All companies and ministries must have a specific structure that demonstrates the general activities and the main obligations of the sectors. Building a company’s organizational structure is a complex task that often arises before both, HR professionals and senior management of companies. To list just a few examples: establishment of a company, introduction of the new division, reorganization, merger or acquisition, etc. The way, the company’s organizational structure is built and the business processes are fixed, determine the effectiveness of the company and its future in the market (Wagner-Tsukamoto, 2003). Mr. Faruqe defines organizational structure as the portion tasks, harmonization, and the direction of the company to accomplish certain goals, due to the fact that it has a great importance in representing responsibilities by different function and processes, which depend on employee objectives in leading the company.
According to Marcus and Van Dam (2007), the types of the organizational structure include the traditional structure, divisional structure, matrix structure, bureaucratic structure, pre-bureaucratic structure, network structure, and team structure. Mr. Faruqe authorizes that they are a governmental entity and have different structures that they use to lead the company in the best way. Above all, company’s mission is always divided into several parts. The first one is the mission of the head office, where the structure might be similar to the traditional structure that classifies duties in compliance with the position of an employee. The second mission refers to the companies QNH is dealing with for managing their hotels locally and internationally.
Generally, the traditional model of organization, as a rule, has a hierarchical structure of management in which the company management throughout its work stages is provided by the leadership team. Employees engaged in the production and sale of goods or services refer to lower levels. It is subordinate to and controlled by the higher level.
The structure also includes employees engaged in accounting, financial calculations, marketing research, the use of information and communication technologies, advertising campaigns. Hierarchical type of governance structure has many varieties. The most common is the linear functional organization of the administration. It is based on the so-called “pit” principle of building and specialization of management process. In such management organization functional subsystems are formed: marketing, manufacturing, finance, personnel, information and communication technologies. For each of them, a hierarchy of services is formed – a “pit”, that permeates the entire organization from top to bottom. The hierarchical structure assumes the existence of rules and regulations for managers carrying out their tasks and responsibilities (Miller, 2011).
The main drawback of this structure is its slow response and changes in the environment, requiring additional coordination of units’ activities. The lines of vertical links are overloaded, all the problems are passed up the rector. Another disadvantage of the functional structure is that it obstructs innovations, as coordination is weak, and every employee has a fairly limited liability and the ability to solve problems.
Based on the literature of Marcus and Van Dam (2007), Mr. Faruqe is leading a company that has the situational analysis strategy, which consists of the definition of vision and mission, internal and external analysis rather than the other types of organization strategy.
The first step in the situational analysis is the analysis of the company’s strategy answering the questions (Wagner-Tsukamoto, 2003):
• To which extent does the strategy meet the objectives?
• How implementable is the strategy?
• Is there a necessity to correct positions?
The assessment of QNH is typically is carried out based on the following stages:
1) The assessment of the competitive strategy of the company;
2) The assessment of growth and development strategy based on the features of the competitive environment in the industry;
3) The analysis of functional strategies;
4) The definition of the key success factors and the analysis of actions providing competitive advantage.
For the empirical evaluation of the strategic position of the company, the two parameters are examined: achievement of the company’s strategic objectives and conformity of its indicators of the average in the industry. The most obvious indicators of strategic activities are:
• Growth in the company’s sales compared to the growth in the industry;
• Attracting new customers in sufficient quantity and preserving the old ones;
• Change in the company’s profits compared to competitors;
• Dynamics of the net profit, returns on investment, added economic value and their comparison with the performance of competitors;
• Change of company’s financial condition;
• Improvement of internal indicators (products’ costs, reject rates, stocks turns, etc.);
• Reputation and image of the company;
• The company’s leadership in technology, innovation, quality, price level, the rate of releasing new products into the market, and other parameters;
• Sound financial and market position of the company.
The analysis and evaluation of QNH strategy forms our conclusion about the need to adjust the strategy. For example, Mr. Ahmad’s company is one of the leader companies in the hospitality industry worldwide that is concerned of envisioning their future business to create the value in the eyes of the customers, and building up the sustainability with a strong position in the market place. Consequently, his company’s vision is to work under the obligation of being always the leader of the hospitality sector by providing the public interest to their colleagues, business partners, relevant stakeholders, and communities. In this case, the second block of the situation analysis starts involving gap-analysis, cost analysis, and SWOT-analysis of the company. However, in stable conditions, the best strategy is the one that does not require radical changes.