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MANAGERS' ROLE IN IMPLEMENTING ORGANIZATIONAL CHANGE IN HOSPITALITY INDUSTRY

Pavia, Nadia; Cerovic, Marta; Popadic, Mladenka. Faculty of Tourism and Hospitality Management in Opatija. Biennial International Congress. Tourism & Hospitality Industry; Opatija (2012): 365-369.

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In modern business conditions of hotel management and forming of a qualitative and competitive offer, the environment is determined by considerable interaction, unstableness and changes, which are happening in technique, technology, market and socioeconomic systems. The hotel is an integral segment of the hospitality industry. It is sensitive to changes in its environment. Hotel must be flexible to respond quickly and adapt to environment challenges. Actions of the management and the entire hotel personnel should focus on adjustments to changes in the environment, and especially on the tourist market. The future success of a hotel will be motivated in large part by the ability to anticipate and capitalize on change. The successful hotel will observe the key factors that will not only define success but also the ability to survive in tourist market. These key organizational trends must be recognized by the successful hotel organization: visionary leadership, diversity, flexibility, horizontal structure, customer focus, network orientation, and being in the information fast lane. [PUBLICATION ABSTRACT]

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In modern business conditions of hotel management and forming of a qualitative and competitive offer, the environment is determined by considerable interaction, unstableness and changes, which are happening in technique, technology, market and socioeconomic systems. The hotel is an integral segment of the hospitality industry. It is sensitive to changes in its environment. Hotel must be flexible to respond quickly and adapt to environment challenges. Actions of the management and the entire hotel personnel should focus on adjustments to changes in the environment, and especially on the tourist market.

The future success of a hotel will be motivated in large part by the ability to anticipate and capitalize on change. The successful hotel will observe the key factors that will not only define success but also the ability to survive in tourist market. These key organizational trends must be recognized by the successful hotel organization: visionary leadership, diversity, flexibility, horizontal structure, customer focus, network orientation, and being in the information fast lane.

Keywords: hospitality industry, hotel, organizational change, manager

INTRODUCTION

Nowadays, more and more companies in tourism and the hospitality industry have to face the changing and turbulent environment. Changes that have been taking place within the last ten years mostly refer to changes in the human resources department and management. Hospitality management must be capable of vision and leadership in order to manage change successfully. Hospitality management also needs to ascertain the key factors which affect operations of hotel companies and their ability to survive on the market. The introduction of changes has an impact on the organisation of hotels. The hotel organisation is termed according to its main feature. New technologies have lead to elimination of concentrated organisations as a dominant model in the industrial age and the appearance of a new scattered organisation centred around the people, not machines; a prototype of the information age organisational model.

1. MANAGING CHANGE IN THE HOSPITALITY INDUSTRY

Today's dynamic environment of hotel business is characterized by the availability of information at the global level, by global competition, as well as very demanding and less loyal guests. In this environment, the hotel management is subject to large changes that are forcing management to adapt their strategy to such changes. The changes themselves are nothing new. People have always been trying to improve their business, but contemporary changes refer to the modification of1:

1. vision, mission, goals and core values of the hotel,

2. operating systems and processes embedded in them,

3. managerial and organisational structure of the model,

4. performance at individual and team level.

Management is becoming increasingly focused on the issue on how to manage change. Every change presents a novelty, something the employees are not familiar with. Hence, it is the managers' duty to get the employees to embrace changes. This will lead to a smoother transfer from current to new state, i.e. state in which changes have been introduced. Managers also need to inform the employees on the implementation of changes, the personal benefits and benefits for the company as a result ofthat change.

Managers at all organisational levels must learn to shape their departments, units or companies, so as to enable them to respond to changing business dynamics and reach planned objectives.

Hotel enterprises are undertaking certain changes in order to improve their business and to make it as successful as possible. Reengineering is an activity set in order to give a qualitative response to changes in the tourism market. It is a new business philosophy oriented towards competitors and users of products or services. Reengineering goals are2 to increase company's efficiency, provide better products and services to tourists, introduce new knowledge, implement radical and complex processes of changing strategies, goals and business philosophy, performance on the market, information flow, organizational and personnel structure of the management, and to multiply profits as well as to improve the overall quality.

