Strategic Management of Human Resources

This study material provides an overview of strategic management of human resources, focusing on the case of FedEx. It analyzes the internal and external environment of the company, evaluates various HR policies and procedures, and provides recommendations for future performance. The material covers topics such as PESTLE analysis, Porter's Five Forces model, and the life cycle of FedEx Corporation.

Strategic Management of
Human Resources
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EXECUTIVE SUMMARY
Human Resources Management is combination of various functions which are configured to
enhance the performance of employees as per the employer's strategic objectives. FedEx corporation is
internal courier services of the American company. The firm is emphasizes on the other strategies like
home delivery services which now limited to the United States only. This services should be extend to
the other countries also to expand their business as well as to increase the profitability. There are
PESTLE analysis and Porters Forces Model which shows the various external of the business
enterprises. This can be possible through motivating the employees to give better performance to
improve their sales and profits margins. The two approaches which company has taken are SHRM
approach and RBV approach. SHRM approaches focuses on the employee performance and its various
performance evaluation whereas RBV model only aimed at the assets which the has company has
achieved and through they will gain the competitive advantages. The various recommendations are low
cost delivery, Online Carrier Delivery, speedy service, dependent on the Domestic Market, various
strategies and Market Demand.
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TABLE OF CONTENTS
EXECUTIVE SUMMARY..................................................................................................................3
INTRODUCTION................................................................................................................................4
TASK 1.................................................................................................................................................4
Critically analyse the internal and external environment for FedEx...............................................5
Life cycle of FedEx Corporation to analyse the links between internal and external contexts.......6
TASK 2.................................................................................................................................................8
Critically evaluate a variety of human resource policies and procedures........................................8
TASK 3.................................................................................................................................................9
Recommendations............................................................................................................................9
CONCLUSION..................................................................................................................................10
REFERENCES...................................................................................................................................12
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ILLUSTRATION INDEX
Illustration 1: Product Life Cyle................................................................................................................8
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INTRODUCTION
Human Resource Management (HRM) refers to as the function in which strategic objectives are
created to maximise the employee performance. Strategic management focuses on the policies and
various strategic plans which are implemented in the organisation to accomplish the goals and
objectives (Human Resource Management, 2016). For conducting the current research, FedEx
Corporation has been chosen. This is an American international global courier service company. The
report will consists of three tasks which will assess the existing HRM practices in the organisation. The
first task comprises of internal and external environment of the business enterprise through various
strategic management tools. Moreover, it also examines the internal and external link between these
two environments. Second task includes various concepts and models to evaluate the human resources
policies and procedures. Third task is about the recommendation which is given for the future
performance of the cited firm.
TASK 1
Overview
FedEx is an international courier delivery business of the American based company. The
business enterprise was previously known as Federal Express, since 2000, the firm is named as FedEx.
The company is famously known for overnight shipping which delivers the services at 24*7. The
business entity was founded in the year 1971 as Federal Express by Frederick W. Smith. The
organisation has also invented the system which could track the courier packages and will provide their
customers the package update (FedEx, 2016). This can be helpful in the time of lost packages and now
these features are copied by most of the courier and other online carrier services. The business entity
comprises of import and export services which has started their business with express shipping. FedEx
has done joint services with British Airways (BA) so that packages can be easily delivered in Europe.
The company has also acquired World Tariff which is a custom duty and tax information Company that
was later re branded form FedEx Trade Networks. The company has its own aircraft fleets through
which it delivers the customer’s couriers in United States next day and other international services on
the time definite period. In United States, it delivers the products at home which makes a difference to
the other countries. The organisation deals in various types of operating units which are FedEx
Express, FedEx Ground, FedEx Freight, FedEx Trade Networks, FedEx services etc. (FedEx, 2016).
The Standard Carrier Alpha Code (SCAC) is a unique code which helps to identify the transportation
companies whereas FedEx Express is shown as FDE. To expand their business and gain more
profitability, the company has invested lot of money in the advertising to promote its organisation.
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Critically analyse the internal and external environment for FedEx
There are various strategic management tools which helps the organisation to find its external
environment. In this, they will consider these factors to be implemented in their business. To analyse
the external factors, PESTLE and Porters Five Forces model are considered.
PESTLE Analysis of FedEx Political Factors: Courier services play a crucial role in expansion and efficiency of the UK
economy. United Kingdom is not located in centre of the Europe so the fast and speedy services
are important factor for the UK businesses which is part of the international trade (Bratton and
Gold, 2012). Despite of economic crisis, the company has shown good growth of delivery
services in the recession period also. Economic Factors: In the UK, the express logistic sector is performing very well which can
affect the success of the FedEx Corporation. However, the courier services sector is getting
advantages from the recent growth of the home deliveries system (Human Resource
Management, 2016). On the other hand, the pound also plays the major factor in decreasing the
sales of the organisation due to the high rate of the pound. Social Factors: The Company is making their services prompt and easy according to the needs
and requirements of the customers. For instance, providing the home delivery services to their
customers is one such aspect (Zalengera and et. al., 2014). In contrast to this, by giving home
delivery, the business entity is charging for the fright operations for the security measures.
