Organization Development

EXECUTIVE SUMMARY

Pakistan Railways (PR) is the state owned railway company of Pakistan. It is a large organization
under the administration of Ministry of Railways. Pakistan Railways provides an important
mode of transportation in the farthest corners of the country and brings them closer for
business, sightseeing, pilgrimage and education. Its Current Chairman is Raja Shahid Hussain.
Pakistan Railways has been facing problems and is now on the verge of bankruptcy with budget
deficit of billions, eroding market share and corruption scandals. At the time of independence,
both India and Pakistan, inherited the Railway Network laid down by British. While Indian
Railways has emerged as a highly profitable organization, Pakistan Railways is struggling to keep
itself running. This report summarizes how organization development can help Pakistan
Railways revamp its image and goodwill. It is based on facts and hypothetical situations created
by the group members to evaluate the applicability of OD interventions. The data is collected
from various sources including books, newspaper articles and internet. The report provides
introduction of Pakistan Railways, its history, organizational structure which is then followed by
how the concepts of entering and contracting can be applied to this case. Diagnosis of the
organization has been done with the help of data collected and hypothetical situations. Based
on the diagnosis, OD interventions have been suggested for Pakistan railways which include
techno-structural interventions.

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Introduction of PAKISTAN RAILWAYS

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. (pakistan railway)

Organizational Structure

president

board of executive regional

Manager
director board cheif

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. (ministry_of_pakistan
railway)

The following officers also report directly to the Secretary Railways:-

a. General Manager (Operations)

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b. General Manager/Manufacture and Services

c. Federal Government Inspector of Railways

Pakistan Railways at this time is a vertically integrated organization and has four business units:

1. Infrastructure Business Unit

2. Passenger Business Unit

3. Freight Business Unit

4. Manufacturing and Services Unit

Structural Design
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 leaner and more 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. (ministry_of_pakistan railway)

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. (pakistan railway)

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Condition of Employees: Pakistan Railways has about 90,000 employees consisting

of staff and officers as of 2008 which is more than required. Employees are taking salaries
without working and sitting idle at home. More than Rs.20 billion is allocated for salaries and
pensions. Employees have very strong unions so it is difficult for Government to fire them.
(dawn.com, 2013)

SWOT ANALYSIS
Strengths
 Potential customers
 Human resource
 Monopoly
Weaknesses
 Leadership
 Wastage of time
 Over emplacement

Opportunities
 Demanding customers
 Al ready setup tracks
 Low cost

Threats
 Uncontrolled loses
 Expenditures are high
 Customer move to alternate options

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PROBLEMS FACED BY PAKISTAN RAILWAYS

There are five major problems Pakistan Railways is facing:

 Shortage of advanced locomotives

 Huge Losses & Budget Deficit
 Mismanagement
 Decreased Market Share
 Corruption. (dawn.com, 2013)

Shortage of Locomotives:
The Pakistan Railways has a total of 546 locomotives but only 290 are on track while the rest
are out of order. Similarly, 70 per cent carriages are out of service. In a report submitted to
Railway Ministry, it has been disclosed that as many as 70 locomotives are awaiting spares at
Pakistan Locomotive Factory, Risalpur since 2004. (pakistan railway problem, 2010)

Huge Losses & Budget Deficit

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. (pakistan
railway problem, 2010)

Mismanagement
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

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Railways need 40 – 50 locomotives annually to run its operations effectively. However, during
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. (pakistan railway problem,
2010)

Decreased Market Share

Over the years, Pakistan Railways could not maintain its share in the country’s 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. (pakistan
railway problem, 2010)

Corruption
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 number 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 PRACS-
Pakistan Railways Advisory Commute Services is responsible for this mess.

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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
bosses and private contractors deposit the funds in private accounts.

In short Pakistan Railways is a classic example of bad governance, poor policies, corruption and
mismanagement. (pakistan railway problem, 2010)

“In the light of above problems the Railway Board decided to hire external OD

consultants to design interventions that can help in turning around the organization

into a successful reform change.

ENTERING & CONTRACTING

First External OD practitioner has been approached by the Railway Board to help Pakistan
Railway and solve the problem of this organization. As OD consultants for Pakistan Railways,
the first task for us is to understand the current structure and the issues of this organization. A
meeting with the Chairman of Pakistan Railways, Raja Shahid Hussain and other members of
Railway Board was conducted to discuss the organization’s issues like huge financial losses,
Decreased market share, inefficient operations and Corruption.

Key Clients
In case of Pakistan Railways, our main client is the Railway Board. Other important key clients
include GM Railways, Addl. GM of each business unit, and representatives from Railway
Employees Union, Railway Workshop Worker’s Union, and Association of Station Masters etc.

