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Organizational Structure Paper

Susie Kelly

MGT 230/ W.Brittain

October 4 2012

Organizational structure is very helpful in providing information on the formal structure and what the chain of command is for a company. For a hotel there is no one standard organizational structure. Structures differ from hotel to hotel based on size and type of the property. The purpose of having organizational structure is to provide guidance to all employees of who they should report to in different situations. Sometimes it can become unclear who exactly has the final say or responsibility when there is conflict or a situation. Departments within the company can work well by focusing time and energy on productive task when a good organizational structure is provided. It can also provide a map for internal promotions allowing for entry level worker advancement.(Ingram, 2012) The Hyatt is just one of several global giant's in the industry of hotels, the company manages, franchises, owns and develops Hyatt branded hotels, resorts, residential and vacation ownership properties around the world. The company's worldwide portfolio consists of 492 properties and the numbers grow every year. Because the Hyatt is such a large company, having a functional organizational structure works best. At the top of the Hyatt's organizational structure is CEO Mark Hoplamzian, the departments that directly answer to him are Human Resources, International Operations, North America Operations, CFO, Legal Secretary, Marketing and Brand Strategy and Real Estate and Development.(www.officialboard.com/Hyatt). Managing each of those departments or operations are head managers who then have assistant managers and down the chain of command it goes. The CEO is in charge of making all final decisions concerning the hotels, presentations, running meetings, the launching of new properties and making all the final decisions for the general managers of each individual Hyatt. The general manager of each hotel is in charge of all issues concerning guest complaints to what the final say is for events and agreements that hotel is involved with. Often when a hotel is large and there are many tasks that need to be overseen an assistant general manager or residential manager will be hired to help ease the work load. Under the general and assistant manager are the department heads or at the Hyatt they are referred to as Directors. For example there may be anywhere from two to five restaurants in a hotel and since not one manager would be able to run so many food and beverage outlets alone, a food and beverage Director would be in charge of overseeing all the outlets and then each outlet would have one head manager to manage the daily operations and the employees that work there. In most large companies such as the Hyatt, several assistant managers as well as a floor supervisor would be hired to help with operating each restaurant and bar. In a company where there are so many outlets and departments it is essential to have a functional organizational structure so everyone has their specialized tasks and knows what is expected of them and is aware of the direct chain of command to report to when conflict arises or when concerns need to be addressed. This form of structure is not defined to just F & B but also with the other departments such as Accounting, Banquets, Catering, Marketing, PBX, Front Desk, Human Resources, etc. Another type of organizational structure is a matrix structure. The matrix structure super imposes the product structure laterally over the functional structure. The difference in this structure is there is three distinctive components: top manager, two matrix managers, and teams. The strengths in having a matrix structure is the accessibility of specialists, flexible team resources and having better intra-team communication. Of course every structure is going to have their weaknesses and role and authority ambiguity is just one weakness that comes along with having a matrix structure as well as being hard to manage with everyone having to report to just two managers. When this happens it can be overwhelming with the overload of tasks that are put upon the two matrix managers. Unlike a functional or matrix structure, a divisional structure is a set of organized divisions where each division corresponds to the end product or services provided by the organization. Where a divisional structure is strong in departmental coordination, its biggest weakness is resource duplication which in a functional structure is not an issue.(Gupta, 2009)
Marketing, finance, human resources and operations are all functions that affect the structure of an organization. Organization objectives and goals also are based on organization functions especially for a company as large as the Hyatt. In a large organization each function is subdivided to achieve right span of control. Characteristics of the market like competition, income class and customer needs must be considered when organizing the market unit. Human resources in an organization also helps set the standard for what organizational structure fits best for the company by specifically offering competitive wages and opportunity to advance when hiring employees that are specialized for any specific department. Organizational structure allows the expressed allocation of responsibilities for different functions and processes. First it provides the foundation in which standard operating procedures and routines rest. Second it determines which employees get the chance to engage in decision making processes and extend their views that will shape the organizations actions.
Because the Hyatt has so many outlets of operation, departmentalization or subdividing helps the company to provide better customer service by having more managers overseeing each outlet. It also has a number of potential advantages for an organization such as, monitoring of the environment is more effective, performance standards are better maintained, decision making and lines of communication are simple and employees have a greater opportunity for specialized training and career advancement. Since the Hyatt has two regional groups, North America and International geographic design is a big influence for why the Hyatt's organizational structure best suits their needs. Functional departmentalization helps companies to respond to the demands of different markets and it reduces cost by locating unique organizational resources closer to customers.
The success of a hotel is based on the entire operation, so if one functional area is not operating successfully, it can affect the entire operation. If a guest had just one bad experience it can bring down the overall satisfaction rating for the hotel. It for this reason, the general manager will promote team work across all functional areas and improve any department's performance if it is not meeting the organization's standards for performance.(Friend, 2012)
As hotels expand and customer based needs change so do the organizational structures.
“Looking ahead, we aim to be more adaptable by pushing more decision making to those who interact directly with our guests and hotel owners, better aligning our development and operating activities in the field and ensuring that all of our critical functions are properly and efficiently resourced.”(Hoplamazian, CEO Hyatt Corporation)

References:

Ingram, David. Demand Media. “Why is organizational structure important?” Retrieved from www.smallbusiness.chron.com
Gupta, Ashim, October 1, 2009. Matrix Structure. Retrieved from www.practicalmanagement.com www.officialboard.com/Hyatt Gupta, Ashim, September 20, 2009. Functional vs Divisional Structure. Retrieved from www.practicalmanagement.com
Friend, Lucy, Demand Media(2012). Organizational Structure of a hotel. Retrieved from www.smallbusiness.chron.com author unknown, May 2, 2012. “ Hyatt configures organization for future performance and growth” Retrieved from www.investors.hyatt.com
Bateman, T.S. & Snell, S.A. (2011) Management: Leading and collaborating in a competitive world(9th ed) New York,NY: McGraw-Hill Irwin

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