Case Study Quality — Ritz Carlton
Dec 15, 2008 
Customer service is at the heart of quality, of late, the perception as to what constitutes Quality has undergone a metamorphosis. Quality is regarding the performance of the product as per the commitment (written or unwritten) made by the producer to the consumer. It does indeed concern itself regarding the control of defectives in a manufacturing environment and or complaints in a service environment. However, the scope of quality as a concept has expanded beyond its conventional definition. Defining quality as only lack of non-conforming product /service would be taking a very limited view. The prevailing new paradigm for world class quality is Total Customer Satisfaction. The customers’ expectations are therefore, paramount. Customer service is at the heart of quality for physical products as well as services .
The Atlanta Ritz Carlton Hotel Corporation operates 23 luxury hotels in the United States and two in Australia. The hotel chain which employs 11,500 people, claims distinctive facilities and an unusual environment, highly personalized services, and exceptional food and beverages. With average room rates higher than $150 per night, Ritz Carlton realized it must do more than just please its customers in order to succeed. The Hotel known simply as The Ritz did what many experts thought no hotel chain could accomplish in 1992, the Ritz became the first hotel to win the coveted Malcolm Baldrige National Quality Award.
When the name ‘Ritz’ has been synonymous with quality for years the luxury hotel chain did not actively begin its quest for total quality management until 1989. It was then that Horst Schulze, Ritz president and CEO told senior managers that he was not satisfied with hotel quality. He believed that the only reason the chain was considered the leading luxury hotel in the industry was that everyone else was even more unsatisfactory. Schulze therefore introduced a total quality initiative rounded in participatory executive leadership, thorough information gathering and coordinated planning and execution. A trained empowered and committed workforce was another essential element. All employees learn the company’s Gold Standards – the Ritz’s minimum set of standards for premium service.
Schulze and a team of the chains’ 14 top executives form the senior management quality team, which meets weekly to review performance and set standards. They spend a lot of time working on ways to improve our product by talking to as many guests and employees as possible.
Ritz Carlton carefully selects and trains its employees to be quality engineers capable of spotting defects and immediately correcting them. Employees receive 126 hours of annual training on quality issues. Ritz management believes that high quality personnel reduce costs because they do the job right the first time. The company reinforces its employee improvements program by recognizing superior individual performance. Annual raises are tied to the individual’s level of performance and work teams share in bonus pools when solutions they recommend for quality issues are successfully implemented.
Management empowers employees to ‘move heaven and earth’ to satisfy customers. Whenever a customer complains or a service problem arises, employees are expected to take immediate corrective action. Employees have total authority to do what it takes to satisfy customer needs without waiting for management direction. The Ritz gathers quality data on all aspects of a guest stay to determine if he customer’s expectations are being met. The chain surveys more than 25,000 guests each year to determine where improvements are necessary. Ritz computers maintain data on the likes and dislikes of more than 240,000 repeat customers.
Ritz Carlton won 121 quality-related awards in 1991and earned the industry best ranking by all three major hotel rating organizations Surveys indicate that 95 percent of the Ritz’s customers rate their stay as a ‘memorable visit’ exceeding their expectations. The 1992 Baldrige Award old Ritz customers and employees what thy already knew – the Ritz means quality.
–
33 Responses to “Case Study Quality — Ritz Carlton”
Leave a Reply
CiteMan Network not only provides an easy way to keep one step ahead of problems related to business management it also gives you an easy interface to network with your peers.
If you want your article published on citeman.com please send it for a review at
EXCELLENT ARTICLE.
okay
Good , if in future visiting any city with ritz hotel deffinetly would like to rate there quality
by enjoying there service
Vikash
ya fell good
welcome
VERY GOOD ARTICLE
Interesting article..
Very good information
Type your comment here.The Quality message has to flow from the TOP and the management has to be committed to achieve it.One can only achieve by repeatedly training your employees for it and it comes over a period of time.
Very good article.
Please let me know during this recession period how to motive employees and get more productivity from them
Thanks in advance..
Hi Rama,Motivation is indeed a challenge for all human enginners all over the world.The theoretical treatment of work motivation was a late comer to the study of work behavior.
Before mid 150s it was generally assuemd that people worked for either economic or social reasons.
motivational theories as yo know have come up which embhasize the existence of internal state of the individual,labeled a need or motive.Teories need hierachy theory,ERG theory,two factor theory. etc.Kindly go through it…which can help you to frame a base.
Next thing identify through work study that all are happy to carry out their work.Then divide them as per their happiness and fill the gap.ensure you go to them as HR ,RATHER they coming to you.salary hike is never a motivator…you can motivate through creating a vibration(passion) towards their job,if require transfer them internally.
Ensure they under stand the work..train them .Improve work environments..importance etc. Kindly stop using the word recession…since itself is so negative .people will get demotivated..I think like during war the soldiers are motivated on daily basis by fiery speeches…you should visit the work place daily basis encourage them..tell your management to use positive words ,divide the tasks into smaller pieces and on completion .give letter to acknowledge their out put..I think empathising with every one will do the trick.
best of luck ..you could do it.
valuable information to know about what is quality
1. Motivation as an activity need to happen irrespective recession, growth or stagnation.
2. Recession is a opportnity to build loyalty and enhance sense of belongingness to the organization.
3. As a leader one need to provide confidence to the team that despite recession we would stay.
4. Need to have concrete plans and share relevent portions with the team.
5. Convey the message that being in business depends on retaining customer, retaining customer base depends on reducing or at least maintaining price. Maintaining price depends on reducing or maintaining cost. Maintaining cost depends on increasing productivity through process enhancements and NOT BY REDUCTION IN SALARIES.
6. This would definitely send the message.
7. A leader need to take that role. The famous saying goes here 'When the going gets tough the tough get going”
All the best
the principle of the TQM revolves around the concept of DMAIC
D-DEFINE
M-MEASURE
A-ANALYSE
I-IMPROVE
C-CONTROL
with the inclusion of these convept an effective TQM can be obtained
pls send me attachment of sbi papers with solution for my preparation of the clerical exam…
its interesting and informational too
its interesting and informational too
nice info….
This is a great article. Take home for me here is that leaders must always walk the talk. With leadership commitment, anything is possible, and vice versa
GOOD
Good article. The whole thing can be concised to - PDCA( PLAN - DO - CHECK - ACT)
With thanks,
DEMUDU ANIMIREDDI
hi
a good case study on operation management, i got lot of hints from that,
its a good case study
VRY GUD
its good
its good
hi everybody
this is a good case study
i am new to this forum.
now i am learning a lot of logic behind all the case studies.
thanks–forum
pls anyone can send me attachment of power grid corporation of india ltd. papers with solution for my preparation of the executive trainee( hr) exam
excellent article
thanks for such good case study
total quality management is a part of products as well as service which leads to cost reduction and customer inflow in any condition.
ok
GOOD.
Do your homework. This is old news…from when I worked for the company back in 1992. The Ritz-Carlton now has 72 hotels world-wide and and employee base of 38,000. It didn't take much to look that up on their Website. They also won the MBNQA again in 1999. Their quality principles are still sound and noteworthy. Just bring your case study into the current century.
can any body tell me that how can i approach to the companies for students placement and its very urgent b'coz it is a new task for me which i have to complete
a good one article containing the CRM activity and concern with satisfaction.
Their primary motto is to satisfy the customer by any how whatever the customer wants employees are ready to satisfy them
this is the best deal they are doing…
wonderfuk