primary case

history

The hotel’s famous name began with the birth of Cesar Ritz in Switzerland in 1850. Eventually known as the “King of Hoteliers”, Ritz opened three luxurious hotels in Europe: London’s Carlton and The Savoy, and the Ritz in Paris, before dying in 1918. Several Ritz-Carlton Hotels were built in North American in the early 20th century, including Montreal in 1912, in New York in 1917(located at 46th Street and Madison Avenue, where Louis Diat ran the kitchens and invented vichyssoise, in Philadelphia, Atlantic City in 1921. Boca Raton, and in Boston in 1927. By 1940, only the Ritz Carlton-Boston, run by its founder Edward N. Wyner, and the Atlantic City location remained. Wyner’s Ritz-Carlton Boston was a legendary feature of elite Boston, allowing only high-society guests and enforcing a strict dress code. During the Great Depression, Wyner kept the lights on in empty rooms to preserve the hotel’s reputation.

After Wiener’s death in 1961, his family sold the hotel in 1964 to Cabot, Cabot & Forbes, run by Gerald F. Blakeley, Jr. Blakeley ran the Ritz-Carlton Boston for another two decades before he sold it in 1983 to developer William B. Johnson, who assembled a four person development team in Atlanta, headed by hotelier Horst Schulze, to create the Ritz-Carlton concept. Schulze instituted a company-wide concentration on both the personal and the data-driven sides of service: He coined the company’s well-known customer employee-centered credo, “We are Ladies and Gentlemen serving Ladies and Gentlemen” and the set of specific service standards on which Ritz-Carlton employees’ base service through the present day. Under his leadership the hotels earned an unprecedented two Malcolm Baldrige National Quality Awards, and grew from four to forty U.S. locations. In 1996, Schulze’s group sold a 49-percent stake in The Ritz-Carlton to Marriott and in 2000; Marriott International purchased the remaining 51-percent when Schulze left with other executives to create the West Paces Hotel Group. The Ritz-Carlton operates fractional residences at several locations in the United States under the name Ritz-Carlton Destination Club. Properties include Aspen Highlands and Bachelor Gulch in Colorado , St. Thomas, in the U.S. Virgin Islands, San Francisco, California and Jupiter, Florida. The Ritz-Carlton hotel at Water Tower Place in Chicago is a Four Seasons managed property, due to the sales of the Ritz-Carlton name for this location prior to the creation of the Atlanta group, and the engagement of Four Seasons by the property owner.

The United States got its first look at the combined name of the Ritz-Carlton in 1927. Boston developer Edward N. Wyner secured the rights for the name. When it opened, the Boston Ritz-Carlton rooms started at $15. The success of the Boston Ritz-Carlton led to an expansion of the bran to Philadelphia and New York City, among others, but the Great Depression decimated all but the original Boston site.

James McBride, leadership responsible for many successful Openings of hotels throughout Asia. His understanding and credentials of how to manage hotel opening attributed to many Awards being assigned to the Ritz-Carlton Enterprise. The paralleled focus on the customer/guests by McBride facilitated the transformation of the company. He was brought in with an entrepreneurial background that suited the assignment of Opening new hotels quite well. (Sucher & McManus, 2003)

The Human Resource group, led by Schulze on the other hand, main focus was on employee relations. Every effort to instill empowerment and trust was evident. For example, self-directed work teams had a “degree of control among team members over how they change the services they provide”. (French, Bell Jr. & Zawacki, Reading 21, 2003). The adherence to allowing teams at RC to be self-directed contributes to the overall operations strategy as well. When employees feel empowered and accountable for shortcomings within their workplace, they are more willing to embrace the vision. At RC there is an open door policy that allows employees to come to management with issues or defects and suggest solutions. It is assumed that they come to work to do a good job’ and that it is not proper to punish employees if something goes wrong. (Sucher & McManus, 2003).

Training and guidance are established by management and then the individuals teams of employees are allowed to gauge their performance and are recognized for outstanding contributions. A reward system allows employee to benefit from their successful teams efforts. The accomplishments of RC to date have confirmed the significance of retaining leaders with a history coupled with proved capabilities that suite the transformation requirement. (French, Bell Jr. and Zawacki, Reading 35, 2005). The accomplishments of RC to date have confirmed the significance of retaining leaders with a history coupled with proven capabilities that suit the transformation requirements.

