The United States Postal service is one of the most independent state corporations in the US and the only provider of postal services in the states. The organization is one of the few established institutions from the US constitution in 1775 by a decree of the 2nd continental congress (Ferrara, 1990, p. 11). Nonetheless, the state corporation has undergone structural and functional changes especially outlined by the Postal Reorganizational Act.
Unique to this institution is its independence from federal funding because since the early eighties, the US postal service has not received state funding. Nonetheless, this fact stands true with the exception of subsidies the state corporation receives with regard to disabled persons and voters residing overseas. Another notable exception is its recent borrowing of funds from the treasury to cover its financial deficits (Herr, 2010).
A major cause of its financial troubles has been the constant decline of mail volumes over the past few years because of information technology advancements, prompting the corporation to cut back on a few functional areas to maintain sound financial health.
The corporation currently employs approximately 596,000 workers in the US which makes it the second largest employers of civilians after Wal-Mart, although it operates one of the largest fleet of civilian vehicles in the world; considering it has over 218,000 vehicles (Herr, 2010, p. 2). The US postal service currently has a duty to deliver packages to all Americans regardless of their locality and at uniform price; although some of its greatest competitors are private delivery companies.
Considering the outstanding success as one of the few state organizations that barely rely on state funding, this study seeks to explore different aspects to this occurrence. More comprehensively, this study notes that Organizational design and effective control processes in the U.S. Postal Service have made it an extremely efficient organization since it is the only government organization that operates on its own revenue, without government funds.
Governance and Organization
The Board of governors of the US mail service act as the sole body that regulates rates, policies and procedures of the state corporation because their role is almost comparable to that of a corporate Board of Directors board.
Eleven members sit at the board but nine of them are appointed by the president and approved by the senate; after which the nine members appoint the Post master General who operates as the corporation’s Chief Executive Officer and at the same time, acts as the tenth member of the board. When they are complete as ten members of the board, they appoint the eleventh member as the deputy post master general whose role is outlined by the position of the Chief operating Officer (Herr, 2010).
Most often than not, the US mail service is often assumed to be a fully owned government corporation but from the above description, the corporation is an independent entity, although established by the executive wing of government. Government influence can therefore be defined through the presidential appointees who control the day to day operations of the corporation. The relation with the government as a quasi governmental agency gives the corporation unique powers because in its operation, it enjoys sovereign immunity, eminent domain powers, the power to strike agreements with several other corporations (overseas) and of course, the privilege of delivering 1st class and 3rd class mails (Herr, 2010, p. 5).
To attest to the independence of the corporation, the US Supreme Court through a ruling in 2004 termed the corporation as a separate entity, free from government ownership. This was in reference to a lawsuit to be governed by the Sherman Antitrust Act but which didn’t go through because of the Supreme Court ruling.
The Supreme Court also ruled that the corporation is the only organization that has the statutory monopoly of accessing letter boxes under the First Amendment freedom of speech which makes it illegal for persons other than agents of the US mail service to deliver mails to letter boxes marked the “US Mail service”.
With regard to its corporate clients, the US mail service has a unique advisory body called the Mailers’ Technical Advisory Committee which assists the corporation meet the needs of its corporate clients (Herr, 2010). The structures above have greatly ensured efficiency is upheld in the corporation.
Monopoly and Overseas Operations
A great factor that contributes to the success of the US mail service is the granting of monopoly for all mail service by the US federal government. According to Government policy, it is illegal to establish a parallel mail service regardless of whether it is public or private; thereby enforcing the monopoly the US Mail service has in America.
Moreover, the federal government has given the state corporation powers to determine whether another entity is going to compete with it or not; however, the US mail service has established an exception for other mail service companies to deliver mails which are extremely urgent.
In spite of the fact that the core mandate for the US mail service is to provide mail service to all Americans at affordable rates, the dimensions to these provisions are greatly undefined because part of its scope entails many aspects to mail service delivery such as geographical scope, quality of service, frequency of delivery among other dimensions. Despite other mail service companies providing a universal mail service, the US mail service still stands out because it provides the same service at very affordable rates.
Proponents of the US postal service monopoly identify that since there is a need to justify the affordable rates the corporation gives Americans, the guaranteed monopoly by the state is in place to ensure it sustains its universal operations. This system has been in place for more than ten decades now. This monopoly can be analyzed in two perspectives because it contains the Private express statutes and the Mail box Access rule which also greatly increases the corporation’s potential in providing affordable universal mail service.
If for example the Private Express mail service provision were to be done away with and the Universal mail service maintained, then the US mail service would need federal funding to the tune of billions of dollars of tax payers’ money. However, since the universal operating service is quickly changing due to globalization pressures, there is an increasing pressure to change existing policies regarding operations of the Universal mail service.
Nonetheless, many economists and professionals are of the opinion that rigid policies and regulations on universal mail service need to be relaxed or the entire service privatized altogether. However, there are still rigid objections to the privatization of mail service in America because many are of the opinion that privatizing the mail service would lock out rural Americans or those from lower classes.
