« Taiwanese Journal of Political Science No.27Publish: 2006/03

Privatization and Organizational Change: A Case Study of the Japanese National Railway Company

Author: Shu-Hsin Lin

Abstract / Chinese PDF Download

When  serious  financial  crises  emerged  in  the  welfare  states  in  Europe  andAmerica  in  the  1980’s,  governments  of  many  countries  have  been  figuring  outsolutions   to   reduce   operation   costs   and   increase   management   efficiency.Privatization,   designated   contractors   or   even   non-profit   organizations   havesubstituted  the  role  of  providing  public  services  that  used  to  be  provided  by  thegovernment. Institutional transformation, organizational reconstruction and changesof   labor   conditions   and   work   environment   are   involved   in   the   process   ofprivatization.  Due  to  the  impact  of  privatization,  significant  differences  occur  inorganizational   development   and   in   the   welfare   of   employees.   Therefore,privatization   involves   substantial   organizational   change   for   publicly-ownedenterprises.Japan Railway (JR) serves as an example in this research. Through    literaturereview  and  case  study,  this  paper  examines  the  various  aspects  of  organizationalstructure, organizational culture and management style. It is found that privatizationis  closely  correlated  to  organizational  change.  Privatization  of  publicly-ownedenterprises  affects  the  mentality  and  cognition  of  members  of  the  enterprises.Organizational  change  is  related  to  the  efficiency  and  competitiveness  of  anenterprise.  Some  organizational  change  will  even  affect  the  sustainability  of  anenterprise. If a publicly-owned enterprise privatizes without organizational change, the  unreasonable  structure  of  the  organization  would  make  it  difficult  for  theenterprise  to  deliver  performance.  On  the  contrary,  if  a  publicly-owned  enterpriseconducts organizational change without privatization, large-scale innovation wouldbe  unlikely  because  of  the  limitations  of  legal  regulations.    The  employees’mentality of keeping lifelong employment is also hard to change, which may causethe failure of organizational change in the end.

Keywords:Japan、Organizational Change、privatization、publicly-owned enterprises、railway