Org Structure A. The Organization Thesis

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They do this by supporting the different functions and subgeographic groups such as those outlined in Exhibit C. Exhibit B. illustrates the role that each of the different functions plays - they are on a par with Ground Operations in the structure, but perform a staff function.

c. The organizational design at FedEx best serves the company's needs. Despite the company having operations around the world, there is little need for matrix structure. There are several reasons for this. One is that the company's core Express operation requires close coordination globally. The company presents a face to the consumer that is united globally, a function of the global nature of the service. Therefore, it is logical that each operating company be run from one head office, with operations managed at the regional level, because all areas must be working closely together within a given operating company.

Another reason is that most of the operating units are limited to the U.S. And Canada, with only one significant global operation (Express). This removes incentive to develop a matrix structure, because there are only two countries involved, one of which is the lion's share of the market.

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Lastly, the different companies do not work closely with one another, so there is no need for global intercompany coordination. Express freight stays within the Express system and Ground freight stays within the Ground system. This is in contrast, for example, with UPS, where Ground and Express freight go through the same system. They have a slightly different organizational structure as a result. A geographic structure would not work well for FedEx for similar reasons. The bulk of the operations require no coordination, so there are no benefits to overarching geographical management.

One element that could improve FedEx's structure is to develop a more customer-oriented structure. Many customers of the different operating companies are the same. These customers may not need any coordination for any given package, but the customer views FedEx as a singular entity and expects that the company has a whole will be responsive to all of its needs. Thus, FedEx could improve its structure by adding this element somewhat.

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