2013

Strategic Management Review of Pakistan Railways

Presented to: Mr. Khalid Jameel Ansari Prepared By: Bilal Hamid BME 1599 Waqas Ahmed BME 1429 Owais ur Rehman BME 1600

Strategic Management Review of Pakistan Railways Menu

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Contents
A Comprehensive Strategic Management Model Introduction of Pakistan Railways Major Stations and Junctions Historical View the inception of Pakistan Railways Review of Mission Statement of Pakistan Railways Review of Vision Statement of Pakistan Railways Analysis of Mission & Vision Statements of Pakistan Railways External Audit of Pakistan Railways Internal Audit of Pakistan Railways Strategy Analysis and Choice Implementing Strategies: Management and Operations Issues

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Letter of Acknowledgement
24-March-2013

Dear Readers: We would like to take this opportunity to thank our instructor Mr. Khalid Jameel Ansari, our respected teacher, who made this report possible by providing his unconditional guidance and cooperation throughout the semester. We also wish to express our gratitude to all other people, who helped us in compiling this report by sharing his expertise, knowledge and experiences, without which this report would never have been possible. Once again we are thankful and look forward for such support in future.

Sincerely,

Bilal Hamid

Owais Ur Rehman

Waqas Ahemd

A Comprehensive Strategic Management Model

Introduction
Pakistan Railways Logo Reporting marks Dates of operation Track gauge Headquarters Website PR 1947present 1,676 mm (5 ft 6 in) and 1,000 mm (3 ft 3 in) Lahore, Punjab www.pakrail.com

Pakistan Railways (reporting mark PR) is a national state-owned rail transport service of Pakistan, head-quartered in Lahore. It is administered by the federal government under the Ministry of Railways. PR provides an important mode of transportation throughout Pakistan. It is commonly referred to as the "life line of the country", by aiding in large-scale movement of people and freight throughout Pakistan.

Major Routes The total length of railway tracks in Pakistan is 5,072 miles (8,162 km). The busiest routes include: 1. 2. 3. 4. 5. Peshawar-Karachi Route Peshawar-Quetta Route Lahore-Sialkot Route Lahore-Faisalabad Route Faisalabad-Khanewal Route

Major Stations and Junctions The major stations and junctions between Peshawar and Karachi include: Peshawar,Darya Khan,Mianwali,Bhakkar,Kaloorkot Nowshehra Jn., Attock city, Rawalpindi, Jhelum, Lalamusa Jn., Gujrat, Wazirabad Jn., Gujranwala, Lahore, Lahore Cantt., Raiwind Jn., Okara, Sahiwal, Chichawatni, Mianchannu, Khanewal Jn., Multan cantt., Lodhran Jn., Bahawalpur, Samasatta Jn., Khanpur, Rahim Yar Khan, Sadiqabad, Pannu Aqil Cantt., Rohri Jn., Khairpur, Bhiria Road, Nawabshah, Tandu Adam, Hyderabad Jn., Kotri Jn.,Jangshahi, Landhi Jn., Karachi cantt. and Karachi City.

