Rationalisation in the Hotel Industry
Is Rationalisation a desirable strategy for managing and organising Junction hotel in the current economic climate?
With the economy being in a double dip recession (and it the deepest and longest recession for generations) there is a major lack of demand for goods and services in the economy. Vice Chancellor, George Osbourne delivered the Autumn Statement 2012 yesterday (Wednesday the 5th December) and stated to expect slower growth [1]. Taking these factors into account, the future for Junction Hotel isn’t looking bright. Junction Hotel’s current economic situation has unsettled Chance. He feels that Meg Mortimer’s (General Manager) social approach to managing needs to be addressed as it’s inefficient and unorganized. An alternative type of management could be ‘Rational Organisation’. Rational Organisation would be ideal for the hotel because it would change and improve the areas of the hotel where it’s underperforming. Rational Organisation recognises that the largest cost to a business is Labour e.g. wages. Therefore it emphasises on Cutting Costs. Rational Organisation does this by fragmentation of production. It also focuses on increasing control, efficiency and has a very formal style. Bureaucracy also plays a large role in this type of organisation [2]. These collectively would improve the efficiency within Junction Hotel’s management as there is a recognizable level of hierarchy and accountability. Rational Organisation was used by many organisations in the 1900’s. The most documented people for using these types of methods would be Taylor, Ford, Webber and Fayol. This type of organisation has also been known as ‘Taylorism’ or ‘Fordism’. Fordism is the name given to Henri Ford’s principles of production. It concentrates effort towards seeking higher levels of output through using conveyor assembly lines and making that the work is broken down into smaller and less complex tasks [3]. In summary Fordism was all about efficiency and focusing on
With the economy being in a double dip recession (and it the deepest and longest recession for generations) there is a major lack of demand for goods and services in the economy. Vice Chancellor, George Osbourne delivered the Autumn Statement 2012 yesterday (Wednesday the 5th December) and stated to expect slower growth [1]. Taking these factors into account, the future for Junction Hotel isn’t looking bright. Junction Hotel’s current economic situation has unsettled Chance. He feels that Meg Mortimer’s (General Manager) social approach to managing needs to be addressed as it’s inefficient and unorganized. An alternative type of management could be ‘Rational Organisation’. Rational Organisation would be ideal for the hotel because it would change and improve the areas of the hotel where it’s underperforming. Rational Organisation recognises that the largest cost to a business is Labour e.g. wages. Therefore it emphasises on Cutting Costs. Rational Organisation does this by fragmentation of production. It also focuses on increasing control, efficiency and has a very formal style. Bureaucracy also plays a large role in this type of organisation [2]. These collectively would improve the efficiency within Junction Hotel’s management as there is a recognizable level of hierarchy and accountability. Rational Organisation was used by many organisations in the 1900’s. The most documented people for using these types of methods would be Taylor, Ford, Webber and Fayol. This type of organisation has also been known as ‘Taylorism’ or ‘Fordism’. Fordism is the name given to Henri Ford’s principles of production. It concentrates effort towards seeking higher levels of output through using conveyor assembly lines and making that the work is broken down into smaller and less complex tasks [3]. In summary Fordism was all about efficiency and focusing on
References: [1] http://www.bbc.co.uk/news/business-20550112 [2] Ian Brooks “Organisation Behaviour: Individual’s, Groups and Organisation” (4th edition) - Pg193. [3] http://www.businessdictionary.com/definition/Fordism.html [4] Ian Brooks “Organisation Behaviour: Individual’s, Groups and Organisation” (4th edition) Pg158. [5] Ritzer, G, (2008) "Efficiency: Drive-Throughs and Finger Foods" from Ritzer, G, The McDonaldization of Society pp.57-78, [6] David Coughlan, “Leadership & Organization Development Journal, Vol. 15 No. 2, 1994 : Organizational Change through teams and groups.” Pg. 18-23