Reinventing Amtrak - The Politics of Survival - Case Study Example

Topic: Amrak Amrak is one of the leading railway transportation systems that strive to provide quality and timely services for its passengers. This company is dubbed as the National Railroad Passenger Corporation. As America’s intercity rail operator, Amtrak bridge passengers to their destinations in what was perceived as the safer and greener way (Perl & Dunn, 1997). The company has a 21,000 route miles encompassing 46 states in Columbia District and in three provinces of Canada. It operates about 300 trains everyday with an average speed of 150 mph toward 500 destinations and it’s believed as a railway that is subsidized by the 15 states and by four railway agencies for its corridor services (Perl & Dunn, 1997; Vromans, Dekker, & Kroon, 2006). As an intercontinental railway system, it serves New York, Washington, Philadelphia, Chicago, Los Angeles, Boston, Sacramento, Baltimore, Albany-Rensselaer, San Diego, New Haven, Wilmington, Nelwark, Seattle, Portland, Irvine, BWI Airport, Providence, Milwaukee, Emeryville, Harrisburg, Lancaster, Boston, and Bakersfield. Thus, it caters the needs of 30.2 million people in America. Owing the expediency and high demand of its services, the company invested for projects to enhance their services and sustain the railway network (Vromans, Dekker, & Kroon, 2006). With the magnitude of services accorded to the public, it facilitated the interconnection of cities populated with diverse and multicultural communities. Amrak became instrumental too in cultural exchanges, in bridging people-to-people relations and intercultural immersion via travels, tourism, migration, and opportunities in other states which drive the influx of people from one place to another point of destination (Gapinski & Tuckman, 1978). Experts opined that the contribution of this railway in shaping socio-cultural development and economic expansion in North America is more appreciable than in Europe. The railway was partly author of industrialization as this was the major transportation of business sector to-and-fro the mainland. This compelled the company to coordinate with all states served for its security as a matter of policy and as measures for public welfare. Legal coordination and networking to all states was an indispensable corporate strategy to accord passenger’s security. As a business, the railway is also one of the leading companies that are dependent on the consumption of energy and thus, also confront the challenges in the utilization of oil and gas amid call for ecological protection and regulation of pollution emission. Although it contributed much for economic advancement because it raked high revenue but there is a need to reevaluate and optimize the company’s expenditures because it has oddly spent $ 3.95 billion in 2011 when it only earned $ 2.71 billion in its operation (Dunn et, al., 1997). Cash flows need to be regulated in such measure that will not devalue the services and sacrifice its operations amid escalating cost in the market. With these stark realities, the company remained subject to the corporation, transportation, insurance, and security policies of the states served and by United States of America. If the policies are not liberally construed to also assist the condition of the company, then unsupportive policies will negatively impact to Amtrak’s operational activities, thus, may constrain its business relations with its passengers and cargo customers. Perl and Dunn (1997) pointed that Amtrak, as a quasi-public and profit –oriented corporation had some internal flaws since it dissociated itself from America's private railroads and from trust-fund financial scheme that could subsidize public transport. Perl and Dunn (1997) criticized its over dependency on political patrons and labor union for protection against executive budget cuts, thus, bleeding its operational cost too much by running the railway system with expensive contracts and services against its revenue. Although the company has undertaken serious reinvention since 1994 to innovatively manage the company, seems there is a need to strengthen its corporate status by improving its relation with served states and evaluate its human resources to ascertain that its performance are attuned to its goals (Per and Dunn, 1997). This calls for management’s evaluation too through organizational capacity assessment to replace the current management with transport-based business managers that are nurtured with probity and competence to run the organization. As has been deliberated in many researches, the corporation was already engaged in an internal reorganization designed and technically aimed at bringing it closer to its customers. History mentioned that Amtrak have undergone external effort to reorient and restructure Amtrak. Some of the leaders perceived the need to improve the company’s interrelation with possible partners while others wanted to privatize the railway. The coordination and harmonization of the opportunities from internal and external reinvention is deemed relevant for Amtrak to gain viable and valuable status as a railway company that offers quality transportation services in this millennium. Moreover, while this researcher noted that the company has been reliant on political structures to maintain corporate security and to nurture social acceptance from varied states served, but the company also needs to strategize its economic and financial dynamics. Priority of transportation should be served to high density population and where transportation is highly demanded. For freight railroads, focused should be given to areas with high volume corridors and to maintain less miles of track, as well as, carry more cargo per train using larger cars and longer trains. This is adopted by other railways which have attained certain degree of self-sufficiency in its system. If this can be pursued by Amtrak as a business model, then it’s likely that the company will also earn higher income (Chen, 2010). By saying this, Amtrak must be a market driven railway system and carry more passengers and cargo to attain its financial freedom. It may increase its fees as necessary in the face of oil prices increases and rate of taxation exacted by the states served. Financial viability could make the company attain economic viability which can be utilized to support railways and substations’ improvement, too. It can also provide some incentives for its human resources but only when there is enough windfall or profit generated or when it’s able