SELEONL2009A Socio-Economic And Legal Environment of FedEx Assessment Answer
Assignment Task 1 Report on FedEx
The assessment deals with the analysis of socioeconomic and legal environment. The chosen corporation is FedEx and is among the top most leading delivery services. Fortune, that included FedEx among the Top Ten Most Respected Firms in the World and 100 Greatest Firms to Work with, recognised his commitment to community contribution”. The report comprises of the in depth analysis of the background of the company and he effect of socioeconomic trends n company growth and economy. Also, it aims at highlighting the influence of political and legal factors for FedEx. This is followed by conclusion of strengths and weaknesses the company and recommendations for improvement.
Background of FedEx
FedEx Corporation is popular with express delivery, a business established by the organization during in the 1970s and one that continues to expand almost three decades later. For the modern age, the industry leader has reorganised and currently consists of five main business units: FedEx Ground, FedEx Mail, FedEx Custom Essential, FedEx Freight and FedEx Exchange Networks. Functioning in 211 countries, FedEx Express is the leading express delivery corporation in the world (Qing et al. 2020). FedEx Ground delivers small shipments on the ground and is Northern America's largest supplier of such facilities. On a quite-than-truckload scale, FedEx Freight makes localised freight shipments. FedEx Custom Critical offers products that need scheduled shipments that are very critical. Finally, a number of consultancy, customs brokerage, and information and technology programs are accessible by FedEx Exchange Networks. FedEx enables about 5 million actual shipments per business day and handles over 100 million electronic transfers. Thus, FedEx uses its airplanes, land equipment, and automated devices to speed up transportation so that firms and individuals can practically seamlessly move time-sensitive content through large distances.
The FedEx mission centres on technology development and fastest deliveries. By offering high value-added processing, distribution and related market services by centred operating entities, FedEx Corporation can achieve superior financial returns for its shareholders. Customer expectations can be fulfilled in the best quality way ideal for each section of the business served (Brondum and O’Connor 2016). With its team members, associates and vendors, FedEx will aim to establish mutually rewarding partnerships. In all projects, security would be the first concern. Corporate procedures can be carried out against the highest degree of integrity and discipline. FedEx Corporation offers the FedEx family of businesses with corporate oversight and integrated financial statements, overseeing a wide range of logistics, e-commerce and services around the world. For the future, FedEx Corporation has specifically defined plans and strategies (Qing et al. 2020).
By delivering "high-value added" package distribution to more than 220 nations, FedEx provides credibility (Passport 2020). The business model can better be summarized up in the early slogan of the company: "When it absolutely, positively has to be there overnight". FedEx promises pace and a reliability of over 99 per cent, with 651 aircraft (the world's biggest freight airline) carrying over 4 million parcels per day (Board 2018). Via owned and controlled subsidiaries, FedEx supplies a range of logistics, e-commerce, and technical services. Headquarters are located in Memphis, as of October 2020, the company hired 324,000 employees (FedEx 2020). In the same year, for the 14th straight year, Fortune listed the corporation 12th among the "world's most admired firms”. Any business could easily move one shipment via aircraft through point A to point B, but without economies of scale, this is outrageously expensive. FedEx Express depends on an incredibly effective operating model based on its aircraft to meet its consumer commitment of fast and secure distribution while providing reasonable pricing. Unlike its closest rival, UPS, a trucking firm that owns aeroplanes, FedEx is colloquially treated as an airline that owns trucks (Board 2018).
Fig: FedEx operating model
Although the world's largest freight carrier is FedEx Express, these aircraft do not fly directly. Rather, all planes fly into one of the 14 big hubs conveniently located across the globe by FedEx.
Fig: major hubs by FedEx (Board 2018)
All aircraft fly in cycles (4 a day) over the same periods rather than taking off regularly through the day. This operating business model eliminates WIP shipping time. Instead of standing around, parcels are quickly put on outbound aircraft, but this requires immense ability to land, operate, and release aircraft as well as to process, as all parcels should be unloaded, processed, and reloaded under strict time constraints.
