Foundations of Management and Organisation

Is rationalization a desirable strategy for managing and organizing Junction Hotel in the current economic climate? Discuss your answer with reference to the topic of organisational change. Rationalization is an organisational concept that aims to increase a firm’s productivity, as it grows in size, through a reorganisation of its current system of operations. Throughout this essay I will be referring to the Junction Hotel case study along with other articles and critiques of the rationalization theory to determine how suitable rationalisation is as a solution for the problems facing Junction Hotel within the current economic climate.
Throughout the 19th century Frederick Taylor, a mechanical engineer, was one of the pioneers of the organisational management approach to business. He was renowned for his theory of scientific management, which focused primarily on increasing the physical efficiency of the individual worker. “The principal object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity for each employee” (Fredrick Taylor, 1911, pg. 09).
One of Taylor’s most famous studies involved designing shovels that could load the most efficient amount of material (21 1/2lbs) consecutively to save workers time and, in turn, increase productivity. Having a clear and structured command over workers allowed Taylor to experiment with efficiency, which was something he saw as paramount to having a successful workforce of employees. Relating this specifically to the Junction Hotel case study, it is apparent that there are some clear organisational problems that could be resolved using a more rational work design, such as the methods introduced by Taylor.

Primarily there is a lack of any concise structure between the task expectations of the employees. The job roles of the General Manager, Deputy Manager, Head Chef and Company Accountant all contradict one another making it further unclear to the rest of the workforce who they should report to as their boss. A rational organisational solution to this problem would be to introduce a more modern, bureaucratic style of management. “Though earlier societies had organisational structures, they were not nearly as effective as the bureaucracy” (George Ritzer, 1996, pg. 09).
This can be implemented through the use of computer analysis of such things as employee timetables, busy periods, and popular items among customers. Specifically, organisational charts, which provide a clear formation of different job roles that are allocated in a hierarchy of either horizontal or vertical structure, would work effectively in restoring order and control. A hierarchy is most effective in assigning control to different regions of management in order to maintain a more specific level of control over a growing workforce.
For Junction Hotel, this would be most appropriate for the separation of the different working areas, which, at the moment, are all under the control of the Deputy Manager. Instead, each area should be operated by group of employees that specialise in that service. From here, each section of workers can then have their own specific manager to report to for daily duties. This way the general manger can take more of an active role within the organisation relieving some of the pressure off of the Deputy Manager and allowing the Head Chef control over his own workforce.
This would provide specific segmentation to each individual work force, allowing for a more direct focus from each manager. This would be the most appropriate way of applying a rational, bureaucratic work design to Junction hotel without having to sacrifice any quality of service. However, if Junction Hotel want to remain a competitive company within the hotel industry, some of the personal relationships between the cleaning and reception staff and the general manager may have to be limited in order to increase efficiency during the working day.
Taylor made it clear that he never saw the benefit of a social relationship between workers and managers. Eventually, he became so focused on increasing productivity that he began to see his employees as just another ‘cog in the machine’ of the production process. As time went on, employees would try and use this to their advantage by demonstrating their ‘asymmetric knowledge’. After years of practising their trade the workers would be able to determine the amount of time it would take to complete a specific task before they began it.
With Taylor’s approach to his employees being so cold-hearted, it was often the case that the employees would exaggerate the time they needed to complete a task so as to insure they weren’t being over worked. This is an example of some of the social problems that Taylor had to face due to having such a strong rational approach to work. As a result, Taylor quickly began gaining criticism. Max Weber, a German sociologist, was one of Taylor’s biggest critics. Weber summarised Taylor’s scientific management theory as an ‘iron cage’ environment leaving workers trapped in working conditions that left them feeling dehumanized.
As a counter belief, Weber explained that promotion by merit with career opportunities for employees was a superior option to the traditional hierarchy of power. However, Weber was aware this would not always be attainable in a realistic world. “Weber knew the bureaucracy he was designing was an ideal type and that it could not always be perfect” (French & Rayner, 2011, pg315-316). Weber developed the belief that there is no one perfect method of managing an organisation. Organisational change occurs when a business has a need to alter it’s current system of operations.
Social, political, technological and economical factors are the four main external aspects that can influence change within an organisation. “Not only are there different types of change, which manifest themselves in different organisations, change also appears at different levels of an organisation” (Barbara Senior, 2001, pg. 57). Specifically, organisational change relates to the larger changes within a company, rather than just small adjustments to products or branding.
