Organizational Policy Essay

Submitted By Iwuchukwu1
Words: 4235
Pages: 17

An Effective Case Analysis Process

Case Name ______Union Pacific _______ Page _383_

1. Gaining Familiarity a. In general - determine who, what, how, where, and when (the critical facts of the case). b. In detail – identify the places, persons, activities, and contexts of the situation. c. Recognize the degree of certainty/uncertainty of acquired information.

Founded 1862
30,000 miles Western US, 2/3 or U.S., population growth but lower density
Bulk commodities “golden goose”
Competitors BNSF, CSX, NS

Drivers Raising fuel costs 2007 recession increased revenues due to fuel surcharge RR industry heavily regulated EPA pollution emissions reductions Unionized labor force, Railway Labor Act of 1926 Railway Retirement Board (Fed, Executive, like SSN) 9/11 Department of Homeland Security Fuel efficient locomotives and High speed rail Low levels of globalization – domestic economy NAFTA increased trade between US and Mexico/Canada Rising fuel costs passed on to customers through fuel charges

Class I RRs – economies of density, long hauls, large amounts of cargo and reduced interchanges of traffic.
Distributed Power (DPS) increase length of trains, improved fuel economy
78.3% of revenue in top 4 (BNSF, UPN, NS, CSX)
Not attractive for new entrants

Customers are considered to have high buying power Intermodal transport Agriculture Automotive Chemical Energy firms Industrial

Industry trend is toward cooperation
Railroads have a common carrier obligation includes transport and liability of hazardous materials


Most significant competitors are trucking companies 60 hours coast to coast Trucking infrastructure subsidized by government
BNSF- geographically direct competitor to UPN
CSX – east of Mississippi
NS – east of Mississippi primary competitor of CSX
Other competitors are river barges, ships and pipelines


Formidable financial resources
43,000 employees
26,083 miles of track
Rail equipment (figure 4)
Facilities – Harriman Dispatching Center in Omaha, Intermodal terminals and classification yards including world’s largest Bailey Yard in North Platte, NE
Technology – transaction based processes lend to good use of technologies
UNP employs a CAD III system real time location of trains and locomotives

UNP Culture of high ethics, work culture that values people and relationships

Leadership – moderately heterogeneous top management

Organization is decentralized helps build local relationships.

Union Pacific Route Map – (Wikipedia)

2. Recognizing Symptoms a. List all indicators (including stated “problems”) that something is not as expected or desired. b. Ensure that symptoms are not assumed to be the problem (symptoms should lead to identification of the problem).

-Heavy regulation, both locally and federally
-New expenses through 2015 associated with PTC compliance, estimated to total $250 million in 2011 alone; this threatens to reduce net income by 1.5%
-BNSF, a close second in terms of revenues, has more miles of track than UNP and threatens the market leader's dominant market share
-Financial liabilities associated with the common carrier obligation, transport analysis, and route planning for the transport of hazardous materials
- Fuel-driven pricing advantages only seem to resonate with the business community during severe economic conditions; when the economy recovers, the market returns to previous modes of shipping
- Failed efforts to establish cooperation between freight and passenger rail operators
- Difficulties coordinating construction of new rail lines needed to expand existing systems
- Competition for coal accounts
- Active, complicated, and congested system of rails
- Advanced, high-service truck lines offering expedited delivery can attract time-sensitive shipments; trucking accounts for 85% of freight shipments and maintains