Rationalization as a Strategy with a Focus on Junction Hotels - Case Study Example

Institution : xxxxxxxxxxx Title : xxxxxxxxxxx Tutor : xxxxxxxxxxx Course : xxxxxxxxxxx @2012 Introduction The 21st century is no doubt one of the most unique periods in the world history. It is at this particular stage that significant transformations have been witnessed globally, notwithstanding the significant transformations in the workplace settings. The century has come along with a transformed workplace, whereby everyone is compelled to adapt to the fast-changing society characterized by the constantly changing opportunities as well as demands. The economy is also globalized and focused on the use of modern technological innovations. In view of all these advancements, organizations are presented with no other option than transforming themselves in order to effectively serve the emergent customer expectations globally. The current economy not only presents challenging opportunities but also dramatic uncertainty since it is knowledge-based and performance driven. In view of the presented challenges, an effective organizational strategy is required in order to achieve goals and ultimately realize success in the competitive world. Rationalization as an organizational strategy has received massive support globally. In fact the allure presented by its significant achievements and assurance has totally distracted various societies and organizations from the realization of a potential problem underlying the continuous rationalization. This paper introduces the main characteristics of a rational organization based on ideologies and the principles of operation in practical companies. It analyzes rationalization as a strategy with a focus on Junction Hotel’s case. The case for Junction hotel The Junction hotel is at present experiencing a myriad of difficulties in its operations. Mr. Chance bought the Junction hotel totally oblivious of its problematic background. He never foresaw the underlying potential problems that might present themselves in future. Later coming to a realization that difficulties existed, he noted that there were significant problems with the operation, where inefficiency and lack of coordination took precedence. While still grappling with its conflicts and difficulties, the hotel is also highlighted as striving to maintain the ‘quality hotel’ identity that it adopted. This resulted from the worsening of the situation thereby compelling it to compromise on its service quality. The business is also highlighted as wanting in terms of the organization structure. While Roles and responsibilities within the departments are undefined, the business also suffers from lack of regulatory measures, procedures and the information technology (IT) system. Further, the operations of Junction hotel have been hampered by the extreme external business influences. Moreover, both the overseas and the domestic leisure tourism seem not to cover the business travel reductions that are essential in the recovery. The hotel business therefore seems to be at the verge of collapse and is projected to undergo serious deterioration in terms of growth rate. In view of these factors resulting from failed leadership and poor collaboration among the Junction hotel staff, Junction’s future is bleak. Its current economic position has also unsettled Mr. Chance, who associates the whole issue with the General Manager’s (Meg Mortiner) inefficient and disorganized social approach. A reduction in the room rates therefore presents a clear opportunity and a competitive advantage over other competitors. It nonetheless highlights the need for a viable alternative to reorganize the operation strategy. This, however, may not be realized under the given situation unless rationalization is considered. As such, delving into the possibility of a successful operation through rationalization is inevitable. Rationalization as a strategy The rapidly growing globalization trend has not only brought with it numerous opportunities, but has also presented challenges for various organizations. Globalization has been characterized by increasing global integration, societal interdependence, and cultural interdependence, a factor that has seemingly led to cultural universalism. This has further created higher competitions due to the facilitation of movement of products and services globally. The desire among organizations to maintain competitiveness and attain a larger share in the world market has therefore compelled them to apply rationalization as a competitive strategy. Gili et al (2009) state that rational organization is an organization emphasizing on the values of efficiency, automation, control, predictability and calculability. Frederick Taylor was the pioneer of rationalization hence was very famous during the 19th century. His engineering background played a significant part in his analysis on efficiency. He held a view that there existed an excellent method, an efficient method to undertake task. While undertaking his studies on efficiency, he developed the idea of scientific management, stating that application of scientific principles could create efficiency in organizational activities. According to Spender & Kijne (2011), scientific management focuses on simplifying tasks through set principles that routinize the task, organize the tasks into repetitive ones for maximum efficiency, and provide the managers with responsibilities and control limits. It is at this stage that automobiles were being introduced to the United States of America. All though automobiles manufacturing began around 1900s, the efficiency was quite low and unappealing. By applying the principles of scientific management, Ford Motor Company began producing vehicles in massive numbers. This theory, despite success in Ford Company, was criticized based on its repetitive tasks that created boredom and constantly replaced workers. Max Weber’s rationalization, on the other hand, is based on logic, consideration for division of labour, promotion of merit as well as hierarchical control, order, and authority, as highlighted by Radkau et al. (2009) and Allan& Allan (2005). He believed that these principles created a perfect organization. The impact of this theory on transformation of organizations to higher efficiencies was later dismissed by several organizations as ineffective. In light of these, it could be argued that a rationalized organization is an organization incorporating efficiency, calculability, automation, control and predictability in its overall continuous operations, as detailed by Ferrante (2010). It optimizes time and resources to achieve its goals. Such an organization may involve stream lining all its operation processes to eliminate redundancies and resource wastage which are linked to higher costs. On the other hand, emphasis on the countable things, and basically on the quantifiable measures, can be argued to be the most defining feature of rationalization. An emphasis on quantity is perceived more crucial compared to emphasizing on quality since measuring quality. Automation, likewise, is