How Rational Organization Increases Efficiency and Cost Reduction - Case Study Example

Rationalization and Globalization Junction Hotel Student Name Course Institution Date Rationalization and Globalization (Junction Hotel) Introduction Junction hotel is one of the most prestigious hotels in that offers a range of services. The rate of customer satisfaction for the hotel is high and it has continued to attract customers both locally and internationally. The strategies used by the hotel have greatly contributed to its success. The management team of the hotel is also active in the provision of services and the implementation of the strategies. On the other hand, the customer satisfaction has also resulted to the good performance of the hotel. The hotel has been able to scoop several awards in the hospitality industry due to its success. This has played an important role in building the brand image of the company and hence attracting customers. However, despite the success of the hotel, it has been undergoing a difficult economic situation in the recent past. The management of the high number of employees and assets of the hotel has been of concern to the management. This has led to managerial problems in terms of implementing strategies. The issues of rationalization and globalization are some off the ideas that may present the solution top the operations of the hotel. The paper thus discusses the issues of rationalization and globalization in relation to Junction hotel. Features of a rational organization Rationalization is important for an organization in terms of streamlining the management process. One of the most important features of rationalization in an organization is the reduced cost of operations. This is beneficial to the economy of the company and hence improving the chances of success for the organization. In most of the organizations that are prosperous, change management is usually part of the business as changes occur from time to time. An efficient change management strategy is also a feature that is found in rational organizations. This is also important in terms of reducing resistance by the employees due to the changes implemented. Guidance for best practices is also among the features of a rational organization. The guidance is importance in terms of ensuring that the company is able to achieve the best quality of goods and services. This is important in terms of satisfying the customers and hence prosperity for the organization. Satisfying the customers leads to the attraction of new customers as well as retaining the existing customers. The use of technology is also common in rational organization in the operations of the business. This is important in terms of increasing the accuracy of book keeping as well as automation of services. The rationalization of a business is thus important in ensuring the success in the management of the business (French, et al, 2011). How rational organization increases efficiency and cost reduction The rational organization is able to increase its efficiency through the initiatives that have been placed. The use of information technology is important in increasing the efficiency. This is because it enhances the accuracy of data used for the purpose of management. It is also easy for the management to maintain the records of the customers and the employees using the information technology. It is thus important to note that the easy management of the record is important in increasing efficiency. On the other hand it also eliminates the manual operations which are costly and time consuming. The automation of services is also important in terms of reducing the operations costs as it reduces the huge workforce. Using the best practice guidance is also important in terms of increasing the efficiency of the company. This is because al the products and services have to conform to the required standards and hence ensuring the efficiency of the organization. The change management strategies are important in minimizing the employee resistance. This is important in terms of ensuring that the operations of the company are not interfered with by the employee resistance. It is thus evident that rationalization plays an important role in reducing the costs of operations as well as increasing the efficiency (Morgan, 2006). Application of rational organization at Travelodge and McDonalds In the current business organization, the rationalization strategies have been used to reduce costs and to ensure efficiency in management by reducing overlapping businesses. Travelodge and Macdonald are among the most successful companies in the hospitality industry that have rationalized the business operations. The centralization of the back office operations is one of the rationalization strategies that have been applied by both organizations. This is mainly for the purpose of increasing efficiency in the management. The centralization process is important in terms of implementing strategies within the company. Both companies have also rationalized their supply chain in order to increase the efficiency. This has enabled the delivery of goods and services to the customers more efficient. On the other hand, rationalization of the supply chain has also played an important role in eliminating delays in the delivery of goods to the company. The rationalization process has also been useful to the company in terms of ensuring that the companies are able to abide by the laws and regulations of the sector as well as the authorities. It is through the application of rationalization that the two companies have been able to meet the goals and objectives as well as satisfying the customers. Rationalization plays an important role in ensuring the efficiency of companies in the hospitality industry (Donkin, 2001). Benefits and disadvantages of rational organization The major benefit of rational organization is the reduction of cost of operations. Most of the companies strive at reducing their cost of operations for the purpose of maximizing the profits. Rationalization therefore plays an important role in ensuring that the company is able to run its operations at a fair cost. On the other hand, rationalization ensures that most of the tedious paper work is eliminated. This is due to the introduction of information technology in the management of the records. The accuracy of the data of the company is also enhanced through the use of information technology. It is also cheap to use the information technology as it eliminates the high number