For an Organization Looking to Cut Costs, What Would Be the Advantages and Disadvantages of Rationalization? Apply Your Answer to the Running Case Study, Junction Hotel

For an organization looking to cut costs, what would be the advantages and disadvantages of rationalization? Apply your answer to the running case study, Junction Hotel

Debbie Lester

Rationalization is the restructuring of a business in order to increase its efficiency. This may mean either reducing the side of the company or sometimes even expanding it, a change in the policy and maybe even a different way of performing some of the tasks included in making the business successful. This way the business is able to meet its goals and targets. Rationalisation is beneficial for the business because increase the efficiency of the business it will also increase service and control back into the business. Junction Hotel are disorganised and have a lack in management.

One way in which rationalisation will help the business is through Fayol and his ideas on managing people. He brings up the idea of direct and indirect control. Direct control is when one person is in charge of the business and is able to speak to the work force face to face and have a personal relationship with each employee. This would only work within a small business as the bigger the business the more people you would need to employee and having one person in charge of all would make the business unmanageable and disorganised. As the Junction Hotel is quite a large business I would suggest that using indirect control would help the productivity of the business and also lower costs it helps achieve the business’s aims in the most efficient manner possible.

However, all does not see Bureaucracy as a good thing. Max Webber who was a sociologist noted the efficiency of bureaucracy but critical of its effects on people. Bureaucracy tends to be linked with inflexibility and demotivation of the employees. This would be bad for Junction Hotel because the staff may decide to leave and therefore would cost the company more money to train the new staff instead of having to cut costs instead. On the one hand...