Strategy Cost—How Does Organization Structure Drive the Cost of Urban Railway Transportation?

As an urban public transport, city railway transportation is far more concerned with its aggressive development in China, especially in recent years. Almost every local government has special interests to own one or more urban railways running across the city, but when they begin to consider the cost of planning, building and operation urban railways, they will find what a black hole they are facing. As a matter of fact, the reasons that result in this situation include two aspects: how to determine the cost and the quantity of the cost. This article will start with the comparison of opinions from different theories about strategy cost, which is the core element of this article, to analysis of the cost of the urban railways. Then different cost drivers in different levels of the life span of urban railway transport will be introduced and how organization structure influences the cost of urban railways will be illustrated by a following mathematical model.