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International Journal of Hospitality & TourismAdministration
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An Examination of Quality Management in LuxuryHotels
Ismail Sila PhD & Maling Ebrahimpour PhD
To cite this article: Ismail Sila PhD & Maling Ebrahimpour PhD (2004) An Examinationof Quality Management in Luxury Hotels, International Journal of Hospitality & TourismAdministration, 4:2, 33-59, DOI: 10.1300/J149v04n02_03
To link to this article: http://dx.doi.org/10.1300/J149v04n02_03
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An Examinationof Quality Management in Luxury Hotels
Ismail SilaMaling Ebrahimpour
ABSTRACT. The purpose of this case study was to analyze and comparethe total quality management (TQM) practices of three luxury hotels.Leadership, guest and market focus, and information and analysis emergedas the three most significant TQM factors successfully implemented inthese three hotels. The human resource focus factor was less successfullyintegrated into these hotels’ operations. Although the three hotels claimedthat they managed their processes effectively, these processes were not aswell-designed or complex as in many other quality-conscious companies.Strategic planning emerged as one of the most difficult factors to imple-ment. The general managers interviewed argued that these six factors con-tributed positively to their hotel’s business results. Managerial andresearch implications are also discussed. [Article copies available for a feefrom The Haworth Document Delivery Service: 1-800-HAWORTH. E-mail ad-dress: <[email protected]> Website: <http://www.HaworthPress.com>© 2003 by The Haworth Press, Inc. All rights reserved.]
KEYWORDS. Quality management, total quality management, hotels,Malcolm Baldrige National Quality Award, case study
Ismail Sila, PhD, is Associate Professor, Department of Finance and ManagementScience, College of Commerce, University of Saskatchewan.
Maling Ebrahimpour, PhD, is Dean, Gabelli School of Business, Roger WilliamsUniversity.
Address correspondence to: Ismail Sila, PhD, Associate Professor, Department ofFinance and Management Science, College of Commerce, University of Saskatchewan,25 Campus Drive, Saskatoon, SK S7N 5A7 Canada (E-mail: [email protected]).
International Journal of Hospitality & Tourism Administration, Vol. 4(2) 2003http://www.haworthpress.com/store/product.asp?sku=J149
2003 by The Haworth Press, Inc. All rights reserved.10.1300/J149v04n02_03 33
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INTRODUCTION
Since the emergence and popularity of TQM during the 1980s and1990s, the hotel industry continues to be heavily involved in the imple-mentation of TQM-related practices. However, researchers in this areahave largely remained indifferent to the researching and developmentof TQM in the hotel industry. Hence, the objective of this study is to filla void in the literature by analyzing and comparing the TQM practicesof three hotels using a case study approach. To make the analyses morecomparable and focused, three luxury hotels that provide comparableservices have been selected. For the purposes of this study, luxury ho-tels include deluxe hotels (elegant, distinctive, highest quality décor;upscale restaurants, full range of first-class amenities and customizedservices) and upscale hotels (well integrated décor; quality furnishings;premium guest room amenities and facilities; high staff-to-guest ratio).
Most of the contemporary TQM literature derives from the qualitymanagement principles and philosophies of quality “gurus” such asFeigenbaum, Crosby, Deming, and Juran. These authors have been crit-ical in the evolution of TQM frameworks with their principles. Crosby(1979) recommended a 14-step program to improve quality throughdefect prevention. Deming (1986) prescribed 14 points encompassingthe organizational requirements for effective quality management.Feigenbaum (1983, 1991) supported the integration of statistical tech-niques and methodology into the processes of firms to implement com-pany-wide total quality control. He also prescribed ten fundamentalbenchmarks as the keys to the successful implementation of total qual-ity control in the 1990s. Juran (1988) believed that quality improvementcan be attained by applying the breakthrough concept (an improvementto unprecedented levels of performance) to problems of quality. Juran(1989) also offered a framework for TQM that involves three sets ofprocesses including quality planning, quality improvement, and qualitycontrol.
Although the works of these authors have been critical in elaboratingon the theme of quality management, a widely accepted definition andmodel of TQM remain to be seen. This argument is also valid for the ho-tel industry. According to Partlow (1996), today the term TQM is beingwidely and wrongly used in the hotel industry to refer to any type of im-provement program. Breiter and Bowen (1998) define TQM as “an or-ganizational culture that emphasizes internal integration at the sametime that it demands innovation in the marketplace.” They argue that theexistence of a TQM culture focused on employees and customers is
34 International Journal of Hospitality & Tourism Administration
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necessary if a hotel is to effectively manage its relationships with cus-tomers and market its services.
For the most part, researchers in the hotel industry took a nonholisticapproach to TQM in their studies. One of the few holistic studies (Breiter &Bloomquist, 1998) attempted to give an overall picture of TQM in theUS hotel industry. This study is the first most comprehensive surveystudy of TQM in the US hotel industry. Some of the important findingsof this study include: failure of top management to support a TQM pro-gram is the major barrier to the successful implementation of such aprogram; “leadership” and “guest focus” are the two main elementsmost often integrated by hotels into their TQM programs.
Three other studies that also used a holistic approach to TQM in thehotel industry are those by Breiter and Kline (1995), Camison (1996)and Soriano (1999). Breiter and Kline (1995) reported on a survey studyconducted to identify the factors critical to the TQM programs of sevenhotels that practiced quality principles. Among the 13 factors extractedusing confirmatory factor analysis, leadership commitment, customerfocus, and vision and values were rated as the top three factors by theseven hotels, followed by training, communications, empowerment,alignment of organizational systems, and implementation/rollout. Camison(1996) conducted an empirical study to examine the extent to which theEuropean Foundation for Quality Management (EFQM) excellencemodel may be used by Valencian hoteliers to learn and close the gap be-tween customers’ perceptions of quality and self-assessed ratings ofquality performance. Soriano (1999) also surveyed Valencian hotels toidentify the most important factors of a hotel’s TQM program and com-pared his findings to the EFQM standards. His goal was to analyze theapplicability of the EFQM standards to the TQM criteria identified byseveral top Valencian hoteliers.
Finally, a survey study by Arasli (2002) examined the perceptions ofvarious groups of employees in four- and five-star hotels in North Cy-prus pertaining to their readiness toward the TQM philosophy.
