The Need of Organization in Rationalization - Case Study Example

FOUNDATIONS OF MANAGING AND ORGANIZING Introduction Numerous organizations in the present business environment of both public and private sectors feel their main responsibility in improving of performance of their operations, which is associated with the costs reduction, refining upon efficiency and management of the business as it grows. Due to constant and rapid economic changes and developments in business, there is a need to be able to adjust business to new conditions and rationalize certain industry or area. However, the costs of rationalized work are different from the views of managers and employees and of those who view the aspects of rationalization outside the organization (Hales, 2001). With such main features of rationalization as systematic work methods that enable the complex work process to be simplified and separated, detailed division of labor, centralized planning and control and technical efficiency, organizations apply these principles for centralized decision-making, external motivation and formal coordination and control through management of operational work. However, the focus is now given to the key issues of the rationalization application which involve the process of rationalization and the extent of the process to be concomitant of the extensive operational work (Meyer & Bromley, 2013). The need of organization in rationalization is in the necessity to overcome previous contradictions and limitations of the organization. Comparing to rationalization, organizational change is called by the relationship of performance to historical and social expectations and the common features of change which is not symmetric around the change of performance. When organizational performance falls below the level on which it is expected, there appears a search of solutions and organizational changes (Sakhartov & Folta, n.d.). Features of early rational organization The early changes and rationalization of organization dates back to centuries ago, when people were looking through the world history and were tracing the stories of others working together in such formal organizations as Greek and Roman armies (Mosley & Pietri, 2014). While in the latest time, there existed numerous attempts at getting to know the newcomers in the industrial life, there appeared also many approaches of early management theory. Early approaches to managing organizations were dictated by the size of organization and entrepreneurial ventures with personal oversight where the efficiency was achieved in the most effective way. Thus, Taylor argued about the complete mental revolution of management and labor, which was associated with the increase production and rise of profits (Sarker & Khan, 2013). Fayol put management practices into patterns that could be analyzed. Fayol’s management principles included division of labor, discipline, unity of direction and command and subordination (Wren & Bedenian, 2009). He realized that management was more than devising systems and methods; rather it involved all the activities associated with the manufacturing and selling a product and a manager needed to be able to develop certain plans and organize the entire manufacturing process. The time of Taylor was known for work organizations with the primitive forms of bureaucracy. In the modern context, various aspects of bureaucracy let organizations to stay ordered and controlled (King & Lawley, 2013). With its structured type of business performance, rules and procedures, bureaucratic approach underpins organizations to be more ordered and controlled and makes its participants to achieve more. In the modern time, organizations cannot operate without bureaucracy. Moreover, planning and forecasting, organizing, commanding and coordination as well as controlling enable modern companies and organizations to be effective. Work on bureaucratic design is an important part in organizational success, where its leaders are able to find the most effective means to achieve their goals and objectives. Rationalization in contemporary organizations According to Ritzer (2007) modern society is growing rationalized. Theorist of rationalization Weber considers the processes of rationalization and bureaucratization to be continuing. In the present says the most vivid example of such notion is the best-known chain of fast food McDonaldization, which employed all the rational principles of bureaucracy and combines these principles with the outcome of the process. The process of rationalization is led by such basic elements as efficiency, quantification and control through human and non-human technology. Meyer and Bromley (2013) consider cultural rationalization has allowed the expansion of contemporary formal organization to happen. Moreover, it is supported by global society, rights ad empowerment discourses and the explosion of education among people. Thanks to McDonald rationalization approach, numerous enterprises borrowed the same pricing and cost minimization model. The vivid example can be the budget hotel industry that came in change to luxury places affordable for fewer people. King and Lawley (2013) give an example of such hotel, Travelodge that does not offer even a shampoo at their rooms because this is the way how the hotel saves its costs for offering more cheap rooms. While the hotel is equipped with everything traveller needs, unlike other places Travelodge does not provide chocolates on pillows and other unnecessary items. Instead, keeping things simple and consistent, hotel understands that all that the traveller wants is restful place to sleep at the same time keeping one’s costs. Pros and cons of rationalization While bureaucracy and rationalization gives more power and enhances control of organizations over the operation performance globally, there are a lot of critiques that argue about the consequences of such approaches. Max Weber, the known follower of bureaucracy was also deeply concerned with the dominance and the negative effects of rationalization within the community (King & Lawley, 2013). In the striving of the society to move from the traditional to rational, Weber found out that the increasing dominance of rational and bureaucratic organizational forms were technical efficiency where there was a functional division of labor, the hierarchical structure, certain regulations and impersonal working conditions. Disadvantages in rational production techniques were