TG’s Organization Design and Development

Analysis of TG’s Current Organizational Structure and Evaluation of Its Appropriateness

Regarding the organizational structure of the company that is suggested for the investigation, its analysis is fundamental for the improved comprehension of the basic concepts of the system theory and their application to real-life situations. A detailed assessment of the performance of a particular organization and its structure can help to conduct a comprehensive evaluation and at the same time use the obtained data as a model for further similar analyses. Thus, the systems theory considers all existing systems as the combinations of patterns and particular structures that can work as entities due to a range of dynamic processes (Van Stekelenburg et al. 2015). Applying this definition to the system model, it would be possible to compare any organization to a living being that consists of several subsystems collaborating efficiently to guarantee the further development of the body and achievement of particular goals. The same goes for companies. In this case, there is a need to present the ability of a system to reach the balance dealing with internal problems and mitigating external threats that exist in the organization.

Using the Concept of Open Systems

Open systems differ from close ones because they do not rely only on internal resources; instead, open systems use external resources and opportunities and turn them into benefits for themselves and the external world (Wiewiora et al. 2013). That is why Travel Group, which is analyzed in the case, presents the entire network of travel agencies. Using such external resources as space, the organization makes efforts to apply them to create high-quality services for tourists and businesspeople. Moreover, the corporation receives evident financial benefits while clients do not have to worry about organizational issues related to their trips. Therefore, it is clear that the Travel Group is an example of an open system that introduces a hierarchical structure for all its subsystems to align its efficient cooperation and provide needed results.

Divisional Structure of Travel Group

Continuing the analysis of the case, it is possible to distinguish several subtypes of organizational structure. In general, the Travel Group seems to possess a divisional structure. According to Daft (2008), the structure of any corporation with a divisional type of structure is hierarchical with several subsystems. Therefore, TG’s support departments operate in accordance with such a principle to cope with the diversity of tasks that might appear in the company’s functioning. The company has a few subsidiaries, and they fulfill their functions with the help of a range of operational divisions to distribute responsibilities and cope with different tasks that appear in the course of the corporation’s development. Furthermore, there are such support departments like finance, IT, marketing, public relations, and human that are supposed to accomplish the clearly defined functions. For this reason, the organizational structure of the Travel Group could be defined as a complex one: every division is subordinated to the leading one and preserves a strict hierarchy.

Advantages and Disadvantages of the Current Structure

The implementation of this structure helps to avoid fatal or wrong decisions as a set of organizational rules along with the hierarchy mentioned above determines the character of relations between all the company’s subdivisions. It means that only top managers are provided with an opportunity to make significant decisions while the rest of the departments are responsible for their consideration and analysis. Regardless of the further perspectives of the company, the pattern of TG could be considered a significant advantage as the adherence to this model cultivates better working culture and fosters cooperation among all organizations’ departments.

However, if it is about the downside of the current structure, some archaic nature of such a system can be mentioned. Certainly, the management, as a rule, can make important and responsible decisions. Nevertheless, the role of ordinary employees is almost not taken into account, and some useful ideas proposed by the company’s workers may not be noticed. Competent leadership, as it is known, implies not only the achievement of the set goals but also the effective use of available resources. Experienced personnel policy, in its turn, means that management is able to use the strengths of its team and productively distribute responsibilities to achieve certain goals. Accordingly, the leadership of TG should focus on its employees and not forget that a cohesive team is one of the mechanisms for achieving success. Therefore, more attention can be paid to strategic management and consultations with experienced and qualified professionals who can offer essential changes.

Evaluation of TG’s Structure Appropriateness for the Future

The company’s further development and evolution is another essential aspect that should be analyzed in the given paper. According to Wiewiora et al. (2013), open systems are more perspective due to their ability to adapt to external changes and to resist harmful external influences. Their implementation, as the author remarks, can considerably simplify the management process of the corporate units since all departments work reliably enough (Wiewiora et al. 2013). At the same time, the adherence to the given pattern guarantees that top managers will be able to effectively control the work process, which deprives subdivision leaders of the possibility to make crucial mistakes. Thus, the given structure creates a significant competitive advantage and stipulates the company’s further growth, which is likely to be the leadership’s one of the central aims.

