Introduction
There are a number of reasons as to why organizations deem it fit to institute change. To start with, change within an organisation may occur as a result of challenges that may be facing such an organisation; especially as far as global markets are concerned. In addition, a reform, on the organisational strategies is another form of change, as are the technological changes. Then there is the impact that competitive pressures have on organisations, and this takes into account acquisitions and mergers (Gordon 2007). Further, pressure from the customers is another source for change, especially in a case whereby we have shifting markets. The management of an organisation may also deem it necessary to institute change in an organisation, in a bid to discover novel skills and behaviour of an organisation, not to mentions the legislative initiatives as a result of the directives of a government.
This report is concerned with the assessment of the types of organisational changes that have taken place at the Ritz Carlton. These include among others, the cultural shifts that the company embraced in 2006, in as far as the provision of services by their employees is concerned. There is also the aspect of hotel design and decor improvement (Gordon 2007), to ensure that each one of its hotels blends well with the surrounding environment. Research findings suggest that a lot of organisations are today undertaking key changes at least after three years. This is because competition is stiff, and customer values have also improved drastically. For this reason, it is the responsibility of organisations to see to it that the objectives of an organisation are met, even as they try to institute change. Change management therefore becomes a very fundamental process of a business entity.
Background information on Ritz Carlton
The inception of Ritz-Carlton goes as far back as 1898. This is the time when the first hotel by this name came into being in Paris, courtesy of Cesar Ritz, a hotelier from Switzerland (ICMR 2007). Having worked for a number of years in the hotel industry, Cesar Ritz amassed a wealth of experience in hotel management, and that is how the idea of opening up his own hotel came up. The design of the first Ritz-Carlton hotel suited the aristocratic and wealthy society that lived in Paris, at the time. The second hotel would later on be open in London during the early part of the 1990s. This was then followed by several other hotels across Europe. With a mushrooming of hotels as the years went by, Cesar Ritz sought to have the hotel logo and name franchised, thanks to the management corporation for the Ritz-Carlton (RCMC) which he helped establish. The hotel has continued to expand even after his death (ICMR 2007).
Change management at Ritz-Carlton
Improvement on quality
Ever since its inception, quality has become a defining term for the Ritz-Carlton brand. Nevertheless, it was not until the end of the 1980s that the hotel chain sought to embrace a systematic approach that was geared towards the achievement of quality management. By now, the hotel had established itself as the best in the United States, with the effect that customers’ organizations were awarding honours to Ritz-Carlton, by virtue of its exemplary service and quality. Nevertheless, Schulze, the then vice president of operations at the Ritz-Carlton believed that the hotel chain was yet to attain excellence; in as far as the attainment of customer satisfaction is concerned. He opined that to quality of service at the hotel was somewhat erratic (Michelli 2008). In addition, it had not been spelt out succinctly to the employees of the hotel the expectations that the company had from them, in terms of provision of quality services to their patrons.
In order to help realize better services provision, the senior management at the hotel undertook quality management. Therefore, the topmost team on quality management at the Ritz-Carlton was made up of the president, along with top managers. On a weekly basis, the team would convene a meeting, for purposes of reviewing the quality of services and products that the hotel offered to their clients. This is in addition to the assessment of the satisfaction that the customers got from the various franchises of the hotel (Michelli 2008). Moreover, the team deemed it necessary to assess such marketing elements as the development and growth of markets, in addition to the evaluation of their competitive status. Furthermore, the quality management teams had another responsibility; of establishing the annual company strategic plan. This was in addition to the development of monitoring targets for the organization’s performance.
Training and recruitment of staff
At the Ritz-Carlton, employees are held in high esteem, seeing that it is they who are at the center of service provision to the customers. For example, the understanding of the company is that they often select’ their employees, as opposed to ‘hiring’ them. The understanding of the company is that they first have to take care of their employees, if at all they want to improve on their services to customers. As such, Ritz-Carlton has over time made it a habit to institute changes in as far as the recruitment exercise of their staff is concerned. In addition, there has also been a change in as far as the retaining and development exercise employees are concerned. In order to ensure that only the ideal candidates are obtained following a selection process, the company had to abandon the conventional method that they used to recruit their staff, and instead replace it with a new process that they referred to as ‘benchmarking’
Other than the selection of the ideal employees, Ritz-Carton also has had to invest more into the area of training and orientation of the newly acquired staff. The understanding of the company is that if at all the very values that the management believed in were to be embraced by heir employees, and then it was necessary to ensure that the training program was quiet comprehensive (Michelli 2008). Following a training period of one year, each of the employees would then have to undergo a total of 100 hours in terms of training time, on an annual basis. It was also deemed necessary to ensure that technical skills were imparted to the individual employees, in order that they may find it easier to assimilate the culture of Ritz-Carlton.
The empowerment of the employees was another factor that the Ritz-Carlton sought to change, for purposes of improving their quality of service. For example, in the early parts of the 1990s, when these changes were being instituted, the entire workforce for the organization had the authority to use upwards of $ 2,000 for purposes of either handling a given complaint, or correcting a specific problem. This mandate applied to all the employees, their ranks or status notwithstanding. Furthermore, they need not have first sought permission from say, their superiors before they could spend this kind of money. In deed, this was quiet empowerment on the part of the employees.