2. BUSINESS PROCESS REENGINEERING

The reengineering of a hotel company includes a business reorganisation. Reengineering emphasises the innovation in business policy, modification of business objectives, and qualitative innovation of offer so as to remove company's weaknesses. Reengineering requires a change in attitude, system of values, thinking, acting, organisational structure, processes management, and the hotel offer. Briefly, innovation should be introduced to all segments of the company.

Reengineering is an action the aim of which is to create a qualitative response to market changes, i.e. to increase the ability to adjust and to enhance the flexibility of business. A hotel may respond to market changes by embracing the change itself, but not changing the business concept. However, such a response will lead to loss of acquired position on the market. Another option is to focus on a protected niche market with greater specialisation. Flexibility of the organisation, innovation and constant improvement in order to create a new vision and overcome weaknesses present a further option.

Reengineering is a response of the hotel to dynamic market changes with fundamental changes in business, mode of action, thinking and business model. Changes in companies should include the following actions:3

* Establishing the need for change - conducting market research and relation to the competition, identifying and discussing issues;

* Creating a powerful leadership - a group powerful enough to stir changes; motivating the group to cooperate as a team;

* Creating a vision - creating an insight into the future to determine the direction of change, developing a strategy on vision development;

* Advertising the vision - presenting the vision in media;

* Empowering others to work on the vision development - removing all obstacles to change, changing the system or organisational structures that will fully develop the vision, encouraging all non-mainstream ideas, activities and actions;

* Planning short-term success - defining apparent advancement, realising advancement, recognising employees' who are responsible for the advancement;

* Uniting and defining new promotion models - employing, promoting and training staff to be able to create and implement a new vision;

* Reviving the process with new projects, ideas, human resources - constantly improving processes to achieve synergy;

* Defining new approaches - analysing the link between new behaviour and company's success, developing a means to ensure management development and success.

Increasing and maintaining quality of hotel product can be achieved through continuous improvement of all organisational processes to achieve customer satisfaction. The quest for constant improvement implies that good is not enough and that even excellent performance could and should be improved.

Business process reengineering is an organisational method the aim of which is to radically transform business processes to achieve greater efficiency of the hotel in terms of cost, quality, service and time of reaction. This is how companies should act when starting over, and when there is a need to recreate and redesign processes in which the hotel creates value and performs its job by eliminating obsolete operations. The three key elements of business process reengineering are:4

* Identification of particular skills and abilities of an organisation,

* Assessment of main processes and

* Horizontal reorganisation in accordance with the processes.

Particular skills and abilities of the hotel refer to the offer that will be more competitive on the market. There is a need to identify the abilities to direct decision making with respect to activities that are essential for the success of the hotel

Hospitality management should assess core elements that clearly add value to the special offer that is to become competitive. Such processes convert resources, capital, information and work force into products and services that will be appreciated by users of hotel product/offer. With the organisation conceived as a series of processes, which range from strategic planning to pre-sales customer support, the management can determine the ratio of values that are gained from each process. This analysis of workflows serves to pinpoint unnecessary activities that add no value or only add insignificant value to the product/service.

Business process reengineering can lead to cutting down on hotel staff, which has an immediate effect on task performance. Tasks become more demanding and a broader range of skills is required, along with greater responsibility. The implementation of reengineering lasts for some time which many employees find difficult to deal with. Employees are affected by the uncertainty and anxiety associated with new tasks and letting go of long-entrenched work habits.

Business process reengineering requires the management to reorganise horizontal processes. This means that multifunctional and independent, self-acting teams are required. It also implies that emphasis should be placed on processes rather than functions. Hence, the middle level of management is redundant.

3. CHANGES IN THE ORGANISATION AND MANAGEMENT

Today, organisations rapidly embrace change. Globalisation has lead to the expansion of the market and greater possibilities for development and profit. The success of the hotel has increasingly become dependent on anticipating and accepting changes.

How are global changes to be accepted? A successful hotel will investigate key factors, which will determine the success, but also the ability to survive on the tourism market. Key organisational trends that every successful hotel organisation must be aware of are: visionary leadership, globalisation, diversity, flexibility, flat structure, focus on the customer, network orientation, quick information access and exchange.