All of the above studies (Breiter & Kline, 1995; Breiter & Bloomquist,1998; Camison, 1996; Soriano, 1999; Arasli, 2002) that used a holisticapproach to TQM were survey studies. However, Breiter and Kline(1995), Camison (1996) and Soriano (1999) all used small sample sizesfor a survey study, which were 6, 38 and 7, respectively. However, casestudies allow for a more detailed documentation of practices and the ex-planation of findings on a more comprehensive basis (Flynn, Sakakibara,Schroeder, Bates, & Flynn, 1990).
Ismail Sila and Maling Ebrahimpour 35
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Thus, in this study, we conducted a case study of three luxury hotels(two being upscale and one deluxe) located in the Northeastern part ofthe US to analyze and compare their TQM practices, as well as the ef-fect of these practices on their business results. Since three of the fiveholistic studies mentioned above have been conducted using non-UShotels, the examination of US hotels in this study will be useful in that itwill shed more light on their TQM practices. Thus, this study uses an in-tegrated approach to TQM in hotels covering all the operations of a ho-tel company and not only human resource management (HRM) or guestsatisfaction that many of the previous studies focused on.
METHODOLOGY
This is an exploratory research using a case study approach. We uti-lized a semi-structured interview format using the 2002 MalcolmBaldrige National Quality Award (MBNQA) criteria as a framework.We used the seven 2002 MBNQA criteria (leadership, strategic plan-ning, customer and market focus, information and analysis, humanresources focus, process management and business results) as a frame-work to conduct our interviews.
The MBNQA is one of the best-known and accepted quality awards.The Ritz-Carlton Hotel Company was able to improve its products, ser-vices and processes using this award structure as a framework, and iteventually won the award twice. This suggests that the use of these cri-teria as a framework for the hotel industry is appropriate.
We conducted semi-structured interviews with each of the generalmanagers of the three hotels. Since none of the general managers wantedthe name of their companies to be identified in a paper or publication,we used three letters–Hotels A, B and C–to discuss our findings foreach hotel. Table 1 provides a brief profile of these hotels.
Note that we had two interviewees from Hotel A, the general man-ager and the director of quality training/human resource coordinator,whereas only the general managers represented Hotels B and C. Each ofthe interviews was conducted using a question-answer approach togather information about the presence of quality management issues re-lated to the 7 factors in each of the hotels. Table 2 summarizes each ho-tel’s experience with a quality related program.
The next section examines and compares the TQM practices of thethree hotels using the MBNQA criteria as a framework (see Table 3 fora summary of these practices for each hotel).
36 International Journal of Hospitality & Tourism Administration
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A COMPARATIVE ANALYSIS
Leadership
Hotel A: Hotel A was originally opened to serve the economy seg-ment and its brand identity was upgraded to upscale in 1998 by invest-ing $1 million. The general manager stated that making the physicalchange from economy to upscale was easy. However, the harder taskawaiting the “new” hotel was to have the employees understand thatthere is a big difference in not only service levels but in attitude betweenthe employees of an economy hotel and an upscale hotel.
The general manager formed a group made up of informal leadersthroughout all the major departments so that they could be the agents ofthe new culture and disperse it to all the levels of the organization. Toavoid “position egos” and thus resistance, he only included hourly em-ployees in the action team, where he acted as the facilitator. To help theteam understand the changes that had to be made for the cultural transi-tion, the general manager conducted meetings once a week for threemonths. He stated that it took everyone in the group about a month tounderstand what they were trying to achieve. Even though the hotel didnot do any formal benchmarking before, the group did pay site visits tofour-star properties in the Northeast to get a feel of what their hotel wastrying to become.
Ismail Sila and Maling Ebrahimpour 37
TABLE 1. A Summary Profile of Hotels A, B and C.
Hotel Segment Hotel size Number ofemployees
Location Type Ownership type Unionized
A Upscale 266 rooms Over 200 Suburban Full service Franchise No
B Deluxe 363 rooms Over 300 Urban Full service Franchise Yes
C Upscale 317 rooms Over 200 Urban Full service Corporatemanaged contract
No
TABLE 2. The 3 Hotels’ Experience with a Quality Program.
Hotel Quality program
A No formal initiative.
B Attempted to implement TQM several years ago with little success. Has recentlyundertaken a Six Sigma initiative investing $12 million at the corporate level.Management is still in training for the program.
C Formally implemented TQM through late 1980s and early 1990s. The generalmanager claims quality is now embedded in the organizational culture.
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TA
BLE
3.A
Com
para
tive
Ana
lysi
sof
the
TQ
MP
ract
ices
ofH
otel
sA
,Ban
dC
.
TQ
Mfa
cto
rH
ote
lAH
ote
lBH
ote
lC
Lead
ersh
ipT
hege
nera
lman
ager
isac
tivel
yin
volv
edan
dco
mm
itted
toth
etr
ansf
orm
atio
nof
the
orga
niza
-tio
nalc
ultu
reas
are
sult
ofa
bran
dup
grad
efr
omec
onom
yto
upsc
ale.
Top
lead
ers
have
acl
ear
visi
onan
dvi
ewof
wha
tthe
com
pany
wan
tsan
dar
ehe
ldac
coun
t-ab
lefo
rth
eco
mpa
ny's
perf
orm
ance
noto
nly
from
afin
anci
alst
andp
oint
butf
rom
aqu
ality
stan
dpoi
ntas
wel
l.T
hele
ader
sof
the
hote
lare
also
com
mitt
edto
the
succ
essf
ulim
plem
enta
-tio
nof
the
Six
Sig
ma
prog
ram
tobe
tter
utili
zeth
eco
mpa
ny's
hum
anre
sour
ces
and
impr
ove
busi
ness
resu
lts.
The
lead
ers
use
noto
nly
top-
dow
nco
mm
unic
a-tio
nbu
tbot
tom
-up
com
mun
icat
ion
asw
ell.
Em
-pl
oyee
part
icip
atio
nin
deci
sion
-mak
ing
ishi
ghly
enco
urag
ed.