Analysis and Impact of External Factors on TG

There is a range of external factors that may pose a threat to the business performance of Travel Group in the future. To analyze them and describe the situation for the organization in a detailed way, it is necessary to use models accepted in different countries. A PESTLE analysis helps to define factors related to different fields of activity that can have an influence on an organization (Zalengera et al. 2014).

Political Factors

As it follows from the case, the most significant political factor influencing Travel Group is the threat of political instability and terrorism that reduces the return on sales. Because of the fact that there are 1600 travel agencies around the world, some controversial situations can happen. There have been a few cases when instability affected flights resorts and threatened the safety of tourists.

Economic Factors

Among the economic factors, it is possible to single out the currency rate of exchange that is rather unstable and may provide the opportunity for speculation. The purchasing power of the population in different countries may vary, and some services and destinations can remain inaccessible for certain social groups. Also, according to the information received from the case study, more than 56.000 people work in the corporation around the world. It means that quite much money is regularly spent on wages, and the corporation can afford to have such a big personnel base.

Social Factors

If it is about the factors that belong to the social sphere, there are intercultural differences among employees in different departments, which can cause conflicts in the company. Increased attention should certainly be paid to career attitudes of workers as discontent in several branches may eventually develop into a global threat of crisis. Therefore, it is essential to monitor the attitude of employees to the work process and, if necessary, carry out special measures aimed at raising the corporate spirit.

Technological Factors

Concerning technological factors that may influence the business performance of Travel Group, particular improvements can be implemented to make working practices safer and less time-consuming. For instance, the use of e-ticketing systems has been introduced due to that reason. According to Zalengera et al. (2014), improving technologies is a natural mechanism for modernizing the business process. Therefore, certain conclusions should be drawn.

Legal Factors

Another group of factors that may have an influence on working practices and financial outcomes for Travel Group is legal factors. All processes used in departments and employment terms should align with the labor law and be non-discriminatory for all the groups of employees working for Travel Group. Human resources are a rather important component of work; thus, the company has to consider the salary level of employees to exclude gender and racial wage gaps in the organization. Otherwise, certain problems regarding corporate ethics can arise and cause inconvenience.

Environmental Factors

Finally, another group of factors that may have an impact on the organizational performance of any company is the one that relates to the current environmental situation. Based on the company’s chosen course of doing business, it adheres to the norms of work in accordance with environmentally friendly production, monitors the reduction of carbon emissions, and makes efforts to prevent the accumulation of waste. All these factors indicate the compliance of TG’s activities with modern standards according to a PESTLE analysis.

Concept of Five Forces

One of the approaches that can help assess the efficiency and potential of the company’s development is the concept proposed by Porter; Dobbs (2014) notes that there are five main factors that can affect the performance of the company, and Porter’s theory can be applied to TG. In particular, it is about, for example, substitutions in the team. Nevertheless, the analyzed corporation is unlikely to face such a problem since a large number of branches around the world give an opportunity to timely respond to emerging problems. Also, according to Mihalic (2016), to remain a competitive company in the modern market, TG should ensure the transparency of its activities and introduce appropriate innovations. It will help maintain a rather large client base and at the same time have a good reputation among competitors. For instance, there are about 40.000 customers of this company around the world. If the management timely responds to all the changes in their purchasing power of clients, no serious consequences will arise.

One of the mechanisms to prevent real problems of the company is the McKinsey 7S framework that allows evaluating the functioning of a certain corporation from various angles (Ravanfar 2015). For example, a timely assessment of the political environment typical for TG will help to save customers from possible risks. The application of the McKinsey 7S framework, in this case, maybe related to the calculation of real threat cases and statistical analysis, from which specific conclusions can be drawn. Timely evaluation of certain areas of the company’s work is a tool that should be taken into account by the leaders of the corporation. The assessment of external factors (market relations, sales volume, etc.), internal features (the specifics of the organization’s policy, relations in the team, etc.), and other peculiarities of development is an indispensable attribute of productive work. The more employees will pay attention to all the attendant conditions that have a direct impact on their work, the higher the chance is that the company will be successful. Such an integrated approach to finding solutions to urgent issues will emphasize the interest of the management and strengthen customers’ confidence and trust.