Historical View the inception of Pakistan Railways

Karachi to Peshawar (Main Line) The possibility of Karachi as a sea port was first noticed in the middle of 19th century. Sir Henry Edward Frere was appointed Commissioner of Sind in 1851 after its inclusion in Bombay Presidency and sought permission from Lord Dalhousie to begin a survey for a sea port. He also initiated the survey for a Railway line in 1858. It was proposed that a railway line from Karachi City to Kotri, steam navigation up the Indus and Chenab rivers up to Multan and from there another railway to Lahore and beyond be constructed. The Railway was formed in 1855 and on 13 May 1861 succeeded in connecting Karachi to Kotri. This was the first railway line for public traffic between Karachi City and Kotri, a distance of 108 miles (174 km). The 4 sections, i.e., Scinde (Sindh) Railways, Indus Flotilla Company, Punjab Railway and Delhi Railways, working in a single company, were later on amalgamated into the Scinde, Punjab & Delhi Railways Company and purchased by the Secretary of State for India in 1885, and in January, 1886, it was named North Western State Railways, which was later on renamed as North Western Railway. The line between Karachi City and Kiamari was opened on 16 June 1889. During 1897 the line from Keamari to Kotri was doubled. The railway line from Peshawar to Karachi closely follows Alexanders line of march through the Hindu Kush mountains to the Arabian Sea. Different sections on the existing main line from Peshawar to Lahore and Multan and branch lines were constructed in the last quarter of 19th century and early years of 20th century. Quetta Rail Link Quetta was always considered as an important strategic destination during British Raj. Britain always considered Russians as a threat to its rule in the Indian sub-continent that they might advance from Afghanistan into Quetta and thereby threatening its rule in India.[1] It was the year 1857 when the idea was suggested by William Andrew (Chairman of Scinde, Punjab and Delhi Railway) that the railways to the Bolan Pass would have strategic role in responding to any threat by Russia. During the second Afghan War (1878-80) between Britain and Afghanistan, a new urgency was needed to construct a Railway line up to Quetta in order to get easier access to the frontier. On 18 September 1879, under the orders of Viceroy council, work
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begun on laying the railway tracks and after four months the first 215 km of line from Ruk to Sibi was completed and become operational in January 1880. Beyond Sibi the terrain was very difficult. After immense difficulties and harsh weather conditions, it was March 1887 when the railway line of over 320 km long finally reached Quetta. [2] Trans-Balochistan Railway The Trans-Balochistan Railway Line runs from Quetta to Taftan and then into Iranian City of Zahidan. It was named as Nushki Extension Railway as its construction started west of Nushki in 1916. This line reached Iranian city of Zahidan on 1922. The length of this track is 732 kilometers with the last 100 kilometer section being inside Iran. Currently there are hardly any traffic movement on this rail track and the frequency of trains reduced only to One-fortnightly between Quetta and Zahidan.[3] Post-Independence At the time of independence, 1,947 route miles (3,133 km) of North Western Railways were transferred to India, leaving 5,048 route miles (8,124 km) to Pakistan. In 1954, the railway line was extended to Mardan and Charsada, and in 1956 the Jacobabad-Kashmore 2 ft 6 in (762 mm) gauge line was converted into broad gauge. The Kot Adu-Kashmore line was constructed between 1969 and 1973 providing an alternative route from Karachi up the country. In 1961, the Pakistani portion of the North Western Railway was renamed Pakistan Railways.

Importance (Benefits) of Vision and Mission Statements 1. To ensure unanimity of purpose within the organization 2. To provide a basis, or standard, for allocating organizational resources 3. To establish a general tone or organizational climate 4. To serve as a focal point for individuals to identify with the organizations purpose and direction, and to deter those who cannot from participating further in the organizations activities 5. To facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization 6. To specify organizational purposes and then to translate these purposes into objectives in such a way that cost, time, and performance parameters can be assessed and controlled.

Review of Mission Statement of Pakistan Railways: PAKISTAN RAILWAYS MISSION STATEMENT: To provide a competitive, safe, reliable, market oriented, efficient and environment-friendly mode of transport

The mission statement of the Pakistan Railways features provision of a competitive, safe, reliable, market oriented, efficient and environment friendly mode of transport. As the largest mover of goods and passengers in the country, Pakistan Railways endeavors to meet contemporary challengers through efficient administrative functioning, modernization of machinery and equipment, and well defined operating procedures for ensuring safety of passengers and rolling stock.

The established criteria for vision statement: 1. A vision statement is future looking. 2. A vision statement identifies a market space. 3. A vision statement is specific and realizable. 4. A vision statement involves change

Review of Vision Statement of Pakistan Railways: PAKISTAN RAILWAYS VISION STATEMENT: 1. Increasing share in freight and passenger market. 2. Restoring confidence of the passenger and trading community. 3. Development of human resource need base coupled with improvement and development of management, infrastructure and rolling stock. 4. Encourage private sector in public private partnership, both for development of infrastructure and train operations. 5. Diversify all its non-core activities to make them self- sustainable units.

The Vision Statement of Pakistan Railway does answers what they want to become which is the basic matter behind writing mission statement. The Vision Statement of Pakistan Railway lacks clarity, by the thumb of rule the mission statement has be very clear and should be based on line or two. For example, General Motors vision is to be the world leader in transportation products and related services. The Vision Statement of Pakistan Railway is objective and more of a tactical type It emphasizing of more on operations rather than future outlook

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Importance (Benefits) of Vision and Mission Statements 1. To ensure unanimity of purpose within the organization 2. To provide a basis, or standard, for allocating organizational resources 3. To establish a general tone or organizational climate 4. To serve as a focal point for individuals to identify with the organizations purpose and direction, and to deter those who cannot from participating further in the organizations activities 5. To facilitate the translation of objectives into a work structure involving the assignment of tasks to responsible elements within the organization 6. To specify organizational purposes and then to translate these purposes into objectives in such a way that cost, time, and performance parameters can be assessed and controlled.

