Ritz Carlton Essay

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Abstract:

In Fall 1992, Ritz-Carlton Hotel Co. became the first hotel company to win the Malcolm Baldrige National Quality Award. Ritz-Carlton implemented total quality management (TMQ) as a means of winning the award and improving its service. Patrick Mene joined Ritz-Carlton 3 years ago as corporate director of quality to coordinate and spearhead the company's TQM program. Mene explains issues concerning application of TQM to the hotel industry and applying for the Baldrige award. One of the planks of TQM - empowerment - was an easy step for Ritz-Carlton. Measurement was a difficult hurdle because the industry does not have service-quality benchmarks. Key product and service requirements of the travel consumer were translated into Ritz-Carlton Gold Standards, which include a credo, motto, 3 steps of service, and 20 "Ritz-Carlton Basics." Team building was also a time-consuming effort. Ritz-Carlton is now requiring its vendors also to apply TQM or a similar process. Copyright Cornell University. School of Hotel Administration Aug 1993

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The search for sustained, competitive advantage in the hotel industry has become focused to a large degree on product and service quality. Achieving this quality on a consistent and low-cost basis, however, has proven to be an elusive target. In the past, managers have been provided with such techniques and programs as management by objectives (MBO), quality circles (QC), and organizational development (OD). Most recently, total quality management (TQM) has become a focus in many manufacturing and service industries, including the hotel industry.

The drive for quality improvement has become a nationally recognized goal. To that end, the Malcolm Baldrige National Quality Award, established by Congress in 1987, recognizes U.S. companies that have achieved excellence through adherence to quality-improvement programs. Named for the late Secretary of Commerce, the award is administered by the Commerce Department's National Institute of Standards and Technology. The goals of the award are to promote quality awareness, recognize quality achievement of U.S. companies, and publicize successful quality strategies.

Companies participating in the award application process must submit comprehensive information on the quality-improvement programs they have implemented. The seven categories on which applicants are evaluated are leadership, information analysis, strategic quality planning, human-resource development and management, quality assurance, quality operating results, and customer satisfaction. Applications are graded on a 1,000-point scale, and companies with the highest scores are visited by a team of quality examiners. The examiners submit their findings to a board of nine judges, who then provide feedback reports to applicants and select award recipients. Two awards may be granted yearly to companies in each of three categories: manufacturing, service, and small business. While award recipients are allowed to publicize and advertise their awards, they are also expected to share information about their successful quality strategies with other U.S. companies.(1)

In the first four years of its existence, 12 firms won the Malcolm Baldrige National Quality Award: eight came from manufacturing; three were in the small-business category; and only one, Federal Express, hailed from the service sector. Certain aspects of the service encounter that are endemic to the hotel industry may make it difficult but not impossible to apply many of the management principles from other industries. Those aspects include the intangibility and perishability of the product, variability of delivery, simultaneous production and consumption of the service, and the changing needs and expectations of providers and users.(2) In a seminar held at the 1991 Annual CHRIE Conference in Houston, hospitality educators and industry professionals stated their belief that the hotel industry could...
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