Lonely Planet - management structure, growth and decision making.

University Degree Business and Administrative studies

Table of Content:

Introduction

“Lonely Planet is the biggest travel guide book and digital media publisher in the world. The company is owned by BBC Worldwide, which bought a 75% share from the founders Maureen and Tony Wheeler in 2007 and the final 25% in February 2011. Initially called Lonely Planet Publications, the company changed its name to Lonely Planet in July 2009 to reflect its broad travel industry offering and the emphasis on digital products. After Let's Go Travel Guides, it was one of the first series of travel books aimed at backpackers and other low-cost travellers. As of 2010, it publishes about 500 titles in 8 languages, as well as TV programs, a magazine, mobile phone applications and websites.” [Wheeler]

Lonely Planet also having own television Production Company, which has produced numerous series like Lonely Planet Six Degrees, The Sport Traveller, Going Bush, Vintage New Zealand, Bluelist Australia and Lonely Planet: Roads Less Travelled. Lonely Planet placed its headquartered in Footscray, a suburb of Melbourne, Australia, with associate offices in London and Oakland, California. As of 2009, it was increasing its digital, online presence greatly.

In 2009 Lonely Planet start publishing a monthly travel magazine called Lonely Planet Magazine in the UK, and in 2010 it launched the Indian and the Argentine editions.

The company name comes from a misheard line in "Space Captain", a song written by Matthew Moore and first popularized by Joe Cocker and Leon Russell on the "Mad Dogs & Englishmen" tour in 1970. The actual words are "lovely planet", but Tony Wheeler heard "lonely planet" and liked it.

Chapter 1

In what ways is Lonely Planet decentralized and / or centralized?

Decentralized: Every one of Lonely Planet office is responsible for all sales and marketing efforts for its own region to address culture and other environment differences. The organization provides the individual offices more flexibility in directing marketing messages to detailed audiences and make sure that employees in each office know their region systematically.

Centralized: Although regional offices may charge books for their area, the headquarters in Australia produces all of the books. This centralization streamlines the production process, reduces costs by keeping cartographers and designers under one place.

Feature:

“An organization's structure and its degree of centralization or decentralization depend on factors, including the size of the organization and its geographic dispersion. In a very huge and diversified organization, it is unlikely that a handful of people will have all the resources to achieve all goals and objectives of the enterprise. As a result, it becomes impractical to focus power and decision-making authority at the top.” [Demand Media] Similarly in a geographically-dispersed organization, a centralized approach will not be the most efficient, as the people with the most authority will be unable to directly supervise operations on a day-to-day basis.

Centralization:

“Centralized organizational structures rely on one individual to make decisions and provide direction for the company. Small businesses often use this structure since the owner is responsible for the company’s business operations. Organizations with a centralized structure have several layers of management that control the company by maintaining a high level of power, which is the power to make decisions about business activities. With a centralized structure, line-and-staff employees have limited authority to carry something out without prior approval. This organizational structure tends to focus on top-down management, whereby executives at the top communicate by telling middle managers, who then tell first-level managers, who then tell the staff what to do and how to do it. Since this organizational structure tends to be quite bureaucratic, employees have little freedom. Centralized organizations are known for decreased extent of control limited number of employees report to a manager, who then reports to the next management level.” [Osmond Vitez]

Decentralization:

“Decentralized organizational structures frequently have several individuals responsible for making business decisions and operating the business. Decentralized organizations rely on a team environment at different levels in the business. Individuals at each level in the business may have some autonomy to make business decisions. Because individual creativity can be stifled and management costs can be greater in a centralized organization, many organizations continue to downsize into a more decentralized structure. Decentralization seeks to remove the unnecessary levels of management and to place authority in the hands of first-line managers and staff so, increasing the extent of control, with more employees reporting to one manager. Because more employees are reporting to a single manager than before, the managers are forced to delegate more work and to hold the employees more responsible. Downsizing has also helped to change the flow of communication, so that top management hears staff concerns and complaints in a more direct manner and management has a more hands-on approach. The hands-on approach involves less bureaucracy, which means there is a faster response to situations that demand direct attention. This structure also takes advantage of bottom-up communication, with staff issues being addressed in a timely manner.” [Osmond Vitez]

The reorganization generally takes place at the mid-management level. Because some middle managers have lost their jobs, been laid off, or simply taken advantage of early retirement and severance packages, their positions have been phased out, thus helping to reduce unnecessary costly salaries and increasing employee span of control. Many middle managers who stayed in their current "positions" found that their jobs have changed to being coaches, or team leaders, who allow their employees greater freedom in completing their work responsibilities [Csoka, 1995].