Analysis of Mission & Vision Statements of Pakistan Railways:

Developing a business mission is a big step toward management effectiveness. The mission statement is well written and reflects the enthusiasm of how PR wants to facilitate their customers safely and with optimum reliability of the journey. Yet it is very much customer oriented. And it does address concern regarding survival, growth, and profitability. Yet the vision statement lacks some potential in its body. And it seems that its not entirely in the agreement with the mission statement of PR. The importance (benefits) of vision and mission statements to effective strategic management is well documented with the collaborative effort of management and employees. The extent of manager and employee involvement in developing vision and mission statements can make a difference in business success. What is our mission? is a genuine decision; and a genuine decision m ust be based on divergent views to have a chance to be a right and effective decision.

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Key External Forces: 1. Economic forces 2. Social, cultural demographic and natural environment forces 3. Political, governmental, and legal forces; 4. Technological forces; and 5. Competitive forces.

External Audit of Pakistan Railways: The Industrial Organization (I/O) Approach

The Industrial Organization (I/O) approach to competitive advantage advocates that external (industry) factors are more important than internal factors in a firm achieving competitive advantage. The Industrial Organization (I/O) Approach defines that firm performance, , is primarily based more on industry properties, such as economies of scale, and level of competitiveness pm internal resources, capabilities, structure, and operations. The I/O view has enhanced our understanding of strategic management. However, it is not a question of whether external or internal factors are more important in gaining and maintaining competitive advantage. Effective integration and understanding of both external and internal factors is the key to securing and keeping a competitive advantage.

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Relationships between key external forces and organization

Social, Cultural, Demographic, and Natural Environment Forces

Social, cultural, demographic, and environmental changes have a major impact on virtually all organizational capabilities, its services, its markets, and its customers. The Social, cultural, demographic, and environmental trends are shaping the way people live, work, produce, and consume. Important Social, Cultural, Demographic, and Natural Environment Variables in Context of Pakistan Railway 1. 2. 3. 4. 5. 6. 7. Government regulation Attitudes toward customer service Average level of education Ethical concerns Attitudes toward government Per capita income Regional changes in tastes and preferences

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Strategic role of railway in creation and progress of Pakistan Pakistan with its linkages with the West and Central Asia, its cultural and ideological orientations as well as, circumstances surrounding has an enormous potential fro growth and prosperity. But unfortunately weak and unstable political system and the emergence of military as a dominant political force and now the war against terror, worse condition regarding law and order and most importantly mismanagement of resources such as power resource management has put the countrys economy on derail and destroying its national assets and corporations one by one, unfortunately Pakistan Railway is one of them. Importance of Railways before and after the partition between India and Pakistan: Pakistan Railways, lifeline of the country, is a national state-run transport service. It is under the administration of federal government. The partition Pakistan and India is the biggest event took place in the region. Although the partition affects the strategic orientation of nearly all organizations of Pakistan but Pakistan Railways has an especial link with it. The Pakistani people love to travel in rails because the railway played a major role in the independence movement of Pakistan when million of Pakistanis travelled through railway to migrate from India to Pakistan. Since then the railways is an enormous emotional attachment with Pakistani people. Even after sixty years of the partition between India and Pakistan, the rail diplomacy is playing an acknowledged part in maintain peace between both countries even in the worst case scenario. Rail track shows keen interest of the two governments to bind themselves in longterm trade ties that could prevent conflict in future. Pakistan Railway helped in developing core infrastructural assets of Pakistan Railways played and strategic role in the development of the core infrastructure of Pakistan, for example, Mangla Dam's rising project, Pakistan Railway put its effort to delivery of materials and tools to the destination which made the project possible for came into being. Not just Mangla every project which requires heavy transformational requirements, the Pakistan Railways always paled a vital part in the completion of such projects.
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Pakistan Railways strategic depth in defense of Pakistan Pakistan Railway has a strategic partnership with Pakistan Armed Forces. There are various strategic tactics and locations which only requires the participation and reach of Pakistan Railways,, wheatear its about strategic logistic support or infantry movement, the Pakistani Armed Forces are heavily dependent on the Pakistan Railways.

