Ritz-Carlton Hotel Organisation Culture

Introduction

The ability to establish a culture that invokes high value for the people working in an organization invokes intrinsic sense of identity, innovativeness, creativity and commitment that forms the main recipe for ultimate sustainability of services and profitability. Organizations leaders and scholars concur that people are the most important elements in an organization because they not only articulate the established policies but innovatively contribute to their holistic improvements through sustained experiences. This paper provides an in-depth evaluation of The Ritz-Carlton hotel culture, challenges in changing it and key lessons that can be learned by other organizations.

i) Harrison-Handy model of organization culture

Though scholars appear divided over the actual definition of the term ‘organization culture’, they tend to agree that all organizations create unique operating systems that fit with their internal capacities and guided towards their objectives. The Ritz-Carlton organization culture can best be described through two subunits of the Harrison-Handy model. To begin with Mullin (2008, p. 21) explains that power culture reflects centrality of authority in a highly bureaucratic outline where orders define the expected targets based on the organization objectivity. On the other hand, the role culture creates a set of rules and guidelines that do not give employees the needed room for contributing to the management. Therefore, role and power culture as Aitken and Higgs (2010, pp. 109-111) concur with Campbell and Craig (2005, 491-493) provide a highly rigid mode of operation that obscures innovation while establishing barrier between the top management and junior staff.

ii) Master servant orientation

The Ritz- Carlton Hotel depicts a culture strongly based on master servant relationship where employees are expected to strictly follow the established code of conduct for the hotels. While expounding on Harrison-Handy model, Laurie (2007, p. 66) explains that though its application may be employed to create a less authoritative tone, the resulting cultural impacts remain unchanged. The notion of ‘ladies and gentlemen serving ladies and gentlemen’ is a working slogan but a principle that employees cannot fully associate with. The establishment of ‘very precise’ standards for treating consumers makes the employees a form of puppet that must follow specific values and guidelines without deviating from them. Owing to the long period of success, the management in the hotel has solidified strict demand for personal traits that one should have for success in such an industry. The code of behavior in the hotel is well written down and managers take no chance in enforcing it (case). For instance, the smile is expected to come naturally (case).

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iii) Discourages individual innovations and creativity

The Ritz- Carlton Hotel’s culture not only lacks the necessary room for innovation and creativity but strongly discourages their application. The aforementioned master servant relationship creates the view of inferiority to the employees; a consideration that largely discourages their voluntary input outside the management demands. The established values that have culminated to scripting expected behavior in the hotel, limits employees from introducing new concepts, ideologies or comparative connotations for improvements. Though the management has established a rewarding system, it might not invoke the necessary innovation due to lack of enough democratic space for them. As Harrison-Handy model of organization culture postulates, going against the established guidelines is often interpreted by the middle level managers to be a threat to them and therefore often scattered before considering it for implementation (Mullin, 2008, pp. 36-37). The managers in the hotel take nothing to chance and therefore emphasize on a fifteen minutes daily reminder of the expected code of conduct by the employees.

iv) Reduced capacity to initiate and propel change.

According to Mullin (2008, p. 31), organizations should embrace change that facilitates adoption of new management outsets to gather a competitive advantage over others and derive the expected sustainability. The Ritz-Carlton Hotel has maintained the key management and operation values that founders laid about a century ago (case). Though the hotel has been doing well, assimilation of change could have raised its current profitability to higher levels. Power culture in the Harrison-Handy model as William (2009, p. 541) indicates, fails to invoke the criticality of extended reference for change agents. As a result, the management becomes the sole source of visionary focus which reduces the overall ability to improve change strategies and creating identity with new propositions for all. It is from this consideration that the proposed changes in the year 2006 were seen to be a major deviation from the normal non-responsive operation mechanism in the hotel (case).

a) Why do you think this type of culture might be important to a luxury hotel?