Achievement of Sustainability Through Changes in Organizational Culture

The corporate sustainability of companies working in the tourism sector depends on the use of proper destinations and tour operators’ ability to provide services that do not have a detrimental influence on the environment of the planet and health of employees and clients. However, these factors are not the only tools to achieve sustainable positions, and one of the mechanisms to achieve appropriate sustainability is organizational culture and working with it. Its essence lies in the name itself: these are special business rules that define the key directions of the activity of a particular organization. They can be evaluated from the point of view of various moral and ethical aspects. For example, timely disposal of waste, properly chosen corporate style of communication, etc., are the indicators of organizational culture. Thus, world companies support “the three-pillar (environmental, socio-cultural and economic) concept of sustainable tourism” (Mihalic 2016, p. 461). It means that this direction of business development has a justification base and should be studied as one of the priority movements with a view to positive changes to achieve an appropriate level of sustainability.

Critical Divergence in Cultural Norms

The achievement of positive results in the process of organizational culture formation should be specifically discussed since this element of corporate policy is a rather flexible and variable parameter. In the context of Travel Group, the complexity of forming the most competent organizational culture lies in the fact that the corporation consists of a large number of departments and subsidiaries, each of which has its own peculiarities and nuances. In order to have positive feedback from customers around the world, the company should show unity with respect to all the issues of the cultural nature that arise in the course of work. As Van Stekelenburg et al. (2015) remark, organizations can successfully generate sustainable competing benefits through regular monitoring and manipulation of human resources. If TG’s approach to the organizational culture is flexible enough, it will certainly help to achieve sustainability even in the face of such an obstacle as discrepancies in opinions.

Attributes of Formation of Organizational Culture

In the search for appropriate mechanisms to strengthen the stability of corporations through organizational culture, certain areas and processes can be used to achieve this goal. For example, the celebration of traditions and customs by company employees helps to strengthen the corporate spirit and team building. This principle of organizing leisure time for the staff can positively affect the success of the company since joint activities unite the collective and provide a trusting relationship.

Value orientations are another important aspect of the formation of organizational culture. Since employees are the main driving force of the corporation, their behavior and relations with colleagues and superiors should comply with modern standards of corporate ethics and at the same time should not contradict the rules of communication with customers. The level of preparedness of personnel should be appropriate for performing the necessary operations and ensuring the quality provision of services.

An equally essential parameter is the chosen leadership style. According to Ravanfar (2015), the structural division within a particular organization is an indicator of the corporation’s organizational model and largely determines the success of the enterprise. In the case of TG, the leadership style is not authoritarian since the company is divided into many departments with heads and branches located around the world. Perhaps, it is such an open leadership style that is the key to a rather stable work in the market and the trust of customers.

One of the indicators of the organizational culture of the corporation is the attitude to the environmental situation since this issue is very relevant today. Shifting priorities towards sustainable practices in the context of environmental degradation is becoming one of the few alternatives to TG (Wiewiora et al. 2013). That is why the organization should also reduce carbon emissions and introduce specific methods of saving resources using information technologies. It includes the use of e-ticketing systems in all countries where Travel Group operates. It can help to achieve sustainability and differentiate among other influential players in the business. The use of innovations can lead to specific implementation problems; therefore, executive management may need to find additional external funding sources. However, in the face of such significant changes, these costs are unlikely to be considered very large. Based on the listed examples and the consequences of introducing relevant practices, it can be claimed that the process of building and strengthening organizational culture is a significant tool for strengthening the role of the corporation in the services market.