Str
ateg
icpl
anni
ngM
akin
gth
ebr
and
upgr
ade
and
the
stru
ggle
for
cultu
ralt
rans
form
atio
nan
inte
gral
part
oflo
ng-t
erm
stra
tegi
cpl
ans
has
prov
edto
beve
rych
alle
ngin
g.T
heho
teld
oes
noth
ave
man
yof
the
mec
hani
sms
need
edfo
ref
fect
ive
stra
tegi
cpl
anni
ng.
Cur
rent
ly,t
here
isa
five-
year
long
-ter
mgo
alof
rede
finin
gth
eho
tel's
asw
ella
sth
ew
hole
com
-pa
ny's
posi
tion
inth
ein
dust
ry.T
hepl
ans
envi
-si
onw
hatt
heco
mpa
nyis
goin
gto
look
like
five
year
sin
toth
efu
ture
asa
resu
ltof
the
Six
Sig
ma
prog
ram
.
Sho
rt-t
erm
plan
sar
eso
lely
deve
lope
dan
dim
-pl
emen
ted
atth
epr
oper
tyle
velb
ytr
acin
gsh
ort-
term
tren
dsan
dus
ing
vario
usqu
ality
feed
-ba
ckm
echa
nism
s.Q
ualit
yfo
cuse
dlo
ng-t
erm
plan
sar
ede
velo
ped
acro
ssth
een
tire
spec
trum
ofth
eor
gani
zatio
n.In
puti
sre
ceiv
edfr
omal
lst
akeh
olde
rsin
setti
ngob
ject
ives
and
devi
sing
actio
npl
ans.
Gue
stan
dm
arke
tfo
cus
Info
rmat
ion
abou
tgue
sts
isco
llect
edus
ing
anu
mbe
rof
info
rmal
and
form
alm
echa
nism
ssu
chas
empl
oyee
s'in
tera
ctio
nsw
ithgu
ests
,gu
estc
omm
entc
ards
and
the
GS
TS
.
The
Sm
ithst
arT
rave
lRep
ort,
apr
oprie
tary
com
-pu
teriz
edsy
stem
and
othe
rm
echa
nism
sar
eus
edto
gath
erin
form
atio
nab
outg
uest
s,m
arke
tco
nditi
ons,
gues
tsat
isfa
ctio
n,m
arke
tsha
rean
dre
venu
es.A
lso,
ince
ntiv
esfo
rem
ploy
ees
are
tied
togu
ests
atis
fact
ion.
The
hote
luse
sva
rious
mec
hani
sms
toco
llect
info
rmat
ion
abou
tits
gues
tssu
chas
daily
de-
part
men
talm
eetin
gs.I
tals
oem
ploy
san
outs
ide
rese
arch
com
pany
tosu
rvey
cust
omer
s.
Info
rmat
ion
and
anal
ysis
The
hote
lass
esse
sits
perf
orm
ance
base
don
data
and
info
rmat
ion
obta
ined
from
the
GS
TS
data
base
,qua
lity
insp
ectio
nsth
atar
eco
nduc
ted
bybr
and
repr
esen
tativ
es,a
ndth
egu
estr
ela-
tions
scor
esob
tain
edfr
omth
e1-
800
num
bers
that
the
gues
tsca
nca
llto
repo
rtth
eir
com
-pl
aint
s.
The
anal
ysis
ofda
taan
din
form
atio
nob
tain
edus
ing
mec
hani
sms
are
dire
ctly
tied
toot
her
fac-
tors
incl
udin
gst
rate
gic
plan
ning
,cus
tom
erfo
-cu
s,H
RM
and
proc
ess
man
agem
ent.
Info
rmat
ion
isal
som
ade
avai
labl
eto
empl
oyee
sto
perf
orm
thei
rjo
bsbe
tter.
Bot
hin
tern
alan
dex
tern
albe
nchm
arki
ngis
com
mon
atth
eho
tel.
The
hote
ltra
cks
100-
200
area
sof
defe
cts
iden
ti-fie
dth
roug
hin
spec
tions
onan
ongo
ing
basi
sby
utili
zing
aco
mpa
nyde
velo
ped
and
driv
enso
ft-w
are.
Sin
cem
anag
ers
and
hote
l'spe
rfor
man
cear
edi
rect
lytie
dto
finan
cial
succ
ess,
gues
tsat
is-
fact
ion
and
asso
ciat
esa
tisfa
ctio
n,da
taan
din
-fo
rmat
ion
inth
ese
area
sar
etr
acke
dex
tens
ivel
yan
ddi
ligen
tlyus
ing
very
vario
usm
etho
dsto
fa-
cilit
ate
impr
ovem
ent.
38
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Hum
anre
sour
cefo
cus
The
hote
lhas
rece
ntly
crea
ted
ahu
man
re-
sour
ceco
ordi
nato
rpo
sitio
nto
plac
em
ore
em-
phas
ison
itsH
RM
prac
tices
.Em
ploy
ees
are
eval
uate
don
the
qual
ityof
thei
rw
ork
and
re-
war
ded
for
supe
rior
qual
itype
rfor
man
ce,b
utem
ploy
eein
volv
emen
tand
empo
wer
men
ttyp
epr
ogra
ms
are
noti
mpl
emen
ted
oren
cour
aged
.C
omm
unic
atio
nis
mos
tlyto
p-do
wn
and
em-
ploy
eew
ell-b
eing
cons
ider
atio
nssu
chas
re-
trai
ning
and
satis
fact
ion
are
note
mph
asiz
ed.
Inad
ditio
n,cr
oss-
func
tiona
ltea
ms
are
rare
lyus
ed.
The
hote
lhas
reco
gniti
onpr
ogra
ms
for
supe
-rio
rpe
rfor
man
cefo
rbo
thits
empl
oyee
san
dm
anag
ers.
Em
ploy
eepa
rtic
ipat
ion
inde
ci-
sion
-mak
ing,
empo
wer
men
t,fo
rmal
ized
and
com
preh
ensi
vetr
aini
ng,a
ndte
amw
ork
activ
i-tie
sar
eco
mm
on.T
heho
telh
asal
sore
cent
lyst
arte
dto
form
ally
trac
kan
dm
easu
reem
-pl
oyee
satis
fact
ion.