a significant feature based on the fact that it offers an alternative where human failures may exist and are unpredictable. Such rational technologies limit human independence and unpredictability in organizations. Additionally, rationalized organizations and the overall rationalized systems are oriented towards control and are structured to facilitate control. It is further noted that an organization’s clients would always expect the same products and services offered by the organization across all its subsidiaries. To this end therefore, an effort towards ensuring predictability has to be made by various organizations. Predictability, however, is also hampered by the existence of various cultures. Whereas a particular culture might appreciate an organization’s services, another culture might find this to be unpleasant or below moral standards. Rationalization basically emphasizes on optimizing time and resources to achieve a desirable output, an analysis of the dimensions in rationalization highlights the proven benefits and the potential benefits in this strategy. The limitless merits of rationalization are widespread globally that organizations and individuals have associated it with success, hence it could be effective in Junction Hotel. Voets (2010) argues that rationalization is a great determinant of a successful organization in the current global climate, stating that rationalization is quite effective in increasing profits and cutting down the costs of operation. It is a reality that issues regarding costs and benefits are often stressed during each decision-making process within organizations. Additionally Pries & Quigley (2012) state that Value engineering entails provision of highly efficient products and services in accordance with the rational design of the organization aimed at making the organization, like Junction Hotel, the most efficient. They further argue that it limits and reduces the operation costs based on the fact that task minimization to the core elements eliminates the need for staff training on operation. According to Ritzer (2008), a rationalized organization maximizes on efficiency through its efficient workforce that delivers the required output in a quick and easy manner. This implies that a lot of task may be accomplished within the same time frame. In addition to this, defined responsibilities inform the workforce in the organization on their specific area of concern (duty) and the resultant organizational expectations on them. This workforce may also specialize in their roles since they have clearly defined roles as supported by the influential Taylorism. Taylorism nonetheless is limited by the need for a direct task, product similarity, and human compliance in order to achieve optimum results. In the case of junction hotel, the implementation of Taylorism would result in a negative outcome since the hotel is based on service provision as opposed to manufacturing. Taylorism and the notable Fordism support manufacturing while stressing on the value of a production line. DISCUSSION: The case for rationalization in notable organizations and Junction Hotel MacDonald and Travelodge are examples of operations that have adopted the rationalization strategy with a resounding success. Rationalization standardizes various processes which in the case of food joints may include chips and burger cooking. A rationalized process may involve batching the two together in a pre-set cooking time before placing them in the warmer. This model enhances production efficiency, rapid service, and business management. While the above process is an indicative of MacDonald’s operation, Travelodge has basically eliminated extra thrills such as shampoo and slip mats while focusing on the provision of basics like befitting showers and beds. Travelodge adopted the value engineering strategy to cut on the operation costs and enhance the service quality. This process, which is focused on both the cost and the value of services, eliminates the provision of low quality service while providing the basic necessities. As regards the extra services that were cut, the customers have a choice of paying an additional cost to access them if they deem them as necessary. The strategy enhances control of the business as it dictates every working stage whereby staff rules are in place to avoid opinions. The scientific management theories have emphasized on a rationalized factor having a properly-designed bureaucracy, where role definition, clarity of responsibility, and stern execution through every rule and method are key considerations. The theories claim that the staff is only after fair wages and that they are actually rational. Bureaucratic domination is therefore considered as formally rational by Webber who further adds that actions oriented towards intellectually-analyzable rules pre-dominate it. Webber further argues that it is also pre-dominated by the assortment of the most sufficient method for a continuous observance. In the technical view point, bureaucracy harbours a domination type that is perceived as the most rational since its primary focus is on designing a precise and highly-efficient method of solving problems. This, as Webber claims, is achieved through ordering mainly under the universal as well as abstract regulations (Adler, 2009; Miner, 2007) In the case of the Junction hotel, its departments are characterized by undefined roles and staff responsibilities whereby Meg constantly tampers with the work of Linda. While Meg believes that she is an expert in the job, the Head Chef plays the role of managing the employees. This highlights that there are undefined roles and staff responsibilities. If these were clear and defined then job overlap and the consequent disturbance would be avoidable. To be professional, the hotel needs to make adjustments with regards to roles and responsibilities by defining them clearly and providing enough space for consideration of individual work. Professionalism is linked to efficiency hence a higher sense of professionalism will counteract the bad situation and consequently transform the business around. Rationalization also calls for a rationalized work design as well as analysis. This is supported by Taylor who emphasized on the value of studies and the standardization of the working criteria. He also supported the standardization of the instruments of work, the working environment and the workload, a factor lacking in Junction Hotel. In his study on the working hours, he managed to disintegrate the job into various easy functions thereby eliminating wasteful activities and consequently achieving positive outcomes. Fayol, likewise, emphasized on six management functions including commanding, coordinating and controlling. The management functions are stated to have attained success in matters regarding coordination. They are also argued to have had positive impacts of smoothening coordination and making it more efficient in organizations. Ford, an automobile company, is argued to be one of its notable representatives as it developed an assembly line