also present. There was an inefficient and inflexible for product ranges with variation and market conditions required rapid changes. Workers were losing their autonomy and control over everyday activities. With the positive characteristics of McDonaldization approach, rationalization has also negative sides, especially when it comes to the organization. Along with the efficiency, calculability, predictability and control of the rationalization approach, there appears certain limitation of the usual employee whose work depends on the one’s commitment and engagement, while leader’s or managers’ work should be done fast and no efficiency is actually considered. Another example of lack of efficiency is the limitation within working environment, where numerous rules and procedures do not allow an employee to act as one wishes even if the situation is different. In terms of predictability, it is almost impossible to plan the entire activities in advance due to the rapid changes in the economic, political and societal spheres. Within particular organization, the efficiency and predictability can fail to meet company’s goals due to different reaction of its workforce on organizational changes. Rationalization and organizational change As of different researches, people do not resist change intentionally, however, they resist to lose the current situation and status as the result of change. From the psychological point of view, this intention to resist change is called by the maladaptive defense mechanisms that protect individual from the perceived threats of the potential change. In such a case, resistance to change is the same as resistance to mistrust and both can lead to the worsening of work performance. This leaves a point to consider whether to validate the appropriate rationalization approach to the resistance to change (Ijaz & Vitalis, 2011). When organization wants to implement any changes within its working environment, it should have strong leadership skills, mindsets and tools to enable managers to lead the change and to understand what drives change within certain organization. Such awareness is essential due to the drivers that establish the whole complex in organization (Jacobs, 1997). If to view organization change through the perspective of rationalization or bureaucracy, bringing such change within state institutions such as hospitals or universities is easier as such establishments are followed by the bureaucratic approaches with numerous procedures unchanged for decades. Zell (2003) argues that resistance to organizational change may be similar to Kübler-Ross approach applied more for terminally ill patients that pass five stages of the change with denial, anger, bargaining, depression and acceptance. The process of change under such approach may be met with denial and in an aggressive manner due to human inability to accept certain newness. However, an adequate explanation and awareness of the need in certain change will enable an organization to reach the desired changes without denials. It is also important for the organization to make its employees and managers aware of what is expected, to communicate them effectively and explain that changes are needed in terms of organization and its policies. Schuler and Jackson (2001) define while implementing the organizational change the main problem may occur within the human resources. These issues are the major indicator of organizational success or failure of such changes. Organizations that follow rationalization approach in their performance start with the main drivers that define the need for organizational change and then they figure out the major characteristics of needed changes. They outline the concrete activities for delivering the set of changes and undertake a series of actions to make the functional, technical or process changes. The process thus is structured (Meyer, Sahlin & Ventresca, 2009). However, many organizations are not ready for the changes created with the help of rationalization approach, hence, cannot adapt to the new processes within working environment. Consequently, there is an inability to use performance tools to connect changes to material advances in the achievement of business objectives.  Benchmarking, however, enables change makers to remain mechanistic and evaluate the rationalization on the development-oriented measures. Rationalization provides clear line-of-sight of the connection between the set of changes and business goals and drives business change effectively and successfully. Business-driver oriented approach informs the shape, size and objective of an organization’s investments within such change (Tepper, 2008). There appeared a need to deploy dynamics of rationalization sue to the increase development of micro-economic data processing and communication technologies that organizations are utilizing these days. Thurman (1993) states, that systematic rationalization needs to be supplemented and replaced partially in both areas. While an organization sets its strategic goals of management and is aware of the functioning of the business, companies anticipate consequences of such rationalization on its relation to the market changes and thus organizational change. However, it is not a simple task to employ changes in rationalization since different factors such as customers’ considerations and also staff’s technical and working skills are needed to be taken into account. Rationalization applied toward Junction Hotel Within the modern business environment, when there is a decline of luxury services especially in the hotel industry, the owners should consider organizational changes to be applied along with rationalization techniques to make the hotel work and bring profit. One of such hotels that suffer from the decline due to its expensive services and inappropriate former management is the Junction Hotel. Difficult economic position of the hotel made its head Simon Chance or the Second Chance Consortium to think about implementation of necessary changes and techniques of rationalization. For that purpose, a trusted colleague Phil Weaver was involved into the process of turning the hotel its reputation. Applying rationalization scheme, Weaver produces the initial report for Chance with the explanation of the major issues that should be solved. As stated by Meyer, Sahlin and Ventresca (2009), to make certain changes and undertake a series of actions within an organization, there should be estimated and