By all means Pakistan Railways is an important source of transportation throughout Pakistan. It carries millions of passengers throughout the country. It used to carry huge freight in Pakistan.

Political, Governmental, and Legal Forces

Federal, state, local, and foreign governments are major regulators, deregulators, subsidizers, employers, and customers of organizations. Political, governmental, and legal factors, therefore, can represent key opportunities or threats for both small and large organizations. Important Political, Governmental, and Legal Variables in context of Pakistan Railways 1. 2. 3. 4. 5. 6. 7. 8. 9. Government regulations or deregulations Political action committees Environmental protection laws Level of government subsidies Importexport regulations Size of government budgets World oil, currency, and labor markets Location and severity of terrorist activities Local, state, and national elections

The political and legal scenario of Pakistan Railways The political interference, nepotism, corruption, poor maintenance of tracks & bridges and mismanagement in almost every field are the major causes of failure of Pakistan Railways. Haji Ghulam Ahmed Bilour, federal minister for Pakistan Railways, is a very controversial figure. He is considered to be somewhat responsible for the deteriorating situation of Pakistan Railways. His viewpoint is that the whole railway system is obsolete. He complains that half of
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the total locomotives are out of order. Almost 86 % bridges are more than 100 years old. The trains, tracks and machinery are outdated or faulty. He says that Pakistan needs 25 to 30 engines annually. He is now making a plan to repair, hire or lease locomotives in collaboration with the private sector. Moreover, he believes that a bailout package can be helpful to overpower the crisis. According to him delay in funds to Railways is the root cause of the crisis. He accuses the federal government for not releasing remarkable funds for the betterment of Pakistan Railways. All his plans may end in failure because of corruption in the management, financial problems, his ill-advised attitude and lack of vision. The efficiency of the railway minister is evident from its almost nil performance. He believes that two mafia gangs are very strong in Pakistan Railways but finds himself incapable to take any action against them. He seems to be too weak to solve the issues and problems faced by his ministry. The Chief Justice has expressed his disapproval for the high-ups of Railways in the following comments: Ninety metric tons of silver worth millions was sold for mere Rs28,000 as scrap, while a light bulb worth Rs60 is being purchased at Rs400, whereas absence of maintenance turned expensive locomotives into junk one by one, besides a Grade-18 officer, a blue-eyed boy of the railways minister, is promoted to hold a Grade-20 post of secretary purchase. In the words of Chief Justice the electricity wires meant for electric trains from Lahore to Kh anewal have been stolen. Moreover, he observed that tickets were sold in advance outside ticket counters and tickets were not available at railway stations. It is also in the notice of the apex court that land mafia has grabbed Pakistan Railways land in different areas of the country. He has already ordered the railways to approach the Sindh administration in this connection. Nonetheless, everybody knows the efficiency of the present Sindh government. The Factor of corruption in Pakistan Railways Corruption is the biggest problem Pakistan Railways is facing today. The Railway Department has been suffering losses since years long. Contractor system is one of the causes of such losses. Moreover, there are enormous irregularities in local purchases. The nu mber of officers cadre has increased considerably since 1977, mostly due to political appointments. It has been revealed that the crises are self generated creating a space for more corruption and PRACSPakistan Railways Advisory Commute Services is responsible for this mess. Selective services have been privatized by allotting its contract to different private parties to operate those privatized trains. Ironically the contract has been awarded only for ticketing and like buss conductors those private firms after selling out the ticket deposits payments into the Railways account. As per agreement after deducting its commission the contractors are legally bound to deposit the funds into the Railway account but due to the nexuses between Railways
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bosses and private contractors deposit the funds in private accounts. This illegal practice has confronted Railways with financial crunch where as the officials of Railways are least bothered for the interest of Pakistan. Some Railways circles insist that Pakistan Railways is still a viable and progressive organization, provided the rampant corruption could be controlled. In short Pakistan Railways is a classic example of bad governance, poor policies, corruption and mismanagement.