Sorting and Delivery Process
The sorting and delivery process of the US Mail service is highly automated to increase the efficiency of the organization’s operations. These activities happen at the Process and distribution centers where over 275 such centers have been established countrywide and mails are sorted from a locality of about 200 mile radius (Herr, 2010). At the processing and distribution centers, the mails are usually emptied into hampers through automated techniques then later, a sorting process is initiated to separate large mails from small mails.
The initial process had a lot of inconsistencies because it was done manually by stamping postage stamps; thereby missing many inappropriately placed stamps, but now, the corporation uses the Advanced Facer canceller system which is much more efficient (Herr, 2010, p. 20).
The mails are therefore categorized into three categories including mails which are fixed by a bar code, mails which have a typed address and mails that have handwritten addresses. The US Mail service now uses machines which have the Optical character technique which is able to read the mails regardless of whether the addresses have been typed or hand written; after which it then sorts the mails into their respective zip codes.
Mails which have been written in a hand written format therefore go through the Optical character reader which sorts the mails according to the zip code; later it prints a barcode which goes through the remote bar coding system to be sorted out into respective locations. This system continues into a series of automated processes that pass through the remote encoding centers, and later, fluorescent bar codes and delivery barcodes are imprinted on the mail envelopes before transportation to final destinations.
From these processes, we can deduce the fact that the US postal service operations are highly automated to keep up with the demands of the current technological environment which emphasizes on efficiency. This has been one of the core reasons why the US postal service has been able to stay afloat in light of tremendous technological advancement.
Keeping it Simple
The US postal service has been able to maintain a fairly simple strategic forecast plan which greatly eases its operations into efficient structures of performance.
This is in contrast to the opinions held by major organizations regarding multiple strategic objectives for success. Kent Smith, the General Manager (cited in Creelman, 2010) affirms that after factoring in the size of the corporation, putting up a few strategies was ideal for efficiency. He further affirms that “Simplicity has been vital as we have had to communicate performance to a large number of employees and millions of customers.
This requires limiting the number of top-level goals and metrics, which also provides clarity and focus” (Creelman, 2010, p. 3). As a result of the incorporation of simple strategies, the US mail service has been able to maintain a commendable scorecard regarding overnight delivery of mails. Its success has been compared to IBM Consulting services which was ranked on its 86% service delivery as compared to US mail’s 95% (under the same parameters).
Benchmarking and Monitoring Performance
The US Postal service has been able to categorize its performance into three portals which act as the criteria to awarding of performance points. Firstly, the organization awards itself points for meeting the organizational goals and secondly for transcending them.
There is a third category through which no point allocation is made because it is a non-contributor category and people who fall in this category face disciplinary measures that are suited to their shortcomings. The point allocation is done out of a possible 100 points at three levels which encompass the national level, operational category and individual category (Creelman, 2010).
According to the management, establishing such a control measure has been effective because everyday, new measures are proposed and this may cause confusion within the corporation. Smith further explains that:
“To keep the scorecard simple and balanced, the general rule is that if something is added then something must be taken away….this helps people focus on the real value of the measure compared to metrics we already have. This we find to be a much more useful discipline than just adding new measures on an ongoing basis as such complexity would lessen the effectiveness of the framework” (Creelman, 2010, p. 7).
Nonetheless, the management confesses that weighting discipline and performance is not an easy task. Smith also explains that:
“We have learnt that in the weighting, if a goal or metric falls below five per cent then people stop paying attention to it. So it’s a challenge to balance the metrics to a level that represents their contribution and ensures that they are seen as important” (Creelman, 2010, p. 7).
Collectively, these measures have been able to assist the organization benchmark their performance and improve the overall profitability of the organization.
Scorecard Devolution
The US mail service has been able to achieve a balanced performance scorecard through its hierarchical managerial structure from the top management to supervisory levels. Key in this strategy has been to customize the process so that the needs of the typical consumer are reflected on the scorecard. For instance, from top managerial level expectations of “high standard service delivery”, the organization is able to apply the same standards for its overnight and daytime parcels respectively.
More weight would therefore fall at the functional level because departmental and operational levels would be at the forefront in ensuring logistical strategies are operational, especially to weak areas of service delivery. The company’s management explains that “The scorecard is narrowly defined for a supervisor, and more expansive as it is applied up the organization through postmaster, district level manager, area manager or vice-president level” (Creelman, 2010, p. 8).
Conclusion
For more than two decades now, the US postal service has been able to finance its operations without the financial assistance of the federal government.
This study identifies that the corporation has been able to achieve this high level of success because of its efficiency and control mechanisms that have ensured the operations of the corporation are up to speed with today’s dynamic business environment. Complimentarily, the corporation has been boosted by existing laws that ensure it receives minimal if any competition at all because of the policies that uphold monopoly.
At the same time, the company’s efforts to automate its operations have greatly improved its efficiency. Its benchmarking and monitoring efforts have also ensured the corporation is in a highly performing condition. These among other complimentary strategies affirm that organizational design and effective control processes in the U.S. Postal Service have made it an extremely efficient organization to support its independence from federal funding.
References
Creelman, J. (2010). The United States Postal Service. Web.
Ferrara, P. (1990). Free The Mail: Ending The Postal Monopoly. New York: Cato Institute.
Herr, P. (2010). U. S. Postal Service: Strategies and Options to Facilitate Progress Toward Financial Viability. New York: DIANE Publishing.