The Thai State Railway Authority (RSR) is a public enterprise in Thailand. As an organization its performance is subject to the argument of contingency theorists that operating efficiency is dependent upon various factors both in the internal and external environments of the enterprise. Most of the internal factors are those that organization theorists in the developed world have identified such as goals and objectives, resources, and organization structures. Meanwhile, external factors such as political, economic and social conditions of the society are regarded as indirect factors that have less importance than do the internal factors. Scholars of the developing world have argued that political, social and economic conditions in the society are as important as internal factors. These factors may have a very significant influence on the enterprises and on the society as a whole. Consequently, public enterprises in developing countries always encounter the same problem of operating inefficiency. The RSR is selected as a case study because of its advantages over the other public enterprises in Thailand in terms of size of operation, length of service, and data availability. For the purpose of this project, data are collected from 1960 to 1984 for longitudinal analysis. The methods of analysis are divided into two major sections: simple regression testing and multiple regression testing. The principal component technique is used in both testings to reduce variables to a smaller number for further analysis. The simple regression tests yielded mixed results, but the multiple regression tests resulted in significant relationships. The three new factors derived from the factor analysis technique were labeled as "the organizational pressures," "the socio-political downturn," and "the public criticisms." They explained 84% of all the variance of operating efficiency. The other 16% was the effect of other factors including the management skills, which were excluded from this analysis.