Leisure Service Organizations and Organizational Structures

Outline the service context in which leisure service organizations operate and discuss the essential differences between mechanistic and organic organizational structures.

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Leisure service organizations are varied in nature. They are each different and provide different types of services and demand different service performances from service employees. Studies show that there are four features of services: intangibility, heterogeneity, perishability, and inseparability (Lashley and Lee-Ross 2003, p. 9). The provision of intangibles is considered as the key feature of the service industries. In the leisure industry, there is a combination of tangible and intangible outputs. Tangible outputs are in the form of meals and drinks whereas intangibles are in the nature of the service – how the customer is treated during the service encounter.

As different customers demand different types of services, service deliverers will be in different positions in relation to their customers. However, the relationship between tangibles and intangibles as sources of customer satisfaction is a major factor in influencing the employment strategies that an organization uses. With increasing significance given to the intangibles, there is greater stress on ways to ‘delight the customer’ (Lashley and Lee-Ross 2003, p. 10).

Service delivery is hard to standardize because, by definition, service is that which fits products and services to the special needs of individuals or limited groups of customers. Service celebrates individuality. As individuals vary in their interpretation of customer needs, different service deliverers will act differently with customers. Some individuals may be more personally committed to successful service encounters. Moreover, the expectations of the customers are also difficult to predict.

All this leads to a variety in different types of services and the degree of standardization within services provided. Some leisure service organizations are able to standardize the tangible elements of the service encounter. For example, many tour operators, travel firms, health and fitness clubs, etc operate standardized products and services to customers who demand the predictability and security of the brand (Lashley and Lee-Ross 2003, p. 10).

Many of these firms have also tried to standardize the intangible elements of the service encounter by scripting employees, whereby training includes phrases and words to use during service. McDonald’s Restaurants and Disney World are well-known examples of organizations that have tried to standardize the service encounter in this way. Most leisure service organizations use a mix of standardized and unstandardized services. Sometimes encounters with customers are more heterogeneous and hence difficult to predict. In such cases services need to be individualized to the needs of the customer (Lashley and Lee-Rose 2003, p. 11). The success of a service encounter depends on how the individual service deliverer is able to understand and fulfill the needs of the customer.

Tangibility/intangibility and customization/standardization are the major factors affecting the human resources management of leisure services (Lashley and Lee-Rose 2003, p. 11). Depending on these variables there are four types of services possible: professional services where services are customized, service shop where the services are customized over a fairly predictable set of variables, service factory where services are standardized and tangible dominant and mass services where the range is standardized and intangible dominant (Lashley and Lee-Rose 2003, p. 12).

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There are two kinds of organizational structures in the leisure service industry: the mechanistic model and the organic model. In control-oriented value systems, all decisions are centralized and taken by the management. This results in a highly mechanistic structure (Burns and Stalker 1961). In flexibility-oriented value systems, decisions are decentralized and problems are resolved at the point at which they occur. Here, subunits are based on workflow and process instead of function (Tata et al. 1999, 440). This results in a highly organic structure (Burns and Stalker 1961).

Organizations with mechanistic structures have formalized rules, specialized procedures, and protocols. They generally adhere to a visible chain of command with a limited delegation of responsibility. Inorganic organizational structures, employees are required to possess multiple skills because of the variety of tasks performed and the complexity of their jobs (Tata et al 1999, 440). There is more horizontal coordination and communication, horizontal dependency (dependency on workgroup), common norms, values, training, and support. Mechanistic structures are appropriate in placid conditions where there are only minor and usually slow environmental changes (Lashley and Lee-Ross 2003, p. 22). Organic structures succeed in dynamic conditions where adaptation and flexibility are required.

Mechanistic organizational structures tend to exist in firms that have sizeable and complex operations, many departments (horizontal differentiation), several levels of hierarchy (vertical differentiation), a centralized configuration, and having formalized rules, policies, and procedures. Organic organizations on the other hand have fewer levels of authority, simpler structures, less formality, a decentralized organization, having employees with general skills, and more discretion in decision making (Lashley and Lee-Rose 2003, p. 22).

In the leisure service sector, seasonal demand, nature of the product, and integrated processes necessary for service delivery have a crucial impact on organizational structure. An example of mechanistic organizational structure can be seen at McDonald’s where the repetitiveness and stability of the procedures needed to cook a hamburger are best when the employee follows established procedures and customers can trust that each hamburger they purchase would taste the same.

An example of an organic organizational structure would be any hotel such as Hyatt Hotel. Though hotels may appear to be structured bureaucracies under the control of the general manager they are essentially organic structures within which departmental managers have considerable autonomy and responsibility. Departmentalization and labor flexibility form part of the hierarchy of control.

Thus, one finds the leisure services industry, in the services context, is characterized by its intangible and tangible outputs. Moreover, when one studies the mechanistic and organic organizational models, in the leisure services sector, it is best to have more fluid and flatter organic designs which help to increase production through autonomous workgroups and self-managed teams using common activities to differentiate rather than functions or departments (Lashley and Lee-Ross 2003, p. 42).

Describe what causes political activity in leisure service organizations and explain how organizational culture and individual behavior can influence political activity. Support your answer with examples from the leisure service industry.

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The term “political activities” refers to ‘activities that are not required as part of an individual’s formal role in the organization, but that influence or attempt to influence, the distribution of advantages and disadvantages within the organization” (Robbins 2001, p. 362). McShane and Travaglione (2003, p. 411) define organizational politics as the “exercise of power to get one’s own way, including the acquisition of more power, often at the expense of others”.

Whether politics is good or bad for organizations depends on who is engaged in politicking and who are the beneficiaries. Some organizations often advocate empowerment and team working and to reach this end they may use strategies that are highly political. Legge (1995) points out that replacing management with a peer or peers for purpose of control is a kind of domination over workers (Lashley and Lee-Ross 2003, p. 47).

