1) Case: Amazon and delivery drones
In 2013, Ceo Jeff Bezos announced Amazon was testing delivering packages using
unmanned drones. While drones have not yet been approved for commercial use, U.S.
government agencies like the Federal Aviation Administration (FAA) have started
considering special rules and regulations governing their use. In Canada, the federal
government agency, Transport Canada, would have to do the same. This futuristic
endeavour by Amazon may not be approved for another five years, but it could
potentially change how packages are delivered in the future, not just for Amazon, but for
all businesses.
The goal for Amazon is to deliver goods to customers, the same day they are ordered, in
30 minutes or less. Certainly, drones have the potential to eliminate time delays due to
traffic as well as shipping costs such as postal or courier charges. While some observers
have doubted the feasibility of this idea, others say it is only a matter of time before this
technology is used for all kinds of purposes. Like the internet, drones were also first used
in the military; however, once applied to commercial use, they could have wide and
significant implications on business and our future way of life.
A large number of delivery trucks and personnel could be reduced or eliminated
altogether; however, an increase in jobs in designing, repairing and operating the drones
could take effect. Technical jobs in robotics, computer engineering and math would be
needed. According to Amazon, the company has already hired PhDs in math and science
to create complex algorithms to deal with error correction, route optimization,
sequencing, failure response and so on. Overall, Amazon hopes to increase efficiency,
reduce costs and increases sales with this premium delivery service.
While it appears to be a new initiative, many companies including UPS and FedEx have
already considered the idea, but are waiting for government approval before changing
their business model and structure.
Indeed, if same day delivery becomes the norm (that is, goods delivered in 30 minutes or
less), customers can easily come to demand this type of speedy service from other online
retailers, or just shop at those who can provide it. Certainly, this may increase the ease of
online shopping if you get goods faster than if you had to go to the mall, wait in line, buy
them, and drive back home.
Will this revolutionize the delivery industry? Quite possibly. Bezo estimates that 80% of
Amazon’s packages are light enough for a drone to deliver. The remaining 20% will still
require delivery trucks and people to carry heavier packages. Can this futuristic idea
become a reality? A lot depends on the government, and of course, a lot depends on the
consumer. If consumers want their books, pizzas and other goods delivered by drones,
businesses will certainly try to find a way to meet their needs.
Test Bank for Karakowsky and Guriel, The Context of Business, 1e
Copyright © 2015 Pearson Canada Inc. 1
, Sources:
Wohlsen, Marcus. Delivery drones already exist – and they’re way bigger than
Amazon’s. www.wired.com January 6, 2014.
http://www.wired.com/business/2014/01/delivery-drones-already-exist/
Banker, Steve. Amazon and drones – Here is why it will work. December 19, 2013.
http://www.forbes.com/sites/stevebanker/2013/12/19/amazon-drones-here-is-why-it-will-
work/
Alistair, Barr. Amazon testing delivery by drone, CEO Bezos says. December 2, 2013.
USA Today.
http://www.usatoday.com/story/tech/2013/12/01/amazon-bezos-drone-delivery/3799021/
How can delivery drones for commercial use (i.e. a technological force) influence all the
other external and internal forces, such as political, economic, societal, competitive,
global, labour (workers), leadership (management philosophy), structure and strategy?
Answer:
External
Forces
Political a) Laws and regulations
The introduction of new technology would require government
to rethink laws and regulations over the affected industries and
areas. For example, Amazon wants government approval from
the Federal Aviation Administration (FAA) to use robotic
drones to deliver packages to customers. In Canada, Transport
Canada would need to approve delivery drones for commercial
use. The government therefore has to think of how these
robotic drones will be regulated. How will they remain safe
when flying in the air, so they do not crash and injure civilians
or cause property damage. Similarly, will they interfere with
airplanes, birds, and other wildlife? How will they be
monitored so the privacy of others are not infringed upon?