The chain of command is the protocol used for communication within organizations. It provides a ...

This is a preview of the whole essay

The chain of command is the protocol used for communication within organizations. It provides a clear picture of who reports to whom. Faster decisions can be made in decentralized organizations because approval usually has to come only from the manager one level higher than the person making the decision. The chain of command involves line-and-staff employees, where the staff's job is completing the actual work and the line functions to oversee the staff.

Advantages of Centralization:

“The advantages of centralization are an organization's ability to closely control operations, provide a uniform set of policies, practices and procedures throughout the organization, and better use the knowledge of centralized experts. In a small organization, operations are likely to be not as diversified and top management may practically possess the skills and skills required to manage all facets of business.” [Demand Media] In such a centralized environment, actions of individuals are also better aligned with management's prescribed policies, as the rules emanate from a single source, and there is little ambiguity.

Advantages of Decentralization:

“Decentralization is a common feature of forward-thinking organizations. A decentralized organizational structure allows faster decision-making and better adaptability to local conditions and context. In a large organization, a high degree of centralization would lead to inefficiency as all actions would have to be approved and cleared by top management. Decentralization also enables an organization to better adapt to conditions by delegating authority to those who are physically present and active in a particular project or operation. Another important advantage is management grooming. In a decentralized organization, managers at lower levels gain relevant experience, which improves quality of human resources.” [Demand Media]

Disadvantages of Centralization and Decentralization:

Centralized organizations can undergo from the negative effects of several layers of bureaucracy. These businesses often have several management layers stretching from the owner down to frontline operations. Business owners responsible for making every decision in the company may require more time to complete these tasks, which can result in slow business operations. Decentralized organizations can struggle with multiple individuals having different opinions on a particular business decision. So, these businesses can face difficulties trying to get everyone on the same page when making decisions.

Chapter 2

Discuss the issues or problems the Wheelers faced as their business grew and comment on the courses of actions taken.

Toney and Maureen Wheeler really needed finance for their next trip. They arrived in Australia with 27 cents and a camera (which they soon pawned) between them. So they decided to write and published the first Lonely Planet guidebook, Across Asia on the Cheap. It was an instant best seller among world wanderers. The first print run was 1500 copies, hand collated, hand trimmed and hand stapled. Tony and Maureen took the book around to bookshops in Sydney and it sold out in the first week.

Decision-making in business:

Decision-making is a vital part of good business. The question then is ‘how is a good decision made of Toney and Maureen Wheeler for their next trip?

One part of the answer is good information, and experience in interpreting information. Consultation, for example, looking for the views and expertise of other people also helps, as does the ability to admit one was wrong and change one’s mind. There are also aids to decision-making, various techniques which help to make information clearer and better analysed, and to add numerical and objective precision to decision-making (where appropriate) to reduce the amount of subjectivity.

Toney Wheeler can be trained to make better decisions. He also needs a supportive environment where they won’t be unfairly criticised for making wrong decisions and will receive proper support from Maureen Wheeler. A climate of criticism and fear stifles risk-taking and creativity; Toney Wheeler will respond by ‘playing it safe’ to minimise the risk of criticism which diminishes the business’ effectiveness in responding to market changes. It may also mean Toney Wheeler spend too much time trying to pass the blame around rather than getting on with running the business.

Decision-making increasingly happens at all levels of a business of Lonely Planet. The Board of Directors may make the grand strategic decisions about investment and direction of future growth, and Wheeler may make the more strategic decisions about how their own department may contribute most effectively to the overall business objectives. But quite ordinary employees of Lonely Planet are increasingly expected to make decisions about the conduct of their own tasks, responses to customers and improvements to business practice. This needs careful recruitment and selection, good training, and enlightened management.

Types of Business Decisions

There can be categorised that few important types of business decision needed for Lonely Planet.

The most popular decision is Programmed Decisions. These are standard decisions which always follow the same routine. As such, they can be written down into a series of fixed steps which anyone can follow. They could even be written as computer program.