Hospitality industry as Severt and Curtis (2008, pp. 121-122) explain, remains one of the most sensitive sectors and therefore demands greater care with critical assessments to beat the high competition. The Ritz- Carlton Hotels’ culture is therefore critical in a luxury hotel because it invokes better monitored coordination and maintenance of consistency in services delivery. By articulating strict rules and regulations that are unit-lined to customers’ satisfaction, luxury hotel is able to guarantee consumers the needed high quality services. Unlike in other sectors such as education, Severt and Curtis (2008, p. 125) add that hospitality industry require the luxury assurance taken to an even higher level.

Creating a strong central authority in the hospitality industry forms particularistic trends in the management and therefore avoiding the uncertainties brought about by change application. Though change articulation in an organization is projected towards improvement, Sinha (2008, p. 63) concurs with Chenhall and Euske (2007, p. 634) conclusion that its articulation may culminate to key discontinuities in services delivery. Indeed, to inculcate new ideologies, it may require an external change agent, additional costs and assimilation of new code of conduct which may take time before being fully assimilated.

Owing to the high sensitivity of hospitality industry, maintaining the power and role based culture reduces the possibility of creating many centers of authority experienced in other cultures. As a result, luxury hotels are able to maintain a highly responsive system to satisfy their clients and therefore sustain their repute and profitability.

b) What might be the drawbacks of such a culture?

Though the culture of power and role appear to work in luxury industry, it lacks the needed force for improvement. Most employees are enclosed in the roles procedures and within the established authority that suppress their personal contribution. The culture therefore lacks the needed checks that come inform of propositions for improvement either through comparison or visionary considerations. As Aitken and Higgs (2010, pp. 116-117) indicate, the culture lacks whole commitment of the employees since they do not identify with the authority, the institution or the rules laid for them. As a result, people under such cultures mostly act under pretense and therefore do not have the needed goodwill for the company. In such situations, Campbell and Craig (2005, p. 497) explain that they mostly contemplate shifting to other related occupations that appreciate them.

In power and role based culture, one evident problem is that people do not exploit their full potential. The Ritz- Carlton Hotel’s management has maintained a scripted behavioral conduct that is often reminded to the employees every day (case). The emphasis of such orientation creates the sense that the advocated methods are the best and therefore achieved results could not have been any better.

Campbell and Craig (2005, p. 490) argue that this culture is a key recipe for direct and indirect resistance by people in the organization. Though they might not directly indicate it due to fear of punitive measures, occurrence of trigger factors may be catastrophic. Particularly, simple conflicts may easily provide an outlet to the accumulated dissatisfaction; a consideration that could easily result to negative publicity and reduction in the overall profits.

a) Challenges in implementing the cultural change

Following a long time application of power and rule model in the company, the new culture might have encountered strong resistance to change. According to Kurt Lewin’s theory of organization change management, the freezing of the existing systems presents the existing managers authorities with a sense of loss as more autonomy is given to the lower level employees (Sinha, 2008, pp. 69-70). To the middle level managers, they resist this change to safeguard their roles (foreseeing application of the rules and supervising scripted behavior) because employees would have greater link with the top management while behavioral outsets would not require supervision.

To articulate the new model of management at The Ritz- Carlton Hotels, the employees lacked the needed skills to implement the needed changes. Owing to the long time application of the old power and role model, many employees might have lacked the expected expanded view in relation to the new autonomy. According to contingency theory, the internal and external environment interacts to derive the needed focus for higher profitability (Laurie, 2007, pp. 36-37). However, most employees in the hotel might have coiled and stuck to the old methods not due to resistance, but due to lack of immediate alternatives after being in a closed model for along time.