Socio-economic trends which affect FedEx organisation’s business model
In the technological meaning of the term, socio-economic "effect" is goal-level improvement in people's properties, skills, opportunities, and living conditions. The socioeconomic factors are that form and influence the variables that societies face (Sarkisyan 2019). There are variables that influence a certain group’s behaviour, often known as a socioeconomic background. Perhaps their behaviour as customers is the most significant activity by members of a socioeconomic community. Generally, different social groups will have different interests, and this will affect where their money is invested or spent.
Increase in the dependence of multinational services
Any influences that socially impact an enterprise are socioeconomic and social elements of international and macro-economic culture. These concentrate largely on the interests and preferences of the customer and the size of the target population in which the company interacts. As there are more clients to deliver to in regards of their services in all industries, a high population could prove an advantage for FedEx (Sarkisyan 2019). The creation of global organisations is influenced by countries' literacy levels. The key reason for the rise of FedEx is the development in the market atmosphere in many countries. FedEx wants to take use of them and make full use of them, since more organisations require postal systems that are secure for shipping valuable official documents.
Buying power of the consumers
Global forces, such as exchange rates, interest rates and inflation, are disrupting customers ' buying power. When there are falls in the economy, the money of the company is at stake. When there is extreme inflation or an increase in exchange rates, FedEx faces difficulties. Interest rates and exchange rates differ in every country as FedEx deals with countries around the world. When the buying power of its future buyers is limited, it adversely impacts the company and vice versa. A downturn in the economy of a nation contributes in a rise in the usage of an organisation's resources. With a global network, FedEx has to change and adapt to the variations of many countries. It is important to accurately predict their costs in compliance with the economic circumstances of the respective countries (Turner 2019).
Social construction of the business
Businesses are trying to create an image that is socially conscious. They also spend a lot in corporate responsibility and involvement with the community. In the sense of marketing, too, socio-cultural factors have become significant. A very positive social profile that is good for its industry has been handled by FEDEX. "FORTUNE, that included FedEx among the Top Ten Most Respected Firms in the World and 100 Greatest Firms to Work with, recognised his commitment to community contribution” (FedEx 2020).
Easy means of communication
Technological advancements and communication techniques allow organisations such as FedEx to keep a record of their shipments and couriers. For customers, it makes it easy to verify the progress of their couriers. (Include this if you want: technologies will help minimise the time required from one country to the other to obtain a parcel) (Manimaran et al. 2020).
Literature Review on Knowledge economy and various drivers of economic change
Macro-economic dimensions of business, knowledge economy concepts
Hadad 2017 states that knowledge economy means that the economic market, which is increasingly focused on knowledge-intensive operations, is more dependent on intellectual resources rather than on physical assets. Knowledge (provisionally: human capital), changes (attempting to create uncertainty and ambiguity, reducing predictability) and globalisation (unification of development, commerce, banking, means of information and communications technology, scientific analysis, competitiveness and other areas) are the three primary key drivers of the new knowledge economy. The concept of the Information Economy (KE) is becoming progressively common over the past few decades, and seen as a driver of global development and competition in all areas of the economy. As a result of this development, the author offers evidence that academics and commentators have promoted the use of modern tools that strengthen knowledge-based economies, such as IT&C acquisitions, high-tech companies, and highly qualified employees. As the present study will say, these variables are viewed as fundamental variables of KE. Indeed, technologies with the assistance of intelligence and the development of information are the generators of KE, both of which are determined by transmission. A comparison and contrast study of the conventional economy vs the knowledge economy continues with the paper. The key elements of KE, also identified under the label of the four pillars of KE, the optimistic economic developments that KE puts forward are also analysed: organizational and political growth stimuli; trained and professional workers that can promote the production and distribution of knowledge; An adequate innovation mechanism capable of accepting, recognizing and adapting the globalised knowledge stock to unique regional / local circumstances; up-to - date information systems facilitating connectivity, information distribution and knowledge management handling.
