Quantitative Methods For Pricing Strategies In Management: A Case Study On United Parcel Services

Background of United Parcel Services (UPS)

Question:

Discuss About The Quantitative Methods For Pricing Strategies?

Bureaucracy precisely means an administrative system that heavily relies on rules, procedures and policies and a hierarchical system that is specific. United Parcel (UPS), commonly referred to as "Brown Giant" is deemed the most significant packet delivery firm. Indisputably, a leading firm won't be invisible from the public eye (Morgan, 2006). UPS has delivered numberless parcels to my relatives and close friends, and this is how I learned about it, the primary reason being its positive reputation. This essay looks into a management organization, describes its main tasks and goals and analyses its aspects such as centralization, formalization, complexity as well as the dysfunctions of its bureaucracy if any.

United Parcel Service is a firm that specializes in package delivery as well as transportation and logistics services. It was founded by James Casey under the name American Messenger Company based in Washington (Stehman & Fisher, 2014). This company aims at remaining relevant as well as being the leading package delivery firm in the world serving over 200 countries. It is a company that seeks to be the expert in all the operation areas in package delivery.

In an organizational perspective, centralization is a process in which organization activities regarding decision-making and strategic planning are concentrated in a particular location or group. This aims at leaving the power at the higher levels of the organizational hierarchy. Formalization, on the other hand, means a situation whereby the managers spell out the procedures, rules, and responsibilities for organizational units, teams, individual employees and the whole of the organization. This leads to the development of relationships, operating procedures and processes resulting to bureaucracy and centralization (Jones, 2007). Complexity means the tendency of having several stakeholders which are interdependent and interconnected technology systems for information and organizational structure (Robbins & Barnwell, 2006). In few words, it is the differentiation degree in an organization.

United Parcel Services is a package delivery company that is based in Atlanta in the United States of America. It was founded by Jim Casey and Claude Ryan back in the year 1907, and up to date, it remains the world's leading logistics and transportation company. It has more than 400, 000 employees recording an annual turnover of more than $45 billion earning a net income of $2.15 billion. This company delivers more than 16 million documents and packages to 6.1 million clients in more than 200 countries worldwide. It deploys 100, 000 motor vehicles and 500 aircraft daily.

Its organizational structure is set up by a management committee that has the responsibility of daily management. The committee operates from 12 focuses within UPS. This structure comprises of the Chairman and the chief executive officer who is usually in charge of the whole function in the operation of UPS. The CEO holds the responsibility of expanding the UPS as well as the creation of new lines for a business that helps to complement the global package delivery of packages of the company.

Organizational Perspective of UPS

The chief operating officer monitors all the operations and package delivery globally. The senior vice president of the global sales and marketing directs customer relationship management, electronic commerce, product development and customer service. It also has a senior vice president of sustainability and supply chain who oversees the environmental activities of the company. The senior Vice president for global Transportation services is responsible for the management of the company’s intermodal transportation network.

The company also has senior vice president for operations, human resource, communication and Brand management, chief information officer, chief financial officer and Vice president for UPS who oversees the company's compliance, legal matters as well as public relations. In addition to this, under each department, UPS has built effective teams for motivating its employees towards reaching their goals and objectives.

The United Parcel services operations are run on a very centralized organization which focuses on proper planning of business processes which are usually run from both corporate headquarters based in Atlanta and Memphis. As usual, in this centralized organization, the top management reserves the authority of making operational and strategic decisions as well as carefully monitoring each department head.

Surprisingly, yet up to date United Parcel services still has bureaucratic and complex procedures starting from its management, procedures, rules, and regulations. The company has pre-set rules and regulations that guide its operations targeting the employees and all its stakeholders. However this may be viewed as having negative impacts on the company as well as depriving its employee's freedom and independence, bureaucracy is what has placed United Parcel Service Company where it is today.

