Question & Answer: Explain whether the United Parcel Service is Mechanistic or Organic. Give some examples of…..

Answer:   The organizational structure of united parcel service (UPS) is mechanistic. The mechanistic organizations have well defined hierarchy, formalized procedures, centralized authority and specialized functions. UPS structure has all these features present in it. The organization is centrally controlled by its president and vice presidents. There is a clear hierarchy like regional managers, department managers, area managers and so on. The organization is divided into specialized functions like HR, Finance, sales, domestic operations, supply chain and freight and so on. There are formal procedures in place and there is a systematic and codified work flow and process inside the company.

The company creates a competitive advantage on the basis of both cost leadership and differentiation. It focuses on innovating and changing its supply chains so that costs can be lowered and the services can be customised as per the needs of the customers. This also provides better control and visibility to the company so that it can offer better and faster services as compared to the competitors.

Other examples of differentiation strategy comes from Apple Inc and Google who use innovation to offer products to the customers which are different from the competitors and uniquely solve the problems faced by the customers.