Organizational Development Case Study

• Students must mention question number clearly in their answer. • Late submission will NOT be accepted. • Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions. • All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism). • Submissions without this cover page will NOT be accepted. Department of Business Administration Organization Design and Development- MGT 404 Assignment 3 Marks: 5 Course Learning Outcomes: • Analyze the human, structural and strategic dimensions of the organizational development (2.4) Assignment Instructions:

• Be sure to cite at least two scholarly, peer-reviewed references in support of two of your answers and also incorporate the key concepts from the course. Assignment Question(s): Please read the case study “TQM at the Ritz-Carlton” in Chapter 13, p.391 available in your textbook “Organization Development & Change” (10th ed.) by Cummings, T and Worley, C and answer the following questions: •

Q.1 Based on your understanding of the case, discuss and evaluate employee involvement as practiced by the Ritz-Carlton in terms of the following key elements: -Power (0.5 mark) -Information (0.5 mark) -Knowledge and skills (0.5 mark) -Rewards (0.5 mark) •

Q.2 Do you think the Ritz-Carlton’s experience with TQM could be provided as a benchmark to other organizations? Explain your answer in light of the stages for TQM application. (1.5 marks) •

Q.3 Discuss which features are evident in the practices of the Ritz-Carlton that would enable the Hotel Company to meet the criteria of high involvement organizations. (1.5 marks) Answers: A.1… 1.1… 1.2… 1.3… 1.4… A.2… A.3…

application 13 2 CHAPTER 13 EMPLOYEE INVOLVEMENT 391 TQM AT THE RITZ-CARLTON T he Ritz-Carlton Hotel Company, the premier flagship of Marriott International, operates 81 luxury hotels in 27 countries. Employing about 38,000 staff, the firm has a venerable record of excellent service that is considered the benchmark by many in the hospitality industry. Ritz-Carlton has been involved in TQM for over 30 years and was the first hotel chain to win the coveted Malcolm Baldrige National Quality Award in 1992. Needless to say, Ritz-Carlton is passionate about quality guest care, from the president and chief operating officer, Herve Humler, to the maintenance, front desk, and housekeeping staff. Ritz-Carlton’s unique approach to TQM is embedded in its strong corporate culture, which is spelled out clearly in its “Gold Standards.” These standards are the backbone of the company and include the values and philosophy that guide how it operates, including processes for solving problems and criteria for grooming, housekeeping, safety, and efficiency.

The Gold Standards include Ritz-Carlton’s credo, motto, three steps to service, service values, and other proprietary statements. All employees know the Gold Standards by heart and are well-trained in what they mean for daily work behavior. For example, Ritz-Carlton’s motto, “We are Ladies and Gentlemen serving Ladies and Gentlemen,” is closely tied to how guests are welcomed, with “a warm and sincere greeting,” and depart with a “fond farewell.” Ritz-Carlton’s TQM program begins at the top with senior executives who spend about a quarter of their time on quality issues. Because the company’s service culture is built on trust, these leaders hold themselves accountable for behaving according to the values that they require of the organization. The senior executives comprise the corporate steering committee for TQM as well as the senior quality-management team. Each week the steering committee reviews various measures of service quality and performance.

It engages in detailed planning by setting objectives, devising action plans, and assessing results. This planning process is essential to RitzCarlton’s TQM program. It extends to each level of the firm where teams in the individual work areas set objectives and create action plans that are reviewed by the corporate steering committee. This cross-level planning process helps to assure that quality goals and action plans are consistent across organizational levels and integrated with the firm’s overall plan. In addition, each hotel has a designated quality leader, who serves as a resource and advocate as teams develop and implement their quality plans. Teams play a key role in providing quality service.

Each work area in a hotel includes teams responsible for problem solving, strategic planning, and setting quality-certification standards for each position. Employees meet as teams to spot problem patterns, prioritize problems, and develop measures to prevent their recurrence. These cross-functional teams require sufficient time and resources to learn how to function effectively. Managers are still responsible for objectives and solutions but rely on input and involvement from team members.

