Case on United Parcel Service

United Parcel Service (UPS) has taken on the United States Post Office at its own game and
won. UPS specializes in the delivery of small packages. It can deliver a package anywhere in the
United States for about three dollars. UPS sees itself in competition with the post office, so it
sets prices below post office rates and still makes an excellent profit.
Why has the Brown Giant been so successful? Much efficiency is realized through adoption of
the bureaucratic model of organization. UPS is bound up in rules and regulations. There are
safety rules for drivers, loaders, clerks, and managers. Strict dress codes are enforced, no
beards, hair cannot touch the collar, no sideburns, mustaches must be trimmed evenly and
cannot go below the corner of the mouth, and so on. Rules specify the cleanliness of buildings
and property. All 60,000 UPS delivery trucks must be washed inside and out at the end of every
day. Each manager is given bound copies of policy books with the expectation that they will be
used regularly. Jobs are broken down into a complex division of labor, including drivers,
loaders, clerks, washers, sorters, and maintenance personnel. Each task is calibrated according
to productivity standards. The hierarchy of authority is clearly defined and has eight levels,
extending from a washer at the local UPS plant up to the president me of the national
organization.
Technical qualification is the criterion for hiring and promotion. The UPS policy book says, "A
leader does not have to remind others of authority by use of a title. Knowledge, performance,
and capacity should be adequate evidence of position and leadership." Favoritism is forbidden.
Moreover, UPS thrives on written records. Daily worksheets specify performance goals and
work outputs for every employee and department. Computer systems have been installed to
facilitate record keeping.
Another key to the Brown Giant's success is that, despite its huge size and bureaucratic
approach, it has never become impersonal to employees. Everyone is on a first-name basis. No
one, not even the chairman, has a private secretary. Top executives started at the bottom, and
they still do their own photocopying. The drivers are the real heroes of the company. "Once the
employees work into supervisory positions, they receive stock and become owners. Employees
care about this company and its customers.

Questions
1. Identify two Critical Success Factors (CSFs) of UPS and discuss the associated implications to
managing people.
2. “UPS maintained a delicate balance between organizational control and employee
commitment.” Do you agree? Present your case with logic and evidence.
3. Identify two possible challenges faced by UPS in relation to Strategic HRM, and make
recommendations for the sustainability of existing satisfactory performance.
4. Discuss the applicability of the approach adapted by UPS to Sri Lankan business
organizations.