However, the express logistics sector is performing well as compared to the road freight
industry so it is a limitation for the business firm. Technological Factors: The courier firm is growing fast in the UK in short as-well-as long
term. As evaluated by (), increasing use of online shopping services is helping the company to
boost their services (Hendry, 2012). On the contrary, the traffic on the roads as well as on the
sky is inculcating the introducing of road transport which can create extra cost for the
company. Legal Factors: The firm has some rules and regulations which also have to be followed by the
British government. The business entity should ensure that the legal framework of the UK
should be followed by the firm properly (Tapinos, 2012). This is because the company will
unable to hurt the sentiments of the customers by leaked their personal information and
packages. If the FedEx avoids this type of legal laws then, the company can get affected by the
same. For instance, the brand image of the company will get demolished.
 Environmental Factors: Due to the problems of over-crowding on the roads and skies, the UK
government has made some environmental controls to stop this congestion. These
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environmental policies will helps in eliminating the problems of pollution (Jamali, El Dirani
and Harwood, 2015). Whereas, FedEx will get affected by these regulations in terms of costs
which was incurred by the road transportation.
Porters Five Forces Model in FedEx Corporation Industry Rivalry: FedEx is a largest company in term of financial position which is positive
aspect for the organisation. This will also help the company to defend its qualitative factor
which will prove as a competitive advantage for the firm. The organisation has relatively few
competitors which is the benefits for the company (FedEx, 2016). But, the chosen entity has a
negative publicity due to which the company will get affected, Competitors of FedEx are UPS,
DHL and TNT etc. Buying Power of Supplier: The bargaining power of supplier is low because large service
provider is affecting the prices of suppliers. This is happening due to packaging materials
services company is offering better offers to the courier companies (West and Bogers, 2014).
This is because FedEx buy in large volumes which can turn the supplier easily. Buying Power of Buyer: The bargaining power of large buyers in the shipping industry is high.
This is because customers are getting attracted towards the shipping provider which easily
delivers their services at low cost and at high speed. FedEx is providing large quantity of
deliveries at lower price than others (Human Resource Management, 2016). Threat of Substitutes: The substitute of this industry is logistics industry which is serving their
customers at very high speed delivery. Other substitutes for this company can be the online
shopping sites which is delivering free services to their customers at their door.
 Threat to new entrants: When the company has been established in the market and has high
presence in the market. Then, it is difficult for the new entrants to come and established them.
This is because the existing organisation has already achieved the competitive advantages as
well as their target market (Buller and McEvoy, 2012). Moreover, there are high fixed cost is
associated with it due to the International transport network. For instance, ground handling,
airlines, road transportation etc.
Life cycle of FedEx Corporation to analyse the links between internal and external contexts
The vital aspects of the life cycle of the company will indicates four points which are
introduction of the company, its growth, its maturity period and its decline stage.
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1. Introduction Stage: FedEx is already established company but it need time to the company
extended successfully. Profits will gradually increased in this stage, it will take time to reach
near the completion of the introductory stage in the Product Life Cycle. The reason for such
low profitability during this stage are high freight charges and the company is not that popular
that runs successfully (Product Life Cycle, 2010). FedEx should concentrates on the pricing
strategy which is going higher, this should be reduced so that more customers gets attracted.2. Growth Stage: In this period, there is a rapid growth in the sales as there are more loyal
customers. The profits surely growth in this stage in which internal environment gets benefits
by the revenues whereas, the external environmental is gets attracted by the large customers
base. So directly, they are inter related to each other in this stage (Purce, 2014). Many new
entrants will try to get in the market because the new products which the company are offering
are attractive to new competitors.3. Maturity Stage: In this, the company is in the maturity period to expand its business. In which
FedEx has fully established in the marketplace and to remain in that position, the firm can
attract more customers through its promotional campaign and advertisements (FedEx, 2016).
However, in this maturity phase, the sales will decrease or it will eventually increase but there
is a possibility it never experience positive growth again. This can become the turning point for
the company so the organization should be attentive in knowing their as well as their internal
environment.