“Organisational change refers to organisation-wide change rather than to small changes such as adding a new role or making minor modifications to a process. ” (French & Rayner, 2011, pg. 574). For example, advancements in the technology used by a company would dramatically speed up the production process forcing them to alter the size of both their workforce and production outlets. Henry Ford, of Ford Motor Industries, was one of the most famous examples of an organisation implementing a change within their production process through the Taylorism ideology.
“Taylor and scientific management allied to Fordism” (Senior & Fleming, 2006, pg. 8). Instead of having a specific number of workers collectively working on one motor vehicle, Ford instead realised that he could save time and increase productivity by assigning each individual worker to a particular station on his assembly line. Therefore, Ford could just move the car around the assembly line where it would stop at each station to have a new part added to it.
This enabled Ford to expand and increase his workforce whilst still increasing the amount of automobiles he was producing. “Only by doubling wages to his famous ‘5-dollar-a-day’ was he able to stabilize the work situation and persuade workers to accept the new technology” (Morgan G, 2006, pg. 25). This organisational change would be an example of a naive approach to change, which sees organizational change as a simple solid set of building blocks that are controlled from the top down, with a limited view of only the techno-structural side of the organisation.
With one of the main purposes of a business being to constantly strive to improve output and lower costs in order to increase revenue, the Taylorism and Fordism approaches became popular around the world and production efficiency was now of the utmost importance. However, this high level of efficiency came at a price for the employees. Many of Taylor’s and Ford’s workers found it difficult to maintain any humanistic grasp on their machinelike work due to its repetitive and boring nature.
This led to a decrease in efficiency as workers became fatigued and after a while could no longer keep up with the rate of production. Charlie Chaplin outlines this perfectly in his video Modern Times (TheCharlesChaplin, 1936, Modern Times) whereby the worker is dragged along the conveyor belt assembly line because he is incapable of keeping up with the pace. In the Junction Hotel case study a similar situation is outlined with the front of house staff not being able to keep up with the orders given by the kitchen staff, leading to conflict between employees.
Ultimately, this will lead to problems in the satisfaction levels of the customers, which can cause huge reputation problems for Junction Hotel, a company who pride themselves on having a high level of traditional customer service. One of the most effective ways of tackling employee confrontation is through the use of team building exercises. Team building exercises are effective as they encourage employees to collaborate with one another to achieve particular goals without having the stress element of actual work.
Being new to the team building approach, the waiting and kitchen staff at Junction Hotel would benefit most from a more relaxed outdoor operation, such as raft building. “For a group that has never done team building before, outdoor experiences can be an exciting way to begin” (French & Rayner, 2011, pg. 410). As a result, when both sets of employees go back to work there will be a greater understanding between each member of staff creating a new atmosphere as a group identity. This social aspect of employees during working hours is a factor that was often overlooked by traditional methods of management, such as Taylorism.
As a result, this 21st century social method of management is now considered a more popular modern alternative than the traditional Taylorism perspective. In the 1920s, Elton Mayo, an Australian psychologist, stumbled upon the importance of group dynamics whilst conducting a study investigating the levels of productivity in employees. His experiments, on 29,000 workers at the Hawthorne factory, examined the effect light had on productivity. His objectives were to discover the optimum level of lighting needed to gain maximum efficiency from workers.
However, Mayo found that the level of lighting had no direct effect on production levels but instead the human cooperative systems that the workers were a part of had a huge effect on increasing worker efficiency. Workers being able to establish themselves within an occupational community introduced the concept of ‘group norms’ whereby workers had their own set of regulations to abide by that were considered more socially acceptable. “Members derived valued identities or self-images, directly from their occupational roles. ” (Van Maanan & J & Barley, S, 1984, pg. 298).
Expressions and labels such as; ‘rate buster’ and ‘the chisler’ became nicknames that were used to define workers as either an over-worker or under-achiever. The power of an informal organisation, where man is more than just a machine but as a social being was one of Mayo’s greatest findings. This became known as the Hawthorne Effect. Conversely, a bureaucratic style of management is most appropriately suited to those organisations that are willing to sacrifice quality in return for an increase in quantity of revenue.
For example, Travelodge, a competing company within the hotel industry, make it clear to their customers that the service they offer is simple but covers all the necessary essentials needed for a comfortable stay. “If you’ve ever stayed at a Travelodge Hotel, you might have noticed they don’t have shampoo in the bathroom. ” (Davis, Evan, 2009) This is known as value engineering and it is a smart way for larger companies to cut production costs whilst still keeping up a respectable level of quality.
