Organisational Structure and Function
Task 2: Organisational Structure and Function
An organizational structure shows how a business is managed and organized. A clear structure makes it clear which part of the structure does what. There are many different types of organizational structures, they can be tall or flat. Organisational structures show clearly the level of responsibility of each subordinate in a particular business, the lines of communication and possible lines of promotion.
Functional
This is when companies divide different jobs and activities into different departments. This is known as departmentalization. Each department has many layers of hierarchy to reflect the distribution of responsibility and authority (see image below).
A functional structure is bureaucratic, meaning that the work of the organization closely follows rules and procedures. Job descriptions are closely defined with little flexibility, therefore this type of structure is unable to change and meet new demands. However an advantage of dividing different jobs and activities in to departments is that there is specialization between job and department e.g. finance and marketing, it also makes control over the organization much easier. Another advantage is that there is a clearly marked distinctions within the hierarchy and lines of authority.
Regional
Other business organisations such as multi national coperations will have different branches in different regions within a country or they may locate in different continents. They operate as separate organisations making separate local decisions, however they are guided by the policy decisions made at the head office. The head office provides services and support but is not closely involved in the day to day running of the branch. However, although the branch manager does have scope to make decisions this is limited as compared to a completely separate business. Regional structures can also be organized by function. A regional structure can be seen below:
Product
Today many companies have reduced the number of management layers and have re-organised away from functional structure towards a divisional structure e.g (such as in a supermarket - toiletries, fruit and vegetables, etc.) or the service (such as a local council's sanitation area including waste disposal, recycling, street sweeping and maintenance etc.) Within each division marketing, production and other staff would work together on the same projects. Each division is self contained and operates as a profit center.
There are many advantages of an organization structured by product. One advantage is that it allows individuals to specialise and gain expertise in specific products and markets. It also allows a large company to operate as several smaller ones, each with greater identity and independence, facilitating rapid decision-making. There is a greater flexibility for growth and expansion.
However an organisation may get difficult to coordinate if there are too many divisions Senior managers may lose control and there may be conflicts between different divisions.
Matrix
The matrix structure involves organising the management of a task. In these situations people usually work together in a team to achieve their projects goals. A person working on a project would have two bosses, the boss of the department that they work in and the leader or manager of the particular project that they are working on at the moment.
Advantages
* ensures the project is better co-ordinated than with four or five departments contributing.
* if many different project teams are organised, it gives more people an opportunity to use their ability.
Disadvantages
* individuals may suffer if both bosses make heavy demands on them.
* Communication and control is more likely to become confused
Organisational Structure of the Marriott
As can be seen from the organization chart of the Marriott below, it can be said that the overall organizational chart is tall as there are many levels of hierarchy (6 levels). It can be clearly seen that jobs are specialized and some departments has managers, supervisors and workers.
Personnel Communications
Accounts Engineering Gif Shop
Reservations Marriott Café Front Office
Training
Sales Office Man Ho Restaurant Concierge
Catering Sales
JWs California At Your Service
Event Management Business Centre
Banquet
Room Service Health Club
Chinese Kitchen Laundry
Western Kitchen Housekeeping
Pastry Kitchen Atrium
Stewarding Security
Purchasing
The Marriott considers customers to be one of the most important members in the business organization. This is because the Marriott is considered to be a customer-service orientated business. Therefore the customer is considered to be the top priority compared to the managers working in the business organisation, leading ...
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Training
Sales Office Man Ho Restaurant Concierge
Catering Sales
JWs California At Your Service
Event Management Business Centre
Banquet
Room Service Health Club
Chinese Kitchen Laundry
Western Kitchen Housekeeping
Pastry Kitchen Atrium
Stewarding Security
Purchasing
The Marriott considers customers to be one of the most important members in the business organization. This is because the Marriott is considered to be a customer-service orientated business. Therefore the customer is considered to be the top priority compared to the managers working in the business organisation, leading the organizational structure tends to be an inverted pyramid with customers at the top and managers at the bottom. This can be seen in the diagram below:
CUSTOMERS
SUB-ORDINATES
SUPERVISORS
ASSISTANT
MANAGERS
MANAGER
Hierarchy
In a hierarchical structure authority are ranked one above the other. This type of structure can have many levels and looks tall or it may not have many levels of hierarchy and as a result it will be quite flat.
For example the overall structure of the Marriott is tall, however within each different department there are both tall and flat structures. A good example is the food and beverage department, which is a tall structure as there are many staff working within the department. However the human resources department has far fewer subordinates (only 6 people) and therefore it does not have many managers, assistant managers and supervisors compared to the food and beverage department. Therefore it can be said that the human resources department is a flat structure. Within the Marriott organization structure every member of staff has a detailed job description, knows his/her manager. It is a formal structure with clear lines of communication.
Span of Control
This is the number of subordinates directly supervised by one person (manager). A narrow span means tight supervision, less discretion and therefore less chance of making mistakes. A narrow span may mean more levels in the hierarchy and therefore a greater chance of promotions. A wide span of control reduces supervision and leads to greater delegation. The span of control can change depending upon certain circumstances. These can be seen below:
* The more difficult the supervision tasks as checking work can be hard and time consuming, the smaller the span of control. Another reason why supervision
tasks can be challenging maybe because the subordinates are not specialised in their job.