Tra
inin
gis
exte
nded
toal
lsup
ervi
sory
and
non-
supe
rvis
ory
empl
oyee
s.T
here
are
also
reco
gniti
onsy
stem
sth
roug
hout
the
hote
l.E
m-
ploy
eesa
tisfa
ctio
nis
exam
ined
onan
annu
alba
sis
thro
ugh
anal
lem
ploy
eesu
rvey
and
com
pare
dto
resu
ltsob
tain
edin
prev
ious
year
sto
dete
rmin
ew
heth
erth
ere
are
visi
ble
tren
dsth
atth
em
anag
emen
tmay
need
toac
tupo
n.
Pro
cess
man
agem
ent
Cus
tom
eran
dem
ploy
eein
puta
reus
edto
im-
prov
eth
eex
istin
gpr
oduc
ts,s
ervi
ces
and
pro-
cess
es,a
sw
ella
sto
deve
lop
new
prod
ucts
and
serv
ices
.
Whe
nde
sign
ing
new
prod
ucts
and
serv
ices
,th
eco
mpa
nyse
eks
feed
back
from
itsem
ploy
-ee
s,cu
stom
ers
and
supp
liers
.The
hote
lals
oco
nduc
tsbo
thse
lf-au
dits
and
outs
ide
audi
tson
cea
year
tom
ake
sure
that
itde
liver
squ
ality
prod
ucts
and
serv
ices
.
The
com
pany
thor
ough
lyre
view
sth
ede
sign
befo
reit
prod
uces
and
mar
kets
apr
oduc
t/ser
-vi
ce.I
tals
oco
nduc
tsa
num
ber
ofbe
tate
sts,
pilo
tpro
ject
san
dre
test
sbe
fore
itim
plem
ents
new
proc
esse
s.E
mpl
oyee
sar
eac
tivel
yin
-vo
lved
inth
em
anag
emen
tofp
roce
sses
.P
re-
vent
ive
mai
nten
ance
and
mai
nten
ance
insp
ectio
ns,s
elf-
audi
tsan
dou
tsid
eau
dits
are
also
com
mon
atth
eho
tel.
Sup
plie
rm
anag
emen
tT
heho
telh
olds
itssu
pplie
rsto
min
imum
ac-
cept
able
stan
dard
sof
prod
uct.
Cos
tis
asim
-po
rtan
tas
qual
ity,s
oth
em
anag
emen
tne
gotia
tes
inte
nsel
yw
ithsu
pplie
rs.R
etur
non
inve
stm
enti
son
eof
the
key
mea
sure
sth
ataf
-fe
ctpu
rcha
sing
deci
sion
s.
The
hote
ltrie
sto
find
aba
lanc
ebe
twee
nsu
p-pl
ier
qual
ityan
dco
stan
dtr
ies
tolo
ckin
nom
ore
than
aye
arat
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tes.
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During the next two months, the team selected several key result ar-eas to work on hoping that if they achieved these targets, the rest wouldfall into place and “self feed and self promote itself.” They used formalproblem solving techniques to select and resolve the issues related tothese key result areas. For instance, one of the subject areas was relatedto addressing the guests by their names, which the general managerclaimed is a big standard in the hotel industry but is very rarely prac-ticed. The group brainstormed to find the best way to implement the ac-tion plans. It was at this point when they invited department heads to theweekly meetings to get their advice on and involvement in implement-ing the proposed actions in their respective departments.
At first, the results seemed to be successful. The general manager feltthat he met his goal of leading his employees toward an understandingof the characteristics of a new culture. This was evident not only fromhis weekly meetings with the employees but from his observations aroundthe hotel as well. However, all the behavioral norms sought that makeup the heart of a cultural shift did not become habit. On the contrary,within six months to a year after the weekly meetings were halted, thehotel reverted due to lack of initiative, constant reminder, and maintain-ing the standard.
Even though the hotel’s image is now closer to that of an upscale ho-tel than it was over two-and-a-half years ago when the brand upgradewas made, the journey is not yet over. Especially making a transition inbehavioral norms within the hotel has proven very difficult, and the neworganizational culture is not yet fully cemented. The general managerrated his hotel’s performance on the change process as C+, and eventhough “it beat an F” and was thus not a total failure, it fell short of hisexpectations.
To address this problem, the executive committee decided to comeup with standards for the hotel. Starting with the assumption that “thereis no new idea in the hotel business,” the five top leaders in the execu-tive committee examined the 20 standards of the two-time MBNQAwinner Ritz-Carlton. Each department came up with five standards,which were then condensed into five generic standards for the wholehotel. Standards cards were printed in English and Spanish and werepresented to each employee during a training session with the hourlyemployees.
The employees were told not only to know the standards by heart butalso to carry the card with them at work all the time. The standards werealso promoted through departmental and information sessions, as wellas pop-up cash incentives. For instance, the pop-up cash incentives in-
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volved the general manager randomly asking both the hourly employ-ees and the department heads to show him their standards card. If theydid carry it at that point, they received $5.
The management feels that the five hotel standards have now becomehabit and that 90% of the time the employees practice them. Therefore,during the time of the interview, they were planning to roll out anotherset of five standards within the next 30 days.
Hotel B: The parent company of Hotel B has invested $12 millioncompany wide (for the first year alone) for its Six Sigma program. SixSigma has been successfully used as a strategic approach to quality im-provement by companies such as Motorola and General Electric. On itswebsite, General Electric, which is one of the most publicized success-ful implementers of Six Sigma, defines Six Sigma as a “highly disci-plined process that helps us focus on developing and delivering near-perfect products and services.” The company believes that “the centralidea behind Six Sigma is that if you can measure how many ‘defects’you have in a process, you can systematically figure out how to elimi-nate them and get as close to ‘zero defects’ as possible” (General Elec-tric Company, 1997-2003, ¶ 2).
The general manager of Hotel B stated that he is not aware of anyother hotel company that has made as big of an investment as they did inthis kind of a program. Unlike Hotel A, where cultural transformationwas mainly aimed at matching the hotel’s products and services with itsnew and upgraded brand identity, the transformation at this hotel is aimedat improving the quality of products, services and the bottom-line.However, it should be noted that in the eyes of the management of HotelA, the brand upgrade also represented a more intense focus on meetingthe customers’ expectations of quality.
