research Paper Example

Berth Modern Terminal Warehouse Building Phase I, 9/F, Kwai Chung, N.T. Hong Kong Tel: 852-2947-0674 Fax: 852-2947-0673 INTER OFFICE MEMORANDUM DATE: December 1, 2006 TO: APAC All-Staff FROM: Louis Wong CC: SUBJECT: CHANGE OF WORKING HOUR **********PLEASE SHARE WITH YOUR EMPLOYEE********** Please be inform that our working hour will be change to 08:30 – 17: 30 instead 09:00 – 18:00 effective December 1, 2006, due to avoid the traffic jam in our new location. Thank you for your attention. Yours truly, Louis Wong Supply Chain Operations Federal Express Int’l Inc. Table of Contents 1. Executive Summary 3 2. Managing Change Chartier’s Model 4 2.1 Disturbance 4 2.2 Decision to Act 5 2.3 Problem Diagnosis 5 2.3.1 Lewin’s Force Field Model 6 2.4 Search for a Solution 10 2.5 Application of Solution 10 2.5.1 Strategy Implementation 10 2.5.2 Assessment of Resistance 11 2.5.2.1 Psychological Theories of Change 12 2.5.2.2 Sociological Theories of Change 12 2.5.2.3 Cultural Theories of Change 13 2.5.2.4 Overcoming the Resistance to Change 13 2.6 Change Agents 14 2.7 Evaluation of Change 15 2.8 Sustaining and Maintaining the Change 16 2.9 Conclusion 17 1. Executive Summary As a global company, FedEx had earned its strong reputation of providing a portfolio of transportation, e-commerce and business services through companies operating independently, competing collectively and managed collaboratively under the FedEx brand. These companies are included in four business segments: These operating companies are primarily represented by Federal Express Corp., an express transportation company; FedEx Ground Package System, Inc., a provider of small-package ground delivery services; FedEx Freight Corp., a U.S. provider of regional next-day and second-day and interregional less-than-truckload freight services; as well as FedEx Kinkos Office and Print Services, Inc. a provider of document services and business services. FedEx started to expand its service offerings in the Asia-Pacific Region when it purchased Flying Tigers, an all-cargo airline with flying rights to 21 countries. For the first time, FedEx obtained governmental permission to carry documents, packages and freight to multiple Asian destinations on a regular schedule including: Hong Kong, Japan, Korea, Malaysia, Singapore, Taiwan and Thailand. As economies across Asia Pacific began to grow and prosper, FedExs shipment volumes and its presence in the marketplace began to expand as well. Recognizing a need for the company to be closer to Asian customers, FedEx moved its Pacific headquarters from Hawaii to Hong Kong in 1992. At present, FedEx dominated in more than 30 countries and territories in the Asia Pacific market with more than 10,000 employees. Operating its own wide-bodied MD-11 and A310 aircraft, FedEx makes over 400 flights per week to Bangkok, Beijing, Cebu, Ho Chi Minh, Hong Kong, Jakarta, Kaohsiung, Kuala Lumpur, Manila, Osaka, Penang, Seoul, Shanghai, Shenzhen, Singapore, Subic Bay, Sydney, Taipei, and Tokyo, as well as destinations in the U.S. and Europe (FedEx History in APAC, 2007). With more than 20 employees under its wing, FedEx Hong Kong is undergoing major changes to further improve its services as more and more customers are availing of their services in Hong Kong. In 1 December 2006, FedEx decided to move the Sung Wong Toi Station to 6/F, Unit 2-3, Global Gateway, 168 Yeung Uk Road, Tsuen Wan. At the same time, they decided to change and extend their office hours to 08:30 – 17: 30, instead of 09:00 – 18:00. This is to prevent their employees of getting caught in Hong Kong’s heavy traffic jam. 2. Managing Change Chartier’s Model 2.1 Disturbance Fed Ex Hong Kong has to manage 3 World Service Centres, 8 FedEx stations and 9 drop boxes. With 26 employees working, FedEx Hong Kong has to consistently maintain its reliable express delivery guarantee. The horrendous traffic in their new location prompted its management to switch their regular operating hours to 30 minutes earlier. Any change of working hours and locations would mean moving on to shifts, working in different locations, extra payments to staff to cover these inconveniences. This is why the HR department must plan for this in advance. In a study of financial professionals from the United States, Great Britain, and Hong Kong who held similar jobs in one division of a multinational company, Wharton and Blair-Loy (2002) found that Hong Kong employees were significantly more likely to express a preference for part-time employment. After rejecting several alternative explanations, the authors adopt a cultural explanation, concluding that Hong Kong employees “are more likely to resent work as an intrusion onto their lives outside of work” (Wharton & Blair-Loy, 2002, p. 55). This change in working hours of making it earlier might cause potential problems in FedEx Hong Kong. The management in FedEx Hong Kong had no other choice because the traffic in their new location is tough and they thought they needed their employees readily to come on time. When employees come in late, the effect will be detrimental to the prompt delivery guarantee of the company. Thus, the company in Hong Kong needs formulate a new strategy to maintain their current employees despite the change in their working hours. 