Action steps for African Business Schools
2011-05-24 13:56:36 UTC
Case Study: Transnet: the state-owned South African transport and logistics group: Maria Ramos' turnaround strategies
Title
Transnet: the state-owned South African transport and logistics group: Maria Ramos' turnaround strategies
Author
Chaudhuri, S; Hussain, S
Pages
7
Product Type
Reference #
306-648-1
Teaching Note
Institute
Setting
South Africa
Year
2006
Keywords
Public sector enterprise; South African railways; South African Railways and Harbour (SAR&H); Metrorail; Overstaffing; Spoornet; Restructuring strategies; National Ports Authority; Spin-offs; The Blue Train; Turnaround strategies; Union troubles
Summary/
Abstract
Abstract
Transnet is a transport and logistics company controlled by the South African government. Started in the late 1850s as a railway system, it got company status in 1990. Being a government organisation, it suffered from inefficiency, bureaucracy and over staffing. In January 2004, Maria Ramos took over as the Chief Executive of the Transnet group. She implemented a four-point turnaround strategy for the revival of Transnet. She is overhauling South Africa's largest transport company, which controls the country's rail and port operations, divesting non-core assets, including South African Airways, embarking on a major capital expenditure programme and improving customer service. Profits were up 57%, to US$1.3 billion, for the fiscal year that ended 31 March 2006, on a revenue of US$4.1 billion. The teaching objectives are: (1) to understand the problems affecting the financial health of Transnet; (2) to analyse the strategies implemented by Maria Ramos to turn Transnet around; (3) to debate whether disinvestments and laying off employees are always the most useful tools to revive a company; and (4) to understand and analyse how a government-controlled company, if enthused and imbued with professional management, can be turned around into a profitable venture.
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