of employees. This plays an important role in the reduction of costs for the organization. The rationalization of an organization is also beneficial in terms of attracting the professionals in the organization. This is because rationalization requires the involvement of experts in the implementation of the rationalization strategies. The presence of experts in an organization is beneficial as it leads to development and improved strategies. Rationalization is thus beneficial to an organization as it provides solutions top business problems as well as enhancing the business operations (Saggi, 2002). It is however, important to note that despite the positive outcomes that rationalization has on the businesses, it also has some negative impacts. One of the major disadvantages is on the employee development. This is because the principles are based on rules and regulations. It thus brings in the issues of collectivism which hiders the individual development of the employees. On the other hand, the initial costs could be high. The concepts of rationalization may require the employees to be retrained on some of the concepts and hence increasing the initial costs. On the other hand, it may lead to the dismissal of some of the employees as some of their functions may become irrelevant. This is because the organization has to undergo a lot of restructuring which may requires extra costs for it to be successful. Rationalization on the other hand has some negative impacts on the innovation process within the company. This is due to the rules and regulations that have to be followed by the employees. Some of the standards may be too high for the company to attain and hence leading to confusion within the company which has negative impacts on the customers. Rationalization thus has negative impacts on the company in terms of the welfare of the employees (Ritzer, 2008). Issues of globalization Globalization mainly refers to the business expansions in other regions and continents. This has been necessitated by various factors that have argued that the world is getting smaller. This is because movement and communication across the world has become quite easy. Most of the business organizations have thus taken advantage of this and hence the increase in globalization. The establishment of multinationals is also an important fact in the growth of the world economies. This has been necessitated by the process of globalization and hence improving the world economies. The globalization process is closely associated with four issues which are; trade and transactions, capital and investments movement, migration and movement of people and dissemination of knowledge. The issues of globalization have changed the current means of doing business. This has led to the movement of people from one continent to another. This has played an important role in the interaction of the people from diverse backgrounds. Globalization has also played an important role in creating closer relationship between countries due to the close business ties. The globalization process has also improved the profits for most of the business organization. It has also played an important role in improving the lives of the people in different continents (Weatherford, 2004). Example of globalization Many companies in the world today have adopted the issues of globalization. This has played an important role in increasing their profits due to the increased demand and production of their products. The customers in different countries have also been able to enjoy the products and services of different companies from different parts of the world. The coca cola company is an example of a company that has successfully embraced the concepts of globalization. The company was first established in the United States of America but has since expanded to most parts of the world. The products of the company are available in most parts of the world due to the globalization. The trade transactions are common in the company in al the continents that it operates. There are usually a lot of transactions that is usually carried worldwide by the company. A lot of investments are usually carried out by the company in different continents. This is for the purpose of establishing new branches in different parts of the world. The movement of the employees and management is also very common in the company. The managers are usually moved to other continents for the purpose of spearheading the development of the company. Globalization therefore brings a new experience in the operations of most organizations (Steger, 2009). Relationship of globalization and globalization The concepts of rational organization are closely associated to the globalization strategies. This is because most of the rational organizations are also global. The rationalization is important in globalization in terms of increasing the efficiency of the company. This is considering that a global company has different branches in different parts of the world. The number of employees in the global companies is always large. The concepts of rationalization therefore play an important role in terms of streamlining the operations in most of the global companies. The concept of information technology which is related to rationalization plays an important role in terms of ensuring that the different branches of the companies can be linked. This is for the purpose of evaluating the success of the implementation of the strategies. The use of information technology ensures that the data of the company can be accessed from any part of the word. This is despite the geographical distance that separates the branches of the company. This has played an important role in terms of reducing the physical barrier and hence ensuring the success of the company (Bhagwati, 2004). It is thus important to note that the relationship between a rational organization and globalization is quite close. Reduction of costs is an important concept of rationalization. This concept is also important for globalization. This is considering the high investment cost that most of the global companies have to undertake. Reduction of costs is thus considered to be a relief for the global companies. It is also important to note that most of the global companies are usually encountered by many challenges in terms of costs. This is because most of the differences in the rules and regulations with regard to the operations of foreign companies. In some countries, the foreign companies are usually subjected to high