A unique team tradition at Ritz-Carlton is the “lineup,” drawn from early French restaurants where the chef got his whole team, including the waiters and waitresses, together at the same time each evening to communicate what they are going to be serving. At the Ritz-Carlton, teams on every shift use the lineup for about 15 minutes every day. This includes sharing up-to-the-minute information as well as talking about great things employees have done to deliver exceptional service. An integral part of Ritz-Carlton’s TQM program is empowering employees to solve guests’ problems as quickly as possible.

Employees are responsible for acting at first notice, regardless of the type of problem or guest complaint. They are expected to stop their normal routine and to take immediate positive action to discover what went wrong and resolve it. They are empowered to handle any customer complaint on the spot and can demand the immediate assistance of other employees and spend up to $2,000 if necessary. Employees can apply this rapid response 392 PART 4 TECHNOSTRUCTURAL INTERVENTIONS not just to solve problems but to do something that creates an absolutely wonderful stay for a guest, such as surprising guests with champagne and cake in their room on their birthdays. Ritz-Carlton also works hard to avoid guest problems before they occur. Employees who detect a potential problem in service delivery are immediately expected to bring it to management’s attention and a solution is found.

Eliminating internal employee complaints can avoid external complaints that might come from guests. A key to Ritz-Carlton’s TQM success is the continuous collection and analysis of data on service quality and its comparison to predetermined customer expectations. Assisted by the latest information technology, the company gathers information on such quality measures as percentage of check-ins with no queuing, time spent to achieve industry-best cleanroom appearance, time to service an occupied guest room, and guest room preventive-maintenance cycles.

Data submitted from each of a hotel’s 720 work areas provide daily quality production reports, which enable rapid identification of problems in achieving quality and customer-satisfaction goals. Ritz-Carlton’s human resource practices are tied closely to TQM. Selection, training, and performance appraisal are geared to talent acquisition, development, and retention. Only about 2% of the people who apply for jobs are hired. A key criterion is how well the applicant is likely to fit the company’s culture including being a team member. Once on board, new employees are versed on the corporate culture through a two-day orientation, followed by extensive on-the-job training, then job certification. To obtain certification, employees are assessed on their mastery of skills associated with their particular job.

They also are tested on how well they know the company’s TQM philosophy and credo, which can qualify them as “quality engineers.” Ritz-Carlton expects 100% compliance with skills testing, so that everyone is certified to do a particular job and is a quality engineer as well. The company’s performance appraisal system is based on the Gold Standards and employees are held responsible only for those things under their control. Ritz-Carlton also has extended TQM to its suppliers. To assure that suppliers can meet the firm’s quantity and quality needs, it has developed a supplier certification process, which measures how often suppliers meet specifications on time and how well they improve their cycle time from order to delivery.

The certification process also includes an internal audit of suppliers’ capabilities and a quality survey of those who use their products and services, including purchasing agents, accounting personnel, sales persons, and hotel guests. Ritz-Carlton ranks suppliers based these data with the objective of getting them certified to become a fully integrated partner. The fundamental aim of Ritz-Carlton’s TQM process is not simply to meet the expectations of guests but to provide them with a visit that is unique, memorable, and personal. According to independent surveys, 92% to 97% of the guests leave with that impression. Ritz-Carlton’s experience and success with TQM has spread worldwide to organizations in a variety of industries and regions.

Started in 2000, its Leadership Center provides knowledge, information and benchmarking to organizations interested in learning many of the business practices that led to Ritz-Carlton becoming a two-time recipient of the Malcolm Baldrige National Quality Award. 13-2c High-Involvement Organizations Over the past two decades, an increasing number of employee involvement projects have been aimed at using high-involvement work practices to create high-involvement organizations (HIOs). These interventions create organizational conditions that support high levels of employee participation. What makes HIOs unique is the comprehensive nature of their design process. Unlike parallel structures that do not alter the formal organization or TQM interventions that tend to focus on particular processes, HIOs address

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