Question

Pick a major strategic decision made by FedEx in recent years, and try to think through the ethical implications of that decision. in the light of your review, do you think that the company acted correctly?

Answer 1

One of the major strategic deciaide made by FedEx over recent years was to acquire an Indian logistics provider Pafex. The Indian logistics market is dominated by world leaders like FedEx, DHL, UPS etc. The competition is so high within the industry that they are conisconston the lookoutl for getting more resources to meet the growing consumer demands.

FedEx initially had a strategic tie up with Pafex where they would do the international service while Pafex focused solely on the domestic market. But over time FedEx realized the gains of being the complete owner in a growing market and acquired pafex.

Few major changes followed this acquisition. The culture within both these organizations we're extremely different and way of working was not in sync. The pay structure and organogram structure was also different. this led to lot of issues within the newly formed organization with regards to policies, regulations and employee engagement. It was also obswrveo that there were multiple people in the same role which were inherited from Pafex and FedEx. FedEx took a decision to retain all FedEx employees while asking the Pafex leadership team to move out of the organization.

From an ethical point of view, the entire responsibly of ensuring every employee retains the job should be of Fedex. But rather than trying to sort the issue they took the easy way out like most companies do after and M&A. There have been cases of employees who had been with pafePsince it's inception who moved to take leadership roles. They also had to leave. This led to disconnect between FedEx employees and Pafex employee too. There was job insecurities and tensions in the organization due to this act. But FedEx stood form in the decision to remove them. From an ethical view, FedEx could have managed to keep them for an year or two before gradually moving them out of the organization.

Looking back at the case, FedEx could hveh done it better and handled the employee retention in a a manner suitbable to all parties involved.