In this case, the political strategies favor the organization and not the workers. The impact of politicking is seen in the “unsystematic allocation of finite sources, unclear budgeting protocols, inequitable salaries, and ad hoc performance evaluations systems”. In a politicking environment, people do not have the information to make the right decisions, and decision-makers are often forced to manipulate the facts or withhold information to suit their personal interests (Lashley and Lee-Ross 2003, p. 49).

Politics can be expected to exist in leisure service organizations due to two reasons: the sector is dominated by smaller owner-operated firms run by entrepreneurs; and entrepreneurial characteristics have been identified in many frontline workers of large hospitality corporations (Lashley and Lee-Ross 2003, p. 49). Apart from personality conflicts there, politicking within organizations may also develop as a result of contextual or cultural factors. It is alleged that individuals differ to a similar extent in all firms and yet some organizations are more political than others. This can be attributed to organizational cultural differences.

People within an organization have varied aspirations, goals, and personality traits leading to conflicts. Biberman (1985) considers that individuals such as entrepreneurs display strong traits of locus of control and a need for power (Lashley and Lee-Ross 2003, p. 49). Politics is based on the distribution of power within the organization. Generally, the top management or the organization’s owners influence the power distribution within the organization (Lashley and Lee-Ross 2003, p. 52).

They have the power to appoint people to senior positions and priorities. They control resources and budgets thereby indirectly having the ability to reward and encourage desired behavior. They also have the authority to force subordinates through the threat of discipline or dismissal from the organization or through just bullying. This creates collective opposition by taking action against other organization members or an individualized opposition (Lashley and Lee-Ross 2003, p. 52). Thus politics can take root due to personality traits in an organization.

Organizational culture is based on differences in norms and shared practices that are learned in the workplace and are considered valid within the organization. In the leisure services industry, one way of ensuring service quality, customer satisfaction, customer loyalty, and high organizational performance is by establishing a strong organizational culture with facilitates the control of service employees’ attitudes and behaviors.

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Parasuraman (1987) argues that a customer-oriented organizational culture is a prerequisite for service firms to excel. Berry, Ziethaml, and Parasuraman (1990) identify culture as a tool for narrowing the gap between customer service expectations and how employees deliver service (Kusluvan 2003, p. 454). Organizational culture leads employees to behave or act in a way that leads to service quality, customer satisfaction, customer, loyalty and hence successful business results in a service organization.

Organizational culture can carry adaptive and nonadaptive features. In an adaptive culture, core values pursue close relationships with customers. In a culture of this kind, the focus is on the quality of relationships both within the organization and between the organization and its customers (Kusluvan 2003, p. 466). Hence an adaptive culture is defined as “one that encourages employee confidence and risk-taking, emphasizes change and focuses on shifting environmental threats and market opportunities” (Rondeau and Wagar 2002, p. 16). In an unadaptive culture core values are management-oriented and common behaviors are expected to be inflexible (Kusluvan 2003, p. 466).

An unadaptive culture is subject to rules and regulations as in a classic bureaucracy. Therefore an unadaptive culture is said to be more bureaucratic and hierarchical and emphasizes control through rules (Rondeau and Wagar 2002). Politicking is nurtured in an unadaptive culture. The top management wields a lot of power and hence can impose his self-interest on the organizational members.

Consider the personality trait of a manager. If a particular manager in a hotel is overly ambitious, he may create strategies such as taking credit for the work done by his subordinates as well. This is organizational politics. Considering the organizational culture of a firm, if a hotel has an unadaptive culture, it would always ensure that the workers who are ‘yes-men’ are promoted and rewarded. This is again organizational politics. Thus the root causes of organizational politics are the personality traits of individuals and the culture in which they work.

Politics arises as a result of the uneven distribution of power. Organizational culture and personality traits play a huge role in organizational politics. If the personality traits are entrepreneurial, or if organizational culture is unadaptive, there is a greater chance of politics being nurtured within the organization. As a result of politics, the interests of one person or influential few are allowed to dominate organizational decisions, and that too, often at the expense of others.

References

Berry, Ziethaml W., and Parasuraman, A. (1990): Delivering quality service: Balancing customer perception and expectations, Pergamon Press, New York.

Burns, T. and Stalker, G. M. (1961): The management of innovation, Social Science Paperbacks, London.

Kusluvan, S. (2003): Managing Employee Attitudes and Behaviors in the Tourism and Hospitality Industry, Nova Publishers.

Lashley, C. & Lee-Ross, D. (2003): Organization Behavior for Leisure Services, Butterworth-Heinemann Publishers.

Legge, K. (1995): Human Resource Management, Rhetorics and Realities, Macmillan Business, Houndmills, Basingstoke.

Lucas, R., (2004): Employment Relations in the Hospitality and Tourism Industries, Routledge Publishers.

McShane, S., Travaglione, T. (2003): Organizational Behavior on the Pacific Rim, McGraw-Hill Publishers, Sydney.

Parasuraman, A. (1987): Customer-oriented corporate cultures are crucial to services marketing success, The Journal of Services Marketing, Volume 1, Issue 1, p. 39-46.

Robbins, P.S. (2001): Organizational Behavior, Prentice Hall Publications.

Rondeau, K.V. and Wager, T.H. (2002): Organizational learning and continuous quality improvement: examining the impact on nursing home performance, Healthcare Management Forum 2002, Volume 15, Issue 2, p. 17-23.

Tata, J., Prasad, S., and Thorn, R. (1999): The Influence of Organizational Structure on the Effectiveness of TQM Programs, Journal of Managerial Issues, Volume 11, Issue 4, p. 440.

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