The fundamental change that was observed in the company was the ways in which a change was observed from the state-owned enterprise to a private enterprise. The objective of the government was to ensure that the shareholders of the railway transportation were responsible enough to ensure and secure the safety. However, in the event of privatization, these issues were overlooked owing to the impact of shareholders. The company’s employees and the management style were attuned to ensure that there was maximization of shareholders investment. The issue of shareholder maintenance was given prime importance rather than security. This was the main factor that leads to the detriment.
A change was initiated in the goals of the company. The ultimate goal of safety and security was overlooked. The goal flexibility principle is a theoretical principle. This was applied was changed in this paradigm. It is comprehended that the companies need to change their operational procedures in order to meet the needs of all the shareholders (Clarence, 2003). However, there is the vague analogy of not meeting the real sustenance factors. The company needs to retrospect and look into all the operational procedures in order to meet the needs of the situation. There are multiple goals that need to be fostered. However, there must be attractive incentives where there can be distortion in the resource allocation to create the different goals. It was initially reported that the Network Rail issue created the company to pay £733m as compensation for the Hatfield crash. However, it was found that promise of a pre-tax profit of £199m for the year 2001 was provided to the shareholders as an incentive (Evans, 2007). The company had to reply on the funding sources from the government to pay dividends to the shareholders (Evans, 2004). It can be alluded that the interest of the shareholders seems to take primary priority. This is owing to the pressure of financial stresses. It seems that the Network Rail really did not have a chance to constantly maintain the standards required for the safety of the stakeholders. There must been enhanced training provided to the staff. This must have been done to ensure that the train engineering or inspection needs to address the survival challenge (Martin, 2010). It is evident that there must be a balance between maintaining the interest of all the stakeholders. However, certain imperative factors such as safety should not be overlooked in the process of maintaining balance. The company needs to provide more training for the staff and continual performance evaluation standard to ensure that the stakeholder interests are maintained in this process. The company needed to have better safety standards in order to prevent bigger scandals and accidents in the future. Lack of this proper governance and nebulous goals setting had caused all the people involved with the company to be impacted in a variety of ways. The next factor that causes a scandal is the prevailing environment. These have been detailed in the following.
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