Manage the flow of goods, funds
Since the beginnings of United Parcel Services in the early 20th century to its position today as the world’s largest package delivery company, the goal of the company has been to efficiently “manage the flow of goods, funds, and information. ” The only difference is that now UPS does this in more than 200 countries and territories worldwide. (“Diversity”) The philosophy of this shipping giant is reflected in its mission statement:
We fulfill our promise to our constituents throughout the world in the following ways: We serve the evolving distribution, logistics, and commerce needs of our customers worldwide, offering excellence and value in all we do. We sustain a financially strong company, with broad employee ownership, that provides a long-term competitive return to our shareowners. We strive to be a responsible and well-regarded employer by providing our people with an impartial, rewarding, and cooperative environment with the opportunity for advancement.
We build on our legacy as a caring and responsible corporate citizen through the conduct of our people and company in the communities we serve. (“The UPS Charter”) The fact that this statement targets all those who are touched by its business – customers, employees, stakeholders and the community at large – is indicative of the vision of its management – to be the enablers of global commerce. The management of UPS aims to be compliant with all laws while moving even further into the global market.
Also inherent in this mission statement is a recognition by UPS that its powerful position as a world leader in shipping brings with it responsibilities in all areas of its business. Company Chairman and CEO D. Scott Davis expressed this in a speech this past summer in which he specifically cited why a company’s reputation is so vital to its sustainability. While acknowledging the harsh economic realities that make cost-cutting shortcuts tempting, he maintains that companies that took these ill-advised shortcuts “compromised their reputations, and in the long-term, their underlying value. ” (Davis)
The management of UPS is motivated by principles that have endured from its very beginning. The values underlying these core principles are honesty, quality and integrity. (“UPS Code”) The management committee expects that everyone involved with the company will adhere to these principles. In a service-oriented business such as UPS, employees play a major part in the success of the company. Employees become one of the company’s major assets. The aim of UPS is not only to treat their employees with “fairness, respect and dignity,” but also to find the best employees and keep them based on “merit, experience, and other work-related criteria.
(“UPS Code”) UPS recognizes the importance of employee relationships and that is why it focuses strongly on its employees. For instance, it rewards drivers who remain accident-free for a certain number of years. Just this past October 7, 2008, it inducted 715 elite drivers into the “Circle of Honor,” a group of active drivers who have not had an accident for at least 25 years. (“UPS’s Circle”) Employee diversity is also at the heart of its employee relations. The global nature of the business demands diversity in hiring.
But diversity in the company takes on other faces, such as meeting the needs of its diverse customer base, incorporating diversity into its network of suppliers and listening to the ideas of its diverse workers. (“Diversity”) In 2006 UPS was named to Black Enterprise magazine’s list of “The 40 Best Companies for Diversity. ” The award recognized not only diversity in the workplace but also the diverse and inclusive business practices of UPS. The company has also been recognized for its contributions to women’s business enterprises, recognition of human rights throughout the world, and its use of minority suppliers.
(“Diversity”) UPS’s commitment to excellence and value is reinforced in its Code of Business Conduct, a comprehensive outline of what is important to UPS in order to sustain itself with fairness and integrity in the global market. In addition to what has already been mentioned regarding employee relations, UPS has made a commitment to its customers to compete fairly and in accordance with the highest by making no misrepresentations of services, clear communication, confidentiality and fulfillment of promises.
(“UPS Code”) This is all part maintaining the company reputation referred to by D. Scott Davis in the speech cited in a prior paragraph. UPS realizes that to remain a leader in the global shipping market it must “compete vigorously, aggressively, and successfully in today’s increasingly competitive business climate,” but that it must also be “at all times in compliance with all applicable antitrust and competition laws throughout the world. ” (“UPS Code”)
As an example, a billion dollar deal for UPS to provide competitor DHL with air transport services for the next 10 years has caused some critics to accuse UPS of breaking the anti-trust laws that its Code of Business Conduct promises to follow. But UPS maintains that the deal is “a straight vendor contract,” and not subject to anti-trust laws. (“Senators”) This is the kind of issue that a company such as UPS faces on an almost daily basis. Its status as the largest global shipping company makes UPS a prime target for regulatory or legal action which it must deal with promptly and appropriately.
In its SEC filing for 2007 which is printed in its entirety in UPS’s Annual Report for 2007, the legal issues are put into perspective and they are addressed thusly: “We believe that the eventual resolution of these cases will not have a material adverse affect on our financial condition, results of operations, or liquidity. ” (UPS Annual Report 2007) Legal issues, whether they are brought up by government or private sources will always be a part of the day to day operations of any business but especially one as large as UPS.
These issues cannot deter the company from facing the operational aspects of the business. Right now, in this time of economic crisis, consumer confidence is an issue of great consequence to UPS and others. In an article in the Atlantic Journal-Constitution the CEO of UPS, D. Scott Davis, conceded that consumer confidence is at a low. He acknowledged that this is a matter that his company would have to address, though he believes that the Atlanta-based UPS will weather the storm well. (Ramos) Part of the credo of UPS is that it should be community-oriented.
It feels that its operation should benefit the resources of a community in any number of ways, not ignore or deplete them. Employees are encouraged to take part in community volunteerism and the company itself tries to make its presence in a community a positive force. Part of this presence is environmental protection. UPS takes an active leadership role in protecting the environment and expects its employees, suppliers and others to follow suit. In October 2008 the UPS Foundation, which this year adopted a new global philanthropic strategy, awarded one million dollars to various environmental groups.
(“The UPS Foundation”) It was also the first shipping company to join the EPA’s “Climate Leaders” program. (“UPS Joins”) Chairman and CEO Davis states that UPS has been a leader in promoting more efficient methods and technologies by doing such things as purchasing alternative fuel vehicles, optimizing its delivery routes, and conserving airplane fuel by reducing the number of engines used in taxiing and recalculating the most efficient air routes. (“UPS Joins”) UPS has also been working with other private and public organizations to promote new fuel technologies.
UPS has also been a leader in stepping “out of the box” to move into related yet innovative areas of business. In 2004 UPS entered into supply-chain management helping their clients by storing, assembling, repairing and interacting with the clients’ customers as well as the usual moving of products to their customers. UPS is willing to take the risk that what accounted for only 6% of UPS revenues in 2004 will grow considerably in the coming years. (Donnelly) It would be virtually impossible to delve into every aspect of UPS as a global package mover.
From the very beginning of the company in 1907 as an on-foot and bicycle messenger service, the business of UPS has been growing in all directions, not only geographically, but also in its business decisions and practices. UPS has become a global presence in the package delivery area but it has also expanded into air cargo, retail shipping and posting, professional services, financing and more. (“UPS Companies”) It has grown, but its philosophy, now with a global influence to it, remains the same.
UPS is dedicated to keeping up with global commerce, sustaining a strong company that will be financially profitable to its shareholders, maintaining a respected employment policy and being a pro-active innovator in the global marketplace. It strives to be sensitive to the social needs of the community, conducting itself in all matters with integrity and dedication to the global environment. Economic downturns, a changing marketplace, and globalization have not been able to shake the foundations of this company.
Its management team strives to keep UPS ahead of the crowd, testing the waters of the business climate that the other shipping companies have yet to try. They acknowledge and face head on any economic, social or global difficulties devising innovative solutions that benefit both the overall reputation and the bottom line of the company. As a result it is likely that UPS will remain a leader in the shipping industry for the foreseeable future.
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