Rapid and uncertain changes are an important incentive and reason to turn to human resources. Uncertainty refers to the vast quantity of information necessary for decision-making. The need to predict and use appropriate methods and models for anticipating market needs and the uncertainty faced makes the manager's job even more complex, thus resulting in greater responsibility to make the right decision for the development of hotel business.

All the aforementioned elements impose greater demands on hospitality management and make the decision-making process exceptionally complex. Thus, the main task the management has to fulfil is to constantly adapt and actively respond to changes. The main task also includes locating and making use of new business possibilities and opportunities. In such circumstances, the only answer is a quick response to market changes. However, centralisation of information and decision-making, establishing clear structures and procedures are not possible within this model. All conventional management coordination mechanisms, guidance and problem solving methods have become obsolete. In such circumstances, the ability and resourcefulness of managers is essential for prompt reaction to changes and proper action, discovering and using new business opportunities.

To survive and yield profit, hotels must have people who will:5

* successfully follow and notice weak indicators of changes in inner and outer surroundings of the organisation

* timely communicate important information on change to sections of the organisations that have the power to act

* correspondingly and creatively react to changes and challenges of the environment, i.e. create internal changes (in business, product, service, technology, methods of work, education, application of new knowledge, marketing, etc.)

* quickly and successfully introduce changes into the environment and gain profit

* ensure continuous feedback on the effect of changes

* constantly develop, learn and follow latest knowledge, make creative contribution

* regard constant changes as a challenge, a possibility and opportunity for creating something new (a novelty) in all areas of work and business

New conditions have also brought about changes in the organisation of hotel enterprise. The organisational structure of the hotel should be such to enable a more efficient use of regional and global resources for introducing higher level innovation, focus on customers and profit. The flat organisation is a tendency that calls for fewer levels of management, employees empowered to make decisions and minor differences in responsibility. Conventional organisations that follow firm rules must give way to leaders who will mediate between discipline and flexibility. The flexibility of a modern organisation refers to ensuring of systems, processes and human resources that will be able to respond differently in different situations. The flexibility also implies a lesser number of detailed instructions and procedure; greater autonomy and motivation of initiative, customizing employment relationships to include telecommuting and job-sharing; and lifetime employability rather than lifetime employment.

Thorough changes to how individual activities are carried out call for comprehensive changes to be made in the management system. The augmentation of business requires employees to engage all their knowledge and capabilities. Such a huge job cannot be carried out without the rights that belong exclusively to managers in a traditional organization. Decision-making becomes a part of each process and takes place at the site of each process, meaning that all employees have the autonomy and responsibility for making decisions . In this way, the clear distinction between employees and managers fades away.

In response to growing competition, hotel managements need to develop new groups of hotel services and focus their offering on specific segments of the tourist market. It follows that the market segmentation of the tourist market is reflected in organizational segmentation. Today, changing traditional organization into modern organization is one of the greatest challenges facing hotel management. Focusing on the development of business processes, the job of management will be more successful.

CONCLUSION

Change is a necessity. The most critical moment in the management of change is to recognize the need for change. Once the need is recognized, the hospitality management is faced with a number of issues that need to be thought through and weighed before a decision is made as to implement the change or not. Consideration should be given as to whether such changes are justified, whether it is possible to implement them, which impact they will have and to determine the suitable moment for their implementation.

Their objective, i.e. a desire for success and effectiveness, more than anything else, force hotel companies to change continually. As the ultimate aftermath of change, the people are affected. Thus, they should be informed, made aware of the changes that are to be introduced and the benefits that the changes will bring about, for them personally and for the competitiveness of hotel offer.

Footnote

1 Galiöic, V., Izmedu ugostiteljstva i turizma, Faculty of Tourism and Hospitality Management, Opatija, 2009, p. 123.

2 Stipanovic, C, Poslovna inteligencija u turizmu, Faculty of Tourism and Hospitality Management, Opatija, 2009, p. 184.

3 Stipanovic, C, op. cit. , p. 187

Footnote

4 Robins, S. P., Judge, T. A, Organizational Behaviour, MATE d.o.o., Zagreb, 2009, p. 659

Footnote

5 Bahtijarevic Siber, F., Management ljudskih potencijala, Golden marketing, Zagreb, 1999, p. 52

References