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.