Although Hotel B formally implemented a TQM program a fewyears ago, the general manager argued that it focused only on one areaand that it was not driving the “behavioral sides” of the organization.Therefore, the managers of the hotel spent a whole day at the Six Sigmatraining solely focusing on utilizing the company’s human resourcesmore efficiently. For instance, they talked about soft skills related is-sues such as managing top performers and performers in general, thelearning cycle, setting goals and objectives, creating and assigning ac-countability and the decision making process.
The general manager also stated that many aspects of this processare measurable and that they would facilitate a “360 degree learning”within the organization. This is especially important given that you canonly manage what you can measure. He also believed that the new pro-
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gram would yield a very good return on investment especially becauseof its focus on the more efficient utilization of the hotel’s human re-sources and the commitment of the company’s Chief Operating Officer(COO) to the program.
The Six Sigma program will involve the creation of a project selec-tion committee, which will be the Six Sigma Council. The Council willbe led by the Black Belt organization and get trained on the DMAIC(Define, Measure, Analyze, Implement and Control) process, which isthe framework or the methodology used in implementing Six Sigma.This strategic process is explained in more detail in the strategic plan-ning section of the paper.
Overall, the general manager of Hotel B believes that the top leadersin his organization have a clear vision and view of what the companywants and are definitely held accountable for the company’s perfor-mance not only from a financial standpoint but from a quality stand-point as well. They seek ways to continuously improve the company’sperformance in terms of quality and profits. In addition, the leaders ofthe business units and general managers drive those results by employ-ing successful teamwork activities within each hotel. The executiveteam including the President, the Chief Executive Officer (CEO), andthe COO showed its commitment to the new Six Sigma program by at-tending the Six Sigma trainings for three-and-a-half days so that theycould “walk the talk.”
Hotel C: Hotel C is different from Hotel B in that TQM was imple-mented successfully company-wide in the late ’80s through early ’90s.According to the general manager, a culture of quality is embeddedin the organization as a result of implementing TQM. Therefore, heclaimed that his hotel is now a TQM company. When the company im-plemented TQM, it shifted its focus as an organization from a central-ized to a decentralized style of management. The management style wastransformed so that not only top down communication but bottom upcommunication was encouraged as well. A culture of input and involve-ment from all levels of the organization was created in order to drive theprocess forward. Thus, unlike the TQM program of Hotel B, the TQMprogram of Hotel C helped it to attain the targeted behavioral normssuch as increased employee involvement and communication.
Strategic Planning
Hotel A: The general manager of Hotel A believed that the hotel in-dustry “gets very scary” whenever one becomes reactionary or short-
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term goal focused. Therefore, when he started his current job as a gen-eral manager four-and-a-half years ago, the owner of the hotel alreadyhad long-term plans for the hotel’s future such as adding a new ball-room and an extra wing of around 250 rooms. However, the owner orig-inally planned to do this expansion without changing the hotel’s brandidentity. The general manager insisted that before attempting to makethe planned changes, the hotel brand had to be upgraded as an interimstep. Four-and-a-half years after the general manager came to this hotel,the hotel has now built a new ballroom (after the brand upgrade), andduring the time of the interview, they were planning to finish the extrawing of rooms within the next six months. The general manager admit-ted that making the brand upgrade and thus the struggle for culturaltransformation an integral part of their long-term strategic plans was“one of the single biggest challenges” the hotel had to undertake.
Currently, the time horizon for short-term plans at the hotel is 1 yearand the long-term plans are set beyond 1 year. In general, strategic plan-ning deals with setting long-term directions and implementing theseplans throughout the organization. Leading companies such as RitzCarlton use a number of methods in their strategic planning processes.For instance, not only top management but also employees actively par-ticipate in the planning process; customer wants and needs are alignedwith the strategies; supplier input is used in the strategic planning pro-cess; and effective feedback systems are established to assess the plan-ning process on a constant basis (Evans, 1996).
Judged by these criteria, Hotel A does not seem to perform very well.That is, the hotel has more of a top-down communication structure andis not enthusiastic about obtaining employee input during the strategicplanning process. Although customer needs and requirements are val-ued, the effect of the strategic quality planning decisions on the bottom-line appears to take precedence. Thus, the hotel is somewhat willing toincur extra costs to improve the guests’ service experience or to exceedtheir expectations but is more focused on keeping costs down. In addi-tion, supplier involvement in strategic planning is non-existent. This isevident from the hotel’s practice of holding suppliers only to minimumacceptable standards of product and not requiring any value-added ser-vices. However, the hotel does have feedback systems in place (dis-cussed in more detail in the guest and market focus section) to makesure that changes in customer requirements are used to update the planspreviously set if needed.
Hotel B: In Hotel B, there is currently a five-year long-term goal ofredefining the hotel’s as well as the whole company’s position in the in-
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dustry. It is a “work in progress” that is going to continue to reinvent it-self, but the general manager stated that there is definitely a clear visionfor what the company is going to look like five years from now as aresult of the Six Sigma program. The plan aims at melding all the keycomponents of hotel operations from a quality and guest satisfactionstandpoint, financial standpoint, as well as employee morale standpoint.Therefore, the hotel’s strategies seem to be appropriately aligned withits human resource and customer satisfaction practices.
As far as human resources are concerned, one of the real componentsof the hotel’s Six Sigma program is behavioral change, which is directlyrelated to the hotel’s plan to utilize its human resources efficiently. Themethods that the hotel will use to recruit and appraise employees willalso be tied in directly to the Six Sigma process. The results of these ini-tiatives and the progress made in terms of employee morale and satis-faction will be measured by the hotel’s existing associate satisfactionindex.
All the projects that will be implemented as part of the Six Sigmaprogram will follow the standard DMAIC process. The definition phasewill involve definition of the problem and the quality characteristicsthat guests view as very important. In the measure phase, measures ofunacceptable performance or defects will be established for each qual-ity characteristic to be improved. The evaluation phase will entail thecollection of data to assess the performance and capability of the currentprocess. In the analysis phase, the root causes of defects or errors will beanalyzed. The improvement phase will involve the use of simple yetpowerful statistical tools to reduce these defects. In the control phase,the improvement accomplished during the improvement stage will bemaintained (Antony & Banuelas, 2002).