Technological Forces
Revolutionary technological changes and discoveries are having a dramatic impact on organizations. This trend reflects the growing importance of information technology (IT) in strategic management. Technological changes can reduce or eliminate cost barriers between businesses, create shorter production runs, create shortages in technical skills, and result in changing values and expectations of employees, managers, and customers. Technological advancements can create new competitive advantages that are more powerful than existing advantages. The technological scenario of Pakistan Railways: Pakistan Railway is required its best efforts forward to strive in technological field. In past Pakistan Railway did took bold steps in this field but lately with destruction in all fields of in the technological filed Pakistan Railways also lagged behind. The current scenario of Pakistan Railways is as under: Directorate of Information Technology: Information Technology (IT) sparks an image of use of computers, data storage, data management and transmission of information. The term information technology has ballooned to encompass many aspects of computing and technology, and the term has become universal. 1. Reservation & Ticketing System (Computerized ticketing System (Reservation) has been introduced since 2003) 2. Fare Management System 3. Online Train Tracking System 4. Website

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Competitive Forces
Competition in virtually all industries can be described as intenseand sometimes as cutthroat. Seven characteristics describe the most competitive companies: 1. Market share matters 2. Understand and remember precisely what business you are in. 3. Whether its broke or not, fix itmake it better; not just products, but the whole company, if necessary. 4. Innovate or evaporate 5. Acquisition is essential to growth; the most successful purchases are in niches that add a technology or a related market. 6. People make a difference 7. There is no substitute for quality and no greater threat than failing to be cost competitive on a global basis One way to analyze competitiveness between two or among several firms is to investigate market commonality and resource similarity issues while looking for areas of potential competitive advantage along each firms value chain. The competitive analysis of Pakistan Railways: Pakistan Railway has no direct competitor as there were no private train services available until the inception of Pak Business Express, which is the first public-private venture in railway in Pakistan. But yet still Pak Business Express doesnt compete Pakistan Railways on wider scale, it has limited capacity and venues where it can compete and also it is a partnership enterprise which is taking much load off the crisis-hit Pakistan Railways (PR). Pak Business Express, not a competitor but a joint venture! Yet its not a competitor to PR, but it is giving a competitive sense to consumer that how the train trail ideally should be, which can be counted as a positive and healthy completion for PR to incorporate within its future outlook and organizational capabilities and culture. The private company Four Brothers entered into a deal with the PR and invested Rs225 million to build the project. The privately-run enterprise is bound to pay between Rs1.5 million and Rs2.5 million per day to the Railways, according to the companys management. The Pak Business Express has so far spent Rs177.5 million to improve its services for passengers and paid Rs510 million to Pakistan Railways as royalty till date.
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Decreased Market Share Over the years, Pakistan Railways could not maintain its share in the countrys transport sector. With Railway ministry shutting down operations of various trains, it is no wonder that the market share of Pakistan Railways in cargo transport has fall to mere 5% from 75% in 1960s and 1970s. Around the world, railways are the cheapest and safest mode of transport and majority of goods transport is carried out via railways. However, in Pakistan the situation is completely different. The indifferent attitude of various governments, direct competition from NLC, container mafia and bus mafia are all behind the drastic condition of Pakistan Railways today. Railways and NLC need to coordinate their operation and also compete in their operations to economize on the inter modal movement of goods traffic. The Railway should carry goods in bulk in the plains, while NLC and private road transport should take over further distribution from these points in to the hilly regions. This will help the railway to concentrate its resources of locomotives and wagons on the main line in the plains, after withdrawing them from the hilly regions. This is in fact the best and most economical rail road mix for the country. The success of the venture is providing much-needed funds to Pakistan Railways at a time when it is facing a huge financial deficit and many of its trains are waiting to be fixed in the workshops. Thus, the once invincible state-owned national carrier cannot afford to lose the Pak Business Express which pays its bills. Indirect competitors: The indirect competition has flourished exponentially due to the below par performance of PR. Which includes: Private transportation facilities Traveling by air Private vehicles It has been observed that during the past couple of years the private transportation services has an exponential growth, the one name which is vibrantly quoted is Daewoo Bus Services, which has the reputable name in inter country travelling, It provides the state of art transportation facilities. Although it has higher fare structure but consumer in dire needs prefers it over PR.