Just to begin with, it teaches and offers training to all the drivers on 340 steps of how they can correctly deliver parcels. This training involves how to load the truck correctly, how to fasten their seat belts as well as the best way to walk and how they should carry their car keys (Schenken & Davidson, 2015). As if that is not enough, managers, clerks and driver's loaders have safety rules that are set to ensure that they are protected from significant risks.

In UPS, the dressing is also considered as Paramount leading to enforcement of strict dress code. The employees are always required to be in clean uniform, usually referred to as browns (Stahl, 2016). Every day, employees are required to have black or brown polished shoes which have slip sols. They should not have beards or any hair below the collar among other dressing rules.

When it comes to supervisors, they conduct a three-minute driver inspection daily. It also has established rules that specify cleanliness standards for truck building among other properties. On the same note, eating is not allowed in any employee’s desk whatsoever the case (Gelb, 2016). To continually remind them of these rules and regulations, every manager is provided with copies of policy books which he is expected to use on a regular basis.

United Parcel Service has also not lagged behind in the division of labor and specialization. Every plant of UPS has specialized clerks, drivers, loaders, sorters, washers and maintenance personnel. This company has prospered in the use of written records and has become a leader in the use of new and advanced technology aimed at enhancing efficiency and reliability (Zeltzer, 2017). In UPS drivers make use of computerized clipboard to be able to track everything beginning from miles per gallon all the way to data on parcel delivery. On top of that, all the drivers are required to have daily worksheets specifying performance goals and work output.

Centralization, Formalization, Complexity, and Bureaucracy in UPS

United Parcel service uses the criteria of technical qualification acquisition and promotion of employees and the company staff. Its policy book says that every leader in the company is expected to have the knowledge and capacity that will justify his/her leadership position in the company (Morgan, 2006). Daily employee performance and quotas are reported on either weekly or monthly basis with frustrating regularity.  Favoritism and leaning on a particular side or affiliation is a vice that is condemned in UPS.

Every organizational structure either works for or against it. United Parcel service has enjoyed positive impacts of employing bureaucracy in its procedure (Leonard, 2016). This is to mean that bureaucracy has worked for it and therefore it hardly experiences dysfunctions of bureaucracy. For instance, United Parcel Service has been ranked as the company having the highest average globally for being the most admired company for business excellence having an industry score of 8.20 on a 10- point scale.

This company was rated in a railroad, airline, trucking and logistics companies and emerged number one worldwide for its allegiance in social responsibility, number two worldwide for quality management, number three globally for the use of corporate assets, people management and product and service quality (Shamsuddin et al., 2017). It was also ranked number 6 worldwide for global competitiveness, number 7 for financial soundness and number nine for innovativeness. This company also got listed as the most ethical company in the year 2010 under the category of social responsibility, a position that is based on how a company translates statements on doing business ethically into action (Bennett et al., 2015). These are just a few of the awards and ranks that the company has received over the years.

Receiving awards and ranks is an indication of positive growth and a result of well-laid procedures. This indicates that the place held by United Parcel service today is as a result of the bureaucratic procedures, rules, and regulations that it exhibits (Laseinde & Mpofu, 2017). In fact, were it not for bureaucracy, the company could have been outdone by its competitors such as United States Postal services and Federal Express.

The training offered to the staff, rules, and regulations well laid out to the employees as well as a useful criterion for hiring and promotion of employees has proven to have worked out well to place the company in a better position (Valera, 2017). The reason as to why there is an absence of dysfunctions of bureaucracy is the initial intention of implementing it. Research has shown that these procedures, rules, and guidelines were not intended to demean the employees but gives them the pathway within which to operate.

Conclusion

Just but to draw the line, the centralized structure exhibited by United Parcel Service and its formalization as well as its bureaucracy has placed it in a better place and given it the rank it has today. Being ranked as the world's leading package delivery is not a minute achievement. Many are its competitors who have been yearning for this position to no avail. Serving more than 200 countries efficiently is a significant achievement. To sum up, research has shown that rules and regulations, even though seeming bureaucratic, help to shape the culture, ethics, and performance of any organization. Thanks to bureaucracy in United Parcel service company in Atlanta and Memphis.

References

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