Reputation management in Federal Express (FedEx) is based on the objective to transmit the corporate culture from within the company to the world. For Federal Express, its most valued asset is its brand, recognized on the global level thanks to the performance of the employees. This focus enabled FedEx to become USA’s major company in this sector. The multination is aware that reputation is built from within, it starts with the employees and is then broadcast to other stakeholders. The company understands that managing expectations of the stakeholders is a prerequisite of success, for in the 21st century stakeholders have much more power. For FedEx, the reputation is like a bridge that connect all stakeholders.

1. Cases
Strategy Documents
C07 / 2011
Reputation
FedEx: Trust as a Value
and a Bridge Connecting
People
Projecting corporate culture from within outwards lies at the heart of reputation
management at Federal Express (FedEx)
Federal Express or FedEx is the largest U.S. As it has already been mentioned, for FedEx
company working in the area of package and reputation is a long-term investment. William
freight transportation. It has a global reach, G. Margaritis, Senior Vice President for Global
ensured by almost 300 airplanes and 300,000 Communications & Investor Relations, explains
employees, who represent the brand’s spirit in the that reputation is like “a child, who has to
USA and more than 200 other countries, generat- be looked after day after day”. The CEO of
ing an annual revenue of USD 36 bn. the company understands this and to this end
implemented in his company the policy of
In terms of corporate governance, FedEx defines bonus distribution linked to the results of the
itself as a company aiming to deliver a full range company according to the reports on corporate
of transportation, e-commerce and management reputation such as RepTrak and Best Places to
solutions to individual clients and businesses all Work, renowned tools for measuring corporate
around the world. The company, led by CEO Frederick reputation and employees’ satisfaction.
W. Smith and his executive team, acknowledges the
importance of reputation management for generating As Margaritis explains, “competition on the ground
value in the long run. However, this idea was not of culture is one of the few ways to differentiate
present in the beginning of the Company’s operations. oneself. Corporate culture is a connecting point
Instead, it developed as the result of the Company’s between the brand image and values, projected to
ongoing efforts to demonstrate its economic return the market and the heritage that will be handed
to the Board of Directors, thus making them realize down to future generations. Reputation and
the need to support reputation management. In the corporate culture cannot be sold or purchased.
last years FedEx pioneered changes in the executive Therefore, they need to be built and grown through
team aimed at management of intangibles. every activity of the Company”.
Document created by Corporate Excellence - Centre for Reputation Leadership quoting from, among other sources, the interventions on
the Fedex case in the 15th International Conference in New Orleans on Corporate Reputation, Brand, Identity and Competitiveness,
on May 2011.