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External Factor Evaluation (EFE) Matrix of Pakistan Railways

Key External Factors Opportunities Monopoly in Train Service Population explosion (Expending consumer base) Vast infrastructure Trained manpower Expendable rail tracks Successful Public Private Partnership Threats Corruption Over employment Mismanagement Decreasing Market Share Political interference Depleting infrastructure Total Weight 0.12 0.08 0.08 0.06 0.08 0.06 0.09 0.09 0.04 0.10 0.12 0.08 1.00 Rating 4 2 3 3 3 4 4 2 2 2 1 4 Weighted Score 0.48 0.16 0.24 0.18 0.24 0.24 0.36 0.18 0.08 0.2 0.12 0.32 2.8

The total weighted score of 2.8 is above the average (midpoint) of 2.5, it shows that Pakistan Railways is not completely gone but its doing well for its survival in taking advantage of the external opportunities and avoiding the threats facing the by it. There is definitely room for improvement, though, because the highest total weighted score would be 4.0. As indicated by ratings of 1, Pakistan Railways needs to capitalize more on the Management strategies to reduce its FAT and make it strategically aligned with its resources.

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Key Internal Forces 1. Marketing 2. Finance 3. Management 4. Management information systems 5. Operations

Internal Audit of Pakistan Railways

The process of performing an internal audit closely parallels the process of performing an external audit. Compared to the external audit, the process of performing an internal audit provides more opportunity for participants to understand how their jobs, departments, and divisions fit into the whole organization. Marketing in Pakistan Railways Vision Statement of the Marketing Department: A progressive marketing organization managed by professional and competent staff committed to effectively marketing the transport facilities of the Railways in the freight and passenger section for a reliable, competitive safe, economical and quick service of recognized standard to its customers.

The Marketing Department was reorganized to perform its functions related to the marketing in both the freight and passenger sectors. The various subjects now being dealt with are:1. The preparation of budget, monitoring of earnings and analyzing of shortfalls and the causes and recommending remedies. 2. The provision of special rates for different commodities to capture traffic. 3. The determination of the Fare and Rates for Parcel & Luggage. 4. The exploring of markets for utilization of its transport facilities
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5. The concluding of agreements with a Public Private 6. Partnership in freight and passenger trains. Management in Pakistan Railways Ministry of Railway is responsible for overall control of Pakistan Railways as well as to guide the overall policy. There are four (4) Directorates in this PR namely Administrative Directorate, Technical Directorate, Planning Directorate, and Finance Directorate. Structural design of Pakistan Railways Pakistan Railways comprises of three functional units. 1. The Operations Unit: It oversees train operations and all related functions. Three Additional General Managers, each heading a Business Unit - Infrastructure, Traffic and Mechanical in addition to various specialized head of departments assist the General Manager Operations. 2. The Manufacturing & Services Unit and The Manufacturing and Service (M&S) unit oversees the management of the Concrete Sleeper Factories, Locomotive and Carriage Factories. 3. Development Unit The Development Unit manages all Railway owned Schools, Hospitals and Railway Academy, Walton, Information Technology Department besides, monitoring projects in execution. Each headed by a General Manager who reports to the Secretary/ Chairman Railways for the performance of his Unit. Human Resource Pakistan Railways is the largest civil employer in the country and has about 90,000 employees consisting of staff and officers as of 2008). 71% of the total employees are working in Civil, Mechanical and Transportation departments. All the hierarchy positions are held by graduate Engineers.

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Analysis of the organizational structure and management of Pakistan Railways Pakistan Railways is a vertically integrated highly bureaucratic organization. The current organizational structure is a mixture of functional and divisional structures. The positions are divided into four classes: Officer Cadre Station Masters Running Staff Class Four comprises of labors, signal operators etc.

The structure needs to be revamped into a more leaner and flexible one. A combination of divisional and network structure will be most appropriate for Pakistan railways. The PR management can retain the structure based on current divisions and create a network of these divisions for better management of operations and resources. The reason for this loss is the presence of unnecessary departments which are white elephant for Pakistan Railways. The biggest among those is the Railways Police that takes over Rs 1.5 billion including emoluments and other facilities followed by Stores and Purchase. These departments should be abolished from Railways without further delay. Their utility for railways is marginal at best. The Audit and Accounts, Railways Workshops Division, and General Administration staff need drastic cuts. These organizations are heavily overstaffed. If they will continue to ignore the presence of non-productive over staffed departments with very insignificant contribution in overall performance of Pakistan Railways, the department will continue to decline. It shall never be in a position to meet the expectations of public. Railways are operating at low rates. A flexible policy for rates and fare requires to be adopted whereby freight rates could be varied according to the type of commodities as well as direction. The factor of mismanagement in Pakistan Railways: Currently Pakistan Railways is facing acute shortage of locomotives and spare parts for maintenance of out of service locomotives. Since independence little has been done to expand the railway network in Pakistan. As per the reports compiled by the design team, Pakistan Railways need 40 50 locomotives annually to run its operations effectively. However, during

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the past two decades only 100 locomotives have been added. The management of PR has failed to generate revenues through use of assets like land, locomotive factory, carriage factory etc. The focus of Railway officials is on getting new locomotives while ignoring the improvement in operations and maintenance of existing locomotives. The plans to change broad gauge into standard gauge at this stage are not just costly but also unnecessary.