taxes. This is for the purpose of ensuring that they do not gain advantage over the local companies. Cost reduction is thus important for the global companies. On the other hand, it is important to note that the use of rules and regulations are common for most of the global companies. The issues of centralization are evident in most of the global companies. This is for the purpose of ensuring uniformity in the management style as well as the methods of production. This is also beneficial to the local customers as they are able to enjoy the products from any part of the world. Rationalization therefore plays an important role in ensuring the concepts of globalizations are fully realized. Application of globalization to Junction hotel The Junction hotel is one of the most prominent hotels due to its efficiency in the provision of services. Globalization is one of the most important concepts that could lead to the growth and development of the company. The company can start by establishing branches in other countries so as to enhance its profits. The concepts of globalization will also be profitable for the company. This is because the sales of the company will increase. Since the company has won several awards in the hospitality industry, the process of globalization will be quite easy. This is because the recognition of a company is important in terms of building its brand image. On the other hand, it is also important to note that the globalization process is usually done on a step by step basis. This should be adopted by the company to ensure that it is successful. It is also important to note that globalization favors most of the companies in the hospitality sector. This is due to the continuous demand for the services of the industry. The movement of the people globally is one of the concepts of globalization. Most of the members of staff of Junction Hotel have an international experience. This will be important in terms of enhancing the process of globalization. Investments will also be required in terms of operating the company globally. Some concepts are also important in terms of ensuring that the economic situation of the company is improved. This is considering that the company is currently facing problems in its economic situation. Centralization or decentralization is one of the concepts that will be required by the company. This is important in the management of the various branches that the company will have to establish in other continents. Experts from the hospitality industry will also be required to implement the global strategies. Capital and investment movements are also an important concept of globalization. It will be required of the company to ensure that the investment of capital is made. This is possible for the company as it has been making profits in the past. Globalization will thus increase the profit base of the company as it will broaden the customer base. Globalization is thus important for the company in terms of maximizing its profits and enhancing the management of its economic. However, the initial stages of globalization always have challenges which must be overcomed for the company to be successful. Conclusion In conclusion, the issues of globalization and rationalization are quite important in the development of a company. A rational organization has a lot of benefits in terms of its operations. It is evident that a rational organization enjoys a lot of benefits. This is important in terms of streamlining the operations of the company. Cost reduction is one of the most important benefits of rationalization. This concept is important for Junction hotel which has a large number of staff and it is facing problems with its economic situation. It also evident that some companies have been successful due to the use of rationalization concepts. It has played an important role in solving the managerial problems that the companies faced in the past. It is thus evident that rationalization is important for the operations of a company. However, it is also important to note that rationalization has some negative impacts on the employees. The rules and regulations that are involved in the rationalization of organizations are for the purpose of ensuring conformity to the set standards. This is for the purpose of benefiting the customers who require high quality of goods and services. The concepts of globalization are also impacting positively in most of the companies in the world. This is due to changes that have taken place in the global market. It is also evident that globalization and rationalization go hand in hand. This is because rationalization can be used to address the problems that are associated with globalization. Junction hotel can take advantage of globalization to solve its problems of economics. Globalization will ensure that the profits of the company have increased and also the profits are maximized. The company also has an advantage if it adopts the globalization process. This is because it has served various foreigners and has offered the best quality of services. This will play a significant role in attracting the customers in the other continents. However, it is also evident that the company will be required to invest highly in order to succeed in the process of globalization. The success of the global strategies will however depend on the implementation and the incorporation of rationalization. The movement of people and hiring of professional to spearhead the globalization process will be required. This is evident as movement of the people is one of the concepts of globalization. Bibliography French, R, et al, 2011, Organizational Behavior (2nd edition) Chichester: John Wiley and Sons. Donkin, R, 2001, Blood, Sweat and Tears: The Evolution of Work London: Texere, Ch. 11 – Western Electric Discovers Motivation. Bhagwati, J, 2004, In Defense of Globalization, Oxford, New York: Oxford University Press.  Morgan, G, 2006, Images of Organization London: Sage, Ch. 2 – ‘Mechanization Takes Command’. Weatherford, J, 2004, Genghis Khan and the Making of the Modern World, NY: Three Rivers Press. Steger, M, 2009, Globalization: A Very Short Introduction, New York: Oxford University Press. p. 11. Ritzer, G, 2008, The McDonaldisation of Society (5th edition) London: Sage, Ch. 3 – Efficiency. Hopkins, A, 2004, Globalization in World History, London: Norton, pp. 4–8. Saggi, K, 2002, "Trade, Foreign Direct Investment, and International Technology Transfer: A Survey." World Bank Research Observer, 17 (2): 191-235. Read More