Administração Trimestral de Hotéis e Restaurantes de Cornell

How Ritz-Carlton applies 'TQM'

Cornell Hotel and Restaurant Administration Quarterly

Ithaca

Aug 1993

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Volume: 34

Issue: 4

Start Page: 16

ISSN: 00108804

Subject Terms: Total quality

Quality of service

Implications

Implementations

Hotel chains

Case studies

Awards

Classification Codes: 9190: US

9110: Company specific/case studies

8380: Hotel & restaurant industries

5320: Quality control

Geographic Names: US

Companies:

Company Name: Ritz-Carlton Hotel Co

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

Full Text:

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 successfully apply Baldrige award criteria and achieve performance levels needed to win the award.(3) That belief was substantiated on October 14, 1992, when the Ritz-Carlton Hotel Company was named a winner of the 1992 Baldrige award, making it the first hotel company to win this coveted honor.

In this article, I will relate the lessons of the Ritz-Carlton experience, based on an extensive interview with Patrick Mene, Ritz-Carlton's corporate director of quality. At the conclusion, I will discuss some of the issues relative to implementation of TQM in the hotel industry.

The contemporary Ritz-Carlton. The Ritz-Carlton Hotel Company is a management firm that develops and operates luxury hotels worldwide. It was formed in 1983 when Atlanta-based W.B. Johnson Properties purchased exclusive U.S. rights to the Ritz-Carlton trademark along with the Boston Ritz-Carlton Hotel. Today,