OD Process
To clearly identify the problems faced by Pakistan Railways, we recommend the OD process
with following key steps:

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Selecting a design team: A team of 8-10 individuals will be selected which will include key
policy makers for Pakistan Railways, representatives from various functional areas of the
organization and worker’s unions.

Diagnosing: Once the team is selected a joint diagnosis of the organization will be conducted
which will include understanding organization’s current strength and weaknesses, growth
opportunities, organization culture and values etc.

Action Planning: The first key output of the team is a 5 year action plan that describes where
Pakistan Railway should move to, key activities and milestones, assigned responsibilities for
those activities, and assumptions that need to be monitored.

Implementation, Monitoring & Evaluation: As the plan is implemented, new information,

changes in the environment and other issues always arise that need adjustment. In this phase
the OD consultants along with the design team will monitor the implementations and collect
feedback to evaluate whether action plan is on track or not and will fix any deviations. Also
design team will conduct formal evaluation processes and discuss their learning about
organization structure and change.

Time & Resources

As OD consultants, we will provide consultancy services up to and including development of
action plan. Additional time beyond that time can be contracted. Apart from the consultancy
fee Pakistan Railways will also be responsible for all the direct expenses for the research. The
complete process including diagnosis and development of action plan might take six to eight
months subject to:

-Access to key information and people.

-Commitment from PR( Pakistan railway) management.

-Access to sensitive information like HR records, PR policies, PR contracts etc.

-Prompt response/feedback from key clients. (pakistan railway-the life line of the country)

DIAGNOSIS OF PAKISTAN RAILWAYS

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Models represent the simplifications of reality and therefore choose certain features as critical
conditions existing in Pakistan Railway organization these models helps to create a clear image
of Railway organization. We are refer basically three main models which represent the Railway
Organization structure, current strength and weaknesses, growth opportunities, organization
culture and values and work environment of the Railway.

Diagnostic Model
Every organization based on Open System Theory

Inputs consist
of human
resources such as information, energy and materials coming into the system. Inputs are
required from the system’s external environment. Transformation processes of converting
inputs to outputs and finally output are the results of what is transformed by the system and
sent to the environment affectively.

We are selecting the model of Burke-Litwin Causal Model. This model has motive that how to
move intentionally to a desirable state and make the dynamic organization for create an
effective image in the eyes of the society.

Current Affairs of Railway:

Today almost all government corporations of Pakistan are in worst shape but Pakistan
Railways is in really bad condition and costing country huge loses every month. For
more than a century the railroad was the dominant form of land transportation in much
of the world. It was, and still remains the economic backbone of a country. Pakistan
Railway faces various problems some are as follows:

 Mismanagement
 Corruption
 Shortage of advanced locomotives
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 Lack of technique-oriented staff

 Downsizing

The Burke-Litwin Causal

External Environment affects on Railway:

 Huge financial losses
 Decreased market share
 Expenditures are high.

Main features to diagnose Railway Organization:

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First constantly diagnose the whole structure, work environment of Pakistan Railway
Organization.
Second what technology should be used, how to use and what further technology
should be installed for further innovation in internal environment.
Each employee/people/Actors must know about their task, what and how to perform in
odor to provide productive output.
Each and single activity makes affects on other activities which are functioning in a work
setting so we have responsibility as a OD consult to focus each factor for creating a new
change and through diagnose identify the main problem or lacking for maintain the long
lasting change.

Model Analysis:

 The main problems existing in all over Railway organization which we were diagnose are
that employees motivational level are the main theme of these whole scenario which
affects the factor of performance.
 All factors are the interrelated with each other if Pakistan Railway setup their mission, goals
and strategy clearly that what they want and how we achieve desired goal and what they
want to get from employees performance.
 The leader plays a dynamic role to boost the organization from bottom to up leaders should
know about mission and strategy, culture, system and management practices because
leader is only a person who guide and lead the way to employees that how and what to
perform efficiently.
 Each and every individual have some needs and values before assigning any task leader or
management should develop the reward system for motivating and appreciating the
employees to perform outstanding and provide various productive outputs to the
organization.

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 If the employees are satisfied with their jobs they automatically give outstanding
performance on their job and they start utilizing their abilities and skills in a right way
rather than other activities.
 Employees performance be productive through motivational level increases than
employees will become more productive.
 If employees performance are satisfied automatically the image of Pakistan Railway

services in the society will be become good and make the best images in the eyes of the
Pakistan’s economy as well as Railway customer.
 Employees are the assets of the organization employees are only main actors who act
according to their values, needs and satisfaction on individual basis that’s it’s the
responsibility of management or leaders to focus those motivational factors that how

employees will be motivated and perform outstanding on the job.

