Case Study

Sample Essay on Business Case Analysis of Ritz-Carlton

Ritz-Carlton

Executive Summary

Company History and Growth

Ritz-Carlton Hotel was founded in 1983 in Atlanta Georgia after the sale of Ritz-Carlton Boston and the United States trademark. The company has been able to expand over time to establish its brand in 26 countries so far with more than 81 hotels and resorts. The founder of the organization, Cesar-Ritz took luxury accommodation a notch higher though his distinct management in the hotels’ branches in Paris and London.

Mission Statement

The mission of the company, ‘’we are ladies and gentlemen serving ladies and gentlemen’’ enhances a close relationship between the workers and customers, and also indicates the perception and appreciation of development in the company.

Ethics Credo

The company’s credo is offering genuine care and comfort to guests, providing better personalized services and facilities, and enlivening the senses and fulfilling the wishes of guests with mind blowing experiences. Husrt established a customer/ employee credo and set standards which employees are required to meet in serving clients. This highlights human resource management practices and organizational cultures like hiring, training and empowerment that have been implemented by the company for organizational success.

Challenges

Some of the challenges that are experienced by the organization in management include strict organizational culture, an expensive recruitment process and an expansive method of enticing guests for ensuring an excellent experience in the resorts and hotels.

Diagnosis

Current Action Plan

The company acquired finances to open new branches from Manufacturers Hanover Trust of New York. Under the leadership of Horst Schulze, the company has emerged as a leader in the hospitality industry in the United States through the institution of a personal and data driven service. The company endeavors to acknowledge the employees’ contributions since they are the greatest resource for enhancing service delivery, nurturing talent towards the benefit of both the individuals and the organization at large, and value diversity, improvement of quality and strengthening of the values of the organization through creation of a proper working environment.

Employee Orientation

The company sets aside sufficient time and resources for the orientation and training of employees since it is believed that proper training enables the workers to obtain service values and the required service standards. To make sure that only qualified individuals are hired and the process is objective, Ritz-Carlton uses the services of Talent+ Recruitment Firm based in Nebraska. The organization conducts ongoing training for the employees in their first year of recruitment (100 hours annually), so that they are able to perfect their skills and master the culture of the organization. Besides, it also holds workshops and training sessions on either monthly or quarterly basis where it discusses aspects like the appreciation of individual disparities, team work and evaluation of co-workers performance.

Training and Development Steps

The Ritz-Carlton employees are taken through intensive and comprehensive training for the achievement of excellent standards. To recognize the quality and commitment towards offering training to its employees, the company clinched the top spot in training top 125 winners in 2007. Besides, the organization has been able to curve a reputation for exemplary performance when it comes to the provision of quality services by calling their staff ladies and gentlemen, and using training methods that help in providing high quality services as expressed in the company’s Gold Standards. For instance, in 2007, the organization invested 10% of its expenditure in creating a sufficient training program.

Ritz-Carlton is a leading name in the hospitality industry because of the choice to create and adhere to its own standards that is portrayed by the fact that it is the only company that has won the Malcohm Baldridge National Quality Award two times and provides the best through its employee training program. According to the Chief Executive Officer, the success of the organization is tied to several fundamentals like location, product building and the people. To make sure that all employees are up to date, the company uses lineup whereby the CEO communicates with the waiters and waitresses on their schedule for the day and employees utilize this opportunity to also discuss their service experiences. This lineup also enhances continuous training and communication since the message from the heads of departments is passed across. Besides, the sharing of experiences motivates the employees to strive towards continuous development.

Empowerment

Giving employees the opportunity to use at least $2,000 to make sure that guests are treated to the best experience instills trust, enhances creativity and also creates a good public image for the company. The values of Ritz-Carlton acknowledge that creating a good working environment requires that employees ate involved in because this will makes them feel part of the organization and influence their commitment as professionals instead of servants. Despite the awards that the organization received for excellence, the CEO still felt that they were far from attaining sufficient customer satisfaction since their services were erratic and workers lacked a clear understanding on what was required of them.

Employees are given the power to spend up to $2,000 in cases where they think that they are able to enhance the experience of customers, handle customer complaints or correcting an error without the permission from their supervisor. This level of trust makes the staff to have confidence, be creative and approach issues and come up with solutions professionally to the advantage of the company. The philosophy of the organization of respecting its employees creates a fully incorporated working environment that accommodates all. The turnover of Ritz-Carlton is about 20%, quite a low rate in the hospitality industry and the move towards evaluating how well the employees feels that the company’s promises are accomplished on day 21 is commendable.

Performance Evaluation

The evaluation of employee performance is conducted by a quality management team every week through reviews ofImage 2 product and service quality offered. The strategic plans are set on a yearly basis to guide the employees on what they are required to achieve over a given period of time and the established monitoring performance is aimed at enabling them to set goals and carry out evaluations at individual levels. Once the management realizes that a particular employee is not delivering, the first step is to establish the source of the problem and through training, they are encouraged to solve the problem themselves. Employees also monitor their own performance and are rewarded at both departmental and hotel level for their accomplishments.

Although the organization does not provide the greatest salary packages in the industry, it is preferred by many people who have the dream of developing their professional standings because of the positive organizational culture. Comprehensive training and delegation of responsibility and trust to employees reduces the employee turnover, thereby leading to growth since hiring and training expenditure are barely at minimum.

Implementation

Challenges of the Current Action Plan

The culture of the organization emphasizes on customer satisfaction and maximization of profits. The question is how much the organization is willing to spend on offering clients exemplary experiences. Besides, upholding the culture of the organization is based on the person at the helm and the processes involved in hiring, much time and resources are unnecessarily spent. Due to the intensive training and strict standards, the organizational culture is static and accommodating change can take quite some time. According to literature, the expense involved in operations and ensuring that guests have mind blowing experiences has been identified to cause strain between the management and owners of the organization.

Recommendation

New Recruitment Strategy

A new plan of action should consider implementing a recruitment strategy that does not take a lot of time and resources. The company offers rewards to employees for better performance like professional growth at individual levels and promotions for employees who are committed and hard working.

Tying pay to performance

Considering a good working environment and name of Ritz-Carlton, it is important that salaries of employees are reviewed so that they are able to coincide with the revenues of the organization.

Target Market for Job Candidates

The target market for the employees working in the hospitality industry is focused on tourism and hotel industry. Therefore, the training program should be flexible so that workers are able to use the knowledge acquired in outside situations.

Training Resources

The company sets aside sufficient resources for hiring, training and employee empowerment. This has ensured success of the company in the industry. With 25% of the organization’s managerial workforce as employees who were hired as casual indicates that the organization provides opportunities for professional growth through promotions. The better working conditions enable the employees to understand their roles and also create a perception that they are not in the company to undertake certain duties.

Conclusion

The challenges experienced in the management of the organization include a stringent organizational culture, an expensive process of recruitment and a costly method enticing guests in an effort to make sure that they have the most memorable experience in the hotels. A review of the strategy of recruitment will make sure that the process is less costly to the company and release resources initially used to other important ventures.

Ritz-Carlton’s process of recruitment is done professionally and only applicants with the highest qualifications in the hospitality sector are absorbed. This is because of the fact that service and quality can only be as good as the staff and for the company to attain the Gold Standards, it is important that it hires the right kind of employees and equip them with the necessary input. Recruitment is conducted through benchmarking, an overtime observation of the ability of an employee to learn and deliver. Besides, the good working environment enables employees to understand their responsibility and instills a perception that they are not in the company to play certain roles.

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