4. Decline Stage: In most of the cases, this phase come in which company gets decline or its sales
drops drastically which lead to the organization gets shut down. FedEx competitors, in this
stage will be Logistics sector which can affect the profitability of the business of courier
services. To increase their revenues, company has to recruit or motivate their employees to get
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Illustration 1: Product Life Cyle
(Source: Product Life Cycle, 2010)

better performance from them (Armstrong and Taylor, 2014). The company can also innovates
new ideas to target their customers.
To increase the sales and profitability, company has to link their internal and external
environment. This can be possible through motivating the employees to give better performance to
improve their sales and profits margins.
TASK 2
Critically evaluate a variety of human resource policies and procedures
There are different kinds of HRM policies and approaches which will helps in strategic human
resource management. The approaches which are to be described are SHRM approach and RBV
approach.
SHRM approach
Strategic Human Resource Management (SHRM) approaches is one of the useful approaches
which ensure that human resources are essential part of the strategic planning. The human resource
policies are important aspects in the policies areas and organizational structure because the strategic
planning are important in day to day work. The SHRM approach is divided into three parts that is
universalistic, contingency, and configurational and they are classified as follows: Universalistic approach: It is also known as 'best practice' approach. As per the view of Zhang
and et.al (2015), there is a set of best HRM practices and their adoption is going to generate
positive results regardless of the circumstances associated with FedEx (Zhang and et.al., 2015).
The author also states that there are wide range of issues such as employee recruitment and
selection, training and development, employee motivation which can easily implemented to the
FedEx Corporation with respect to the nature in which operates. FedEx used this approach to
analysis the direct relationship between the strategic practices of the HRM and the performance
of the company. Contingency approach: This is the 'best fit' approach on the other hand, Beer and et.al (2015)
argued that, the presence of international prescriptions to the different HR issues (Beer and
et.al., 2015). It focusses on the need for integration between HR policies and a wide range of
other FedEx company policies and procedures which help the firm in their strategic plans. The
chosen company select this approach to deal with the situation in the critical times (Alfes and
et.al., 2013). This application will helps the FedEx in specific situation where they have to deal
with the management behaviours.
 Configurational approach: According to Rao (2016), states that this approach will aims on the
requirements for practices that are contingent with organisational circumstances (Rao, 2016).
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Despite of this, West and Bogers (2014) asserted that the approach also emphasizes the need for
horizontal or internal fit in the FedEx company (West and Bogers, 2014). As a whole,
configurational approach is knowing the suitability of the 'best practises' which is universalistic
approach and which is practises by the FedEx corporation (Dainty and Loosemore, 2013). But
at the same time, it also giving acceptance to the implementation of HR policies and
procedures with the overall organizational strategy which is decided by the FedEx corporation.
This approaches is suited for the small and medium sized organization which are identify the
social and cultural aspects.
RBV approach
Resource Based View (RBV) is a model which sees resources as key aspect as compared to the
firm performance. If a resource exhibits VRIO attributes, the resource enables the firm to gain and
sustain competitive advantage. RBV approach relies on the resources which can be tangible and
intangible which must be Heterogeneous and immobile in nature. These all attributes constitutes in
VRIO resources which provides competitive advantages.
On the contrary of above, RBV is a model which is wholly different from the SHRM approach.
Storey (2014) argued that organizations should look inside the company to find the sources of
competitive advantage instead of looking at competitive environment for it (Storey, 2014). SHRM
approaches focuses on the employee performance and its various performance evaluation whereas
RBV model only aimed at the assets which the has company has achieved and through they will gain
the competitive advantages. As per the view of Renwick, Redman and Maguire (2013) RBV model is
more feasible to exploit external opportunities which uses only existing resources (Renwick, Redman
and Maguire, 2013). On the other hand, Alfes and et.al. (2013) criticized that SHRM approach is
focussing on the acquiring new skills through which new innovative ideas will come in the company
for each different opportunities (Alfes and et.al., 2013). In SHRM approach, human resources are
given more importance however, West and Bogers (2014) concluded that RBV model only thinks
about the resources which are helping the companies (West and Bogers, 2014).
TASK 3
Recommendations
Company's Strategy
The organizational strategy which has FedEx corporation has used is inventing the overnight
delivery services for their customers which was later copied by the other courier services. The firm is
emphasizes on the other strategies like home delivery services which now limited to the United States
only. This services should be extend to the other countries also to expand their business as well as to
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increase the profitability (Human Resource Management, 2016). The company HRM strategy is to
make their staff efficient and effective which will perform better and will provide good services to their
target market. Human resources as well as resources like aircraft are important for the business
enterprise.
