Burlington Norhtern- The Ares Decision Essay

The purpose of catch up withfulness in sectors of an economy and dominate administrations is to strike goals and objectives of an organization with ease and at least embody. The supreme purpose of both system is that it should be in control rather than tyrannical mountain (Simons 2000). Systems which atomic number 18 in perfect control anformer(a)(prenominal) than controlling them array profound differences between the two concepts and the ability to come upon their goals with ease. Both the inner and orthogonal environments opposition an organization control structure.There are quaternion ikons that marks the frame form around which the theme of understanding of controls is built (Simons 2000)In the first paradigm is one that enables organization to lodge themselves to their environment knowing what they wish and how to achieve it with ease,. When an organization decides what they want, the process is referred to as part of control system. The process would either be based towards centralization or decentralization. Purpose would be, to effectively adapt to the changing environment.When an organization is able to station and disc everywhere the top hat strategies and instruments of control, it is headed towards success. (pp 2) The booster paradigm of the control system comprehensively covers the activities and behavior of top precaution levels of the organization (described as centering controls), process ( cognitive performanceal control) and task or transactional control at the Grass-Root level (pg 3). The paradigm emphasizes on the integration at the get along levels of the trouble team (management controls)The third paradigm explores the explicitly democratic and participative styles of management due to the growth in the field of information engineering and intimacy management. This has resulted in research on management control and its relationship with strategic management. The paradigm deals with coordinating control systems with self control and designing and implementing systems for controlling the not-so-sincere people. The quartetth paradigm deals with the adaptive theory of human behavior.Simons assumes that human beings want to contribute, achieve innovate and work competently even though they do not want to claim specific external inducements to be so. extension and slaying of adaptive control strategies are quite capable by human beings. This stinkpot be achieved by means of and through mutual consolation with protrude an external force t make them fall in like and work for the organization. Everybody doing a business or government owned organization are looking for growth. Sufficient profit is thus essential to support grocery store expectations.The problem arises when the top management pushes too hard for profit and does not have the right controls in places. In such cases employees whitethorn origin to do dumb things like misusing receiptss or making unethical decisions. In r esponse to the above the telephoner should in that respectfore employ all sorts of controls. It should in all case be noted that if they go overboard in that same direction, the businesses provide risk go internally centrees loosing growth business leader. This forms the basis of our paper in which we shall discuss the variety of forces in a business and to maintain the ultimate challenge.The Burlington Federal Rail Road (BN) was created in 1970 by the merger of four rail roads, Chicago Burlington and Quincy railroad blue pacific Railway, Great Union Railway, and the Spokane Portland and Seattle Railway Co. In 1980 another railroad the ST. Louis-San Francisco Railway co. (Frisco) was acquired and merged into BN- (oligopoly watch 2003). BN decision to delay to deploy the ARES was as a result of perhaps because of the high price tag associated with the system wide application. The Amtra Ares would benefit the Burlington Northern by working an move on train control system .Passengers would benefit with on time proceeds in performance, reductions in running time and continuous communication for change magnitude services reliability. The Ares deployment would cause a vast improvement in the management on safety of trains on any apt(p) rail. It enables the railroad to determine the exact location of train. If implemented ARES bequeath abide an additional capacity on rail livestocks and wear enable trains to be dispatched faster. In addition the technology will also permit timely monitoring of the mechanical conditions of equipment. (Oligopoly watch briefs 2003)The beau monde also faces study competition form other established rails in US and therefrom the intentness profitability depends on porters five forces model for believably profitability. As porter (2005) a business has to understand the dynamics of its industries and securities industrys in revise to compete effectively in the marketplace place. He contends that the competitory environment is created by the interaction of the five contrasting forces acting on a business. (Bowman and Davviney 1997) The original emulous forces as proposed by porter, identified forces which would impact on an organizations behavior in a agonistical market.The analysis concentrate oned on the chase areas- The rivalry between actual sellers in the market The impact of the suppliers on the sellers The potential holy terror of sunrise(prenominal) sellers entering the market. The threat of substantial products becoming available in the market. The force out that is exerted by the nodes in the market. The analysis are well illustrate in table in Appendix I DEGREE OF RIVALRY The club faces major(ip) competition from other railway operators and means of transport. Rivalry determines the uttermost to which the value created by an industry will be dissipated through head-to-head competition.The concentration of alternative means of transport in the function seem to be a component that affecting the effectiveness of the industry. ( highschool Beam Encyclopedi) The nature of the cost of transport should be variable in order to attract ore travelers to use that means of transport. The capacity of the rail should be considered by the management to accommodate more people and goods. They should also focus of market growth to augment competition and this shows their stability. In terms of operation and customer service their mode should be different from other lines in operation. THE THREAT OF ENTRYPorters admit that both potential and existing competitors function average industry profitability. This threat is usually based on the market entry barriers. Entry barriers exist when it is difficult to economically operate for an outside in an industry already saturated with incumbents. The company faces loss threats from other competitors in terms of economics of scale. The benefits derived from such operation is worth noting and can be utilized t o keep the company making other contracts in to industry faces challenges and barriers such as cost of entry, distribution channels and may lack differentiation. THREATS OF SUBSTITUTEWhen a company is faced by the threat of substitute products that pose to its profitability it will depend on the copulation price-to-performance ratios on the different types of services or products that the customer can do work to satisfy his basic needs. The company should know that there are major alternatives to rail transport and that customers can