to gain competitive leverage in the market. The organization must understand that running a quality railway is about making strategic decisions. The allocation and distribution of resources should be attuned to the macro-economics and micro-economic conditions of served customers. Amtrak should optimize its expenditures by using information technology to monitor and detect the movements of the railways. Infotech hasten intercommunication and monitoring for security and administrative management. Infotech could also reduce the number of human resources needed for the railway substations. The company needs to partner via investment with oil and gas refinery corporation to sustain its operation and gain leverage in the use of energy while at the same time adapt to regulatory and technological measures that can help control pollution emission. While maximizing the political bridges, it shouldn’t be forgotten that this is business and thus, should not be compromised to political interests. It should be asserted that as a transportation business, the management should be clear in articulating the company’s plans, targets and expected outcomes to all stakeholders. Incentives for human resources should be performance-based. It should be understood that the railway is not there solely to afford public services but its also competing with the rest of the companies in the transportation services. Managing a railway is also about maintenance. The company must have its own engineering office that operates autonomously. Like other leading transportation in other countries, the engineering department will provide its services for the railway and ensure that the trail is of good quality status in order for the railway to operate competitively (Patton, 1974). As such, the company can undertake project development including in alignment, location of stations and accurate timeliness in the implementation thereof. As usual, based on policy, salaries and benefits is always performance-based. Added to this, the company should engage itself in rigorous promotion of their services and point destinations to welcome tourism at best. Advertisement or popularization of it services will also enhance its competitiveness and reliability. In railway business, reliability in its services can be assured through reduction of travel delays and adoption of network simulation to get alternative timetables analysis. All stakeholders of Amtrak should understand what it takes to secure this business against possible terrorist attacks and criminalities, too. Security management can be undertaken in close coordination with the police and military offices of the states. Aside from this, the company must strengthen its security measures in the substations to protect its passengers and its property from willful or accidental interest of criminals. It cannot be denied that there are already documented incidences when railways are sabotaged by groups in the name of political ideologies or for simple criminal vested interest. Railway is indeed very important in bridging developments in the community. But the management of the company should be able to accurately communicate to its stakeholders what it takes to maintain, secure, operate and manage a railway system that can be at par with other railway station in the world. As a critical infrastructure of a nation, railway security and its business management deserve to be respected and supported by the communities served. Adopting technology for to ascertain absence of security and operation breach is a much welcome strategy. Plant (2004) pointed that passengers of railways’ suffer security breaches often caused by trespassers thus, also increases the liability of Amtrak to a number of people who died, injured, and whose property are damaged due to trespassers. Hence, it is very important that the railroad industry, in partnership, with government should accord strategic security management to prevent terrorism. Plant (2004) contended that the company will be directly and indirectly involved in mitigating risks and vulnerabilities of passengers by engaging part of its administration in sharing and reporting information on suspected terrorist and other related knowledge pertaining to allied criminal syndicates or organization. This can be further advocated in partnership with the American Association of Railroads (Plant, 2004). The freight railroad network approach can be enhanced via pro-active collaboration with the homeland security. Plant (2004) further opined that Amtrak can utilized the Kingdon's model of security regulation to akin to how the 9/11 provided a strategic opportunity for railroads to adopt security management policy to gain windows and leverage in risk management while at the same time reject or resist possible reregulation. It can also strategize measures about how Amtrak could utilize the network approach via traditional hierarchical-bureaucratic system of the organization strategically designed by Department of Homeland Security. The company can learn and adopt diverse manners and mechanism pertaining to threat or security information sharing (Plant, 2004). References Perl, A. & Dunn, J. (1997). Reinventing Amtrak: The politics of survival. Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 16(4), pages 598-614. Tae Hoon Oum, T. H. & Yu, C. (1994). Economic Efficiency of Railways and Implications for Public Policy: A Comparative Study of the OECD Countries' Railways Journal of Transport Economics and Policy, The London School of Economics and Political Science. Vol. 28, No. 2 (May, 1994), pp. 121-138 Vromans, M. J.C.M. & Dekker, R. & Kroon, L. G., (2006). Reliability and heterogeneity of railway services, European Journal of Operational Research, Elsevier, vol. 172(2), pages 647-665 Gapinski, J. & Tuckman, H. (1978). Amtrak, Auto-Train, and Vacation Travel to Florida: Little Trains that Could," Management Science, INFORMS, vol. 24(11), pages 1109-1116, July. Chen, X., (2010). The High-Speed Rail Development In The Northeast Megaregion Of The United States: A Conceptual Analysis. Theoretical and Empirical Researches in Urban Management, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 5(8(17)), pages 30-48, November. Patton, E. (1974). Amtrak in Perspective: Where Goest the Pointless Arrow. American Economic Review, American Economic Association, vol. 64(2), pages 372-77, May. Plant, J.F. (2004). Terrorism and the Railroads: Redefining Security in the Wake of 9/11," Review of Policy Research, Policy Studies Organization, vol. 21(3), pages 293-305, 05. Read More