International Journal of Advanced Studies (Oct 2019)
CORPORATE MANAGEMENT IN RAIL TRANSPORT
Abstract
Background. Corporate governance in the context of reforming large state-owned enterprises into commercial corporations has led to the need to develop new methods and approaches in the activities of large transport companies, in the management of all operations / processes at the unit level and in the organization as a whole. Particularly significant changes have been made in rail transport, where the structure is being gradually reorganized, and recent changes have involved the transformation of strategic management based on the functional-cost approach (with the allocation of Directorates that manage the individual functions and costs performed by the cost centres under their control). Strategic management in the Corporation was the object of research. Materials and methods. To assess the effectiveness of strategic management, formal logic, systematic approach, questionnaires and analysis of statistical data were used, which allowed to identify the following problems. Results. The developed management strategy aimed at improving the manageability of units, improving the relationship between the levels of the hierarchy of the management system and cost optimization had a negative impact on the development of units. Discussion. In our opinion, this is due to the inefficient distribution of cash flows between the center and the departments, which, with insufficient funding, led to increased losses, overtime at relatively low levels of remuneration of basic workers, unproductive costs and downtime in the cost centers. This situation, in our opinion, requires the implementation of certain changes, primarily through strategic management by the method of “bottom-up” and create structural divisions in the field on the valuation of cost accounting of material-technical basis of each specific cost center and their coordination in the framework of the overall corporate budget. This situation will allow the divisions to develop steadily and improve their socio-economic development. Conclusion. In General, it is possible to note the rationality of the application of the functional-cost approach in the strategic management of the railway Corporation. At the same time, special attention should be paid to optimizing the distribution of cash flows between the links of the Corporation.
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