Evaluation of Findings
There are various strategic management tools which evaluates that the company runs
successfully in time of recession in the UK. The business entity has the tough competition with the
logistics sector which are delivering the services on a very high speed. FedEx corporation is affected
by the various reasons such as high congestion through road and air transportation, legal and regulatory
framework of the UK which has to be followed by the company so that they can easily established
business in the UK (Zhang and et.al., 2015). There are various HRM practices are to be taken by the
organization so that they can implement in the strategic plans which are by the human resources of the
FedEx corporation. The SHRM approach perfectly linked to the Strategy which is make by the
organisation and these both have the impact on their internal and external environment.
Recommendations Online Carrier Delivery: The company should start their online carrier delivery services
through which customer can make their orders on the internet only. Through this, customers
will not have to go to the company to place their order and customers will easily can do it from
home only. Low Cost Delivery: The organization should provide low cost delivery services to their
customers as compared to the competitors. The firm can also provide value added services with
that by which it will be easily attract large numbers of customers (FedEx, 2016). FedEx should
minimize their prices so more customers can get attracted to it. Speedy services: The firm has to provide speedy services in the United Kingdom because the
country has the wide range opportunities for the courier services. This is because in economic
crisis also the courier services eventually grow without having any negative impact. Dependent on the Domestic Market: FedEx is dependent on the US market most, which is
restricting their growth in international market (Buller and McEvoy, 2012). The company
should expand their business as much as possible because it is a competitive segment which has
many competitors. Cooperative strategies: The business firm should make the effective strategies to expand their
market and to increase their revenues. These strategies should be make according to the needs,
preferences and requirements of the desired customers. Organisational strategy: To expand the business, company can choose the strategies like
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merger and acquisitions with other courier or carrier companies. To get the competitive
advantages as well as to developed their poor services and products, FedEx needs a strategy for
it (Hendry, 2012). The strategies can giving their customers a vouchers on high rate delivery by
which they can visit again for next delivery services.
 Market Demand: The company should know the market demand and work accordingly to it .
This is because ; if company will not know the new changes then it will hard for the firm to
implement that in their strategic plans. The company should minimize their delivery charges as
compared to the competitors.
CONCLUSION
This report concluded that FedEx corporation is one of the company which delivery charges are
low as compared to others. The company is also following the environmental controls which are
imposed by the UK government. The company has very few competitors but this very competitive
segment in which rivals can go ahead from the FedEx. So the company should concentrates on the
strategies which set them apart from the competitors can customers can easily gets attracted to them.
The PESTLE analysis and Porters Five Forces Model shows the external environment of the business.
Whereas the life cycle shows the link between both external and internal environment.
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REFERENCES
Journals and Books
Alfes, K. and et.al., 2013. The link between perceived human resource management practices,
engagement and employee behaviour: a moderated mediation model. The international journal of
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Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management practice.
Kogan Page Publishers.
Beer, M. and et.al., 2015. Back to the future: implications for the field of HRM of the multistakeholder
perspective proposed 30 years ago. Human Resource Management. 54(3). pp.427-438.
Bratton, J. and Gold, J., 2012. Human resource management: theory and practice. Palgrave
Macmillan.
Buller, P. F. and McEvoy, G. M., 2012. Strategy, human resource management and performance:
Sharpening line of sight. Human resource management review. 22(1). pp.43-56.
Dainty, A. and Loosemore, M. eds., 2013. Human Resource Management in Construction Projects.
Routledge.
Hendry, C., 2012. Human resource management. Routledge.
Jamali, D .R., El Dirani, A. M. and Harwood, I. A., 2015. Exploring human resource management roles
in corporate social responsibility: the CSR‐HRM co‐creation model. Business Ethics: A European
Review. 24(2). pp.125-143.
Purce, J., 2014. The impact of corporate strategy on human resource management. New Perspectives
on Human Resource Management. Routledge.
Rao, P., 2016. Investment and collaboration: the Indian model for “best” HRM practices. Journal of
Asia Business Studies. 10(2).
Renwick, D. W., Redman, T. and Maguire, S., 2013. Green human resource management: a review and
research agenda. International Journal of Management Reviews. 15(1). pp.1-14.
Storey, J., 2014. New Perspectives on Human Resource Management. Routledge.
Tapinos, E., 2012. Perceived environmental uncertainty in scenario planning. Futures. 44(4). pp.338-
345.
West, J. and Bogers, M., 2014. Leveraging external sources of innovation: a review of research on
open innovation. Journal of Product Innovation Management, 31(4), pp.814-831.
Zalengera, C. and et. al., 2014. Overview of the Malawi energy situation and A PESTLE analysis for
sustainable development of renewable energy. Renewable and Sustainable Energy Reviews. 38.
pp.335-347.
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Zhang, M. M. and et.al., 2015. Towards a Research Agenda on the Sustainable and Socially
Responsible Management of Agency Workers Through a Flexicurity Model of HRM. Journal of
Business Ethics. 127(3). pp.513-523.
Online
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