Question

How does FedEx design its structure and control systems to strengthen its business model? For example, what steps does it take to further cross-functional integration? Does it have a functional, product, or matrix structure?

Answer 1

FedEx Corp is an umbrella organisation with several wholly owned subsidiaries which cater to transportation, e-commerce, packaging and business services.

FedEx Corp: 1. FedEx Services 2. FedEx Express 3. FedEx Freight 4. FedEx Ground/ Packaging.

These subsidiaries inturn have few companies under them catering to particular business segment.

Established in 1997, FedEx is the world leader in Air express delivery and serves more than 200 countries across globe. FedEx business model is committed to expeditious delivery by meeting deadlines and the corporation has always been able to meet it's commitments.

FedEx subsidiaries operate through their individual murli delivery channels which do not overlap or work through single centralised delivery channel for the whole corporation. With such a giant network of deliveries, packaging, e-commerce and services operating across the globe the corporation has put in place various control systems in its Business structure to continuously evaluate all the processes.

FedEx Corp has done several mergers and acquisition across the globe to cater to customers across the globe with ease. It has also purchased it's own fleet of aeroplanes and trucks to cover air and land distances without any barrier of a third party. The corporation has a strong control system through regular reporting on a technology driven database wherein reports are fed on real time basis to keep track of meeting its delivery commitments. The company houses largest online client server network in the world. FedEx houses centralised and advanced customer oriented worlwide package tracking system which is a good service point for the customers as well as tracker for global services control on real time basis.

Logistics are made advanced with good technology investments by the company. Latest package trackers, scanners, warehousing technologies have all helped to streamline and expedite the worldwide delivery network for the company. All the packages are brought to a centralised place in any of the countries whose traffic is less at that point of time and is sorted and dispatched to the least distant network for delivery. Cross functional integration is made effective by a customer oriented centric work culture throughout all outlet and subsidiaries.

FedEx has product or customer or service centric organisational structure wherein the corporation is divided into subsidiaries which in turn are divided into companies to cater to niche services in different geographical regions across globe.

Matrix structure pools all its employees with common specialization in one group and similarly several matrix with separate specialisation and different job responsibilities is established.

Functional organisation is one which divides it's employees between various functional units of the organization. Thus FedEx Corp has product driven structure.