2.2 Decision to Act The reality of being a traffic-prone new location of FedEx Hong Kong, the company is concerned about their employee’s reception of the new working hours. The top management has to identify, analyze the cost and benefits, to evaluate the impact on stakeholders and decide to implement the new system of incentives to maintain their current employees despite the earlier imposed work schedules. 2.3 Problem Diagnosis The Lewin’s – Force Field Analysis Model will be used to identify forces affecting the problems while the new working hours is implemented. According to his force-field theory, these two sets of forces are always in opposition in an organization. When the forces are evenly balanced, the organization is in a state of inertia and does not change. To get an organization to change, managers must find a way to increase the forces for change and reduce resistance to change, or do both simultaneously. Any of these strategies will overcome inertia and cause an organization to change. FedEx Hong Kong decided to implement the change in working hours because it can enhance the work efficiency of employees, to avoid the domino effect of lateness due to traffic and to maintain the “on-time” delivery guarantee that FedEx is known for. For a long term, it can maximize FedEx Hong Kong’s recourse on time management and increased productivity. 2.3.1 Lewin’s Force Field Model Below is Lewin’s Force Field diagram to illustrate the forces causing the change (below) and the forces resisting to it (above). The middle line denotes the balance that the management wants to reach with the opposing forces. Exhibit A - Lewin’s Force Field Model (analysis the forces that could affect the change in working hours). Identify the Data To effectively diagnose the problems changing the working hours and evaluate the threats that might arise after the changes process, it will be necessary to have a survey to all staff. We are going to collect both the qualitative (primary sources of data) and quantitative (secondary sources of data). Qualitative Data (primary source of data-Interview and Surveys) Staff interviews will be very helpful to obtain the feedback of the employees of what they think is the impact of the change in working hours that was implemented. Surveys will determine of what could be done with regards to the negative impacts of this change to them. We will use staff interviews to collect qualitative data, as we can have two ways communication between management and employees for diagnosis the problems & issues. The human resources department will conduct the interview with the staff. With the acquisition of the feedback of employees, the management might consider flexible work schedules and flexible job assignments to provide FedEx with a way to adjust to slow periods without losing valued workers because of this change. Quantitative Data (Secondary source of data) We obtained secondary sources data from Hong Kong’s current labour market to verify the impact of this change in working schedule. On the back of strong economic growth in Hong Kong, job creation reached record levels in 2006, bringing the unemployment rate to 4.8%, the lowest level in five years. Hong Kong has a sound business environment and labour regulations that do not impede business activities (Euromonitor International, 9 February 2007). Exhibit B represented the changes of wages in Quarters of 2005 and 2006. FedEx belongs to the Community, Social and Personal Services sector which had posted significant changes in worker’s wages. With employment growing faster than labour supply, employees can start demanding better pay. Latest national statistics indicates some signs of improvement in earnings, with the average wage rate rising by 0.3% in real terms (after discounting consumer price inflation) in the third quarter of 2006 over the same period of 2005. This is the first real wage increase since 2003. Employees are also starting to demand better conditions, including a five-day working week, minimum wage and overtime pay. Only by 2005 did the government start implementing a five-day working week for civil servants. And FedEx will definitely be affected because it requires its employees to work in six days. Thus, the new work schedule will definitely reduce the morale of its employees. Exhibit B. Year-on-year change in real wages by selected major sector: Q3/2005-Q3/2006 (Source: Hong Kong Census and Statistics Department). 