 This model creates the image that all factors have strongly affects on performance that’s
why as a consultant we totally focus on performance of employees that how reward
system should be develop by the organization in odor to satisfied intrinsic and extrinsic
values of individual.

FEEDBACK:
Feedback is the outcome of diagnosis. For the desired result several meetings needs to be
conducted with clients to determine the required OD intervention for Pakistan Railway. To
resolve the current crises it is necessary that consultant and clients may agree on a joined
venture.

If positive energy created between employees and valid information transfer to the right
person at the right place, bring transformational change from lower to high level results the
desired outcome.

TECHNOLOGICAL CHANGE:
However through proper use of technology in different areas like computerized seat
reservations, proper trains schedule, up to date customer care service, time management,
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check and balance, track management etc can bring positive output. Services should be
providing on online system to customers and internal environment setting as well.

PRIVATIZATION:
Pakistan Railway can privatize some of its manufacturing units, locomotive factory, carriage
factory so that through proper management all units work properly and level of corruption
reduces. In Privatization Company they are maintain proper check and balance on employees,
focus and evaluate the job performance as well that how they provide productive output to the
Railway organization. Some departments if becomes privatize it is beneficial for Railway and
environment as well and create an outstanding image in the eyes of the customers through
performance of organization.

EMPLOYEES:
If employees of Pakistan Railway are provided with benefits, incentives and their level of
motivation is high they will get satisfy from their organization. Each and every employee should
perform his duty which is assign to him according to his post. Pakistan Railway should adapt the
structural change which will help in eliminating unskilled and non productive staff through
audits, layoff and buyoff packages. Pakistan Railway should develop the compensation plan for
employees to motivate their performance level and satisfied their all basic needs and want.
Compensation plan for employees should be like that:

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EMPLOYEE
SATISFACTION

ENVIRNMENTAL
MANGEMENT
PHILOSOPHY

INTERNAL
ENVIRNMENT

COMPENSATION TAXES
ECONOMIC
FACTORS

INFLATION

COMPANY
PROFITABILITY

CONDITIONAL
FACTORS SUPPORTIVENESS
OF COMPANY

KIND OF
INCENTIVE ON JOB
PERFORMED

ACTION PLANNING
After a careful diagnosis, the results were feedback to the main clients. Several meetings were
conducted with key clients to determine the type of OD interventions that will most
appropriately suit the needs of Pakistan Railways. The clients and consultants jointly agree that
Pakistan Railways need a mixture of techno-structural and human resource management
interventions to recover from the current crisis.

INTERVENTIONS FOR PAKISTAN RAILWAY:

INTERVENTIONS:

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To improve productivity of Pakistan Railway, we as an OD consultant can do techno structural

interventions and human resource management interventions. We are selecting these
interventions because we observe that by doing technical interventions and human resource
interventions we able to bring new technology in PR and we recruit and select only skilled and
job match candidates first and then we would continuously observe their performance and
talent level and would given financial and non financial rewards to motivate their performance
level and increase their production level. And involve them as much as possible in decision
making and empowered them for employee involvement and committed them in organization.

TECHNOSTRUCTURAL INTERVENTIONS:
1- STRUCTURAL DESIGN:
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.

2- Restructuring Organizations
We are focusing upon how to divide the overall work into subunits and how to co-ordinate
these subunits for task completion. By this we are capable to set our mission and vision more
clearly and also make aware of this transparent knowledge to our clients and members of the
organization.

3- REENGINEERING
Pakistan Railways have great potential for growth. 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:

 Seat Reservations
 Freight Management
 Asset Management
 Track Management
 Electric Billing
 Timetable

Pakistan Railways should be privatizing some of its units like The Locomotive Factory, The

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Carriage Factory and other large manufacturing units. Only privatization of this sector is the
solution of problem because currently government of Pakistan has to bear the huge losses
monthly.

4- 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 organization’s financial troubles.
Departments like Railway Police, Stores & Purchase need to be abolished.

5- EMPLOYEE INVOLVEMENT AND COMMITMENT

By involving employee to our organization we are capable to bring successful interventions and
low resistance from organization. We have to increase their commitment by information,
knowledge and skills, sharing of decision power with the union and its members and rewards
are manipulated to increase employee participation and empowerment in organizations. It
increases focus on the improvement of organizational processes and customer satisfaction.

Human Resources Management Interventions:

1- Goal Setting
By setting goals for all members of organization we would able to do more productive work in
Pakistan railway. Employees should be goal directed towards organization mission and vision.

