ORGANIZATIONAL STRATEGY

HISTORY

State-owned “Russian Railways” company was formed on 23rd of November, 2003 by the merger of 987 firms of railway industry. The aim of the company’s formation was to reform Russian railways industry.

Atpresentmoment, “Russian Railways” contributes for 2% of Russian GDP, and the length of railroads owned by “RussianRailways” accounts for 85200 km making company the second in the world in terms of length of railroads. “Russian Railways” corporation annually serves approximately 1 billion of passengers and delivers around 1,2 billion of tons of cargo.Companyemploys 1 million of employees working both at Russian facilities and foreign representative offices and company’s demands give job to 500 thousand people working for adjacent sectors such as oil extraction and refinery industry, power generation industry, iron extraction and steel industry. There are about 20 thousand of locomotives and 1 million of wagons belonging to the company. In the 2010, thecompanyholds theforthplaceby value of sales among Russian companies[1].

“Russian Railways” is of a great importance to Russian economy because it provides services for many Russian companies, connects distant regions and offers the most affordable means of transportation.

OPERATIONS

The main types of activities are:

· transportation of passengers

· freight transportation.

Other types of activities include:

· manufacture, repair and construction ofrolling stock (locomotives and wagons);

· maintenanceofrailwaysinfrastructure

· R&D activities (planning, design, construction, testing laboratories)

· Informationandcommunication

· trade

· thesocialsphere

· foreigntradeactivities

ORGANIZATIONAL STRATEGY

The company’s management has formulated a long-term organizational strategy based on its vision of making “Russian Railways” efficient transportation business that is able to compete on the Russian and international markets, while implementing the responsibility of a national carrier and rail infrastructure owner.Organizational strategy includes next objectives:

1. to increase the scale of operations with a particular focus on freight traffic
2. to achieve better customer orientation and to create better values for the customer by adding new transportation services, by improving the quality of existing services (reduction of delivery time, higher capacities, higher safety of cargo and passenger trains), by developing supply chains and by introducing innovative operational techniques.
3. to improve the processes of transportation by increasing the technical reliability of infrastructure
4. to improve the company’s image by reducing environmental impacts, accident and industrial injury rates
5. to expand employees competences
6. to ensure that corporate governance meets global best practices.

To support the implementation of organizational strategy “Russian Railways” continued the process of its restructuring. There were various changes in organizational structure (the number of departments was diminished and several branches appeared), big efforts were made to improve management vertical, non-core assets were partly sold. Functional strategies also were reviewed putting more emphasis on issues of the capacity development, the reliability of the transportation process, finance management and human resource development.

INTERNATIONAL EXPERIENCE

Development strategy for international affairs and general overview

There are many important transport corridors going through the territory of Russian Federation. That is why “Russian Railways” aims to develop international operations and expand into foreign transportation markets. Deeper integration into Eurasian Transport System will have a positive impact on competitiveness of “Russian Railways”. The key priorities of the strategy are:

· to increase the market share in the Eurasian market;

· to increase transit freight traffic and sales;to get better access to foreign markets by investingin logistics and infrastructure projects in Russia and abroad

· to strengthen competitive positions relative to the alternative means of transportation;

“Russian railways” is a member of various international transportation organizations such as International Union of Railways (UIC), the Organization of Cooperation between Railways (OSJD) and others. Membership in such prestigious international organizations allows the company and the government of Russia to move further in the process of regulatory and technical harmonization.

International collaboration on transit operations

At present moment, “Russian Railways” is actively involved in transit operations with countries of Central Asia, Ukraine, Belorussia and European Union. Basically, commodities and agricultural products represent the total volume of transit operations. In order to boost congestion of existing railways the company has to provide high level of delivery time stability, use flexible approach to price setting, increase the level of cargo safety, facilitate customs procedures and improve the electronic system of data sharing and tracking the locations of cargos.

In the long-term company is planning to provide transit services for Kazakhstan, China, Korea, Japan and other European countries. The progress in this direction is highly dependant on:

a) the capability of the company to ensure the efficient interaction of various means of transportation, thus the supply chain becomes more complex;

b) the progress in harmonization of regulation in cargo transportation;

c) the volume of “Russian Railways” investments in foreign transshipment terminals.

International collaboration on passengers transportation

“Russian Railways” actively collaborates with foreign railway companies in order to boost volumes of passengers. The company carries out direct investment into foreign passenger terminals, modernizes its own infrastructure to launch high-speed trains, and integrates its own electronic system of ticket purchase via internet with systems of its international partners. The last one

International collaboration on other projects

In 2010 the company signed a special agreement with Siemens which implies consequent extension of the level of production localization of locomotives in Russia. Localization of production promotes economic growth of regions and it is very beneficial for Russian suppliers of raw materials and assembly parts.

“Russian Railways” also participates in various joint venture projects with its international partners ranging from investments and development of regional railway infrastructure. While most of projects are connected with European region (Germany, Slovakia, France, Austria), some others vary from Southern America to Middle East. For instance, in Argentina, Russian Railways is going to electrify some parts of national railways. Despite the implementation of such projects have low positive impact on Russian economy, it can be a good opportunity to have additional source of income coming from the abroad and allow attracting useful foreign technologies. Participation in such projects also serves the political interests of Russian Federation.

There are several agreements on the development of scientific and technical cooperation. Such agreements imply that (1) there was established an information exchange in the field of technological documentation, industrial engineering and testing of new types of wagons, (2) Russian employees now have an opportunity to pass trainings in the foreign companies and to share their experience while working on joint-venture projects. It also allows “Russian Railways” to get access to foreign technologies and apply them in the production, repair and maintenance of hi-tech engines of locomotives.

Date: 2015-04-20; view: 1455