Airborne Express

1765 WordsMar 26, 20008 Pages
In a highly competitive industry the structure of a firm is very important to its success. Today firms are moving away from the centralized structure of the past, and adopting a more decentralized structure (Management Challenges in the 21st Century p 315). The air express industry is no exception. FedEx, the leader in the air express industry since the late eighties, is also leading U.P.S. in the race to become decentralized. Airborne Express is not even in the race. In order to compete in today's changing environment, Airborne Express needs to move away from its old fashioned centralized structure and form a more decentralized structure. The old fashioned structure is not the only variable that makes Airborne the follower in the…show more content…
Airborne needs to smooth over relations with its pilots soon, because the contract expires May of 2001. Therefore, unless Airborne settles this dispute, it will be facing an imminent strike. Another labor issue affecting Airborne is the Teamsters Union. Airborne signed a five-year contract with the Teamsters Union in 1998. There are three major provisions in this contract (Associated Press online p 2). 1. Provides improved working conditions for Airborne employees. 2. A Bonus for employees the first year, followed by a yearly wage increase for the last four years of the contract. 3. At least 50 percent of the current part-time work force will be changed to full-time by 1999, with the remaining 50 percent offered full-time positions by 2000. The last provision is could have consequences for Airborne Express. Using part-time help is a way for express companies to cut expenses by not having to pay full-time benefits. How will Airborne be able to keep up its strategy of being the low-cost operator if they lose the efficiency of a part-time workforce? Airborne Express needs to operate as efficiently as possible if they want to have the capital to compete in the growing electronic commerce market. 3) Electronic Commerce Market Today the air express industry is faced with a technology that will force express companies to change organizational structure and basic operations. This technology is electronic commerce, or better known as

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