Case Analysis - Ritz

Discussion of the question about the integration of business changes is always complicated by the influence of key stakeholders. Hence, owners and investors are likely to want changes to maximize benefits, while management is usually sure that the existing business model is the optimal solution and that any changes will cause only new risks. An example of such a situation is the case of the Ritz-Carlton Hotel Company which entered into cooperation with the Millennium Partners Company to operate its hospitality facilities in Washington, D.C. The owners desire to introduce changes to the staff training process to increase its productivity, while the Ritz-Carlton Hotel Company argues for the existing format. This paper will provide an analysis of the issue and demonstrate a possible solution with recommendations.

Problem Statement

Ritz-Carlton Hotel Company is considered to be one of the most promising and effective organizations in the sphere of hotel property management. In its history, the company has managed to develop a very effective management strategy that allows it to operate hotel properties around the world with the highest potential level of profitability and benefits for owners. At the same time, while the Ritz-Carlton Hotel Company is considered to be just a managing agent, the organization needs to form effective cooperation and communication with actual owners of the hotel property. Recently, the hospitality industry has faced the problem of rising risks of conflicts between owners and the management team presented by the staff of the Ritz-Carlton Hotel Company (Sucher & McManus, 2013, p. 4). In this way, the organization has recently agreed with the Millennium Partners Company to operate its hospitality facilities in Washington (Sucher & McManus, 2013, p. 2). This is a quite promising offer for the Ritz-Carlton Hotel Company due to the attractiveness of the site and its potential financial benefits for all key stakeholders. At the same time, the specifics of cooperation with the management of the Millennium Partners Company have led to the occurrence of a conflict that could eventually lead to an absolute change of operating principles that previously governed the actions of the organization.

First of all, the owners of the Millennium Partners Company intended to change the existing procedure of hotel opening for the Ritz-Carlton Hotel Company in the way of change of staffing processes. The management of the Millennium Partners Company considered the existing Seven Day Countdown procedure of staffing and training of personnel for a new hotel facility to be ineffective. In this case, the arguments of the owners were connected with the fact that the existing procedure provides limited opportunities for adequate training of the staff (Sucher & McManus, 2013, p. 16). In these conditions, the owners imposed pressure on the management of the Ritz-Carlton Hotel Company to bring changes to the existing procedures of staff integration and training. This way, the owners insisted on the increased of time for training and education of the staff so customers face the highest quality of service upon arriving at a new hotel facility in Washington.

While this solution could be considered as relevant and attractive for realization, the management of the Ritz-Carlton Hotel Company did not want to accept and realize it due to the influence of one most important factors, which was the time required for its realization. In the hospitality industry, the question of time usually plays a vital role. In this case, the management should search for formats of an operations organization that would allow the company to maximize the overall quality of hotel services and minimize the required time. Otherwise, competitors are more likely to start operations earlier than clients of the Ritz-Carlton Hotel Company and potential financial and reputational benefits would be lost in the specific region. The management of the Ritz-Carlton Hotel Company intended to reduce the probability of such a negative scenario so that orientation on the Seven Day Countdown format of staff education and training was one of the highest priorities for the organization in its recent operations. To avoid possible risks of poor competition in the market, the management of the Ritz-Carlton Hotel Company was aimed at preserving existing procedures that demonstrated their effectiveness in other markets.

In this situation, the conflict between the manager and the owner is obvious. While the manager aspires to create conditions for the optimization of the managerial process according to his position and point of view, the manager is not ready to accept corresponding risks and apply for changes. In this case, the sides should reach a common solution using conducting a careful analysis of the existing industry situation, assessment of the best available practices connected with the issue of staff training in the hospitality industry, and evaluation of potential benefits and losses connected with the implementation of alternative solutions. Results of the careful analysis of all stated issues should allow the management and owners of the new Millennium Partners Company facilities to form major recommendations for the development of business in the discussed location.

Advantages of the Ritz-Carlton Model

At the initial stage of case analysis, the advantages of the approach that was previously demonstrated at the Ritz-Carlton Hotel Company should be discussed. Thus, the main characteristics and advantages of the Seven Day Countdown format of staff education and training should be analyzed to define the objective quality of this approach for the initiation of activity of the new hospitality property of the Millennium Partners Company in Washington.

The main advantage of the existing procedure of staff training is connected with the minimization of time required for its realization. In just seven days, the management of the Ritz-Carlton Hotel Company provides the result that allows businesses to start operating in a new location, contributing to the maximum level of customer and owner satisfaction. In these conditions, alternative solutions should be considered from the perspective of advantages they can provide to compensate for additional time and expenses required for the implementation. This way, if the alternative solution requires additional time expenses, but cannot provide extra value for stakeholders as compared to the Seven Day Countdown format, it should be rejected.