The competitive position of the Ritz-Carlton is that the training is a rigorous process of identifying committed service professionals, individuals come to the company with varying levels of technical skill and backgrounds both inside and outside the hospitality industry. New staff members are assigned learning coaches who train and certify them on the core competencies of their jobs. Training and learning are taken very serious. The focus is on designing the learning, measured competency, and whether the skills learned are truly being delivered to the customer. The training organization is evolving into a learning environment. Realistically 70 percent of learning is on the job. This feeds through to operational certification, making sure that within the employees first 21 days, they are certified within their jobs, in alignment with the Gold standards for the hotel. Some of the tools are online training modules, detailed operational manuals that help facilitate that certification process. These tools are in alignment so that it can analyze operational skills acquisition against the results of mystery shopper and customer engagement surveys. This training and being part of the Ritz-Carlton culture engenders a great sense of commitment from all of our Ladies and Gentlemen, and they feel empowered and engaged in their own decision making and in their own career development. While the new 21 day certification process is constantly occurring as new hires are brought into an existing hotel, the task of initially training staff for a new hotel opening is rather daunting.

Training a predominantly new group of Ritz-Carlton Ladies and Gentlemen to prepare a hotel for opening, are chosen for around the world. The training starts at 6:00am in the morning with the trainer’s lineup, and ends about 8:00in the evening. The trainers, staff, put things in their right place, stocking minibars, making beds, and doing whatever it takes to make the hotel ready for the next day’s staff training and ready for the upcoming needs of guests”. Ritz-Carlton has effectively developed structured approaches to help staff members understand and embrace the company’s culture during both new hotel openings and the new-hire onboarding process.

The transfer of corporate knowledge is highly valued both in terms of certifiable operational standards and cultural identify and history. The Cultural imprinting is essential to the success of Ritz-Carlton hotels internationally. No matter what is going on in the corporate headquarters, everything is dropped to make sure the hotel is launched from a solid cultural and operational foundation. Both the front line and leadership, helps them understand their Gold Standards and o their approach to business. At the leadership sessions, it is define that the expectations in regards to their business model treatment of staff, care of guests, and community involvement. The overall leadership of the Ritz-Carlton has developed a very sophisticated process of making training a person-to-person journey that results in the inculcation of corporate values and mission.

Interventions

This information will highlight the top issues and alternatives as to how to best to bridge the organizational issues faced today in the hope of improving collaborations and reducing competition between owners and management. With this main OD goal in mind, an appraisal of alternative Organizational Development procedures to facilitate change and recommendation will be proposed.

As our first alternative, we suggest a confrontation meeting. The primary reason why we choose this method is the alliance with MP and changes in the leadership structure. (French, Bell Jr. & Zawacki Reading 18, 2003). We suggest interviews of each group followed by information sharing meeting and observation of group interactions. This will be expanded to include sub-groups of Quality, and Human Resources in order to disseminate to the entire leadership constituency.

Confrontation Meeting Questions

How does each group perceive the other?

What re the issues/problems of collaborating together?

Are there any areas of bottleneck, statements, or standoffs?

How can they collaborate to improve the performance of both groups?

Are goals common between the groups? Are line of influence and trust apparent?

What is the tone or impressions among the groups?

How do the individual group members desire this to work?

Our second alternative involved diagnostic interventions to “identify some of the underlying symptoms of disturbances in the system and what some of the probable causes might be.” (French, Bell & Sawacki, 2003). A review of the current policies by the entire leadership team may uncover insight into the perceptions of what the mission is, how it may have changed, how it is perceived. The hope is that these types of Diagnostic meetings will assimilate information in a short span of time.

Diagnostic Meeting Questions

Has the organization’s culture changed? Is it changing?

What is the organization climate in leadership trusting or suspicious, cooperative vs. competitive?

What are the organization’s goals? How have they changed?

Are organization goals shared and understood and accepted by leadership?

Another alternative due to the global presence of RC and its location in many nations worldwide, that we suggest is organizational mirroring. The Ritz-Carlton Management in Washington D.C. could hose cross sectional participation from all of the other hotel management teams. Typical methods for gathering input include individual interviews with an ensuring group meeting to review the interview data. A fishbowl group seating arrangement can be used with the inner circle being leadership from both RC and MP of Washington D.C, and the outer being a mirror leadership team of representative from other RC hotels posing as observers. Next we reverse the roles as the mirror leadership team of representatives from other RC hotels move to the inner circle and the RC and MP Managers from Washington D.C., take the observation role. The resulting feedback and action plans are designed to assist the host in resolving the issues.

Are organization goals shared and understood and accepted by leadership?

Mirror Intervention Questions

How do the key people in the observing group view the inner group?

Do they detect conflict, tension, or areas of resistance between groups?