2.4 Search for a Solution For change management to safely implement the earlier work schedule and to introduce new guidelines and polices to all staffs, FedEx Hong Kong is required to motivate their valuable staff to work by promoting hard working bonus system. Rewards await for those staff who are working on times. Moreover, FedEx Hong Kong needs to provide leadership and time management training to employees for them to balance their work-family schedules and become more productive individuals, regardless of the earlier work schedules required of them. 2.5 Application of Solution 2.5.1 Strategy Implementation The General Managing, the Supply Chain Operations and the employees need to collaborate on helping the strategies for change that can be smoothly implemented. Items Implementation Plan Duration 1 The Implementation of the Change in Working Hours to 30 minutes earlier than the usual for all employees of FedEx. First Month 2 The conduct of surveys/interview to know the feedback of employees regarding the change in working hours. Second and Third Months 3 Training programs/workshops to help employees balance their time and encourage them they could be more efficient. Fourth Month 4 Formulation of possible incentive mechanism for employees and resolving the issues voiced out by employees in their feedback. Fourth Month 5 Monthly monitoring of employee performance and attendance Monthly 6 Management showing employees of how effective they can manage their time using the new schedule. Long Lasting 2.5.2 Assessment of Resistance Individuals within an organization may be inclined to resist change because of uncertainty, selective perception, and force of habit (Likert, 1967). Uncertainty and Insecurity. People tend to resist change because they feel uncertain and insecure about what its outcome will be (Argyris, 1957). In our case, FedEx had changed the working hours 30 minutes earlier that the schedule they were attuned to, some employees might find this difficult because most of them have their own families. Employees resistance to the uncertainty and insecurity surrounding change can cause organizational slowdown. Absenteeism and turnover may increase as change takes place, and employees may become uncooperative, attempt to delay or slow down the change process, or passively resist it. Selective Perception and Retention. Perception and attribution play a major role in determining work attitudes and behaviors. There is a general tendency for people to selectively perceive information that is consistent with their existing views of their organizations. Thus, when change takes place, employees tend to focus only on how it will personally affect them or their function or division. If they perceive few benefits, they may reject the change. Not surprisingly, it can be difficult for an organization to develop a common platform to promote change across an organization and get people to see the need for it. Habit. This is people’s preference for familiar actions and events, is another impediment to change. The difficulty of breaking bad habits and adopting new styles of behavior indicates how hard it is for people to change their habits. Why are habits hard to break? Some researchers have suggested that people have a built-in tendency to return to their original behaviors, a tendency that would affect change. For our purpose, it will be best to examine the psychological, sociological and cultural theories of change and see the possibility of resistance in FedEx scenario. 2.5.2.1 Psychological Theories of Change Jung (1953) formulated the idea of a collective unconsciousness is invoked to explain why some changes are inevitable and why others will be resisted, whenever people are brought together in groups or organizations. Freud and researchers like Bowlby (1981) thought that the response of adults to change was determined by their childhood experiences of birth, suckling, sibling rivalry, attachment, separation and loss. They concluded that for many adults the prospect of change might re-stimulate their separation anxiety and their fear of loss. They predicted a pattern of shock, denial, grieving, catharsis, insight and adaptation. For Kurt Lewin (1951), this meant that resistance to organizational change was inevitable. Lewin thought that resistance to change could be tackled by managers through a process which he called Force Field Analysis. 