Laws that may need to be reviewed and amended include:
o aviation law
o privacy law
o safety law
o criminal law (for potential damage of drones by
individuals)
o property law (for potential damage to property by
drones)
Test Bank for Karakowsky and Guriel, The Context of Business, 1e
Copyright © 2015 Pearson Canada Inc. 2
In 2013, Ceo Jeff Bezos announced Amazon was testing delivering packages using
unmanned drones. While drones have not yet been approved for commercial use, U.S.
government agencies like the Federal Aviation Administration (FAA) have started
considering special rules and regulations governing their use. In Canada, the federal
government agency, Transport Canada, would have to do the same. This futuristic
endeavour by Amazon may not be approved for another five years, but it could
potentially change how packages are delivered in the future, not just for Amazon, but for
all businesses.
The goal for Amazon is to deliver goods to customers, the same day they are ordered, in
30 minutes or less. Certainly, drones have the potential to eliminate time delays due to
traffic as well as shipping costs such as postal or courier charges. While some observers
have doubted the feasibility of this idea, others say it is only a matter of time before this
technology is used for all kinds of purposes. Like the internet, drones were also first used
in the military; however, once applied to commercial use, they could have wide and
significant implications on business and our future way of life.
A large number of delivery trucks and personnel could be reduced or eliminated
altogether; however, an increase in jobs in designing, repairing and operating the drones
could take effect. Technical jobs in robotics, computer engineering and math would be
needed. According to Amazon, the company has already hired PhDs in math and science
to create complex algorithms to deal with error correction, route optimization,
sequencing, failure response and so on. Overall, Amazon hopes to increase efficiency,
reduce costs and increases sales with this premium delivery service.
While it appears to be a new initiative, many companies including UPS and FedEx have
already considered the idea, but are waiting for government approval before changing
their business model and structure.
Indeed, if same day delivery becomes the norm (that is, goods delivered in 30 minutes or
less), customers can easily come to demand this type of speedy service from other online
retailers, or just shop at those who can provide it. Certainly, this may increase the ease of
online shopping if you get goods faster than if you had to go to the mall, wait in line, buy
them, and drive back home.
Will this revolutionize the delivery industry? Quite possibly. Bezo estimates that 80% of
Amazon’s packages are light enough for a drone to deliver. The remaining 20% will still
require delivery trucks and people to carry heavier packages. Can this futuristic idea
become a reality? A lot depends on the government, and of course, a lot depends on the
consumer. If consumers want their books, pizzas and other goods delivered by drones,
businesses will certainly try to find a way to meet their needs.
Test Bank for Karakowsky and Guriel, The Context of Business, 1e
Copyright © 2015 Pearson Canada Inc. 1
, Sources:
Wohlsen, Marcus. Delivery drones already exist – and they’re way bigger than
Amazon’s. www.wired.com January 6, 2014.
http://www.wired.com/business/2014/01/delivery-drones-already-exist/
Banker, Steve. Amazon and drones – Here is why it will work. December 19, 2013.
http://www.forbes.com/sites/stevebanker/2013/12/19/amazon-drones-here-is-why-it-will-
work/
Alistair, Barr. Amazon testing delivery by drone, CEO Bezos says. December 2, 2013.
USA Today.
http://www.usatoday.com/story/tech/2013/12/01/amazon-bezos-drone-delivery/3799021/
How can delivery drones for commercial use (i.e. a technological force) influence all the
other external and internal forces, such as political, economic, societal, competitive,
global, labour (workers), leadership (management philosophy), structure and strategy?
Answer:
External
Forces
Political a) Laws and regulations
The introduction of new technology would require government
to rethink laws and regulations over the affected industries and
areas. For example, Amazon wants government approval from
the Federal Aviation Administration (FAA) to use robotic
drones to deliver packages to customers. In Canada, Transport
Canada would need to approve delivery drones for commercial
use. The government therefore has to think of how these
robotic drones will be regulated. How will they remain safe
when flying in the air, so they do not crash and injure civilians
or cause property damage. Similarly, will they interfere with
airplanes, birds, and other wildlife? How will they be
monitored so the privacy of others are not infringed upon?
Laws that may need to be reviewed and amended include:
o aviation law
o privacy law
o safety law
o criminal law (for potential damage of drones by
individuals)
o property law (for potential damage to property by
drones)
Test Bank for Karakowsky and Guriel, The Context of Business, 1e
Copyright © 2015 Pearson Canada Inc. 2