Švarw and Dabić 2017 states that the transformation is not only due to technological shifts in global production, but it has played an essential part in the cognitive evolution and foundational shift of the idea of "knowledge economy" in particular and "knowledge" in specific. The paper explores the various conceptions of knowledge within modern forms of intangible economies (e.g. emerging / Internet, ethereal, service, artistic, cultural economies) when knowledge is considered to be created not as a result of science research but as an operation or creative practise and the position of science and research in a knowledge economy led by service is critically examined. Based on the utilisation of knowledge as a special, unregulated and autonomous resource that cannot be replaced by other resources, the knowledge economy has been developed and extended. In most business fields, information has been converted into economic products and sales, not just in those specifically connected to the most advanced technology. This concept is fully satisfied by FedEx as innovation has been gradually transformed by organisations. In this situation, creativity has not only been the goods and technologies, but also the company and consumer experiences. Their sustained economic growth and advancement has been facilitated by growing the productivity of companies and business expertise.
Dima et al. 2018 aims to know the effect of different metrics linked to the information economy on the performance of countries in the European Union (EU). The Global Competitiveness Index (GCI) was evaluated on the basis of the panel-data regression models and Pearson coefficient in relation to research and development ( R&D) spending (as a ratio of gross domestic product ( GDP)), portion of higher education population, learning environment, per capita GDP, and commutation. The results highlighted both creativity and education’s critical position as determinants of EU productivity and economic convergence. The implementation of EU policies on the workforce’s lifetime learning opportunities and the emphasis on research and development programmes will make a substantial contribution to the productivity of EU Member States.
Further, Moos et al. 2019 in the scope of Canadian universities and higher education (undergraduate students), study the spatial interactions between three popular aspects of contemporary urbanism: gentrification, youthification and studentification. Authors perform the study using proprietary Statistics Canada survey files, including data on people and their geographic regions, and the locations of universities and schools, by enrollment numbers size, in three main Canadian cities with large knowledge economy industries. By studying the spatial correlations between universities and gentrification and youth growth, we record the 'spill over' impact of expansions in undergraduate enrolment and campus construction. Studentification and youthification correlate to some degree, but not completely, although the relation to gentrification is more difficult. Study gives new insights of how the three distinct facets of modern urbanism intersect and add to our perception of how the social geography of cities is shaped by universities and schools, as defining characteristics of the knowledge economy.
Also, Ojanpera et al. 2017 put forth that rising internet communication has raised many expectations for Sub-Saharan Africa's democratisation of communication and information development. Three primary metrics are analysed in order to explore the trends of information generation in the area and between other countries worldwide: geographical dissemination of scholarly papers (traditional knowledge production) and collective growth of technology and Internet domain registration (computer - mediated knowledge development). The regional and global trends of collective coding and domains registrations are more uniform than those of scholarly journals, counter to the assumption that digital content will be more globally dispersed than academic articles. Sub-Saharan Africa generates a lower share of multimedia content than scholarly papers, despite expectations of democratisation provided by the information revolution. The findings show that the conditions frequently framed as catalysts in the transition to an information economy do not consistently apply to the three metrics. Although accessibility is an essential enabler for the development of digital content, it seems that it is just a necessary prerequisite, not an adequate one: income, potential for creativity and public expenditure on education are also important factors.
Bejinaru 2017 contends that work reflects on universities' current positions in the knowledge economy. Universities have been technological, intellectual and emotional milestones for humanity since their inception, and still today they have the mission of promoting society's economic and social development. Author begins the presentation of the analysis by outlining the links between the new definition of the concept of information and the operation of the university. Knowledge is the university's strategic asset as well as the key tool utilized in all its organizational functions and has a significant influence on the final goods and services that the university offers to its customers and, eventually, to community as a whole. Author addresses the strategic positions played by universities in community in the second part of the article. Results shows that Revolutionary expertise, information , skills, creativity and fresh ideas expand the limits of economic and social growth, to become a central resource for wealth and productivity. Many researches claim that the development of the so-called "economic order" into the post-industrial period is dominantly driven by them. The radical advancement of information, connectivity, cosmic, biogenetic, transportation and other new technology has evidenced this in the university learning.