2.5.2.2 Sociological Theories of Change When people come together in groups, communities, cities or nations, levels of confusion and anxiety rise. Attempts are made to manage this anxiety by creating structure, rules and legislation. Change usually benefits some people, functions, or divisions at the expense of others. This is why when change occurs this usually causes power struggles and organizational conflict, an organization is likely to resist it (Kotter and Schlesinger, 1979). 2.5.2.3 Cultural Theories of Change Organizations can be viewed as mini societies in which changes are driven or resisted in accordance with the beliefs that are deeply held by the members of that society. The beliefs may not be articulated explicitly. They may be conveyed symbolically, through such things as stories, myths, rituals and ceremonies. According to cultural theories, people are likely to change their behaviour in response to symbolic actions by managers. The more senior the manager, the more powerful the signal. If senior managers break with a traditional way of doing things, they signal the direction in which they want the organizations culture to shift. If they consult clients or front-line staff before putting proposals to the board, they send out a very different message than if they always consult a member of the board before they do anything. 2.5.2.4 Overcoming the Resistance to Change What the FedEx management could do is to conquer the psychological, sociological and cultural aspects of resistance to change. They should be assured that their “sacrifice” will improve them as individuals. Their differences in functional orientation could impediment to change and a source lower productivity. Different functions and divisions often see the source of a problem or issue differently as a result of their own viewpoints. This “tunnel vision” increases organizational inertia because the organization must spend time and effort to secure agreement about the source of a problem before it can even consider how the organization needs to respond to the problem. Moreover, the mechanistic structures are more resistant to change. People who work within a mechanistic structure are expected to act in certain ways and do not develop the initiative to adjust their behavior to changing conditions. The extensive use of mutual adjustment and decentralized authority in an organic structure, on the other hand, foster the development of skills that enable employees to be creative, responsive, and find solutions to new problems. This is why FedEx should formulate ways that employees could feel they are given importance. Bonding activities and team building seminars might help them realize their role in the organization as a whole. 2.6 Change Agents Chartier’s change model had emphasized the change agents provide five functional roles for facilitating change. The top management, staff members, or outsiders are all vital in this process (Resource Kit). Position Role Tasks General Manager/ Supply Chain Operations Manager Catalyzer/ Resource Linker/ Stabilizer Be a role model in managing their time Provide the necessary resources to make employees comfortable to change Encourage the formulation of an incentive program for employees Consider the suggestions of employees to make their new change program a win-win solution HR, Staff, Employees Resources Linker/ Process Helper/ Solution Giver Undergo time management seminars Initiate the surveys and interviews to obtain employee feedback Suggest solutions to problems that may come up after the change was implemented Monitor the change of employee attendance and morale after the change was implemented Exhibit C. Chartier’s Change Model 2.7 Evaluation of Change Assessing the effectiveness of changing the working hours and maintaining the same attitudes of employees would be the desired result. To know the success of this aim, the surveys, feedbacks and employee performance would be the barometer that will indicate if they positively received the change that was instigated. In terms of working hours, the effect of employment status on preferences for working hours is not straightforward. Based on Schor (1991) and Jacobs and Gerson (2001), fulltime workers (who may feel overworked) are expected to have the lowest preferences for an increase in working hours. The unemployed are expected to have the highest preferences. It is not clear to what extent part-time workers would prefer longer or shorter hours of work. According to Jacobs and Gerson, they will show higher preferences for working hours than full-time workers. According to Hakim’s (1989) contention, however, part-time workers, especially women, are less committed to market work and thus will be less likely to prefer an increase in market time. It is also important to note that marital status is expected to affect differently the preferences of working hours. Being married is expected to increase market-time preferences for men and to affect negatively the preferences of women due to the