After recognizing some missteps in sending American managers overseas, UPS adopted a new approach, explained UPS Chief Operating Officer Tom Weidemeyer.
“Today, we have 40,000 international employees, and how many do you think are U.S. nationals?” he asked today in a speech here. “The answer is less than 40, spread out over 200 countries. We’ve learned that everyone wins when we put international business operations into the hands of the people who know their local cultures. ”
Speaking at the 2003 Ethical Corporation magazine conference, “Rebuilding Trust Through Corporate Responsibility,” Weidemeyer said successful expansion into international markets hinges on U.S. businesses’ ability to employ a long-term, integrated approach that serves the needs of local communities.
“A short-sighted, quick-hit approach to international development may serve a company’s immediate business goals, but it won’t allow for sustainable growth in global markets,” he said. “Building strong relationships and aligning business goals with the goals of local communities are essential to building a long-term global presence.”
Since its founding in 1907, UPS has taken a sustainable approach to running its business, and that includes the company’s relatively recent international expansion. Sustainability at UPS means focusing on long-term solutions and integrating the company’s business strategy with larger environmental and societal needs.
“When UPS entered Europe in the late 1980s, most shipping took place largely within national borders,” Weidemeyer said. “We saw that Europe was moving toward a single currency and that the need for simple, cross border shipping would soon increase. After establishing strong German operations, we acquired 16 European operators and began working on a careful integration of the ground and air networks.
“Because we took the long-term approach, UPS had a huge head start on our competitors,” he continued. “We were the first with an integrated air and ground network and today we offer consistent services within and across borders. Today, UPS has become part of the European infrastructure and has generated more than 26,000 European jobs.”
UPS’s expansion in Asia and India grew from a combination of wholly owned subsidiaries, joint ventures, partnerships and strategic alliances. By sacrificing some control, UPS gained the invaluable local relationships and access to local customers provided by the Asian partners. Today, UPS Asia is the third-highest contributor to the company’s total global revenues.
Despite much success, UPS’s international expansions have not been flawless. The important thing, Weidemeyer said, is to learn from your mistakes.
“The company had to learn the hard way about respecting local business practices and trusting local employees,” he added. “For instance, when UPS first entered Europe, many managers had a hard time understanding that the U.S. way of doing things was not necessarily the best way to do things overseas. They made some mistakes and our business suffered.”
Through years of international expansions, UPS has learned the importance of enabling acquired companies and employees to become part of the company at their own pace, in their own way. To assist in an easier blending of cultures and traditions, UPS adheres to local norms in the communities where it operates. For instance, Buddhist shrines are often displayed in UPS facilities in Thailand and statues of the Blessed Virgin are often seen in facilities in Argentina, Mexico and Brazil.
“Integration is a two-way street; it means that companies and communities must align values and make meaningful contributions to create a sustainable future,” Weidemeyer concluded. “We in the business community are well-positioned to lead the way by promoting mutually beneficial growth.”
UPS is the world’s largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS's stock trades on the New York Stock Exchange (UPS), and the company can be found on the Web at UPS.com.
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