FedEx: Unwillingly Dragged into Ray Rice scandal (2014)

By: Kristin Ingala

Company Overview

Federal Express Corporation builds around their core philosophy of People-Service-Profit. Business models strategies are an essential part of their culture, and are built upon innovation practices. FedEx team members are their core representation of their Corporation, by delivering exceptional customer service and providing assistance to communities globally. This corporation preforms a unique operating strategy, and is divided into three operating levels: compete collectively, operate independently and manage collaboratively. These three levels of strategy work seamlessly and simultaneously, to conduct in a manner that allows all employees to stand as one brand worldwide and speak with one voice, focus on independent networks to meet distinct customer needs, and to work together to sustain loyal relationships with their workforce, customers and investors. FedEx also builds off a business strategy that allows them to compete highly against their competitors throughout their industry, but allows them to focus on the highest ethical and professional standards and the needs of their customers and communities.

Case Overview:

A current topic throughout the NFL has been the Ray Rice Scandal, which FedEx was unwillingly dragged into. The NFL, it seems, has been unable to keep up with the actions of their players and how to handle multiple domestic violence cases that have captured the nation’s attention. Sponsors who pay hundreds of millions of dollars to have their names and products associated with the NFL are starting to pull away. Although FedEx is not just re-evaluating their sponsorship they are also defending their company. Roger Goodell, commissioner of the NFL, has repeatedly stated that “No one in the NFL saw the second video to his knowledge.” The second tape was the official tape that showed Ray Rice hitting his wife. Which is where FedEx comes about; FedEx just thought they were like any other sponsor of the NFL during this situation. They were slightly mistaken when FedEx was pulled directly into the situation directly; they were accused of delivering the second video. Not only was FedEx accused of such false actions, they were also accused of late delivery which is why the NFL’s reaction to this scandal was delay. FedEx is in the top ten of NFL sponsors, back in 1993 is when the relationship between FedEx and NFL started. FedEx wanted a new dynamic sponsorship that met their business models and strategies, which gave them a promotional breakthrough. This allowed them to work with the most popular national sporting league for advertising; this allowed them to address a large amount of their target audience at one give time. The relationship between FedEx and the NFL has grown tremendously over the years, FedEx sponsors a player on the NFL's webpage. Every week FedEx sponsors NFL's "Air & Ground Player of the week", FedEx air player of the week is the player with the top passing performance and FedEx ground player if the week is the player with the top yardage. In 2013, NFL sponsorship revenue totals $1.07 billion which was a 5.7% increase since 2012. FedEx main marketing goal is to maintain its competitive presence in the minds of their future and current consumers. As mentioned before FedEx values their relationship and sponsorship with the NFL, back in 1993 this National League was the reason for their promotional success. Since this Ray Rice scandal has happened FedEx does not look like they are going to pull their sponsorship, although there have been controversies throughout the NFL FedEx knows that the NFL had the upper hand over any American sports league in sponsorships. Even though they choose to stay a sponsor of the NFL a FedEx representative state “We are watching developments in this matter closely and we are confidence that the League will take the appropriate steps” ( Ray Rice Scandal, 2014).

Stakeholders:
Since the National Football League and Federal Express are well-known companies throughout the United States there are many stakeholders to keep in mind. One of  most relevant stakeholder is Ray Rice himself, if he did not preform such careless and unethical actions FedEx would have never been involved in this scandal. Another relevant stakeholder is the company of FedEx, this company had been managing their reputation and success for over 40 years, FedEx admires their sponsorship with the NFL and continues to watch closely on the appropriate steps that the NFL takes. The NFL is another stakeholder, they continually face confrontation with their sponsors due to the actions of their players. Lastly, because of this scandal with Ray Rice I think women in generally are a huge stakeholder. Many women will continue to frown upon they NFL and those companies who support it.

Individualism:

There are multiple theories that are used to analysis a business ethics case. In theory, individualism is based solely on the interests of the company while upholding human rights and following the appropriate laws. Individualism is a theory that is known to focus on the actions of the business by maximizing profits for the owners of a business. For example, it is in the interest of the company and upper management to develop a profitable and successful company. According to the company of FedEx and their business models, did not act individualistically because they did not care about profit maximization. FedEx strives for overall success in many other forms,  which believes me to say that they did act within their company's image and identity and they did not act unlawfully. As mentioned previously FedEx focuses on the people of their company, and how each one of their employees stand as one brand worldwide and speak with one voice. Just because FedEx’s main priority is not on profit maximization or preform many actions under the ethical values of individualism does not mean they want to be content amongst their competitors. FedEx Corporation will produce superior financial returns for its share-owners by providing high value-added logistics, transportation and related business services through focused operating companies.

