Decision Making in DHL

Topics: Decision making, Organization, Formal organization Pages: 8 (2673 words) Published: April 23, 2013
DHL commits its expertise in international express, air and ocean freight, road and rail transportation, contract logistics and international mail services to its customers. A global network composed of more than 220 countries and territories and about 275,000 employees worldwide offers customers superior service quality and local knowledge to satisfy their supply chain requirements. DHL accepts its social responsibility by supporting climate protection, disaster management and education. DHL is part of Deutsche Post DHL. The Group generated revenue of more than 53 billion euros in 2011. I will be discussing DHL from many aspects such as decision making and its effect on the organizational performance from the perspective of Cyert & March and compare it to Bursson theory. Also I will cover Zimmermen theory about rules and apply it to DHL case study. Finally I will examine the macro environment of DHL organization.

DHL was the global market leader in international express shipping, overland transport, and air freight, as well as ocean freight and contract logistics. As of April 2011, its network covered more than 220 countries and territories worldwide in 120,000 destinations. It had many awards to its credit (Refer to Exhibit I for the details of awards won by DHL). According to Ken Allen, CEO, Express Division, DHL, “The express sector is one of the major drivers of global trade and we are excellently positioned to capitalize on this through our services which meet our customers’ domestic and international transport requirements, anywhere around the world.”

Formal organization has its own specific function or functions. A university for example has the main function of promoting education. But it also promotes artistic, literary, athletic and other interests of the members. The principal function of the church is religion but it also promotes charitable, ethical, athelitic, recreational, educational and other activities. Thus the formal organization may have its latent as well as manifest functions. The formal organization has its own norms or rules of social behavior. Certain conducts are appropriate in certain organization. Formal organization lays down procedure to be followed by the members. Members of an organization have different statuses. Statuses imply division of labor. The division of labor is characterized of all organizations and in a sense; organization is synonymous with the division of labor. Organized actions in a formal organization are possible because of division of labor. Bureaucracy refers to the administrative aspect of the formal organization. It refers to the arrangement of the organization designed to carry out its day to day business. It is represented by a hierarchy of officials who are assigned different responsibilities and provided with different statuses and roles. The formal organization is based on rationality. The rationality of formal organizations has two sources- the predominance of rules that have been devised to help achieve definite results and the systematic reliance on knowledge in the operation of the organization. The formal organizations are relatively permanent. Some organizations last for longer time while others perish within a short period of time. According to Zimmerman he illustrates the inadequacy of the rational decision making approach. He shows that members of an organization are far from adhering to the rules and procedures that should inform their decision making; they instead use & understand these rules in everyday work in creative & adaptive ways. He wants to understand how organizational members actually make sense of & understand what these rules mean in practice. Studies assumes and accept the existence of clear rational , objective rules of decision making but are contrasted with actual practice. Zimmerman objects this view; he offers how these rules become alive: how formal plans are used by members to deal with...
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