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Consider all feasible alternatives 1. Advantages 2. Disadvantages 3. Trade-offs 4. Costs 5. Benefits

Strategy Analysis and Choice

The Nature of Strategy Analysis and Choice Strategy analysis and choice seek to determine alternative courses of action that could best enable the firm to achieve its mission and objectives. The firms present strategies, objectives, and mission, coupled with the external and internal audit information, provide a basis for generating and evaluating feasible alternative strategies. Unless a desperate situation confronts the firm, alternative strategies will likely represent incremental steps that move the firm from its present position to a desired future position.

The strategy-formulation framework 25

The Input Stage The input tools require strategists to quantify subjectivity during early stages of the strategyformulation process. Making small decisions in the input matrices regarding the relative importance of external and internal factors allows strategists to more effectively generate and evaluate alternative strategies. Good intuitive judgment is always needed in determining appropriate weights and ratings.

The Matching Stage Strategy is sometimes defined as the match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors. The matching stage of the strategy-formulation framework consists of the SWOT Matrix etc. SWOT Analysis of Pakistan Railways

The Decision Stage After a careful diagnosis, it is proposed that Pakistan Railways need a mixture of technostructural and collaborative interventions to recover from the current crisis.

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Implementing Strategies: Management and Operations Issues

Downsizing The Pakistan Railways is an over staffed organization. Political appointments over the years have added to the problem and are the major reason behind organizations financial troubles. Departments like Railway Police, Stores & Purchase need to be abolished. Other over staffed departments like Audit & Accounts, General Administration etc. need drastic cuts in workforce. For successful implementation of downsizing, the PR management must follow the following steps: Clarify organizations strategy to its members and provide ample opportunities for them to voice their concerns ask questions and obtain counseling. In case of PR, the structural change will help in eliminating unnecessary layers, merge units and non productive staff can be reduced through layoffs and buyout packages. While implementing methods of downsizing, management should use a top down approach. It should target inefficient and high cost areas. Keep people informed throughout the process about restructuring activities. Address the needs of survivors and those who leave to help them overcome the stress of structural changes.

Reengineering Pakistan Railways have great potential for growth. However, the current process and technology does not provide much room for implementing growth strategies. Pakistan Railways can improve the performance of its various functions and department through proper use of information technology. The areas where information technology can play a vital role include:
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Seat Reservations Freight Management Asset Management Track Management Rolling stock inventory Electric Billing Timetable

During diagnosis many members of Pakistan Railways suggested that the organization should be privatized like PTCL to improve performance efficiency. However, research suggested that key state owned enterprises like Railways, Airlines, and Road Transport etc. should remained publically owned for the overall benefit of the customers. However, Pakistan Railways can privatize some of its units like The Locomotive Factory, The Carriage Factory and other large manufacturing units.

Alliance Interventions Apart from techno-structural interventions, Pakistan Railways can make good use of collaborative interventions to improve productivity. Instead of hiring information technology and database experts, Pakistan Railways can create an alliance with National Database & Registration Authority (NADRA) for developing Track Management and Seat Reservation Systems. Similarly Pakistan Railways can create alliance with China Railway Engineering Corporation (CREC) for expansion of railway tracks in Pakistan. Network Interventions With the help of Public-Private Partnership, Pakistan Railways can create networks to operate some of its route for privatized trains. For creating such a network, PR can call for a private investors convention and brief those about the available opportunities select the organizations that can fit in the network best and implement networking strategies and evaluate the performance of networks periodically. CONCLUSION With growing interest in the development of Trans-Asian rail links, one might think that Pakistan Railways has a promising future. However, the Railway Ministry, the Railway Board and all the relevant agencies have to play their role to return Pakistan Railways to its glorious days. Before allocating any further funds to bail out the organization, government should force the management to undergo vast structural changes as recommended. These changes can be implemented within a period of 3 5 years and once the changes have been made and evaluated then new investment plans can be made.

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