2- Performance Appraisal and Reward Systems

Line managers should compare their subordinate’s actual performance to the standards that
have been set. They should set appropriate task for all their subordinates like: Role

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requirements (Expected outputs and outcomes), Objectives in the form of targets and
standards of performance, Performance measures and indicators, Knowledge, skill and
competency, Corporate core values or requirements, performance development plan and
continuously monitor their performance, skill and mental level and give feedback and appraise
them to bring better commitment of employees towards organization’s goal and set rewards
for them (intrinsic and extrinsic rewards).

3- Career Planning and Development

Management should pay attention for their employee’s career planning and development
opportunity to satisfy them and retain best employees in organization. Management should
arrange workshops, seminars, on-the job and of-the job training programs and job rotation to
satisfy all employees and managers to retain in Pakistan railway.

4-Managing Work Force Diversity and Employee Wellness

We should consider organization basic culture and the working condition which best suits for
them and eliminate gender difference and biasness among employees and make good
compensation plan for employees.

All in all, we would first have to recruit best job match and skilled
candidates and downsize all corrupt and old age employees who don’t have ability to
learn something new and do high resistance to change. We would bring technology
to our organization and train all employees. We would do gradually reform change
and guide all our stakeholders and make them with us to reduce resistance level.
We would make our information transparent for our employees and make them
highly involve in decision making and provide them chance for giving suggestions and
give new ideas for successful interventions to make them feel like that they owned
this interventions and feel part of the organization.

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RESISTANCE:
 Pakistan Railways staff faced severe resistance in the initial phases of privatization and
deregulation. The media aligned with big capital in its assault on workers’ rights and
credibility. Then there is the age-old colonial and bureaucratic mindset, which has always
said that the workers never work.

 The political parties have attributed labor wings towards the Pakistan railways. This influx
has definitely impacted the unity of railway workers and has historically tried to undermine
the just fight of the unions. This is because every party has its own agenda and these wings
work according to those agendas.

 If the Pakistan railway privatized than the private party will be responsible to bring
substantive changes to value adding in the service to be provided to passengers, Pakistan
Railways would provide locomotives and coaches with the standard fitting and amenities.

 Pakistan Railways had to bear the expenses of Pakistan Railway Police (PRP) from its own
budget and resources.

Conclusion
Pakistan Railways have great potential for growth. . Pakistan Railways can improve the
performance of its various functions and department through proper use of information
technology. Pakistan Railways should be privatized because this is one solution of problem
because currently government of Pakistan has to bear the huge losses monthly. Pakistan railway
have some financial problems due to over staff. It’s should be mange according to their needs of
employee. Pakistan Railways can create networks to operate some of its route for privatized
trains. So, to solve these problems as the OD consultant we use techno structural
interventions and human resource management interventions. so with these
interventions many problems are solved in PR. implement on these intervention. once
the change have been made then can be made Organization Development & Change

Recommendations
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Firstly employee needs motivation level increases then employees will become more
productive.
The Rail services should be improved and must be provided to the Passenger in time.
The HR department of the Pakistan Railways is not playing an effective role. Proper
arrangement should be made for professionals by issuing detailed job description and job
specification to get maximum profit from them.
The salaries of the employees should be reasonable.
To restructure and modernized Pakistan railway under the present administration.
The present situation of Pakistan railway may not change unless corrupt high ups are
removed, suspended and dismissed from the services.
Pakistan Railway should develop the compensation plan for employees to motivate their
performance level.
Focus and enhance the productivity of organization and expand their abilities in to a
sustainable and productive market in an ethical manner.

Bibliography
(n.d.). Retrieved from
http://en.wikipedia.org/wiki/Ministry_of_Railways_(Pakistan)

dawn.com. (2013, 18 01). Retrieved 04 28, 2013, from www.dawn.com

government-people-places. (n.d.). Retrieved from

www.friendsmania.net/forum/pakistan-government-people-places/25171.htm#ix
zz2RhObsT
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ministry_of_pakistan railway. (n.d.). Retrieved from

http://en.wikipedia.org/wiki/Ministry_of_Railways_(Pakistan)

pakistan railway. (n.d.). Retrieved 4 28, 2013, from www.wikipedia.com

pakistan railway problem. (2010). Retrieved 04 28, 2013, from pakistan railway
problem: www.friendsmania.net/forum/pakistan government-people-places

pakistan railway-the life line of the country. (n.d.). Retrieved from organization
development and change: http://www.slideshare.net/Marwed/pakistan-railways

http://www.privatisation.gov.pk/Transport/Pakistan%20Railways.htm

Article “Corruption in Pakistan Railways” published in Pukhtoonistan Gazette on

Friday, 26 November, 2010

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