Another advantage of the Seven Day Countdown format is that it effectively integrates the required process of informing the staff about the core values, vision, and priorities of the organization. This procedure mainly includes two first days of the Seven Day Countdown format. During this period, the senior management of the Ritz-Carlton Hotel Company directly communicates with the staff of the new hotel and informs the audience about the main values, vision, and priorities of their future performance. This process is extremely important to guarantee a high level of employee motivation and productivity in the workplace (Husain, 2011). In this situation, if the manager intends to reach the highest potential result for each worker’s productivity, it is important to deliver necessary messages about the requirements and expectations of the management to employees. This way, the new strategy of staff training in the Washington hotel should integrate this element into the existing or changed format.

Finally, the advantage of the Seven Day Countdown format is that it is the optimal strategy for informal relations development in the organization. Thus, informal relations are the main contributor to a significant increase in employees’ productivity and performance of the company (Toni & Nonino, 2010). In this situation, aspects of informal communications and relationship development among the staff should be integrated into the staff training process. In the context of the Seven Day Countdown format, informal relations are developed during the first day of the training process. This result should be maintained or even improved in the new staff training strategy.

Overall, the results of the analysis have demonstrated key benefits of the existing Seven Day Countdown format of staff training and education that was previously applied in the Ritz-Carlton Hotel Company. The next stage of research will include the assessment of alternative solutions in the hospitality industry to assess the perspectives of specific changes to existing procedures and make a decision about an objective need for changes.

Assessment of the Best Industry Practices

Experts and management should be able to integrate the most innovative and effective solutions into staff training in the hospitality industry to make the training process, even more, contributing to future staff productivity. This way, experts should be able to assess the latest findings in the sphere of staff training and human resource (HR) management to be able to integrate them into everyday practice.

In the context of the latest findings in the sphere of HR management and staff training in the hospitality industry, specific attention should be paid to the question of the HR flexibility principle realization in the staff training and management process. The concept of HR flexibility should be considered one of the latest findings in the sphere of hospitality industry management and it integrates the idea about the importance of management procedures implementation based on a careful analysis of the existing environment of business (Tracey, Hinkin, Tran, Kingra, & Taylor, 2015, p. 347). In this situation, staff education and training processes should be organized in such a way that they would guarantee a high level of flexibility for the HR management team depending on specific conditions of the market. In this context, the existing Seven Day Countdown format of staff training and education that was previously applied in the Ritz-Carlton Hotel Company does not demonstrate maximum effectiveness since it lacks the element of HR management flexibility. As a result, the organization that implements the Seven Day Countdown format of staff training and education may lose to competitors due to poor adaptation to existing conditions in the market. This argument should be discussed.

The concept of HR flexibility integrates two key elements: resource and coordination flexibility (Tracey et al., 2015, p. 347). Resource flexibility envisions that the HR management team is capable of using available staff resources for the realization of a wide range of tasks that correspond to the needs of the specific market. In this context, the training process should be optimized to guarantee maximum productivity of the staff in a variety of roles that are available for their level of knowledge and experience. In turn, coordination flexibility supposes that the management team would obtain the required knowledge and skills to quickly adapt to changes in the environment and effectively adjust the managerial style.

Concerning the question of effective staff training procedures, experts have defined the role of three key categories of skills that should be provided to the staff during the training process. These are the following: strategic content education, interpersonal skills training, as well as technical and task requirements training (Tracey et al., 2015, p. 347). These key elements should be integrated into the training process to maximize its utility for the staff and other critical stakeholders of the organization. Strategic content education would suppose the provision of information about the strategy, vision, and value of the company, its strategic objectives, and methods. At the same time, each of these elements should be implemented in a flexible way to guarantee maximum effectiveness of training for the staff. Thus, common employees will require just a basic understanding of strategic content, while management will have to spend more time studying this issue. This way, the main theme of HR flexibility is connected with the development of special attitudes to different categories of staff.

At the same time, the process of education should be adapted to guarantee high-quality evaluation of its outcomes for the staff and other stakeholders of the organization (Tracey et al., 2015, p. 348). This way, the management should be capable of integrating effective training assessment processes to ensure that the outcomes of the training process correspond to the needs of the organization and that the process itself is organized effectively. Unfortunately, the discussion of the Seven Day Countdown format that was applied at the Ritz-Carlton Hotel Company has not included a discussion of the issue of training effectiveness evaluation. As a result, it is difficult to say whether the solutions applied in the Ritz-Carlton Hotel Company envisioned adequate evaluation of the outcomes of the training process for the staff. In any case, these solutions should be applied to the new strategy.