Are there underlying assumptions of the groups or individuals?

The final alternative is to do nothing. Is to leave everything as it is and continue with the “opening of the Washington Hotel with the current operating strategies as is. RC has been very successful in Opening Hotels for years. Their brands, trademarks and strategies have brought them Award winning success. Though the occupancy rate is slow in ramping up to full capacity expected this has not been a problem in the past. Besides MP owns the competition and would not compete with its own interests in RC.

Recommendations:

We suggest a combined Mirror Intervention meeting and a Diagnostics Meeting. The Mirror Intervention Meeting will address internal issues of Washington D.C; AR a Mirror Intervention can begin to the forefront the collaborative versus competitive issues in leadership of owner and managers in an unbiased setting. The mirror or outside leadership poses as a checkpoint of accountability in reference to changes or modifications that could be the guideline (not policy) for all RC hotels with similar internal issues. The Diagnostic Meeting would allow cross sectional collaboration on issues that affect the entire RC enterprise. The reverse “Fishbowl” model of Mirror Interventions used within the Diagnostic Meeting would allow other RC leaders across the RC organization views to be expected with reference to brand and trademark changes Due to the opportunity for precedent for handling similar merger or brand issues. For instance, the modifications to the trademark (Seven Day Countdown), is an organization wide issues and requires input from leaders across the RC enterprise. The resolution could serve as a model for dealing with any other trademark changes or amendments within the RC enterprise.

By combining the two interventions, the Washington D.C. RC can resolve their own internal issues using the fishbowl interviews, feedback, and action plans with the Peer leadership observing for accountability. The use of the reverse fishbowl of peer leaders from outside the host group allows validation to occur from an organization development standpoint. A decision to change or amend the brand or trademark needs from all stakeholders across the RC organization. The diagnostic intervention allows deeper analysis or underlying cultural and vision transformation. Threats from competition, the largest competitor being The Four Seasons basically been eliminated due to MP’s ownership. Now with RC and MP working together, MP has a vested interest in deferring from competition with its partner in RC. Once the internal issues have been resolved or at least addressed, the future for the RC enterprise looks profitable and poised for the new millennium.

Preamble

The Ritz-Carlton Hotel Company acknowledges and respects the principles contained in the Universal Declaration of Human Rights. The RC Human Rights Policy reflects the Company’s commitment to conduct its business in a manner consistent with these principles and to protect human rights within the company’s sphere of influence. The Ritz-Carlton demonstrates global leadership in responsible workplace practices, and endeavors to conduct it business operations in a manner that is free from complicity in human rights abuses. The Company’s core values and culture embody a commitment to ethical business practices and good corporate citizenship. Ethical Business Conduct: the Ritz-Carlton policies require that its business be conducted with honesty and integrity, and in full compliance with all applicable laws. Company policies establish clear ethical standards and guidelines for how we do business and establish accountability. All company employees are required to obey the law and comply with specific standards relating to legal obligations, ethics, and business conduct. The Company has clear accountability mechanisms in place to monitor and report on compliance with these directives.

The Ritz-Carlton condemns all forms of exploitation of children. The Company does not recruit child labor, and supports the elimination of exploitative child labor. The Ritz-Carlton also supports laws duly enacted to prevent and punish the crime of sexual exploitation of children. The RC will work to raise awareness concerning such exploitation, and will cooperate with law enforcement authorities to address any such instances of exploitation of which the Company becomes aware. The Ritz-Carlton has a long history of supporting programs and partnerships that help at-risk young people and their families prepare for and find meaningful employment. The Ritz-Carlton will continue to focus on programs that help children break out of the cycle of poverty that makes them and their families vulnerable.

The Ritz-Carlton supports and upholds the elimination of discriminatory practices with respect to employment and occupation, and promotes and embraces diversity in all aspects of its business operations. The Ritz-Carlton further supports the elimination of all forms of forced bonded or compulsory labor and the freedom of association and the right to choose a collective bargaining representative, if desired. The Ritz-Carlton also provides a safe and healthy working environment of all forms of forced, bonded or compulsory labor and the freedom of association and the right to choose a collective bargaining representative, if desired. The Ritz-Carlton also provides a safe and healthy working environment for all its employees.

References

1. Bell Patricia, Peter French Jr., Collins Zawacki “Putting on the Ritz April 17, 2003 pp.165-66

2. Sucher William, Eddie McManus, Collins Checks into New Ritz Digs, January 4, 2003

3. Ritz-Carlton Plans to Move Headquarter Closer to Marriott, “Hotel and Motel Management, August 2002, p.15

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