Hotel C: Short-term plans and strategies are developed and imple-mented at the property level by tracing short-term trends and using variousquality feedback mechanisms such as tracking defects using customerfeedback and employee feedback in order to modify and improve theexisting processes.
Quality-focused long-term plans are developed across the entire spec-trum of the organization using all the resources available including mar-ket research, suppliers, guest and employee feedback, which are thendownloaded into each hotel’s framework of operation. Hence, the hotelhas a very effective feedback system, where input from all stakeholdersare integrated to the strategic quality planning process.
The existence and strength of these mechanisms should probably beattributed to the successful implementation of TQM. The employees
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now contribute to the setting and achievement of goals, and they are asmuch a part of solving customer issues as anyone else in the organiza-tion. This is important in that such bottom-up planning helps the hotel tounderstand and evaluate customer needs and requirements better.
Guest and Market Focus
Hotel A: Information about guests is collected at Hotel A using anumber of informal and formal mechanisms. Informally, to collect spe-cific information about the guests’ experience, the clerks are instructedto ask questions to guests about their stay at the hotel. In addition, thelobby concierge approaches guests in and around the lobby and asksvarious questions.
Two other more formal methods used at Hotel A to gather guest in-formation, which are used by almost every major hotel chain, includeguest comment cards and the Guest Satisfaction Tracking System (GSTS),the largest such system in the lodging industry. This advanced databasemeasures and tracks product and service attributes directly related tosatisfaction and guest retention at the hotel. For each property in thechain, questionnaires are sent out to customers to obtain informationabout their stay at each hotel. This information is stored in the GSTS da-tabase and then sent to each property.
Hotel A has a quality committee that reviews this information andthen follow-up calls are made to those guests who were dissatisfied withthe service. Feedback information received from the guests are thencompiled and presented at a departmental staff meeting once a month.The hotel also tracks the satisfaction levels of its banquet customers us-ing similar sources such as employee contact with customers and ques-tionnaires. Overall, the general manager rated the mechanisms his hoteluses to gather guest information and identify his hotel’s strengths andweaknesses as better than fair.
Hotel B: At Hotel B, guest information is gathered from varioussources as well. The hotel chain especially relies on the SmithstarTravel Report to identify and manage its competitive sets, the industrystandard to measure market share and room revenue per available room(RevPar). In every competitive set around the country, there is a keytool that it uses to measure and assess market penetration and marketshare. The company also has a proprietary computerized system to mea-sure the market conditions, as well as its current and potential revenues.In addition, the system enables the company to assess the effectivenessof its yield management practices.
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Believing that human resources affect customer satisfaction greatly,the hotel directly ties its incentives for every employee at every level toguest satisfaction. JD Power and Associates, a global marketing infor-mation firm, provides each hotel in the chain with a guest satisfactionindex electronically. The hotel receives a 20-page report every monthfrom this company that has every detail from the speed, efficiency andfriendliness of guest check-in to quality of food in its restaurant andbanquet facilities, as well as the cleanliness of rooms, the level of guestloyalty, and how the hotel compares against other same brand hotels inthe chain. The general manager of Hotel B argued that the mechanismsused to maintain a customer focus at his hotel are “very thorough” andthat the hotel “does not miss anything” as far as it is concerned aboutasking the guests about their experience at the hotel.
Since standards are important in providing consistent, high-qualityservice to customers, the hotel has pages of written service standards inevery single discipline. The performance of the hotel against those stan-dards is tested continuously through self-audits. An outside companyalso does a yearly audit of the hotel like a mystery shopper. This com-pany conducts inspections in hundreds of different areas to make surethat the hotel follows the standards required for its logo specificationand that they are consistent throughout the entire company and brand. Acouncil at the corporate level reviews and updates these standards everyyear.
The company also conducts a lot of market research, and if the mar-ket research results suggest that certain standards are not important tocustomers anymore, then they are modified or eliminated. Other rea-sons for changing the standards as cited by the manager include changesin staffing levels and the company’s expectations.
Hotel C: Hotel C uses various mechanisms to collect informationabout its guests. Every department of the hotel conducts daily meetingswhere the employees in each department talk about the issues that hap-pened the day before such as the defects they detected, ideas they had,and the guests they interacted with. In those departments that involveshift work, these meetings take place multiple times a day. The depart-ment managers are held responsible for gathering relevant informationand either put a team together to solve the problems detected or reportthem to those people responsible for solving them. The hotel also em-ploys an outside research company that surveys customers on a randombasis and provides the hotel with tabulations of relevant data on monthly,rolling average, and annual basis.
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As far as “interpersonal” standards are concerned, Hotel C simulatedthe 20 standards that capture the Ritz-Carlton creed, beliefs and the ba-sic ways in which they do business. These 20 basics are written out andgiven to all the employees in each of the same brand hotels in the chainnot only to carry them around but also know them by heart.
Information and Analysis
Hotel A: A survey questionnaire that covers various areas of the hotelis sent out to a cross-section of the guests who stay at the hotel eachmonth. The guests rate the hotel’s performance in these areas from 1 to5, 1 being very satisfied (which means that the hotel receives a score of100% on its guest satisfaction performance), 2 being somewhat satis-fied (60%), 3 being neither satisfied nor dissatisfied (40%), 4 beingsomewhat dissatisfied (20%), and 5 being very dissatisfied (0%). Thehotel is very critical about the survey ratings in that it considers a ratingof 2 as a failing grade. The data is compiled in a summary report usingthree criteria for how the system or the brand ranks the hotel. Forty-fivepercent of the hotel’s overall rankings come from these GSTS scores,and another 45% comes from unscheduled, “surprise” quality inspec-tions that are conducted by brand representatives as part of the hotel’slicense agreement. The final 10% of the overall ranking comes from thehotel’s guest relations scores, which is obtained from the 1-800 num-bers that the guests can call to report their complaints. When the overallranking is obtained by compiling these three separate factors in a sum-mary report, that data is analyzed rigorously in weekly staff meetings todetermine the issues that caused customer dissatisfaction and take theneeded measures to fix these problems.
The general manager of Hotel A believes that this process of deter-mining the hotel’s weaknesses and where it needs to focus its energies isonly “40% of the journey. The other 60% is never the idea. It’s the fol-low-through.” He admitted that his hotel needed to be better at follow-ing through on the problems detected.