use other means eg. form and road. The threat of switching out should also be discovered as a factor that can affect their competitiveness in that these be are incurred when retaining, retooling and redesigning when a customer switches to a different mode of transport. The company should be sensitive on their determine system which should be in tandem or cheaper with other alternatives. When designing substitutes of their own such as luxury coa ches they should consider if they can do without it other than adding extra costs. vendee tycoon Buyer power influences the appropriation of the value created by an industry/company. The concentration of customers and size determines the buyer power. Other factors depend on how the company has marketed itself to the customers and differentiation of the competitors.The company poses credible threat of backward integration form the travelers who are their frequent customers. They should focus much on their maintaining the customers base through service improvement. The declining number of customers also does not frequent the route, their bargaining power towards the company falls means of attracting them back should be developed. SUPPLIER POWER This typically focuses on the relative size and concentration of companies offering connatural services to the industry participants and degree of differentiation.The ability of a company to rout out customers different prices in line with different in the value created indicates that there is high add of services with low supply power For the supply power of Northern railway to exist the company should Maintain their dent name power in recognizable in the market. Create different values in services offered with different prices. Able to counter any increasing threat of forward integration that wills an increasing number of travelers. go out that the customer is well informed of his services. The merger of the four companies is a soused point they should maintain. Case 2Burlington industry must capitalize on the stability and management control it has instituted over the years it has been in operations. overly begin planning and reporting by business line and should identify activities and functions that led themselves to competition. This is because the company faces a serious problem when it comes to regulating the railway transport. Use of technologies such as ARES should be encouraged by this company. Th e following measures as stated above cn help them to solve this internal problems. 1. commission control They should try to reinforce what they already have accomplished over the years.Substantial structural and run changes can result in increased stability, expense control and an effective program of capital reinvestment. The restructuring effort should- restrict management levels clarify roles played by authority and enhance accountability. Should have regular reporting. Control budget Focus on its core dealings of passenger rail service. 2. Planning and reporting by business line Accountability in their financial transactions is one major factor they should consider. Transparency should be provided along the companies operating profile to facilitate management and god policy decision.In infrastructure management good technology like ARES which can help them control traffic should be deployed. such structures would bring a different dimension which not only focuses on the cost of apiece line of operation but the mission, goals and market opportunities associated with the company. The management accountability should go hand in hand with the performance for each business line and this includes on time performance and customer service. 3. advancement Competition The utimage goal of Northern rail line should be to focus on maintaining a vibrant passenger rail system with a competitive supply of service industry and delivery.This objective should be support through The development of an activity based analytical capabilities that elatify the cost of single business lines. By enhancing the carrying out a comprehensive review and implementation of operating efficiencies. 4. The company should focus on delivering services in a cost effective manner as possible. They should also identify opportunities for revenue advancement and savings. This can be achieved through Embracing innovation, marketing and pricing strategies. Creating flexible work rule t hat will enhance operational qualification while maintaining service quality. Timely scheduling of departure and reachs to reduce cost. point in technology such as ARES that will improve productivity, help solve internal problems and failures. 5. Customer service and time performance. In order for the company to have an even customer service it should focus on the following- Develop a highly skilled, service oriented men which has the capacity to interact well with customers. Create timely dispatch and arrival times which will avoid congestion. Evaluate on areas where improved customer care can be achieved at a lower cost through outsourcing of services. Case 3The future on the success of Burlington Northern rail depends upon its inputs form the high traffic volumes, higher revenues yields while ensuring operating capacity is sufficient to match demand and lowered unit costs. They therefore need or are obligated to address these issues in grater lucubrate superior performa nce will only flow if the company gets expose at managing new care competencies like pricing, capacity, networks and schedules. In addition o making improvements in general productivity the company should have better cost management by addressing this cost disparities in comparison with other transport modes.Burlington should move from a constraint driven environment to a market driven one with an aim of capturing and retaining the market share. This will be achieved if they offer excellent services to customers and ensure that resources are used properly. trouble to comply with such minor issue will push them out of business as they lose market share. Case 4 The advanced Railway electric system (ARES) is important if implemented would address traffic and increase yield through market planning and scheduling technology. The increase operating would lower operating cost.The management science techniques as they are called are being used for queuing, decision, information, statisti cs as well as stimulation, operation research and linear programming. The new approach for planning and re-configuring rail networks are opening up key opportunities and major savings. To maintain a competitive advantage the company should aim at developing high press forward rail networks and advanced scheduling though ARES a key factor in matching out to demand. The increase in demands calls for an effective system to build schedules to strike the changing demand, both constraint driven and market driven criteria.The system makes it possible to choose between all alternatives and get down best arrangements tailored to meet the organizations conditions. If Burlington does not implement ARES it is faced with and imminent threat on traffic as the railway scheduling is becoming more and more complex. They will not be able to meet the changing demand and because of this they cannot maximize profits as there will be increased operational costs. Being able to find the best technology like ARES in such a difficult cream environment is a strong competitive advantage.