* A small span of control maybe necessary if communication with subordinates is time consuming.
* The better the supervisor, the more people he or she can supervise and as a result there will be a wide span of control.
It can be seen from the organizational structure of the Marriott that each department manager has some sort of span of control. It can be said that the overall structure of the Marriott has both narrow and wide spans of control, for example in the food and beverage department there is a wide span of control as there are several restaurants and therefore the number of people the worker controls is much more. However within the human resources department there is a much narrower span of control as there are only six people in the department.
Chain of Command
This is the line of command from top to bottom of the hierarchy within an organization. Information is communicated from each managing head or director, and any orders are passed through this chain. Orders pass through many different people within the hierarchy. For example a "manager" sends information to an "assistant manager" within a certain department, and then it is sent to a "supervisor". Then they would send the various messages to the "worker" in that department. This is an example of how messages are sent down the chain of command with a department in the Marriott. This type of structure can be effective as it helps give a clear understanding to staff to whom he/she is responsible. The diagram below shows the chain of command within a department in the Marriott.
However the longer the chain of command within an organization the more difficult it can get for messages to get sent across. Messages can get lost or distorted as they travel across the chain of command. This problem has been prevented within the Marriott by having daily meetings with departments so that each member of staff knows what he/she is doing.
Managing change can also be a problem in a large organization compared to a small organization such as a sole trader where change is simple. The sole trader decides to change and acts on that decision. Whereas in a large organization, the chairperson might decide on change but it might be resisted further down in the organizational structure.
Delegation
This is the passing of authority for work to another worker lower down the hierarchy of the organization, the result is decentralization. There are two main types of decentralisation, they are vertical and horizontal decentralisation. Vertical decentralisation is when authority is handed down the hierarchy of an organization. The Marriott believes in empowering their staff, and they make it one of their objectives to ensure that the staff are being treated well. Therefore, responsibility is passed onto member's staff. However by empowering staff responsibility still remains with the original person. This is the case in the food and beverage department as authority maybe handed down from the assistant mangers to the supervisors. This helps motivate and empower junior managers and supervisors leading to greater improvement and enthusiasm, and as a result the people will work harder. Empowerment reduces the need of tight control, senior managers only focus on the most important decisions and the people lower down the organization will develop new skills and will be able to take on more responsibility.
Functional Areas of the Marriott
As can be seen from the organization chart of the Marriott there are six main departments. This is known as departmentalisation, this is when each department is independently separated into units within the company. The jobs are grouped together to make it easier for the company to manage the functions.
This well organised structure of departments allows the Marriott to function quick and efficiently without the need to find someone within a job. This makes it easier for a work ethic being reinforced as it saves a lot of hassle.
There are six main departments within the Marriott they consist of the human resources, marketing, finance, engineering, food and beverage and rooms.
Human Resources
This department in a business ensures that the associates have a comfortable relationship with their managers, so that they are more motivated in their jobs. This involves providing the staff with the professional abilities to take on more jobs. Staff are encouraged to study for non work related subjects. This means that the management allow each member of staff to have a variety of responsibilities, so that they can improve in different areas. Staff training is viewed as very important and large amount of money is put into the training and development project. It tries to motivate subordinates to work harder, this makes the job security effective for that individual. Therefore, the staff provides excellent customer service. The Human resources department is considered to spend more money to provide facilities for staff personnel development and training, in order to make staff more efficient. However as the human resources department has a low staff turnover rate of 9%, this means that recruitment costs are much lower compared to departments like the food and beverage.
Human resources makes sure that each member of staff is treated fairly, and advices the staff on the certain things they can do and be involved in to improve themselves. This department ensures the health and safety of each individual, guaranteeing that the environment they work in is not dangerous. This department looks for the well being of all the associates in the hotel. Human resources gives training, which tries to increase staff motivation and loyalty within the organisation so that they will become more efficient in what they are doing.
Marketing
The marketing department is responsible for the sales and profitability of the organisation. The marketing department is concerned with investigating the needs of the consumer it tries to produce what the customer wants. The sales department will make sure the customer is attracted to what the company produces.
Finance
The director of finance (Franklin Mak) is responsible for supervising the accounts and finance of the department. The management of accounts involves keeping a record of money coming in and going out of the company. They will also need to communicate with cooperate headquarters in the US in order to send information on how well the company is doing in Hong Kong.
A controlled business makes sure that all the departments are up to date on their budgets, and checks frequently how much goes in and out of that expense. It is crucial to the businesses survival to check and recheck on the expenses of the hotel. If something were to go wrong financially it could cause a threat to the entire business. Accounts have to be made by the managers to ensure that the requirements are being made and that the profit that is made is sufficient. Legally this has to be checked so that the profit isn't too much or too less.
The hotel may need to buy new materials and equipment. Therefore, they need to increase their expenses in this case the financial department check what the hotel can afford and how they are going to get it. They will plan an organised structure to better aid the hotel on what it needs.
