Marketing Review — Summer 2008 - (Page 50) IMPLICATIONS: This management style suits Generation Xers and Millennials well, as it tends to let them work in whatever fashion suits them so long as the job gets done. Downsizing has spread from manufacturing industries to the service economy. Again, this process encourages the entrepreneurial trend, both to provide services for companies outsourcing their secondary functions and to provide jobs for displaced employees. Many older workers have been eliminated in this process, depriving companies of their corporate memory. Companies have replaced them with younger workers whose experience of hard times is limited to the relatively mild recession since 2000. Many firms may discover that they need to recruit older workers to help them adapt to adversity. This too is driving the entrepreneurial trend. Many older workers find themselves self-employed by default, as they need income and cannot find work in their accustomed fields. IMPLICATIONS FOR HOSPITALITY AND TRAVEL: 49 48 The growing demand for specialists to join in task-oriented teams will reduce the number of broadly experienced industry generalists needed by large hospitality and travel operators. Unfortunately, by relying on specialists for their expertise in relatively narrow aspects of company operations, it also will make it difficult to train promising staff members in the broad range of skills needed for promotion to higher management positions. reduce promotion from within and encourage companies to seek upper-level execs from other firms, and even industries. Executives increasingly will start their own companies, rather than trusting the old-fashioned corporate career path to provide advancement. IMPLICATIONS FOR HOSPITALITY AND TRAVEL: This trend could endanger the hospitality and travel industries’ tradition of promoting from within. Because there will be fewer opportunities for promotion, it will be difficult to provide employees with the breadth of experience required of top executives. Thus, high-level managers are likely to come increasingly from competitors and from other industries. This is likely to increase the turnover of management personnel, who can no longer look forward to the rewarding careers that these industries once offered. This also will force corporate managers to develop new ways to motivate their employees and provide them with the kind of experience needed to fill the few positions remaining at upper levels of the company. 49) Government regulations will continue to take up a growing portion of the manager’s time and effort. 48) Organizations are simplifying their structures and squeezing out personnel. Computers and information-management systems have stretched the manager’s effective span of control from six to twenty-one subordinates. Information now flows from frontline workers to higher management for analysis. Thus, fewer mid-level managers are needed, flattening the corporate pyramid. The span of control could stretch again if computer science finally delivers on its long-delayed promise of artificial intelligence. Opportunities for advancement are shrinking, because they come within the worker’s narrow specialty, rather than at the broader corporate level. By 2001, only one person in fifty was promoted, compared with one in twenty in 1987. ASSESSMENT: In the United States, downsizing, restructuring, reorganization, and cutbacks of white-collar workers will continue at least through 2025. Its pace will slow as most organizations accomplish the necessary changes. IMPLICATIONS: A typical large business in 2015 will have fewer than half the management levels of its counterpart in 1995, and about one-third the number of managers. Information-based organizations have to make a special effort to prepare professional specialists to become business leaders. Broad experience of the kind needed by a CEO no longer comes naturally during an executive’s career. Top managers must be computer-literate to retain their jobs and must make sure to oversee the increased spans of control that computers make possible. Finding top managers with the broad experience needed to run a major business already has become difficult. It can only grow more so as the demand for specialization grows. This will In 1996, the U.S. Congress passed regulatory reform laws intended to slow the spread of government regulations. Nonetheless, by 2001 more than 14,000 new regulations were enacted. Not one proposed regulation was rejected during this period. The Brussels bureaucrats of the European Union are churning out rules at an even faster rate, overlaying a standard regulatory structure on the national systems of member countries. This is not all bad. A study by the Congressional Office of Management and Budget estimated that major federal regulations enacted in the decade ending September 2002 cost between $38 billion and $44 billion per year. However, the estimated benefits added up to between $135 billion and $218 billion annually. ASSESSMENT: If the future holds an end to this trend, it is not yet in sight. IMPLICATIONS: Regulations are necessary, unavoidable, and often beneficial. Yet it is difficult not to see them as a kind of friction that slows both current business and future economic growth. The proliferation of regulations in the developed world could give a competitive advantage to countries such as India and China, where regulations that impede investment and capital flow are being stripped away, and health, occupational safety, and environmental codes are still rudimentary or absent. However, there is a significant penalty for the kind of risk that comes from inadequate regulation. China pays an estimated risk penalty of 6.49 percent for international borrowing. Per capita GDP, access to capital, foreign direct investment, and other measures of a country’s economic health all decline directly with a rising Opacity Index, which is heavily influenced by the lack of effective regulations to guarantee a level playing field for those doing business there. As a result, lands such as Russia will remain at a competitive disadvantage until they can 55 TRENDS FOR TRAVEL & HOSPITALITY • SUMMER 2008 50 SB10069764F-002/TONY ANDERSON/GETTY IMAGES
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