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Ritz Carltonhotel 110523053824 Phpapp02

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  1999  Application Summary T HE R  ITZ -C ARLTON ® H OTEL C OMPANY , L.L.C. Copyright© 2000 byT HE R  ITZ -C ARLTON ® H OTEL C OMPANY , L.L.C. – All Rights Reserved    Products and Services: President &COO: Headquarters:Operations:Customer Base:1999 Revenue: Employees: History: The Ritz-Carlton Hotel Company, L.L.C. develops and operates luxury hotels for others. The hotels are de- signed and identified to appeal to and suit the re-quirements of its principal customers who consist of:(1) Meeting Event Planners and (2) Independent Busi-ness and Leisure Travelers. Horst Schulze3414 Peachtree Road, N.E.Suite 300 Atlanta, Georgia 30326 One Central Reservations OfficeSeven International Sales Offices (ISO’s)24 Hotels and Resorts in North AmericaTwo Hotels in Europe Eight Hotels and Resorts in AsiaTwo Hotels in Australia30Hotels under Development Over 800,000 Customers World-wide$1.5 Billion. A 40% increase over the previous five years.17,000 World-wide, known as The Ladies and Gentlemenof The Ritz-Carlton Established in 1983, the former owner, W.B. Johnson Properties, acquired the exclusive North Americanrights to the Ritz-Carlton trademark, the foremost name in luxury hotels. This status was largely due tothe legendary Caesar Ritz who developed and operat-ed two of the world’s best hotels in Paris and London.The hotels achieved such fame in the marketplace that they attained what is often referred to as “The Ritz  Mystique”. In 1995, The Ritz-Carlton was jointly ac-quired by Marriott International Inc. to achieve their  strategy of entering the luxury hotel segment of theindustry; the takeover/merger occurred in 1997. T HE R  ITZ -C ARLTON ® H OTEL C OMPANY , L.L.C. at a Glance Copyright© 2000 byT HE R  ITZ -C ARLTON ® H OTEL C OMPANY , L.L.C. – All Rights Reserved   1 The Ritz-Carlton Hotel Company,L.L.C. 1999 Application Summary Overview AHistory of Managing forPerformance Excellence in the Hotel Industry Previously, in tiny hotels and inns, the innkeeper di-rected activities in the organization personally, including“managing for quality”. As hotels grew in size, the volumeof activity outgrew the capacity of the innkeeper to manage by personal direction – it became necessary to delegate.Apprentices were trained in the craft and qualified  by examination to become craftsmen. The innkeeper - themaster - then delegated much of the managing for quality tothe craftsmen, subject to inspection and audit by the master.Many of our standards go back 100 years to this era of Cae-sar Ritz and the legendary Chef August Escoffier.As we entered the 20th century, the size of a hoteland its organization sharply increased. The resulting largehotels required functional departments. The innkeeper - nowa general manager - delegated to each functional departmenthead the responsibility for quality, for performing the func-tion correctly.With the emergence and growth of technology, hotel products and processes became increasingly complex. Todeal with these new complexities the hotel industry adopted the principle of separating planning from doing. Planning of the various departments was delegated to division and depart-ment heads (e.g. Food &Beverage managers, Rooms Execu-tives, Purchasing Directors, etc.). This left the job of execut-ing the plans to the first-line supervisors and the workforce.The separation of planning from execution had four major consequences.1.A factory concept emerged in which people were assigned one task rather than a single craftsman performing the en-tire sequence of tasks. In this factory approach, if task #11was causing a problem for task #24, it wasn’t identified until it reached the customer, and even then the problemlikely continued.2.A dramatic rise in productivity.3.The segregation of divisions and departments.4.Afurther distancing of upper managers from the job of managing for quality.The progressive removal of upper management frommanaging for quality produced negative effects on quality.Typically, performance either fell short of customer need or the cost to meet the need became excessive. In addition, thehotels accumulated huge chronic costs as a result of poor quality.Most hotels remained profitable despite these quali-ty deficiencies because competitors had similar problems. Ritz-Carlton Returns to the Fundamentals:Upper Management Participation Then came 1983 and Horst Schulze. The pacequickened with a lengthy procession of new Ritz-Carlton Ho-tels under development. Faced with this challenge, HorstSchulze and his team decided to personally take charge of managing for quality because they realized managing for quality could not be delegated!The upper management participation of HorstSchulze and his team ranged across a broad spectrum, butmost significant activities consisted of:ãDefining the traits of all company products which are setout in The Credo. For a full explanation of The Credo, seeFigure 1 on page 2.ãTranslating The Credo into basic standards to clarify thequality responsibilities for our Ladies and Gentlemen; themost important of which include: (1) anticipating the wish-es and needs of the guests (2) resolving their problems and (3) genuinely caring conduct towards guests and each other.ãPersonally training the Ladies and Gentlemen of a newRitz-Carlton on The Credo and Basic Standards, commonlyreferred to as The Gold Standards, which are shown on page2 as Figure 1.ãAggressively instilling a passion for excellence. Another Major Change,A ComprehensiveStructure By 1989 Horst Schulze realized that a more com- prehensive structure was necessary for the Ritz-Carlton tooptimize its performance. He selected the MalcolmBaldrige National Quality Award Criteria. Through the useof this assessment tool and the resulting feedback reports,The Ritz-Carlton developed a “Roadmap” to business excel-lence (see pages 3-4) which has attained significantly higher  performance levels. A major ingredient of this approach wasinvolving people in the planning of the work that affects them.
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