Next, Radosevic and Yoruk 2018 explore measurement issues with countries transitioning from middle to high-income position for technology upgrades. Radosevic and Yoruk 2018 use a technically applicable and empirically based middle-level philosophical and statistical paradigm focused on three components in exploring this problem: I intensity (ii) reach of technical upgrades, and (iii) sharing of technology and information. The authors created a three-pronged integrated technology upgrade indicator based on 35 indicators that represent different drivers and trends of countries' technology upgrades at different levels of income. Middle-income economies' technology upgrades are distinctly different from those of medium- and high-income economies. Findings indicate that there is a middle-income trap in technology upgrading, i.e. the technology upgrading operations of countries are not expressed in their income levels. Based on a basic data analysis, authors demonstrate that in all three areas of technology upgrading, the middle-income trap is real, but its relevance differs across various dimensions. A trap tends to be greater for technology update 'distance' than for technology upgrade 'intensity' and is through far the maximum for the dimension of information and technology engagement with the global economy.
FedEx has high-tech development (informatics, communications, aerospace), industries in the service industry and software design services for companies such as data and communications (Walker 2018). Technology and information have been beneficial to the economy, but some economists believe that the global economy has been highly knowledge-based in the past several decades. This is mirrored in the rise in the high-tech industry, the rise in the retail sector, the improvement in self-employment as well as the spike in the proportion of patents (Walker 2018). FedEx meets the knowledge economy in many concepts and FedEx believes that knowledge and data are main efficiency generators, development of investments and markets of high technology, development in knowledge-intensive service industries such as education and communications, a non-finite resource is information, money is used up, but without wasting it, information is not constrained and can be spread, sharing will, in turn, help improve overall awareness and demand growth for highly qualified labour / degrees from universities (Zhang et al. 2018). Further, FedEx is working for economy development as innovation is powered instead of top-down linear frameworks from industry and suppliers (for example, open source platforms/ consumer feedback), spills of information from one sector to another, the essence of the knowledge economy, which is tied to the globalisation process and the global distribution of knowledge and the information economy and the high-tech sector are growing the potential for expanded automation of manufacturing processes, contributing to rapid labour market shifts (Malefyt 2019).
The issues faced by FedEx as per these concepts are because of the reduction in well-paid manual work, the knowledge economy may have widened the difference between highly educated and low-skilled employees. There may be other variables behind increased income disparities, but one possible cause is the information economy. The knowledge economy could also be a force behind the 'Gig economy' growth. For those with high academic potential, this provides more jobs, but those with poorer expertise may find jobs more temporary and low-paid (Bhardwaj 2019). Also, past years have seen a decline in production market and economic growth, amid the potential benefits of the information economy, indicating that we are undergoing an era of secular stagnation (Motoyama and Mayer 2017).
Drivers of change
This company has shown major significance on drivers of change FedEx is reshaping the technological advances and robotics is among the major sustainability driver of technological change that will be used by FedEx in future projects showing its efficacy on environmental and socioeconomic changes (Madry 2020). The major technological advances integrated by FedEx and are under process includes driverless deliveries: lightweight, eco-friendly automobiles that deliver without someone at the wheels around cities. One driver controlling a line of trucks would see the driver of the vehicle in front operating all the trucks following him: "vehicle platooning". Jet fuel from waste oils, farm waste, industrial waste products, natural gas and even algae is now being produced by FedEx. This is also part of their target of getting 30 percent of alternate sources from our jet fuels by 2030 (FedEx, 2020). The present challenge of the FedEx Corporation was to attract its consumers and improve its efficiency. The business faces evolving customer preferences and rising demands, as well as facing manufacturing challenges because the company has struggled to satisfy its consumers. The business must fulfill its clients’ needs and therefore raise its scores when a buyer is considered to be a king in order to gain more revenue. In the context of FedEx, the implicit demographic pattern was that more individuals were calling for more details to trust a logistics supplier at lower time periods (Turnbull 2019). If overlooked, certain implicit socio-demographic patterns will make or break companies. For any age, demographic factors such as the period of time we are able to wait until we see a result are reducing. "This immediately results in demand for more software".