2. FedEx: Trust as a Trust as a Corporate Culture reputational risks related to employment of
Value and a Bridge Movies, TV series and other media products often 300,000 people, a fleet of airplanes and trucks and
Connecting People
contain references to the culture of Fedex. However, its commitment to the global reach, which means
all references to the brand and broadcasting of the obtaining operation licenses in new markets.
company spirit are primarily directed towards the The executive team realized that reputation
Company´s employees, who develop a motivation management was of paramount importance for
to remain in the Company. FedEx employs around obtaining licenses and mitigating reputational
300,000 people throughout the world and the risks. In the case of FedEx, understanding of the
success of its business depends on their level of fact that reputation drives performance excellence
satisfaction. FedEx understands that the employees came from the top management, which facilitated
of the Company are the ones who are in direct the Company´s commitment to management of
contact with customers on a daily basis. That´s why intangibles. Reliance on the help and support of
generating a sense of pride and closely aligning the the top management allowed the Company to
employees with the company, plays a key role in the overcome the barriers which typically hamper
sector characterized by high turnover rates. firm-wide management issues, such as reputation.
“For Federal Express All this enabled a U-turn in the Company
management. This meant a shift from the
reputation builds traditional brand focus on the customers to a focus
long-term value, it is on the employees. The brand was reinforced by
attributes which helped to create a connection
compared to a child who between the Company and its employees. Even if in
needs to be looked after the beginning FedEx did not pay enough attention
to the key group of its stakeholders, they were able
day after day’ to react timely to focus their efforts on human
resource management.
The Company defines trust as an emotional
connection which allows FedEx to become part For FedEx, reputation is directed outwards by means
of its customers’ daily life. It is interesting how of a strong corporate culture and an understanding
the employees believe in the company and see that the employees are the key ambassadors of the
its brand as a guarantee of superior quality. The brand. In this sense, the Company implies that
stories of delivery staff, who after overcoming the corporate culture is the starting point for any
thousands of obstacles, manage to accomplish their of its activities. A solid corporate culture is based
tasks, contribute to creation of trust both among on the emotional link which translates into a good
employees and among ultimate users. FedEx uses service and eventually positive experience for the
this competitive advantage to develop the content ultimate user. The feeling of pride, belonging and
of the corporate brand. loyalty generate brand value, which translates into
the capacity to attract talent and capital.
Priority Stakeholders
The U.S. multinational first took interest in Change of Paradigm
the matters of reputation when it realized the But reputation management is important not only
from the viewpoint of the employees, but also from
The corporate culture the viewpoint of consumers, public authorities, trade
unions, etc. We are observing a change of paradigm:
of trust through
today power is held by the stakeholders, and
organizations have to consider their expectations
- Reputation Management.
- Support the entire and provide adequate responses. Target groups
Company:
steering committee. become more and more discerning, they try to find
- Investment in intangible
and tangible resources. out what stands behind the brand, who directs it
- Brand Management and what is done by the company as a corporate
Confidence entity. This means that it’s no longer sufficient to
Employees: offer a good product or a good service.
- Generation of brand
ambassadors. According to the philosophy of FedEx, the brand
Clients: - Pride of ownership.
- Change in customer - Contribution to the creation
is determined by the Company, while reputation is
service. of brand value. the perception of the Company by others. In order
- Listen to the network - Videos and Story telling as a to have a good reputation it is important to do what
24 hours a day. motivational tool
- Recovery of one promised to do, and to do it well over a long
customers after period of time. That’s why holding to one’s promise
the error
and doing it consistently and coherently over time
is indispensable for generating trust. Margaritis says
Source: FedEx, 2011. that “reputation consists of many dimensions and
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3. FedEx: Trust as a is more profound – it is the inner substance rather understanding that the employees’ peers trust more
Value and a Bridge than the way we dress or speak. Reputation is what in what is said by people rather than by the company
Connecting People
drives our behaviour”. as an institution.
Creation of Content This focus is risky from the viewpoint of controlling
FedEx sees content as a way to reach its stakeholders. the messages. But Federal Express believes that even
More specifically, by using communication the if there is 1% of employees who do not associate
Company established a relational policy, which themselves with the ideals and principles of the
enables the Company to receive interesting company, 99% of the employees do. Therefore, it
contributions for free without resorting to is impossible to change the HR policies to suit this
traditional press releases and paid advertising. 1%. In this sense the benefits are greater than the
Directors of the Company believe that in future risk. Again, the strategy used for the transmission of
videos will account for 80% of the information flow messages by the employees are the contents which
and therefore base communications on multimedia tell a story, mainly in multimedia formats, areas that
content and related technologies. This is a kind of also are useful for training the employees.
“storytelling” aimed to add content to the brand
and reach different stakeholders in the most Conclusions
effective, easy and quick manner. FedEx believes that its brand is its most valuable
asset, recognized at the international level thanks
‘Reputation is projected to excellent performance of its employees. This
understanding enabled the Company to become
from within and works the leading U.S. enterprise in its sector. The
through the circles multinational realizes that the reputation is
projected from within: it starts with the employees
of trust” and is transmitted onto other stakeholders. Thus
managing expectations of the stakeholders is key to
On the other hand, the new social media opened success in the 21st century. FedEx views reputation
new communication channels and enabled dialogue as a bridge that connects all stakeholders.
between clients and companies. This revolutionized
the traditional customer service, normally offered
by companies to their clients. Capturing this trend,
FedEx created a team of professionals who offer
24-hour customer service through the social media.
The team’s responsibility is to browse the web in
search for all relevant comments or messages in
order to respond to the needs, anticipate possible
problems and mitigate risks.
However, the Company went even further and is
trying to turn all its employees into communication
agents, involved in positioning the brand through
the Internet. As was already mentioned, FedEx
believes that its employees are the main ambassadors
of the brand. The Company bases its policy on the
Brand philosophy: old versus current
Ancient philosophy: Current philosophy:
Focused on the client Focus on the employee
and customer
Company Company
Staff
Staff
Customers Customers
Unique approach Approach the employee
to client and with to reach the customer
little ability to react and ability to react very
Source: FedEx, 2011.
Cases 3

4. ©2011, Corporate Excellence - Centre for Reputation Leadership
Business foundation created by large companies to professionalize the management of intangible assets and contribute to the development
of strong brands, with good reputation and able to compete in the global market. Its mission is to be the driver which leads and consolidates
the professional management of reputation as a strategic resource that guides and creates value for companies throughout the world.
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