The Gap Between the Company’s Interests and Real Organizational Work

Despite TG leadership’s rather obvious attempts to raise the level of the organizational culture of the corporation, some gap between interests and real work can be observed. According to Mihalic (2016), one of the problems that clients of travel companies may face is the discrepancy between promised and actual services, in particular, significantly lower quality of services in comparison with the declared. When it is about Travel Group, it cannot be argued that the company violates the principles of honest business conduct and deceives consumers. However, too many departments, that is, a complex corporate structure, can lead to misunderstandings among employees, and certain difficulties can arise in the course of work. Such conventions should not affect customers’ satisfaction, and if the management of the corporation makes real attempts to strengthen communication between the departments of the organization, the quality of work and interest of clients will surely increase.

Another issue that can be considered as one of the reasons for the gap between the interests of the company and the real organizational work is the failure to adopt the principles of creating flexible management structures. Despite the absence of an authoritarian style, there is no strong corporate culture due to the nature of TG, which has emerged due to the chain of mergers. The case shows that the disparity among specialists who used to work in different companies worsens the atmosphere within the collective and makes it impossible to create the necessary corporate structure (Wiewiora et al. 2013). For this reason, to achieve sustainability, ensure the participation of employees, and, consequently, improve financial results for Travel Group, the company should reconsider its current approach to organizational culture.

Recommendations for Successful Changes

To achieve high performance and customer satisfaction with the company’s services, the Travel Group management should take some organizational changes, in particular, to improve the corporate spirit of employees to comply with the principles of fairness. It may be necessary to revise the wage policy so that all workers are paid according to the amount of work they do and the degree to which they are responsible for the actions of other specialists. Any conflicts on the interethnic or other grounds may arise since many employees work in numerous branches of TG. Therefore, managers should do everything possible to exclude such conflicts and prevent any inequality.

A special behavioral model aimed at protecting the interests of subordinates and strengthening the corporate spirit can be effective enough. All employees have their ideas about the way of doing business and the direction of the company’s development. However, the management should not prohibit members of the collective from having their personal opinions. On the contrary, effective leadership means following the advice of competent employees and working together to strengthen the corporate spirit. Using specific mechanisms to influence potential customers by reacting to the market situation and assessing the behavior of clients, it is possible to significantly increase sales. Thus, TG should make some changes to create the basis for its further evolution and achievement of sustainability. Otherwise, the company will not be able to fully develop and become a corporation with a high level of organizational culture.

Reference List

Daft. RL 2008, Organization theory and design, 10th edn, South-Western Cengage Learning, Mason, OH.

Dobbs, M 2014, ‘Guidelines for applying Porter’s five forces framework: a set of industry analysis templates’, Competitiveness Review, vol. 24, no. 1, pp. 32-45.

Mihalic, T 2016, ‘Sustainable-responsible tourism discourse – towards ‘responsustable’ tourism’, Journal of Cleaner Production, vol. 111, pp. 461-470.

Ravanfar, MM 2015, ‘Analyzing organizational structure based on 7s model of McKinsey’, Global Journal of Management and Business Research, vol. 15, no. 10, pp. 1-7.

Van Stekelenburg, A, Georgakopoulos, G, Sotiropoulou, V, Vasileiou, KZ & Vlachos, I 2015, ‘The relation between sustainability performance and stock market returns: an empirical analysis of the Dow Jones Sustainability Index Europe’, International Journal of Economics and Finance, vol. 7, no. 7, p. 74-88.

Wiewiora, A, Trigunarsyah, B, Murphy, G & Coffey, V 2013, ‘Organizational culture and willingness to share knowledge: a competing values perspective in Australian context’, International Journal of Project Management, vol. 31, no. 8, pp. 1163-1174.

Zalengera, C, Blanchard, RE, Eames, PC, Juma, AM, Chitawo, ML & Gondwe, KT 2014, ‘Overview of the Malawi energy situation and a PESTLE analysis for sustainable development of renewable energy’, Renewable and Sustainable Energy Reviews, vol. 38, no. 1, pp. 335-347.