Impact of legal framework and political factors
Political factors influencing FedEx
There are 220 countries where FedEx operates. For their companies to develop prosperously, political stability in any of these nations is necessary. Instability has got a bane of its own. Destabilization leads to a breakdown in the economy. The whole company's production chain is hampered. The extent of corruption at each point of the supply chain is also an important element. The US being the source and major market, the power of the dollar affects companies. Since FedEx has its operations distributed also in China, political conditions such as the trade war between China hamper industry (Zand 2017). Government stability is also important. Stable governance leads to better market processes. As an influential and effective leader in the political process, FedEx has built a reputation. The list is illustrative, not comprehensive; the description in this part is meant to highlight the variety of events that have led to the prestige of FedEx as a political actor, beyond campaign donations. While the degree of political involvement of FedEx is strong, its activities are not unique; companies often use these kinds of acts to create political capital. The credibility of FedEx is dependent, in part, on its political spending. FedEx regularly ranks close to the top of the donor list in campaign donations alone. FedEx’s soft currency, PAC, and influence expenses totalled more than $6 million per election season in recent times (Smith 2020).
Capital expenditure in political capital by FedEx goes beyond cash donations. In Washington, FedEx has strategically established its credibility. Since establishing the firm, founder and CEO Fred Smith have kept an influential presence in Washington politics; he visits to Washington once a month probably elected officials and speaks directly before to Congress officials annually. FedEx has also established ties with insiders from Washington. Smith's relations are deep with influential political figures. With many congress members, Smith is officially on a first speaking terms but has enjoyed close relations with many presidents. Smith's friendship with Bill Clinton persuaded Clinton and included Smith on a "trade mission" to China in the formal delegate. Other illustrations of Smith's attempts to establish partnerships with political leaders involve his funding of a reception by the Congressional Black Caucus Foundation to honour Congressman Harold Ford Jr., acting as chief strategist for the re-election campaign for Tennessee Senator James Sasser, although counterproductive, and his service for the 1994 government campaign of former Tennessee Governor Don Sundquist (Thurber 2018).
Any study of the political operation of FedEx must begin with the legalisation of air freight, as this progress was crucial for FedEx to work as a viable company. The airline company was heavily supervised when Smith formed FedEx in 1971. 106 Most international airlines were subjected to the Civil Aeronautics Board's ('CAB') stringent legislation that made fares and routing responsive to CAB approval (Thurber 2018). Moreover, FedEx also fought the idea that legalisation of air freight was policy of special interest. But whatever interest of the public purpose of deregulation may have been, the legislative process members agreed that the law was sponsored by and primarily intended to favour FedEx, hence why the bill was commonly recognised as the "Federal Express Act" in Washington.
There are several legal questions surrounding major public corporations. Outside the framework of this case study, FedEx has been active in policy campaigns, including its role in state administrative reform and actions targeting the Executive Branch. FedEx is governed by laws such as:
China reference guide a conditions for carriage china
The subsequent sections include the Generic Carriage Criteria applicable to, FedEx International Priority DirectDistribution Service (IPD), FedEx International Priority Service (IP), FedEx International Priority Freight Services (IPF), FedEx International Broker Pick (IBSO), FedEx International Economy (IE), from chosen countries and regions to, but not limited to, all selected countries (FedEx n.d.). For all shipments, a correct FedEx account number is needed whether cash (not approved at all FedEx locations), cheques, direct deposit or purchases by credit card are made as a result of shipping. Using a correct FedEx account number means that (a) FedEx receipts are delivered to the relevant payment locations; (b) our method summarises payment information; and (c) the payer is paid with the required discount (Gong et al. 2018). If a correct account number 'bill to' is not issued, a surcharge may be applicable (FedEx n.d.). U.S. The IRS "Employer Identification Number" (EIN) or, for an employee, the U.S. recipient's security number is required by customs laws for such shipments being transported into the United States. These details must be provided on the overseas Air Waybill and on the sales order on all non-U.S. exports to the U.S (FedEx n.d.).