 

Utilitarianism:

Based on this ethical theory, FedEx did act for the greater good. The company measured all aspects of the controversy between them and the NFL. A great deal of upper management decided that it would not be appropriate for the greater good of the company to end their sponsorship with the NFL. In order to maximize the happiness of the corporation, FedEx will continue to work with the NFL. FedEx main marketing goal is to maintain its competitive presence in the mind of their future and current customer, and being a sponsor of the NFL helps achieve that goal. NFL’s reputation lately has been negatively declining, and the delayed reactions and responses by the chairman Robert Goodell is not helping their case at all. Although the overall reputation of the NFL is decreasing, with the impressive TV ratings are showing no sign of slowing down. Since this incident with Rice, the public’s opinion has changed about the NFL and the sports industry in general, even though your opinion on a national league can change doesn’t always mean you’re going to stop watching a sporting event that you love. The American public is still watching the product in droves, offering further proof that the NFL is a television-ratings powerhouse. Last Thursday, an average of 16.5 million viewers watched the Green Bay Packers beat the Minnesota Vikings, 42-10 (International Business Times). Statistics show that 16.5 million people viewed one game last Thursday; there are 32 teams in the NFL which means there are 16 games a week whether on Thursday, Sunday or Monday. If you take the views of one game last Thursday and multiple it by 16 games the total of NFL views per week would be about 264 million people. If you took those statistics and compared it to the greater good of the company this allows FedEx to market to a greater number of people at one given time. Now looking back at the ethical values of Utilitarianism, FedEx did a great job of applying these values to the greater good of the corporation as a whole.

Kantianism:

Overall Kantianism is a duty based ethical theory meaning that business must be “motivated by good will” and acting with respect to all individuals through actions and words (Salazar). It mainly deals with treating people respectfully because it is part of the ethical duty of an individual to do so. Kantianism pushes for equal rights and integrity of businesses, companies are required to make decisions that are ethically acceptable for all stakeholders. Businesses are to be motivated by good will and not self-interest and their actions should not cause harm to workers or consumers (Salazar). The will is the rational part of each person, and the good will is rationality which chooses to do what is right for the reason that it is good (Salazar). In FedEx case, as I mentioned before their core philosophy is based off of People-Service-Profit. Throughout all aspects of the FedEx corporation upper management, Frederick W. Smith, chairman and CEO, is responsible for providing strategic direction for all FedEx. This corporation has performed ethical values of Kantianism, after this scandal FedEx could have cut all ties with the NFL to prevent any future damage to their corporation’s reputation. Unfortunately Robert Goodell, chairman of the NFL, cannot control the actions of the players throughout the NFL but what he can control is how he reacts to their actions. For the overall reputation of the NFL, as mentioned before FedEx has been partnered with the NFL since 1993, FedEx looked beyond the recent issue with Rice and continued to be a sponsor for the NFL. FedEx understood the unfortunate actions of some NFL players, but that should not ruin the reputation of the national football league as a whole. The Formula of Humanity is a more intuitive version of the Categorical Imperative and it states to “Act in such a way that you treat humanity, whether in your own person of another, always at the same time as an end and never simply as a mean.”As mentioned before, since the scandal of  Ray Rice has happened FedEx does not look like they are going to pull their sponsorship, although there have been controversies throughout the NFL FedEx knows that the NFL had the upper hand over any American sports league in sponsorships. Even though they choose to stay a sponsor of the NFL a FedEx representative state “We are watching developments in this matter closely and we are confidence that the League will take the appropriate steps” ( Ray Rice Scandal, 2014).

 Virtue theory:

Virtue Theory does not encourage greed, arrogance, selfishness, or any traits with similarities. The positive traits listed are characteristics that businesses should encourage in the workplace, reinforce them at all times, provide actions to prevent and discourage negative behaviors. This type of ethical theory deals with what a “person should do” instead of what kind of “person someone is,” making this theory force a different view of people’s actions (DesJardins). The theory also helps understand other people’s lives and actions in and out of the workplace. Out of all the ethical theories, this ethical theory resembles the actions performed by the company of FedEx. FedEx promotes a working environment that respects diversity and strives to provide their employees with confidence they need to perform at their fullest potential. As mentioned before FedEx believes that their people are the foundation of their success, a reason for their success is they provide their employees with seven Key Programs which allow the employee to become a part of FedEx success personally. Not only does FedEx believe in the success of their employees they also believe in the success of their sponsorships. In the case between FedEx and the NFL may have not preformed virtuous actions due to the public’s opinion in the matter of domestic violence. No sponsor wants to resemble a nation league if the players within league are preforming unethical actions. But on the other hand FedEx promotes a virtuous business model throughout the corporation, this company is built upon the idea of service excellence of meeting or exceeding customer expectations in everything we do.

References:

"Company Information." About FedEx. N.p., n.d. Web. 2 Oct. 2014. <http://about.van.fedex.com/company-information>.

Salazar, Heather. Kantian Business Ethics. Retrieved from https://kodiak.wne.edu/d2l/lms/content/viewer/main_frame.d2l?ou=18408&tId=102994 on November 17.         

NFL Sponsor FedEx Gets Pulled Into Ray Rice Controversy, Issues Statement." ThePostGame. N.p., n.d. Web. 4 Oct. 2014. <http://www.thepostgame.com/blog/dish/201409/ray-rice-fedex-nfl-video-roger-goodell-domestic-violence-john-mara-art-rooney>.

DesJardins, Joseph R. An Introduction to Business Ethics. Fourth ed. Print.