Privatization of Rede Ferroviária Federal, Sociedade Anonima: The People Aspects

            
 
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Case Details:
Case Code : HROB139
Case Length : 08 pages
Period : 1992-2000
Pub Date : 2011
Teaching Note : Not Available
Organization : Rede Ferroviária Federal / Sociedade Anônima
Industry : Transportation / Railways
Countries : Brazil

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Excerpts

About RFFSA

During the 19th century, the rail transport system of Brazil was in a fragmented state with most of the railway companies being owned and operated by British and French concessionaires. To ensure operational efficiency, the government nationalized the rail transport system in 1957 and formed Rede Ferroviária Federal Sociedade Anônima (RFFSA), a freight rail transport company, by amalgamating 18 independent railway companies...

Privatization and Workforce Restructuring

In 1992, the RFFSA was included in the Programa Nacional de Desestatização, ensejando studies, promoted by the Banco Nacional de Desenvolvimento Econômico e social (BNDES is also referred to as Brazilian Development Bank)...

The Initiatives Undertaken

The RFFSA chartered a staff reduction program that included downsizing of 18,000 employees within three years, training and outsourcing to improve staff productivity, and providing severance payments in order to minimize the social cost...

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

Payoffs of the Incentive Programs

The staff reduction program had positive results. The early retirement program introduced by the company proved successful with more employees opting to retire rather than go in for voluntary separation incentives (Figure II for workforce reduction plan vs reduction implemented as on 1999)...

Epilogue

Many experts opined that downsizing was important in public sectors that were mired in red-tape, bureaucracy, and overstaffing, especially in developing nations. However, one of the major hurdles to downsizing in the public sector was the high costs involved in staff reduction...

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

 

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