Non-Programmed Decisions are another common business decision. These are non-standard and non-routine. Each decision is not quite the same as any previous decision. Strategic Decisions can affect the long-term direction of the business, for instance, whether to take over Company A or Company B. Tactical Decisions are medium-term decisions about how to implement strategy, for example, what kind of marketing to have, or how many extra staff to recruit. Operational Decisions are short-term decisions and be also called administrative decisions about how to implement the tactics, for instance, which firm to use to make deliveries of Lonely Planet publication. [Herbert A.Simon]

Simple decisions usually need a simple decision-making process. But difficult decisions typically involve issues like Uncertainty which is any facts may not be known; Complexity which is Wheeler have to consider many interrelated factors; High-risk consequences which are the impact of the decision may be significant; an alternative which is each has its own set of uncertainties and consequences; Interpersonal issues which can be difficult to predict how other people will react. With these difficulties in mind, the best way to make a complex decision is to use an effective process. Clear processes usually lead to consistent, high-quality results, and they can improve the quality of almost everything Lonely Planet do.

Quality of Decision-Making in Lonely Planet

Wheeler makes better decisions than others. Good decision-making comes from: Good information in the first place, Management skills in analysing information and handling its shortcomings, Experience and natural ability in decision-making, Risk and attitudes to risk, Human factors, People are people, Emotional responses come before rational responses, and it is very difficult to get people to make rational decisions about things they feel very strongly about. Rivalries and vested interests also come into it. People simply take different views on the same facts and people also simply make mistakes. [Herbert A.Simon]

Managing all of these activities in four countries on three continents requires communication and coordination. So, managers rely on the Internet for regular communication and to create consistency among marketing messages.

Electronic Business Communication:

The Internet and electronic communications also called computer mediated communications (CMC) doesn't just mean new tools for communication; it means new ways to communicate. Today Lonely Planet organization interacts with its various constituents differently like employees, board members, customers, partners and others. Its depending upon the nature of the message, the goals you are trying to achieve and the strengths and weaknesses of the available media like telephones, voice mail, fax machines, print, etc.

Electronic communications adds a powerful new channel that not only will change how Lonely Planet uses this mix of options, but it will create entirely new ways to interact. For example:

Electronic communications lets Lonely Planet combine numerous media such text, graphics sound and video into a single message. That can result in far more meaningful communications tailored to the nature of Lonely Planet particular audience. In contrast to broadcasting, narrowcasting reflects the ability to develop numerous communications for subsets of your market or constituencies.

Electronic communications is interactive. It engages audiences in active, two-way communications. That requires a new way of thinking about advertising copy and the handling of public relations. The pay-off, however, is a self-selected audience, engaged and actively participating in the communications process.

Two-way communication is nothing new but electronic communications creates a new form of many-to-many communications that lets geographically distributed Lonely Planet’s offices communicate interactively and simultaneously through text, sound and video. They can hold inexpensive video conferences or press conferences from their desk, or conference with staff at several desks located across the world. [Morino Institute] One of the growing phenomena of the Internet is businesses and organizations sponsoring, supporting and moderating discussion groups about issues, products, strategies that anything of interest to the Lonely Planet and its constituents. Sponsorships are also solicited for popular resources, such as indexes and other Internet search tools and these provide an additional communications and marketing opportunity.

Lonely Planet using electronic communications facilities, such as the World Wide Web, as internal communications tools to enhance team work. Many individuals at different locations can work on the same documents, hold meetings and integrate research findings.

Electronic communications eliminates the power of communications gatekeepers to both positive and negative effects. Lonely Planet used to controlling the messages that go out to its constituents through managers, spokespeople and others. But with the Internet, constituents begin to talk among themselves, requiring new approaches and a new emphasis on listening and reacting, not just talking.

With the Internet Lonely Planet have the ability to transmit and receive large amounts of information quickly to and from individuals and workgroups around the world. These changes the way activists, for instance, can galvanize communities, inform legislators and change public opinion. It changes the sources and depth of Lonely Planet constituents' knowledge levels. It also lets those constituents reach Lonely Planet with new kinds of communications they may never have attempted before.

Tony and Maureen Wheeler are still very much a presence in the company, visiting its worldwide offices and maintaining contact with many employees. There are some drawbacks to this far-flung method of managing because sometimes staffers grumble about the challenges of dealing with time differences, but they concede that this is a minor inconvenience.

Tony and Maureen Wheeler can have access to a wide range of communication methods to use with employees. From the traditional business meetings and print to the new age social media and videoconferencing businesses can use multiple tools to address audiences in locations near and far. While new methods of communication receive a great deal of attention, the traditional methods still have value and relevance.

