Is Rationalisation a Desirable Strategy?

Topics: McDonaldization, Hotel, Nottingham Trent University Pages: 4 (1268 words) Published: April 21, 2013
Foundations of Managing and Organising – Essay 1

Is rationalisation a desirable strategy for managing and organising Junction Hotel in the current economic climate?

Junction Hotel is an ‘upmarket, city centre hotel with proud tradition of strong customer service with a traditional approach’. (2012, pp.2-3) FoM Seminar workbook 1 – 2012-13). Simon Chance is the newly appointed C.E.O of the hotel in hope to restore the glorious hotel there once was. Simon Chance is a venture capitalist and president of Second-Chance consortium and is willing to step up to the challenge of updating the hotel through the way it operates, looks and how its run. Problems with the hotel range from poor management and organisation to dated equipment and deteriorating interior. This does not impress the high-class clientele the Hotel claims to cater for. The poor condition of the hotel matched with the very expensive room charges is not something customers will oblige to pay for especially in the current economy where people’s expenses are rising alongside taxation and a poor economic climate leaving people with less disposable income. Furthermore, with the worldwide hotel sector looking as if it will be much more profitable there will be increased competition for Junction Hotel and a wider choice of hotels for customers to choose from. (MarketingCharts Staff, February 21, 2012. Hotel Industry Poised for 2012.

Chance has decided a new business strategy is what Junction Hotel needs in order to regain the success it once had and looks at rationalisation as a potential strategy. Rationalisation is organising a business through principles of management in order to gain efficiency often accomplished through downsizing e.g. reducing workforce or selling/closing plants. By increasing efficiency it can cut hotel running costs of which the money can be spent on renovating the run down hotel. A problem...
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