United Parcel Service Case

1. Introduction

UPS was once the largest transportation company and air freight carrier in the world. Human Resources System of UPS was based on lifetime employment, and many employees felt it was very nice and comfortable. However, deregulation and IT evolution had brought big external environment changes for UPS. To look at IT field, it is very specialized and changing fast field. Thus, UPS should change their internal environments such as HRS and Human Resources Management (HRM) to adapt external environment. There were two ways to adapt external environment changes, or enhancing IT division. First option was training internal UPS employees, and second was recruiting from outside of the company.

2. Recommendation

There are many strength and competitiveness of UPS. One thing is a loyalty of employees for the company; because their compensation level is higher than other company, enhancement of training system and having labor’s union, UPS established labor union at very beginning of its history. These things contribute to keep satisfaction level of employee’s high and to achieve minimize frictions. Another thing is effective management, so they have cost advantages than others. Therefore, basically management of UPS went well. I think there are three options to overcome UPS’s issue regarding IT, outsourcing, establishing specialized IT function subsidiary and keeping inside UPS as Information Service (IS).

Focus on final option, there are some merit and demerit. UPS should continue to recruit outside of the company as IS staff. Because it isn't enough to catch up the competitor companies level of IT function. Generally speaking, environment changing of IT function is very fast; and need specialized knowledge. And IT function is completely different from UPS’s main business.