Unlike the old well scripted behavioral expectations, the new culture was hard coordinate and monitor at the beginning due to the high autonomy exercised by the people. According to Chenhall and Euske (2007, pp. 625-626), transformational leadership requires constant link and communication between the management and junior staff to maintain the needed bonding for greater cohesion. However, these bonds are built on trust, commitment and rewards in a system. Taking into consideration that this structure takes a lot of time to establish, changing the culture might have experienced partial discontinuity as teams and their operations, new reward schemes and communication modes were established.

b) Maintaining the new culture

In his view, William (2009, p. 537-539) explains that though changing an organization culture is the harder part of assimilating a new culture, its maintenance is very critical in that it determines the holistic sustainability of the company. The Ritz-Carlton Hotel maintained the better elements of the old system such as a happy guest driven by the services provided. As a result, the hotel was able to articulate the changes without negatively affecting the services provided to the consumers. In addition to that, the company increased the employees’ decision making autonomy and therefore encouraged naturally relaxed and innovative interaction with clients. According to transformation leadership theories, this autonomy and attachment to the management and operating system creates the needed identity for all; a consideration that invokes high creativity (Mullin, 2008, pp. 58-59).

According to Robert Maslow’s theory of motivation, people will always struggle to get to the next higher level in the hierarchy of needs and ultimately, to self actualization (Gomez-Mejia, David and Robert, 2008, p. 88). The Ritz-Carlton Hotel therefore created this upward shift by articulating a highly motivating environment for employees. According to Carmine (2008) the management has solidified the employees’ involvement in decision making and therefore creating the sense of stability and satisfaction to them. As a result, customer satisfaction becomes easy to link with higher sustainability of the monetary and other benefits that employees derive from the system.

One common aspect evident with new cultures that are people oriented is consideration for continued improvement. The Ritz-Carlton Hotel conducts frequent trainings to its employees to enrich their skills by creating new insights that are critical in maintaining high quality services to clients. According to American management Association (2008), The Ritz-Carlton Hotel’s management seeks highly experienced coaches and trainers in hospitality industry to impact new skills and therefore raisin the employees’ ability to make correct decisions in their duties.

The case of The Ritz-Carlton Hotel brings out the critical role played by an organization culture in defining and guiding its overall operations for sustaining of its profits. Employees were brought out to be a key element when defining the culture of an organization and must be involved at all levels. Though the power and role cultures saw the company reap high profits, it was a major obstacle towards achievement higher level customer satisfaction and profitability. Employees could not go beyond the scripted behavioral demands.

The Ritz-Carlton Hotel’s case further brings out the need for continued improvement in an organization as a critical cultural facet towards remaining relevant and therefore ahead of other competitors. Through cooperation of employees and management it is possible to maintain high level services for the clients. When employees get the sense that their management has bestowed high trust on them, they take greater responsibility oriented towards surpassing the set goals in a company’s objectives. From the case, The Ritz-Carlton Hotel services remained unchanged even after withdrawing the highly authoritative culture.

In any change articulation, organizations must recognize that there will always be some resistance and therefore must be effectively prepared to counter it. To concur with Severt and Curtis (2008, pp. 121-123) view, it is critical that organizations facilitate the change orientation in a manner that brings all the people aboard and therefore creating a highly acceptable final product. In a freezing-refreezing model, organizations must create the roadmap largely based on communication that facilitates addressing inherent concerns. Besides, organizations must take change to be a process and therefore expect it to take time before the actual results are identified.

Though changing the culture is the ultimate choice, organizations must seek to incorporate the necessary ideals while creating a room for later improvement. The assimilated change model must be able to place the organization in a mobile note where both the employees and the management do not view the achievement of the positive results to be the end, but establish considerations to take the achievements step higher. Through professional training, teamwork and comparative orientations, organizations can be able to remain highly competitive and thereby maintaining high profitability.

Conclusion

From the above conclusion, this paper concludes by supporting the thesis statement, ‘the ability to establish a culture that invokes high value for the people working in an organization invokes intrinsic sense of identity, innovativeness, creativity and commitment that forms the main recipe for ultimate sustainability of services and profitability.’ It came out from the discussion that though The Ritz-Carlton Hotel had high returns, its power and role culture poorly invoked innovativeness and creativity. By effectively addressing the challenges evidenced by change application, The Ritz-Carlton Hotel was able to achieve the same results it achieved previously. Organizations seeking to change their cultures should therefore seek to incorporate people’s contribution to create the sense of continued improvement and thereby raise their profitability and sustainability.