Face-to-Face

“67 percent of senior executives and managers say their organizations would be more productive if their superiors communicated more often by personal discussion, based on the survey” [NFI Research]. But, while face-to-face communication is often preferred, it is not always realistic, particularly in companies that may be based in multiple locations even around the world. Fortunately there are tools that make it possible to approximate face-to-face communication through videoconferencing, for instance, allowing even the largest companies to create personal connections between staff and management.

“Email communication has become common in organizations and is an important tool for sharing information with one, or hundreds even thousands of employees” [Linda Pophal] with Strategic Communications. Email is often an important part of any communication plan, and while it may not replace face-to-face or other forms of communication, it is an inexpensive and readily accessible option. So, Wheeler can contact with his employees by Email without visiting to every offices worldwide.

Social Media

Social media tools like Facebook, Twitter and Google+ can be used effectively within organizations to communicate between employees, departments, divisions and locations. Other tools like Yammer are designed specifically to create social media networks within the confines of a specific business domain.

Meetings

“Meetings remain common in most business settings” [Pophal], and can now be improved through the use of technology tools that allow remote participants to take part in discussions, even if they are not physically on-site during the meeting. Effective meetings share key elements such as an agenda, a facilitator and minutes that clearly outlines follow-up activities and assigns accountability for various tasks.

Chapter 3:

In what ways does Lonely Planet achieve horizontal coordination across departments or offices?

Lonely Planet applies reengineering approach to cut horizontally across the company and involve teams of employees working to give value directly to customers. Reengineering frequently involves a shift to a horizontal team based structure. All the employees on a particular process have easy access to one another so they can easily communicate and coordinate their efforts, provide value directly to customers and share knowledge. By using this way, Lonely Planet achieves horizontal coordination across departments.

Business Process Reengineering

Business process reengineering (BPR) is a computer science and management, an approach aiming at improvements by means of enriching efficiency and effectiveness of the business process that exist within and across organizations. The aim of BPR is for organizations to look at their business processes from a "clean slate" perspective and determine how they can best construct these processes to improve how they conduct business. [Michael Hammer]

Business process reengineering is also called as BPR, Business Process Redesign, Business Transformation and Business Process Change Management. Reengineering is a primary rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, speed, and service. BPR combines a strategy of promoting business innovation with a strategy of making major improvements to business processes so that a company can become a much stronger and more successful competitor in the marketplace. [Michael Hammer]

Re-engineering is the source for many recent developments in management. The cross-functional team, for instance, has become popular because of the desire to re-engineer separate functional tasks into complete cross-functional processes. Also, many recent management information systems developments plan to integrate a wide number of business functions. Enterprise resource planning, supply chain management, knowledge management systems, groupware and collaborative systems, Human Resource Management Systems and customer relationship management systems all be obligated a debt to re-engineering theory. [James A. Champy]

Word Count: 3250

References:

Lonely Planet, [Online] Available from: [Accessed 1st March 2012]
Centralized Vs. Decentralized Organizational Structure, [Online] Available from: [Accessed 6th March 2012]
Centralization and Decentralization, [Online] Available from: [Accessed 6th March 2012]
What's The Difference Between Centralized And Decentralized Systems Of An Organization? [Online] Available From: [Accessed 6th March 2012]
Centralised and Decentralised Organisation, [Online] Available from: [Accessed 7th March 2012]
Advantages and disadvantages of centralization and decentralization, [Online] Available from: [Accessed 9th March 2012]
organisation - decision-making in business, [Online] Available from: [Accessed 15th March 2012]
How Important Decision Making In An Organization? [Online] Available from: [Accessed 15th March 2012]
Various Communication Methods in Business, [Online] Available from: [Accessed 15th March 2012]
Importance of Communication in an Organization, [Online] Available from: [Accessed 19th March 2012]
Why Use Electronic Communications? [Online] Available from: [Accessed 19th March 2012]
Electronic Methods of Communication in Business, [Online] Available from: [Accessed 4th March 2012]
Reengineering, [Online] Available from: [Accessed 4thMarch 2012]
Process/Project BRE - BRE - Business Reengineering Process, [Online] Available from: [Accessed 4th March 2012]
Business process reengineering, [Online] Available from: [Accessed 4th March 2012]