SECTION A [100 MARKS] Read the extract below and answer the questions that follow. Leadership and Motivation: FedEx Corporation and UPS Inc. Fred Smith is a renowned leader who founded FedEx Inc. after serving in the Vietnam military in the position of a marine back. It is from the military job that Fred acquired his leadership skills and this helped him pursue his business successfully. Fred opined that the military teaches its officers good leadership skills with an emphasis on influencing people to achieve organizational goals. According to Smith, leaders are required to get the maximum output from their followers by encouraging them to contribute all their effort towards the achievement of the goals of the organization. Efficiency in communication has been identified by Fred Smith as the most important aspect in achieving good leadership skills. In addition, leaders must provide feedback to their followers to ensure a complete understanding between and among people in an organization. Fred was also of the opinion that managing change in an organization is very important as a strategy of achieving goals and overcoming competition from other players in the industry. He also believed that in an organisation, report cards are important so that employees can know what is expected of them and how to perform duties assigned to them. Employees further need to be appreciated for their contribution towards the goals of the organisation by providing them with attractive rewards and sharing in the profits made by the organisation among other incentives. There is a time when FedEx Express National, a subsidiary of FedEx was faced with low employee motivation and high rate of turnover. This was a great challenge especially when the company was launching its new products. To solve this problem, the managers of FedEx used 360-degree feedback system to identify the causes of the problems facing the company as well as to identify leadership strengths and weaknesses as applied by the managing director and the senior managers. The analysis found out that there was inefficient communication between the managing director and the senior managers. To solve this problem, the managing director improved communication among the employees. This created trust among the employees and their leaders and the company was able to improve communication systems among all stakeholders. This reduced the rate of employee turnover and the work environment was favourable for achieving goals of the organization. The performance of the employees also improved. To improve the performance of employees, Fred Smith encouraged efficient communication between the leaders and their followers. Fred Smith encouraged the workers to put all their effort towards performing their jobs because they were doing a very noble business which was important to many people in the world. Smith was able to maintain change within the company depending on the prevailing conditions. For example, Smith developed Zapmail in the 1980s to improve communication among all stakeholders of the organization. This technology led to the development of a worldwide express market. FedEx continued changing its systems to avoid risks of competition from other companies in the industry, Managers should realize that employees are the greatest assets that an organization has and they should be treated with care. FedEx is a company that appreciates its employees and encourages them to contribute willingly to the goals and objectives that have been established. The company has realized that having the most efficient equipment and technologies is not as important as having motivated employees. Organizations experiencing a lot of changes within a short period of time require motivated employees so that they can keep pace with the changes being experienced at the workplace. Organizations can use monetary or non-monetary motivational strategies to improve their performance. FedEx has been applying the two methods to motivate its employees. Examples of such motivational rewards include job promotions, training employees on new technologies, paid leaves, awards and other motivational strategies. There is a compensation and reward program that was established by FedEx to motivate employees, encourage innovative ideas and encourage teamwork within the organization. To achieve this, the company has established several programs such as increasing the wages for employees, offering training sessions, paid leaves, offering discounts for travels and shipping rates on employees and other programs. Promotional incentives at the company are offered depending on the performance of employees. Employees are trained on modern and up-coming technologies to equip them with changes in the global market. Paid leaves are offered when employees require maternity, marriage or paternity leave. Employees are offered a discount on their travels and shipment of goods to encourage them to use the services of the company and making them feel as part of the company. Special awards are offered to employees with improved performance during a specific period.

QUESTION TWO (25 Marks)

Fred Smith is a renowned leader who founded FedEx Inc. after serving in the Vietnam military in the position of a marine back. Drawing from the extract and from your knowledge of transformational leadership, argue whether Fred can be described as a transformational leader or not. Substantiate your argument.