Hotel B: All the information needs of the hotel are tied directly toother factors including strategic planning, customer focus, HRM andprocess management. That is, the hotel does yearly appraisals, and ev-ery point that the hotel’s performance is measured against is related toone of these factors. The general manager provides the executive com-mittee with information regarding his role and performance in attaining,developing and maintaining staff, conducting sound financial manage-ment and driving business results.
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Hotel B consistently tracks and measures performance in various di-mensions including employee and guest satisfaction. It also makes use-ful information available to its employees on a day-to-day basis throughdaily stand-ups, line-ups and departmental meetings before the shift. Inaddition, an information sheet is given to each employee every morningand contains information about everything from all the days events tooccupancy for the next ten days, as well as information that could be ofuse to guests during their visit such as the weather forecast, taxi fares toairports nearby and so on.
As part of its information management practices, Hotel B also doesboth internal and external benchmarking. External benchmarking (mostlydone at the corporate level) is done against not only other hotels in theindustry but against companies from other industries as well in orderto create best practices within the corporation. This external bench-marking is mostly targeted to the company’s HRM practices such as itscompensation packages.
Hotel C: Just like Hotel A and B, one of the most important measuresof performance at Hotel C is based on customer feedback about thehotels’ products and services. However, overall, the hotel tracks 100-200 areas of defects on an ongoing basis by utilizing a company-devel-oped and company-driven software. Defects are identified through in-spections that are conducted by both the general manager and thedepartment heads. The information about defects is loaded on to a com-puter database. These are printed out on a monthly basis and are usuallyused to identify the top five problems that the hotel has on a monthly,quarterly and annual basis. Then, action plans are developed to fix thoseproblems. The hotel also tracks whether it has to reimburse customerswith money to resolve issues related to customer dissatisfaction. Thus,Hotel C tracks not only the costs associated with the actual defects butthe costs associated with fixing the issues arising from these defects aswell.
Since the general manager and the hotel’s performance are mea-sured in three dimensions (financial dimension, which includes bothsales and profit; the guest satisfaction dimension; and the associatesatisfaction dimension), data and information in these three dimen-sions are tracked extensively and diligently to facilitate improvement.As far as employee satisfaction assessment is concerned, the hoteltakes employee opinion surveys on an annual basis. This data is com-pared not only to the hotel’s performance in previous years but to themarket performance, the national performance and the performance ofother companies from other industries as well. The hotel also holds
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monthly departmental meetings, as well as employee meetings in orderto facilitate communication and gather information.
All the managers and the department heads in the hotel have a spe-cific goal associated with each of the three categories of performancemeasurement. Based on the feedback they receive from customersurveys and departmental meetings, the managers put together plansin order to address these issues. On the guest satisfaction dimension,most of the information is obtained from formalized customer sur-veys. On a monthly basis, the general manager receives reports oncustomer satisfaction measures in various formats including nu-meric and chart format, as well as in comparative format that looks atthe hotel’s performance versus all other like hotels. These reports en-able the hotel to identify the top five performers in a number of areason a monthly basis, as well as on a rolling basis. Then, the managers inthe hotel are encouraged to talk to each other about the processes thatare in place in one hotel versus another that they could adopt.
However, just like in Hotel B, benchmarking of processes is mostlydone at the corporate level. For example, before the company opened uparea reservation sales offices, it identified the best telephone reservationprocesses in the country and in the world. Representatives from thecompany paid site visits to several airlines, as well as to several othercompanies that were experts in making reservations. Based on thesevisits, the company took the best of what it saw and created its own res-ervation system. The company also benchmarked its consumer affairsservice against the best customer interaction system that it identified.
Although most of the external benchmarking is done at the corporatelevel, Hotel C sometimes does collaborate with another hotel in thesame chain that has a “great practice.” For example, the hotel put intoplace a process called “at your service.” It is a “one-stop shop” processthat enables the guests to dial a number that is directed to a centralizedlocation to help them with all kinds of questions or concerns. However,before Hotel C rolled out the service, it sent its representatives to a hotelin the same chain that implemented the service very well. The represen-tatives spent a couple of days at this hotel to analyze the processes andto understand what it entailed.
Human Resource Focus
Hotel A: Hotel A does not have effective mechanisms in place tomanage its human resources efficiently. For instance, even though theemployees are evaluated on the quality of their work and rewarded for
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superior quality performance, employee involvement and empower-ment type programs are not implemented or encouraged. However, re-member that the action team formed by the manager to help with thechange of the quality culture of the hotel consisted of only hourly em-ployees. This suggests that the role of the employees in decision-mak-ing and affecting change is valued in certain situations.
According to the general manager, the communication within HotelA is 65% top-down and 35% bottom-up. The hotel also does not for-mally design improvement activities that include employee well-beingconsiderations such as retraining and satisfaction. In addition, cross-functional teams are rarely used.
The general manager also stated that his hotel is not as driven by for-malized training programs as those organizations that are part of a muchlarger top-down group. For example, the Westin Hotel, he stated, is aproperty of Starwood that manages or owns 700 hotels. The Starwoodhas a whole separate division in the corporate headquarters that focuseson providing training. Therefore, training is driven top-down, and sinceit is tied to the general managers’ review systems, managers are forcedto implement these training programs.
As part of Hotel A’s license agreement as a franchise, either a spe-cific department or the whole management team of Hotel A receives aformalized training program from the franchiser from time to time.However, the general manager stated that he would rather have non-supervisory employees such as the room attendants be trained by thefranchiser, because they have far more of an opportunity to impact guestsatisfaction. Of course, all the new workers are naturally given specificinstructions as to how to perform their jobs, but the general managersaid that his hotel did not have as much focus on employee training as itshould for various reasons including lack of infrastructure and qualifiedstaff. The general manager also argued that the owner of the hotel ismainly focused on the strategic decisions about growing the size of theproperty and the financial success of the hotel. His experience in the ho-tel industry for 33 years showed him that about 95% of the hotel ownersonly think about the financial side of their hotels’ performance.