Higher-end hotels tend to ignore this strategy as it can harshly diminish their unique selling point of providing the best quality goods and services. This would be particularly true for Junction Hotel. Throughout the case study it is clearly outlined that Junction Hotel are a company who pride themselves on having a traditional approach to customer service. This would specifically involve having a very high focus on self-presentation, customer relations, and particularly individual customer requirements.
Rationalisation revolves more around a very routine and strategic attitude whereby all customers are greeted with the same standardised mannerisms and production is aimed at being a quick process, which sacrifices quality for speed. This is the first indication from the case material that suggests that rationalisation might not be the most appropriate method of management for a company that markets itself as ‘an oasis of calm in the city’ as Junction Hotel does. McDonald’s is a perfect example of how quality over quantity has been sacrificed to maximize output.
A quick service where customers can walk in and point to a number on the menu as they order means workers can speed up the transaction process of payment for food allowing them to switch to new customers swiftly. “The manager ensures that all employees are allocated to those jobs in which they perform most efficiently, known as ‘aces in their places”. (Hill, Terry, (2005) McDonald’s Corporation). This type of McDonaldization means there is no room for flexibility making it a real problem if customers request to manipulate the menu.
This slows down the process from kitchen staff to front of house staff, if one individual burger is needed to be adapted this will take precious time out of an employee’s schedule, which will have a domino effect on the time taken to serve other customers. Ultimately, the efficiency of the entire operation will have slowed dramatically, especially if this happens on more than one occasion throughout the working day. As Weber explained, dehumanization and lack of motivation are due side effects as a result of having such strict time schedules and regulations to keep to.
“Nevertheless, organisations continue to strive for maximization in the hope that they will at least increase efficiency” (Ritzer, G, 2008, The McDonaldisation of Society). Junction Hotel, on the other hand, has a slightly different demographic to that of the market that McDonalds are focusing on. With the emphasis on high-end, premium quality goods and services Junction Hotel are attracting an older age range of those customer who can afford to spend extra on hotel costs. This will most likely be older people enjoying their retirement along with businessmen and women who have their expenses paid for.
The reason this is important to identify is because of the current economic position of the UK. Having just emerged out of a recession, consumer spending within in the UK is still continuing at slow pace. This means, that for the more expensive and luxurious organisations it has become just as hard to keep current customers as it has been attracting any new ones. This is the second indication that suggests a complete rationalisation for Junction Hotel would not have much of a positive impact considering it would only increase the similarities they have with already well established rival companies such as Travelodge.
In an economy that is still recovering from a recent recession due to a ‘run on the banks’ consumer confidence is still very low which means less people are going to be willing to experiment with new organisations, especially the more expensive ones. However, some of the most recent economic reports have identified a rise in gross domestic produce, which is a positive sign for Junction Hotel as it means more consumers are starting to get comfortable with spending a little extra money.
“The Office for National Statistics said its first estimate for gross domestic product (GDP) showed the economy grew 0. 3% during the first quarter of 2013. ” (Hugh Pym, 2013, UK economy avoids triple dip recession). Although the increase is not a significant one this will benefit Junction Hotel in the long run as it shows signs of a slow but steady growth which is a good climate to begin setting up a new organization in. “Economists say the news should give a small psychological boost to consumers and businesses”. (Hugh Pym, 2013, UK economy avoids triple dip recession).
Keeping with the premium quality approach should provide a competitive edge in the favour of Junction hotel. This type of organizational change is a strategic intervention to provide Junction Hotel with a competitive advantage over their rivals in the hotel industry by aiming their services at a different demographic who will, in the current economic climate, be more likely to afford hotel accommodation. In conclusion to this essay, Junction Hotel will need to introduce a more rational work design to their organisation in order to maximize efficiency and start making a respectable profit.
It is vital however that the rational approach is put into action in the most applicable places of the organisation as otherwise it could cause a detrimental effect to production the rates, as was evident with some areas of the McDonaldization. Firstly, a bureaucratic design should be implemented through the use of organisational charts that clearly layout the different tiers of management throughout the entire organisation in a hierarchal fashion.
This should enable each section of the work force to have a structured view of where they stand within the organisation and know exactly who to report to. Secondly, team-building exercises must be put into place at least quarterly throughout the year to dispose of any unwanted negative energy and allow workers to voice any concerns they may have with their superiors, especially kitchen and waiting staff. A formal relationship must be of the utmost importance in front of customers between all of the employees.
Although, where customer service is not of a high importance, such as in the kitchen, a more relaxed attitude should be taken if it means the social side of individual worker will promote a higher level of efficiency. Overall, it is clear that with the right leadership and a positive attitude towards organisational change from the workers, rationalisation is strategy that could have significant positive implications for Junction hotel.