After a press report brought into question the corporation's track record on capital expenditures and tax collections in the aftermath of federal tax reform attempts, the CEO of FedEx Corporation went on the offensive. FedEx owes over $1.5 billion in taxes throughout the 2017 fiscal year. It owed zero the next year. Moreover, in response to the tax reform law, FedEx declared a $4.2 billion pledge. 1. Speed up pay rises for some hourly jobs, 2. Restore payments for bonuses reduced due to the cyber threat, 3. To strengthen our pension package. 4. Increase capital expenditures, such as the modernization and expansion of the Indianapolis and Memphis hubs of FedEx Express (FedEx 2018). In his argument, Smith contented that, since the tax code came into effect, FedEx spent billions in fixed capital eligible for capital expenses, increased wages and even contributed money to employee pension plans. "These variables, he said, decreased the federal income tax of the corporation, which he said was" the purpose of the legislation to help increase GDP and stimulate investment in the U.S.
Conclusions and Recommendations
From the above analysis it can be concluded that FedEx Express is the leading express delivery corporation in the world. The FedEx mission centres on technology development and fastest deliveries. By offering high value-added processing, distribution and related market services by centred operating entities, FedEx Corporation can achieve superior financial returns for its shareholders. FedEx is benefitted in terms of socioeconomic factors. As there are more clients to deliver to in regards of their services in all industries, a high population could prove an advantage for FedEx. The creation of global organisations is influenced by countries' literacy levels. The key reason for the rise of FedEx is the development in the market atmosphere in many countries. FedEx wants to take use of them and make full use of them, since more organisations require postal systems that are secure for shipping valuable official documents. Further, with a global network, FedEx has to change and adapt to the variations of many countries. It is important to accurately predict their costs in compliance with the economic circumstances of the respective countries. Technological advancements and communication techniques have been integrated effectively by FedEx which improves its efficacy as a corporation in communicating with the customers and making transparency in services.
Also, FedEx has high-tech development (informatics, communications, aerospace), industries in the service industry and software design services for companies such as data and communications. Technology and information have been beneficial to the economy, but some economists believe that the global economy has been highly knowledge-based in the past several decades. This is mirrored in the rise in the high-tech industry, the rise in the retail sector, the improvement in self-employment as well as the spike in the proportion of patents. Next, in terms of political influence also FedEx have been benefitted by having strong political relationships. Many alliances have been in favour of FedEx and make their regulatory framework easy. Further,, FedEx complies with the legal framework and have been adequately working as per the US and other counties legal requirements but fails to fulfil the tax reforms. The company have been questioned in terms of tax returns. Further, the strengths of the company are fastest deliveries and technological advancement and the imitation includes lack of customer responsiveness and communication.
FedEx consumers expect excellent service, creativity, improved distance range and increased functionality and performance overall. The control of these standards is critical for FedEx's growth and profitability. Customer relationship management (CRM) is a very useful method that is used in modelling of strategic management. Through knowledge management, reporting and data technology, CRM can help FedEx create value for customers. Customer profitability analysis (CPA) as component of CRM will help FedEx handle its customers more efficiently (Guha et al. 2018). CPA can facilitate FedEx's strategic decision making as it offers valuable consumer, branding and pricing knowledge. Tesla has numerous consumer groups knowing various consumer groups would encourage FedEx to better understand its needs, allowing it to better communicate with consumers (Thakur and Workman 2016). The long-term performance of FedEx is strongly dependent on the ultimate adaptation of BEVs by customers. FedEx must bear in mind that consumer expectations are constantly changing and evolving, and to insure that these requirements are fulfilled, its management must adjust to those changes. Importantly FedEx should also follow the regulatory framework by paying on time taxes which does not hinder the economy and also does not let the reputation of the company in question.