Organisation cultural change
It is not lost to anyone that at a time when customer satisfaction is quiet wanting in a given organisation, the management of such an organisation always tries to ensure that they find ways and means of enhancing the quality of service, as well as the improvement on the products that they offer, in a bid to enhance the value that they offer to their customers. In the process, they hope to also win back the confidence of their customers and consequently, ensure that they fulfil their satisfaction (Sims 2002). Nevertheless, it is worth of note that the management of any one given organisation has a moral duty to ensure that they seize such an opportunity to serve their customers better. As such, it may deem necessary for the management to turn around, literary, the culture of an organisation, in order to attain such an objective. Horst Schulze knows this only too well. Schulze recently stepped down as Ritz-Carlton president, a position that he held for a long time.
Schulze, who happens to be a German by nationality, was still at the Ritz-Carlton in the early 1980s, a time when he described the hotel industry to have been in “a lousy lot”. At the time, not only were the employees of hotels paid peanuts, they were almost never awarded any benefits (ICMR 2007). In addition, less value was attached to the whole process of recruiting new employees. Due to these pathetic conditions of operation, the industry experienced a very high level of attrition of the employees. As a result of these developments, the management at the Ritz-Carlton lacked any morale in terms of career development and training fro their staff, seeing that these would often leave in large droves within a short time. Even then, the management was awake to the realization that threw was to be found tangible value in as far as the application of marketing management concept is concerned. With the change of hand in the name of Schulze however, a transformation in the Ritz-Carton proved to be the much needed anecdote towards prosperity, growth and expansion for the hotel chain.
At the moment, the hotel industry, unlike that of the yester-years has witnessed a tremendous transformation, not least because such entrepreneurs as Shultze were able to successfully implement a customer revolution (Gordon 2007). According to analysts, the salaries that employees at the Ritz-Carton may not have been at the same level as those of their competitors in the early 1990s, but the organization still attracted a lot of employees. This may be attributed mainly to the culture of the organisation in addition to the treatment that the employees got from this employer. In addition to aiding in the attainment of excellent service to customers, the organization culture at Ritz-Carlton has also managed to establish an atmosphere that ensures that their employees, regardless of their position that they hold, always feel quite valued (ICMR 2007). However, there would be a cultural shift at the organization in mid-2006. This was largely envisioned as a necessary step that would ensure that contemporary experience would be realized by the hotel on the one hand, and by the customers, on the other hand.
What led to the establishment of such an initiative was a realization that the customer profile for the hotel had considerably changed for a number of the past years. In addition, there was also a realisation of a ‘new breed of customers’ that was emerging, and unless the hotel had to change its intense formality levels, then there was no way it would attract the new customers. During the early 1990s, customers that frequented the Ritz-Carlton hotel had on average, an age of 59 years (ICMR 2007). Thanks to the ‘cultural shift’ initiative, this average age was seen to slowly fall to an average of 47 years by 2005. It is due to the embracing of change to ensure value products and services that the Ritz-Carlton has managed to the conventional vicious circle that was characterized by high attrition rates of employees owing to poor pay. This has been possible because the management has integrated all the processes of the hotel, with a view to ensuring that the plight of the customer is addressed first.
In addition, the employees to the hotel have also been accorded respect, besides also being awarded opportunities to develop professionally. This is by way of helping and encouraging the employees of the Ritz-Carlton to rise up through the ranks within the organization. According to a 1999 survey that was meant to gather the view of guests to the hotel as regards customer satisfaction, over 80 percent of these responded that they were “extremely happy” with the kind of services that they got at the hotel, in addition to the products that the organizations offered (ICMR 2007). The company has also sought to embrace the Total Quality Management concept, in order to ensure that the experience of their guests at the hotel is enhanced. This is in addition to ensuring that all the problems that customers to the hotel may experience, gets eliminated.
Conclusion
The hotel industry has not always been as robust and thrifty as is the case today (Sims 2002). A case in point is the Ritz-Carlton during the early 1980s. This was a time when employees’ turnover was very high, forcing the management to shun the whole process of recruiting and training employees. As such, customer satisfaction suffered, as did the business. With the change of management though, the new president, Horst Schulze, helped the hotel to integrate all the process, so that customer satisfaction became the main goals of the hotel. The demonstration by the Ritz-Carlton is that the possibility of reconciling between on the one hand, customer satisfaction and on the other hand, bottom-line essentials, is one that is quite feasible.
The hotel has thus demonstrated that customer satisfaction may also be accomplished by embracing the kind of change that involves an approach to quality management that is detail-oriented. This is in addition to ensuring that problem solving strategies are not only developed, but also ought to be documented as well. Organisation change, at least from the perspective of the Ritz-Carton, should ideally start from the top moving down. In addition, there is a need to ensure that the junior employees are made to feel very much part of the organization. As such, they should be motivated because it is they who have to deal directly with the customers. If they are not adequately catered for, then it follows that customer satisfaction may also be wanting for such an organization.
References
Gordon, J. (2007) “Ritz-Carlton: redefining elegance (No. 1 of the training top 125). Web.
ICMR (2007). Ritz-Carlton’s Human Resource Management Practices and Work Culture: The Foundation of an Exceptional Service Organization. Web.
Michelli, J, 2008, The new gold standard: 5 leadership principles of creating legendary customer experience courtesy of the Ritz-Carlton hotel company New York: McGraw- Hill.
Sims, R. R, 2002, Organisational success through effective human resources management. Westport, Connecticut: Greenwood Publishing Group.