developed the detailed plan of what should be redone and reinvented. Presenting itself as “An oasis of calm in the city”, the hotel has potential in its room occupancy to reach 75%. However, previous owners could have only 40% of visitors due to rooms to be expensive. In the current time, most weekday visitors come to hotel on business where they have conferences and meetings in the comfortable facilities. The main problem apart of the absence of constant visitors is the lack of clear procedures and policies for room service staff. Employees are performing their work in personal consideration, which result the lack of common approach in treating visitors. No clear organizational objectives and targets are established, hence, there is no vision for employees about any structural approach in meeting visitors’ needs and achieving any potential. Based on the Fayol’s considerations, Junction hotel can apply such approaches as division of labor, discipline, unity of direction and command and subordination. Along with such practices, the new management of hotel should develop accurate plans and set SMART goals so that staff would be able to view the real point of destination in their professional life. While bureaucracy is not always understandable for the employees, however, effective bureaucratic design will contribute toward organizational success, and for Junction hotel in particular it will enable its leaders to find the most effective means to reach their objectives. To bring the improvement plan to life, Chance and Weaver should start with organizational change that will show hotel staff the activities they will be involved in and will make them ready to implementation and fostering of new targets. The organizational change following the use of rationalization techniques will start with the assessment of the current situation. The primary goal of the management should be to quickly organize staff and the hotel to maximize the return on investment and the net present value. For that purpose, the assessment of top priorities should be done and the analysis of the hotel abilities should be well-thought. Sustaining of each phase of change and then rationalization should be determined. Thus, the staff should obtain clear and accurate instructions about their occupational duties. While the hotel covers three floors with rooms furnished, restaurant, conference and meeting rooms and fitness suite, there is a need to implement changes by different hotel divisions of labor. Room service employees will discover new tools and methods to operate more effective. Rational principles of bureaucracy such as procedures and rules should be taught, according to Ritzer (2007). Their achievement and areas for improvements will be assessed by the supervisor and the appropriate feedback will be given. Trained with the certain procedures, every division will be able to join the unity of direction to move in the same direction. As a component of Fayol’s approaches, discipline is the integral part of every bureaucratic organization along with subordination to the management. Hence, abiding rules of the set standard will enable all hotel staff to perform its work effectively. When all the Junction hotel staff is aware about the changes, there is a need to introduce the new rules and procedures. Here the McDonaldization approach would be useful and Ritzer (2007) argues that a traveller would probably want more rationalized and predictable forms of services. In terms of calculability, predictability and control within the Junction hotel, such predictability diminishes the new experience. At the same time, criticized by Weber (King & Lawley, 2013,) bureaucracy is a good opportunity for hotel to protect its visitors from potential misunderstandings. Rationalization at the same time promotes domination of hierarchy, however, to bring on good high quality services in the hotel, such as Junction hotel, it is necessary to have a clear range of rules that employees would perceive as subordination and discipline. In terms of application of organizational change to bedrooms’ staff, there is a need to make the process of such service more rationalized. This can be achieved if new improvement of the rooms will be done. Currently 24 rooms are not fully habitable due to maintenance issues. Others are very expensive and decorated with good quality. However, as Travelodge hotel practice shows, there is a need to save money in many details such as leave only those rooms, which are good for visitors and save efforts of staff for serving other rooms. Studying rationalization and its techniques and knowing the main characteristics of successful organizational change will help management to better understand the important changes in the contemporary hospitality industry. Applying Fayol’s approaches gives possibility to analyze and integrate bureaucratic approaches that though criticized, but are useful in managing such industry as provision of good quality service to people. Moreover, it is worth mentioning that Weber’s considerations about the need of rational organizations should also be taken into consideration by policy makers and business performers. Rationalization and changes within organization enable managers and employees to understand practical usefulness of alteration of the current conditions into new. References Hales, C. (2001). Managing Through Organization: The Management Process, Forms of Organization and the Work of Managers, Cengage Learning EMEA Ijaz, S. and Vitalis, A. (2011). Resistance to Organizational Change: Putting the Jigsaw Together, International Review of Business Research Papers, Vol. 7. No. 3 Jacobs, R. 1997. Real Time Strategic Change: How to Involve an Entire Organization in Fast and Far-Reaching Change, Berrett-Koehler Publishers King, D. and Lawley, S., (2013). Organizational Behaviour, Oxford University Press Meyer, J. and Bromley, P., (2013). The Worldwide Expansion of “Organization”, Sociological Theory, 31(4) 366–389, American Sociological Association, Retrieved from http://www.patriciabromley.com/MeyerBromley2013.pdf Meyer, R., Sahlin, K. and Ventresca, M., (2009). Institutions and Ideology, Emerald Group Publishing Mosle, D. and Pietri, P., (2014). Supervisory Management, Cengage Learning Ritzer, G., (2007). The Weberian Theory of Rationalization and the McDonaldization of Contemporary Society, Classical Sociological Theory Sakhartov, A. and Folta, T., (n.d.). 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