Frederick W. Smith Fedex Case Study

Lesson #7, Assignment #6: Chapter 8 Case Study Review the Case Study, 'Frederick W. Smith - Federal Express' on pages 344-346 of your text, and address the following questions in an essay of 700-800 words: 1. How do the standards set by Fred Smith for Federal Express teams improve organizational performance? The focus on empowerment, employee involvement and quality action teams has meant many things to Federal Express: • Increased teamwork • Improved employee morale • Strengthened leadership skills • Improved productivity • Additional revenue through cost savings • More satisfied customers. Employee involvement and the quality action teams are the key to improving and strengthening the relationship between workers and management. Federal Express appears to be achieving their organizational performance by taking the human side of quality and empowering employees and putting people first. Employees are encouraged to be innovative and to make decisions that advance quality goals. Federal Express provides employees with the information and technology they need to continuously improve their performance. 2. What motivates the members of Federal Express to remain highly engaged in their teams? FedEx encourages its employees to be innovative and to make decisions that advance quality goals and also provides employees with the information and technology they need to continuously improve their performance. Federal Express knows that acknowledging efforts is essential for a motivated and satisfied work force, and that such acknowledgment stimulates new ideas and encourages better performance and team spirit. Federal Express also offers many types of incentive programs such as the Suggestion Awards Program.

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Introduction Contd...

He's a legend and great visionary."5 Smith was genial and understanding towards his employees at FedEx and he in-turn received tremendous support and confidence from them. By adopting the People Service Profit management philosophy in as early as 1971, Smith set an example to the corporate community about the significance of employees in the success of any company. Smith created an open, informal work culture where in the talent of employees was well recognized and rewarded. Commenting on confidence and loyalty that employees had on Smith, Art Brass, a FedEx employee said, "If Fred lined up all Fed Ex employees and told them to jump from a bridge, 99.9% would jump."6

Smith was one of the few business leaders who first anticipated the application of Internet in business operations resulting into the launch of the website in 1994, enabling customers to do business online. However, like all successful men, Smith was not spared from criticism. A few analysts accused him of resorting to unethical means while doing business.

Background Note

Frederick W. Smith was born in an affluent family in August 1944, in Marks, Mississippi, US. When Smith was four-years old, his father expired. Smith studied in the prestigious Memphis University School,7 where he was named the "best-all-round student" in his senior year. Apart from being a keen observer, Smith was also an avid reader. He read books on history and famous personalities. Right through his childhood, Smith was inclined towards becoming an entrepreneur. In 1959, at the age of 15, he started his first business - the Ardent Record Company in a small garage with two friends. The company recorded songs using sound recording equipment and sold them...


5]  As quoted in the article, "Fred Smith's FedEx isn't looking back at 30 years," posted on, dated November 26, 2001.

6]  As quoted in "A Review of Overnight Success: Federal Express and its Renegade Creator, by Vance Trimble", reviewed by Bernhard Richert, in the Journal of Business Leadership 2000-01, posted on

7]  Founded in 1893, it is a reputed academic institution located in Eastern Memphis, which imparts high school education (grades seven through twelve) to boys.

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