differences in their domestic responsibilities. We expect education to be negatively correlated with preferences for more work (that is, the more educated are expected to prefer to invest less of their time in market activity). This is mainly because their jobs more often entail higher levels of earnings and security (Drolet&Morissette, 1997). Similarly, we expect a negative correlation between family income and preferences for working hours. The abovementioned research about the concepts of people regarding working hours could serve as a guide to predict the reception of the worker’s response to the change that FedEx Hong Kong inevitably instigated because of the traffic in their new location. Thus, the HR has a pivotal role in the monitoring of the employee’s reception of the implemented change. This will closely indicate any negative receptions and management can immediately find solutions to avoid any deleterious effects on the organization as a whole. 2.8 Sustaining and Maintaining the Change The time management workshops will be a great buffer to change the previous negative concepts of employees to their change in working hours. The implemented change would also be sustained if the company will provide rewards and recognition to their employees. Rewards and recognition are needed primarily to provide reinforcement when people are successful at implementing changes. Rewards and recognition are often what people focus on as they strive to achieve their goals. When goals center on implementing changes, rewards and recognition help reinforce the achievement of those goals and, ultimately, help sustain the implementation of the changes to be made. Another important reason to reward and recognize people during a process of change is to help motivate them to implement changes in the future. If they are not rewarded and recognized for the work they put in to accomplish the goals of a change effort, they will be much less willing to put in the same amount of effort the next time a change process is undertaken. 2.9 Conclusion As an old saying goes “time is gold”, this is why FedEx should value time as a resource for both the organization and their employees. Due to the inevitable decision of making their working hours earlier, FedEx Hong Kong should find ways to counteract any negative force that would take effect after the change was implemented. The solutions will lie in increasing the employee morale and their confidence in the company. That is why, the probable solutions to the negative reception of employees should be conducting surveys and interviews to know what are their innate reactions to their new work schedules. Moreover, augmenting their skills in time management through workshops and seminars would empower them to counteract their possible problems of dividing their time for work and family. Lastly, constantly monitoring their absences and lateness would let the HR to evaluate if the change is beneficial to the company. With these, the change implemented would be determined if it will not affect the company’s range of services. Also, using the concept of teams to accomplish a change process is a very effective way to achieve desired results. The value of the managers and employees are usually greatly enhanced when he or she works together with others in an environment that is supportive, creative, and focused on results. Works Cited Argyris, C. Personality and Organization, New York: Harper and Row, 1957. Bowlby, J. Attachment, Separation and Loss, vols I, II and III. Penguin, 1981. Drolet, M., and Morissette, R. (1997). Working more? Less? What do workers prefer? Perspectives on Labour and Income, 9.4 (1997): 32-38. Euromonitor International. Hong Kong’s Jobless Rate Falls to Five-Year Low. UK: Global Market Information Database, February 9, 2007. FedEx History in APAC. Retrieved 14 February 2007 in FedEx Hong Kong website: http://www.fedex.com/hk_english/about/history.html?link=4 Hakim, C. Models of the Family, Women’s Role, and Social Policy. European Societies, 1.1(1999): 33-58. Jacobs, J. A., and Gerson, K. Overworked Individuals or Overworked Families? Explaining Trends in Work, Leisure, and Family Time. Work and Occupations, 28.1(2001): 40-63. Jung, C. The Integration of Personality. Farrah & Ruck-hart, 1953. Kotter, J.P. and Schlesinger, L.A. “Choosing Strategies for Change,” Harvard Business Review (March–April 1979): 106–14. Likert, R. The Human Organization, New York: McGraw-Hill, 1967. Resource Kit. Managing Change (BUSM2193, Intake 13), RMIT BBM Program (Hong Kong), 2006.. Schor, J. B. The Overworked American: The Unexpected Decline of Leisure. New York: Basic Books, 1991. Wharton, A. S., & Blair-Loy, M. The “Overtime Culture” in a Global Corporation. Work and Occupations, 29.1 (2002): 32-63. Read More