1.

Only after two years of acquisition, Fedexs stock price fell for the first time in its history and their net earnings reduces. 2. After acquisition with Flying Tigers their operating losses from foreign operations increased more than 200 million annually, by 1991. 3. Foreign operation: 3.1 Fedex had difficulties in consistently guarantying delivery times to its foreign customers because of some reasons. They are 3.2 It was difficult for them to implement a hub and spoke system globally because geographical distances were to great to allow every package to go through a single hub. 3.3 Holidays abroad occur in different dates then in the US. 3.4 Modes of customary transportation varied widely abroad 3.5 With international expansion, full employee cooperation or high commitment had been more difficult to achieve. As a result efficiency and quality of service had suffered. 3.6 Fedex wanted to establish in abroad as quickly as possible by buying exiting local companies. But may have underestimated the difficulty of integrating so many desperate companies into one integrated system. 3.7 Although Fedex made serious efforts to train employees of local couriers in the companys operating procedures and methods, there was no guarantee that it will be adequate for global operation. Links to centralize customer service centers where often difficult and sometimes impossible to maintain in foreign locations. 3.8 Their reputation of quality service was in threat in foreign market due to inadequate training method. 4. When Fedex enter into global market there were already some well established companies like DHL, united parcel service and TNT. This creates huge competition for Fedex. 5. Psychology of a merger: 5.1 International expansion and acquisition created problems of discipline and insubordination that threaten Fedex s strong organizational culture. 5.2 Flying Tigers employees were suspicious and dissatisfied with the union policy of Fedex. Thus expertise employees of Flying Tigers leave the company and Fedex lose potential employees. 6. Human Resource Policy 6.1 Fedex face employee recruitment problem in abroad due to cultural diversification and low level of availability of entry level employees. They also face challenges in providing training to newly recruited employees. 6.2 Due to no lay-off policy Fedex had to take responsibility of extra burden of employees which also create problem in payroll. 6.3 Fedex face problem in employee promotion problem due to cultural diversification and the promotion policy is different in various places.

6.4 Fedex had difficulty in exporting GFT procedure because the value systems prevailing abroad where often vfery difficult from those found in the US. They also need to change SFA plan for certain areas. 6.5 The competitive compensation practice of Fedex significantly increased the fixed cost of the acquired companies and sometimes turns a profitable operation into a unprofitable le one. 6.6 Financial participation and incentive compensation programs practiced by Fedex in the US had also proven to be less successful in abroad. Due to different legislation in pay plan, variable pay plan was unworkable in different countries. 6.7 Overtime work plan also did not appreciate in different countries. 6.8 Fedex faced cultural diversification in different countries as in local operation work gropu was more focused in individual activities which was completely different in some other places.