An Organization in the railway industry needs to be changed and adapted along with environmental changes of transportation. We have to make a comparative study of two cases of Japan and Britain for the successful organizational reformation in the privatization of railway. Each government made a policy of separative privatization in the railway s industry for the efficiency and productivity, to market competitive system, to improve services, to secure safety and public interest, and to make a profit. In Japan, the organization of railway was divided into 6 TOCs regionally with integrating infra and operation and 1 FOC nation-wide, establishes several special institutions. In Britain, the organization of railway was divided into about 100 small institutions with 25 TOCs, 6 FOCs, 3 ROSCOSs, 13 BRISs, Railtrack, and especially adopt franchising in the sector of TOC to promote competition and improvement of services by make short-term contract with TOCs. Between of them, there were many differences, such as policy target, plans of competition, governmental method of regulation and supervision, and effect and evaluation of privatization. So, this study is focusing first on the comparison of plans and effects of railway s privatization, second on finding out the correlation and mechanism of similar and different facts - method of organizational separation, shape of organized market, business method of privatized enterprise, regulation and supervision of government - on the basis of political․ideological logic, economic logic, organizational logic. There were some special features in there. First, there was difference in railway market between Japan and Britain. In Japan, regionally separated JR did compete with a private railways and automobiles, so had to make and develope services better for competitiveness, made many investment in improving its infras and services. In Britain, TOC had powers of monopoly, so did not need to compete services with other TOCs. Second, franchising had self-contradictions. it reduced possibilities of entrance into railway market and induced the monopoly of track by one selected TOC. it also had possibilities to restrict the development of services within the contract with government in open competitive bidding because of pursuing more profits. Third, franchising also made another problem. Franchising permitted short-term operations, prevented TOC from investing a big project with large capital, forbade the subsidiary business and reduced a subsidy gradually. So TOCs did not have long-term project and did not improve the level of services, but pursuing short-term business project like a raise of fare. Fourth, government made a mistake in controlling the balance of railway market. It intervened railway market so to make confusion in principle of supply and demand. TOC resided within regulation and supervision of government, avoiding responsibilities of market obligation such as principles of supply and demand. Government did not make TOC observe the principles of market competition throughly. Many elements made a difference in results of two cases. Although government had a good idea and ideology such as neo-liberalism doctrine, it failed to make a privatization of railway without following many principles of economy.