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CASE: STRATEGIC PLANNING AT UPS SUBMITTED BY: SUSHANT BHASIN 1.

Describe the planning organization structure at UPS and the roles of the various units and discuss its effectiveness. The planning organization structure at UPS is completely functional in nature. Organizations that work on a day to day basis working environment requires a functional type structure in order to be effective and low cost in nature. Since the UPS has various units so, it demands to be specialized in each unit. Here, each department have a functional head either in the form of a manager or a director. So, UPS is highly centralized, hierarchical organization with a traditional structure at the top. All strategic decisions are made by the corporate office. UPS does tactical, rather than strategic planning at the regional level. Effectiveness According to my thinking, having functional structure is the most common strategy for an organization since it enables to have high specialization and high control in order to achieve maximum efficiency. Decision making becomes much faster because most of the departments are controlled by the top management. The operations in each department become crystal clear to the top management by making sure no wrong is happening in the organization. Sometimes decision making might take long time because there is no communication between any departments since they are all specialised in their respective fields and the pressure is on the top management. 2. Describe McDevitts role. Is there an ongoing need for McDevitts role in strategic integration? Why or why not? According to Michael Eskew the CEO McDevitts role was to make sure that all the teams delivered what they said were going to deliver. His task was also to convert ideas that went into a gleam to reality. To oversee the efforts and put into the discipline that was needed to accomplish the 2007 plan. His role was to make sure that the four strategic imperatives were actually aligned and executed and the development activities were moving forward at the right speed, with the right support, and with the right support of urgency. According to my thinking, there is no ongoing need of McDevitt leaving his original position and then leading between two teams. McDevitt is the senior vice president for the transportation department and taking him out of his work would result in the mismanagement of the department. As mentioned in the example of Trade direct, anyone who has a good amount of experience working with UPS can handle the projects like McDevitt did. It is clearly mentioned that the CEO couldnt able to handle the whole pressure alone that is why he has appointed McDevitt. I would recommend an external person should be hired like a consultant who already has the working experience with UPS. She/he should be given authority to lead the teams and directly work with Michael Eskew.

SUSHANT BHASIN

3. Describe the four steps of the planning process. And how well you think they were executed. The four steps of planning process are: Plan: The first step is to develop a structured approach to address issues happening in the organization. Do: This step ensures to carry out the approach as planned without any compromise. Check & Learn: the third step is to evaluate the outcomes and verify, does the outcomes are desirable or not. Adapt: after getting to know the results there is a need to resolve goals, strategies and issues. There is an ongoing demand for a business like UPS is doing. Global customer base for this service is huge. I think UPS has done a great job in planning the approach and the way they developed the same. Usually the meeting took place twice in a year for plan 2007 when they were about to complete 100 years. Timely they also came up with a new mission statement. No doubt the application of the model was very situational since it was all about future planning. The CEO Jim Kelly, soon to-be CEO set up a small advisory group and made them to meet monthly for half a day was a great decision and reflects that everything was on track. But, according to me one of the most important principles was not followed viz. there was no system to balance the level of understanding between the strategic and the tactical level department. It was not even 10% of the workforce which understood or implemented any of the strategic planning happened at UPS top management department. 4. Describe the steps that led to the Centennial Plan for 2007 and how well you think they were executed. The centennial plan was formed from the outcomes of the strategic process meetings. It is UPSs version of five year strategic plan which is straight forwardly directed to its centennial anniversary. By providing themes and broad overarching direction it consists of qualitative set of Goals and Characteristics for the year 2007 that addressed issues such as the UPS brand, competition, growth, and profitability, people, customers, operational efficiency, cost control and quality. The plan is concentrated with the goal of creating a global, unified company with one vision and one brand. It consist a set of four strategic Imperatives: Winning Team: attracting and developing a highly skilled, diverse, and aligned global workforce Value-added solutions: providing customers with value added services combining movement of goods, information and funds Customer focus: building customer loyalty and expanding UPSs services worldwide Enterprise excellence: creating an environment of high quality service and value According to my thinking UPS has never forgotten where they came from. To grow the company it helped them to think in a creative manner in order to promote the company and find new ways to do the business. The centennial plan is one of those creative ideas to think in a creative way. This plan has served them to preserve their company culture and be effective from top to bottom level employees in the organization. It also assures to afford to mistakes and come up brilliance and excellence of doing work and serving the end customer. It was a brave decision of changing the vision and come up with the theme of one vision and one brand. By making changes in their process which is the third step they managed to do things very quickly. Finally, centennial plan helped the company to make a remarkable change in the organization.

SUSHANT BHASIN

5. Does the process need changes to keep UPS on the leading edge? If so, what are they? There are many things to be opted or changed in UPS in order to keep the leading edge. For the short term success UPS follows the business model of strategic planning but they also need to understand that this is not a quick fix but a way a life that a company needs to adopt for a longer term success as well. There should be some specific planning committees be formed which decides about What and Why not How. The committee should consist of board members and chief officers who start discussing from mid level committees to compile long term projections. An executive committee should be formed consisting low level managers which directly deals with the customers in order to keep them happy and satisfied with the organization. In order to provide efficient quality service to the customer vertical communication should take place in the organization. For UPS strategy has never been taken lightly. To envision the future there are monthly meetings which takes place in UPS and some assess decisions played an important role to low cost management. But not even 10% of the workforce understood what Eskew the CEO understands with the strategic planning meetings. I think it is really important to make workforce understand about the future predictability done by the UPS. 6. What is the value of strategic planning for an organization? According to Michael porter white paper a strategic planning is all about delivering value, profits and securing a competitive advantage. It is the organizations go forward plan for the future and accompanying desired outcomes. The part of a strategic planning process is that organization employees never violate the principles because the organizational values are a set of common behaviours that the entire department is committed to. The values of employee towards the organization plays a key role to understand a customer and it is the customer who gives feedback about the company and let the employee know the perception of that organization in the real world, which is also a part of strategic planning process. But in most of the companies including UPS, none of the employees are sure about why a company does strategic planning, but there is always a mystical hope that some good will come out of this. In an article it is said that Its like the old Communist system: We pretend to make strategy and they pretend to follow it. So when a formal planning is done with right goal in mind like it helped for UPS in one way or the other, it is never a waste of time and can, in reality, be a factual source of competitive advantage. References http://sloanreview.mit.edu/the-magazine/2003-winter/4429/the-real-value-ofstrategic-planning/ http://www.usfa.fema.gov/pdf/efop/efo34639.pdf http://www.methodframeworks.com/article/definition-strategic-planning-whitepaper/index.html http://www.scribd.com/doc/53755374/Strategic-Analysis-of-UPS http://www.studymode.com/essays/Ups-Case-Analysis-406261.html http://dreadefoe.hubpages.com/hub/UPS-A-Case-Study http://www.123helpme.com/ups-case-analysis-view.asp?id=167992 http://www.antiessays.com/free-essays/86122.html

SUSHANT BHASIN