which consequently translated into automobiles being affordable even to the regular individuals. Due to this, rationalization was later termed as Fordism, based on the principles of production adopted by Henri Ford. In this case, high-level outputs were attained through conveyor assemblies meaning the work was defragmented into simple smaller tasks. Fordism was basically concerned with efficiency and focus. On revisiting MacDonald’s current position, its success could also be attributed to its work design. While people are quite amazed by the highly efficient operation, Ritzer (2008) states that the company has invested enormously in unearthing the finest working methods to achieve its goals, and optimize on every process of operation. The resultant significant reduction in source materials, steps and services has therefore enabled the company to save massively on costs, which could also be done in Junction Hotel. With the current technological advancements, it is also hypothesized that the use of Information Technology may impact positively on efficiency not only in the office but also in industries, where automation of processes may be experienced. An instance is where manual tasks can be replaced with computer operations and robots. Computers, as Weber (2001) further states, can as well handle complicated calculations within short span in organizations like Junction Hotel. A further study on efficiency, however, indicated that efficiency can not be enhanced by better remuneration or welfare as employees may still be generally tired even during simple tasks. This was further solved through studies conducted by Hawthorn who found that the value of social needs was much higher compared to the economic values. In view of this therefore, groups and teamwork greatly determine the employee state as individuals share various characteristics after being together for a given duration. Informal team influences various areas in an organization as a result of socialization which may present an ethics code, as highlighted by Mahadevan (2010). Cultural development is a great determinant of impacts of organizational change. Tupperware, a company dealing in home products and services, is an example of an organization maximizing the opportunity presented in the form of family and friend connections to sell its range of products and services. Additionally, the success experienced in Europe and Asia only attests to the strong impact of informal groups. Culture has been known to link and unite people during inter-team conflicts that are frequent during the organizational change. Culture has significant impact on the cost-reduction strategy, where a discipline-based culture may help eliminate wasteful habits. Such a culture reinforces group unity and provides an impetus for attaining the organizational goals. Despite the indicated benefits of rationalization, it could also be argued that the rationalization process comes along with some negative consequences. In light of this, one major setback of rationalization is the development of organizational forms which are basically difficult to adapt especially in the current changing circumstances. It also presents inefficiency and unpredictability that may result from a rational system. As such, even though bureaucracy is meant to create a higher efficiency, common inefficiencies like ‘red tape’ are often experienced in the bureaucratic organizations. In addition to the above, rationalization is also argued by Sharma(2011) to be able to heighten levels of bureaucracy hence limiting employee participation in effective operation of the organization. On the other hand, apart from organizational design like Taylorism being able to create segmentation in the setting, Ritzer (2008) highlights that such a segmentation may translate into creation of barriers which eventually impacts negatively on the business performance. Another downside of rationalization is its dehumanization characteristic. It is argued that rationalization dehumanizes employees and especially employees who are at the lowest hierarchy level. The dehumanization can be seen in the reduction of individuals to a robotic level. In addition to these setbacks, rationalization is also considered as creating disenchantment hence leaving out mystery, happiness, and excitement. Owing to the given facts, it can therefore be stated that a rational organization could be an alternative to the management of Junction hotel in the current economical climate. It would be appropriate owing to the fact that it would transform and improve the weak areas that underperform. It is a concept that acknowledges the significant contribution of labour to the overall cost especially in terms of wages, hence stresses on cost cuts through a fragmented production process. Additionally, rationalization will be beneficial as it aims at increasing the overall control and efficiency through its formal technique. This style also supports bureaucracy, which together with other characteristics, would positively influence efficiency in the Junction’s management since hierarchy as well as accountability are recognized. Rationalization is still be being used and was also used widely around 1900 with the notable users being Fayol, Ford, Taylor and Webber, whereby successful outcomes have been experienced. Fordism was based on the principles of production adopted by Henri Ford where high-level outputs were attained through conveyor assemblies meaning the work was defragmented into simple smaller tasks. Fordism was basically concerned with efficiency and focus, which should also be a significant concern in Junction hotel. Conclusions From the above analysis, it is clear that rationalization has not only gained recognition, but also acceptance in many societies across the world. This is attributed to the qualities it upholds foremost being efficiency. In almost all sectors of operation within societies, there is a stronger emphasis on the core values of predictability, efficiency, calculability, and automation, that junction hotel should also adopt. Even though its benefits may be seen as endless, rationalization is held down by the stated limitations which may increase in the future. Notwithstanding, these challenges can not be the reason to shift to a non-rational system as such a shift will not only be unpleasant, but also impossible. Therefore what is required is a higher sense of control on the rationalization process to limit the negative impacts. Reference Adler, P., 2009, Sociology and Organization Studies, Oxford Handbooks: London. Allan, K. & Allan, D., 2005, Explorations in Classical Sociological Theory: Seeing the Social World. Pine Forge Press: New York Ferrante, J., 2010, Sociology: A Global Perspective, Cengage Learning: Stamford Gili, s. et al (2009), Global organization: Rationalization and actorhood as dominant scripts. 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Weber, S., 2001, Information Technology in Supplier Networks: A Theoretical Approach to Decisions about Information Technology and Supplier Relationships, Springer: New York. Read More