Together with the usage of the company’s training resources, the attraction of external experts for effective education of the staff has also demonstrated its effectiveness for the hospitality industry (Gazija, 2011, p. 9). Concerning the question of the actual duration of the training process that should be defined for the new strategy of the Ritz-Carlton Hotel Company, average results for the hospitality industry have demonstrated the value of 23-24 days required for a full cycle of the staff training process (Tracey et al., 2015, p. 349). At the same time, this process has been divided into separate cycles for the managerial and line staff. If these groups of staff are divided, a total of 10-11 days is required for managerial staff training, and 13-14 days are required for line staff training (Tracey et al., 2015, p. 349). This result seems to be more reliable and effective for realization in the conditions when managerial and line staff are being trained at the same time in parallel groups. In the context of the training process, a major part of the time is spent on technical content education for the new staff to be able to operate technologies required for their specific tasks. At the same time, strategic content training generally takes 2-3 days under typical plans of hotels (Tracey et al., 2015, p. 349). In the context of the Ritz-Carlton Hotel Company, the Seven Day Countdown format included just one day for the realization of this element. Since the company demonstrated positive results using this approach in the past, it is possible to say that in the conditions of the Ritz-Carlton Hotel Company one day would be enough for the strategic content training. In the sphere of interpersonal content training, applied solutions also consider the amount of time required for realization at the level of 1-2 days (Tracey et al., 2015, p. 349). In the Ritz-Carlton Hotel Company, just one day was provided for this task. Hence, additional opportunities for minimizing time expenses can be found.

Benefits and Losses of Alternative Solutions

In this section, the alternative strategies that are applied in the hospitality industry have been discussed. The benefits of such solutions include the factor of HR flexibility which should be considered as the main strength. In this situation, adaptation to the conditions of different markets requires companies to change staff training strategies. In these conditions, the management of the Ritz-Carlton Hotel Company would benefit from the integration of the HR flexibility paradigm into its business processes of hospitality facilities management. At the same time, presenting such a solution would satisfy the needs of the business owners of the Millennium Property Company business owners who must adapt the strategy to the needs of the Washington region.

From the perspective of adaptation to future changes, key findings of the analysis in the sphere of HR flexibility increase can also be considered as a benefit for the Ritz-Carlton Hotel Company since they can be adapted into the existing Seven Day Countdown format without serious losses for the organization. According to the results of the analysis, strategic content and interpersonal content stages of the staff training process can be taken from the existing Seven Day Countdown format of the company, which significantly simplifies the process of change integration in the organization. This way, a new approach to HR flexibility issues should require only a change in the technical content element of the training process. As a result, the organization does not lose its current advantages of the Seven Day Countdown format that has been discussed previously in the paper and gains additional advantages connected with the HR flexibility option in business processes. At the same time, recommendations about the required time for technical content training vary from 5 days for the managerial staff to 9 days for the line staff (Tracey et al., 2015, p. 349). In the context of the Seven Day Countdown format for the Ritz-Carlton Hotel Company, five days were initially provided for this task. So, the company will have to add just 4 days to the training process to reach considerably higher results in the question of staff effectiveness and productivity.

Concerning losses of the alternative solution, additional time expenses should be mentioned. Thus, the total time required for training will have to be increased from 7 to 11 days or by 57 %. This is a serious time expense increase, but in the context of the discussed advantages, it should be considered a possible risk for the organization. While additional 4 days can create opportunities for competitors of the Ritz-Carlton Hotel Company, the advantages of the new strategy should provide competitive benefits that will overcome possible risks of increased time expenses.

Recommendations

In the existing conditions, the advantages of HR flexibility principles integration for the Ritz-Carlton Hotel Company are obvious. The company will be able to adapt to changing market conditions more effectively and reduce possible losses connected with poor quality of hospitality facilities management. To reach this goal, the following strategy should be applied. In the context of the Seven Day Countdown format, elements of the training process that are connected with strategic and interpersonal content should remain as they are. The management of the company has demonstrated high effectiveness of the existing processes organization and new solutions are not needed in this respect. The analysis has demonstrated that in this respect the Ritz-Carlton Hotel Company has reached the best results in the industry from the perspective of time expenses. Hence, changes are meaningless and ineffective.

As for the technical content training, additional time expenses will be required for the training of the line staff. For the managerial staff, initial time expenses of 5 days would be sufficient. This way, new solutions in this element of the training process should guarantee an increase in staff performance flexibility with the ability to participate in a wide range of activities required to guarantee maximum benefits for clients and profits for the organization. Additional time expenses will include 4 days for line staff with a similar time for the managerial staff. In general, the training period for the organization should be increased from 7 to 11 days or by 57 %. This result seems to be optimal for all parties, requiring minimum additional expenses for the Ritz-Carlton Hotel Company and moving needs for changes stated by the Millennium Partners Company.

Conclusion

The results of the performed analysis have demonstrated the required changes to the existing procedures of the staff training applied by the Ritz-Carlton Hotel Company. In the context of the existing Seven Day Countdown format, the main changes should be connected with the technical content element of the training process. All other elements of training should remain as they are. For the managerial staff, existing time expenses of 5 days will be left. As for the line staff, an additional 4 days for this element of the training process should be provided. The main task of the training process should be connected with the integration of the HR flexibility concept, which focuses on the maximization of staff productivity and benefits for all key stakeholders.

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