Engineering
The engineering department is responsible for any technical problems that might occur in the hotel. They are responsible for any problems that might occur. This makes sure that that the hotel is helped towards its objectives of meeting customer service requirement. The engineering department makes sure the Hotel maintains its corporate brand image as a 'flagship' company by renovating different areas every 5-6 years.
Food and Beverage
This department is one of the largest in the Marriott's organization as it has thirteen sub departments within its organization structure. The Marriott has four main restaurants, The Marriott's California, Man Ho, The Marriott café, and the Lobby lounge and bar. The restaurants have to keep their occupancy rate high otherwise it would be difficult for them to survive.
The kitchen has 39-quality and safety standards checklist. This has a very high standard amongst other hotels in Hong Kong. Tests are also done to evaluate staff and ensure that they know the necessary information required. The food and beverage department have to be up to date with what is going on in other hotels, as well as other restaurants in Hong Kong. This is because competition is tough, and the Marriott has to be certain that they are up to the same level as others in order to be successful.
Rooms
There are three main types of rooms in the JW Marriott, they are the club lounge, standard room and the presidential suite. The club lounge has three staff and a supervisor, it accommodates VIPs and guests allowing them to use the conference room and have internet access. The club lounge provides concierge and business facilities as well as limited dining.
The standard rooms have a high occupancy rate especially during conferences. They have two phone lines allowing calls to be made whilst on the internet. The rooms include a guest satisfaction survey for guest to fill in. This is done so that the JW Marriott can find out what areas it needs to improve on in order to meet customer requirements. They have a high response rate between 70-80%, the surveys then go on to be reviewed by the US research department, who send monthly reports back to Hong Kong.
The Presidential suite has a much lower occupancy rate (less than 50%) compared to the standard rooms. One reason maybe because they are very expensive, it costs HK$20,000 per night and is only permitted to reputable guests.
Structure and style of the Hotel Management
The Marriott believes that the customer is one of the most important aspects of the business compared to the general managers. Therefore the overall shape of the management pyramid is inverted, instead of the traditional business style which tends to be autocratic, meaning that superiors e.g. managers make most of the decisions and inform the subordinates. However the Marriott believes otherwise and the customers have some control in the running of the business and as a result the frontline staff are the most important in the business, as they try to meet and exceed customer expectation which is one of the main aims of the Marriott.
Overall we can say that the Marriott's orgaisational structure is a centralized structure although there maybe some decentralization within departments. Centralisation is when only the top levels of the hierarchy have the authority to make decisions. In this case in the Marriott's organisational structure subordinates in each department will take orders from the manager of that particular department, likewise the general manager will have the authority over the managers of each department.
In an organization that is spread worldwide and regionally, it means that all orders are taken from the head office. In Hong Kong's JW Marriott the general manager maintains control of the business and makes decisions in terms of the whole organization. This leads to little opportunity for subordinates to make their own decisions leading to a lack of motivation. The Marriott prevents this from taking place by having some decentralization within the structure. For example in the food and beverage department authority maybe passed down to staff in a lower status e.g. assistant managers may pass down authority down to the workers. This motivates sub ordinates to make decisions based on their area of expertise and they are encouraged to solve problems by themselves. The widespread delegation allows greater flexibility and more decision-making and as a result it reduces stress on senior managers as they will be able to concentrate on strategic decisions. However due to increased decentralization senior managers may lose control as there is less need for tight control and communication.
Within the JW Marriott's organizational structure the overall span of control is both wide and narrow depending on the departments for example it can be seen that the food and beverage department has a wide span of control as there are many restaurants and therefore are many people the worker has to control whereas in the human resources department there are fewer people working (only 6) therefore the span of control is much narrower. From looking at the organizational structure of the JW Marriott in H.K it can be said that the spans of control are not all the same as different departments will have a varying number of people working and therefore the number of subordinates the worker controls alters within each department.
Both narrow and wide spans of control within an organization have many advantages and disadvantages. These can be seen below:
A wide span of control may mean fewer levels of management and decision-making as there will be many subordinates within each level, this reduces supervision costs. However, this may mean that direct supervision can become difficult and as a result management can lose control as the subordinates will have some authority in decision making this motivates workers increasing job satisfaction, this is the case in the food and beverage department. By passing down authority to subordinates there is a chance that orders can get confused reducing efficiency and motivation. This is prevented from happening in the Marriott by having daily departmental briefings for 15 minutes.
A narrow span allows for tight control and close supervision reducing mistakes to be made as communications with subordinates is made easier, this is true for the human resources department. However by having close supervision, sub ordinates may lack the motivation as they may feel they are left out of decision-making. Management costs will also be high due to the tight supervision with sub ordinates. A narrow span may have more levels in the hierarchy, however the human resources department in the JW Marriott is only made up two levels (training and personnel), it tends to be less decentralized this can be seen in the human resources department which is only made up of six people this improves communication within the department and the workers tend to be specialized in what they are doing increasing efficiency.
Sharon Jayasekera