Overall, the general manager of Hotel A thought that his hotel hadnot made enough progress yet in the area of HRM to call itself a qualityfocused organization. However, keeping in mind that they are up to a“journey with 1,000 miles,” Hotel A started a new initiative to become amore human resource-focused organization within the past 90 daysfrom the time of the interview. As a first step, as mentioned before, thedirector of security was promoted to the position of director of quality
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training/human resource coordinator. His job description covers twofunctions: to assist in personnel administration and to institute and main-tain training programs at the hourly employee level by discipline withinthe hotel. He is also responsible for the general education and trainingof supervisors and department heads.
Hotel B: Just like at Hotel A, employee recognition programs at Ho-tel B are common. However, unlike Hotel A, Hotel B also rewards itsmanagers for superior quality performance by selecting the manager ofthe quarter. The hotel also selects the employee of the month, whereemployees are nominated by their peers or by their managers.
The hotel also does a quarterly all-employee meeting where all theemployees are brought together with the leaders to talk about the direc-tions of the hotel and the company. Teamwork activities and trainingexercises are done departmentally at least twice a month in additionto monthly departmental meetings. The hotel also encourages and em-powers its employees to take part in decision-making. Of course, theconcept of empowerment at Hotel B is not as advanced as it is atRitz-Carlton. For instance, Ritz-Carlton allows its employees to spendup to $2,000 to satisfy a customer without having to consult with a su-pervisor (Evans, 1996).
Unlike at Hotel A, training at Hotel B is formalized, comprehensiveand conducted often. Departmental training is done on a monthly basisin addition to quarterly training from the corporate level. Issues coveredduring these training sessions range from the state of the hospitality in-dustry to risk management, controlling alcohol risk effectively and sex-ual harassment.
The hotel also formally measures employee satisfaction once a year,but since this practice was started only a year ago, there is no data avail-able to make comparisons with the previous years’ performance. How-ever, the general manager stated that the results were favorable ascompared to other same brand hotels owned by the company.
Hotel C: Hotel C also offers various training activities to its employeesby using a process called certified new-hire training, which is a com-puter-based CD-ROM training. In addition, each department has train-ing manuals. In each of these training programs, the employees aretrained not only in the technical functions of the job but on the loyaltyaspect as well. During these training sessions, the employees are alsogiven information about issues such as where Hotel C stands relative toits competitors, the hotel’s vision, where it makes money, and how itmeasures its performance.
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Unlike Hotel A where training is mostly targeted to managers and su-pervisors, Hotel C provides training to its part-time employees as well.The hotel believes that everyone must go through training if they are tobe a responsible employee and add value to the organization.
As far as the reward programs of this property are concerned, thereare some recognition systems that run throughput the hotel, as well asthose that each department has based on the goals that they are trying toachieve. These systems can change throughout the year or from year toyear. An example of a recognition system that goes throughout the en-tire hotel is the recognition of the achievement of an overall satisfactionlevel set as a goal by the company. If a goal set periodically is achieved,all the employees are rewarded. At the departmental level, the house-keeping, for instance, has goals for cleanliness, and the restaurant hasspecific goals for food and beverage. If the goals set are achieved, eachdepartment rewards its employees accordingly. Of course, we shouldalso mention that the success of these goals is tied to feedback receivedfrom guests.
Hotel C also measures the level of its employees’ satisfaction withtheir jobs on an annual basis through a survey. The satisfaction ratingsobtained for various employee satisfaction related issues are comparedto those compiled in previous years to determine whether there are visi-ble trends that the management may need to act upon. The analysis isnot limited to the overall satisfaction of all the employees, and it in-cludes employee satisfaction ratings for each department, as well asthose for each employee position. When the results are obtained, eachdepartment is informed about their scores, and if needed, the depart-ment heads are held responsible to develop action plans for their depart-ments to solve the problems identified.
However, the general manager stated that the employee survey theyconduct cannot always be analyzed at the employee type level (i.e.,full-time versus seasonal), since some of the employees do not answerthe question associated with their employment status. In addition, sincethe seasonal employees vary from year to year, the issues that arise ev-ery year are also different, which makes comparisons of satisfaction rat-ings over time at the employee type level difficult. However, there arealso some underlying patterns that are always consistent from year toyear and can be measured. Overall, the general manager stated that themeasurement of employee satisfaction has been useful in that the plansformulated to eliminate some of the problems identified produced posi-tive results in terms of employee satisfaction.
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Process Management
Hotel A: Naturally, most of the processes of hotels are service-drivenrather than product-driven. Although Hotel A does not use tools suchas quality function deployment in designing new products and services,it seeks the feedback of its customers and employees before implement-ing them. In addition, customer and employee input are used to improvethe existing products, services and processes.
Hotel B: At Hotel B, the design of products and services rangingfrom guest rooms to food and beverages are done at the corporate level.Deals with vendors around the country cover all of the company’sbrands, which give all the properties buying power and synergy.
When designing new products and services, the company seeks feed-back from its employees, customers and suppliers. For instance, thecompany recently created the trademark bed used in its guest rooms byusing customer focus groups. Feedback from employees about productsand services are obtained through the associate satisfaction survey men-tioned before, which also includes questions about products/servicesand processes in addition to questions related to their job satisfaction.Hotel B also conducts both self-audits and outside audits once a year tomake sure that it delivers quality products and services. These auditscover every aspect of its operations.
Hotel C: Just like at Hotel B, the design of products and services isdone at the corporate level at Hotel C. The company thoroughly reviewsthe design before it produces and markets a product/service. For exam-ple, in changing the bedding in the guestrooms, the corporate headquar-ters have done extensive research and reviews to offer the customers thebest products. Hotel C has also recently rolled out new processes in itsaccounting area. More specifically, it started outsourcing some functionsthat it previously did within the hotel. However, the idea to outsourcestarted 4-5 years ago, and the conceptual stage was followed by a num-ber of beta tests, pilot projects and retests before it was eventually rolledout.
Hotel C tries to utilize its employees effectively to manage its pro-cesses more efficiently. It gives clear, standardized work or process in-structions to employees. Employees also engage in self-inspection.Preventive maintenance and maintenance inspections are also commonat the hotel.
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Hotel C also continually conducts self-audits and outside audits tomake sure that its products and services live up to the hotel’s brandname. It has an in-depth standard brand audit that is conducted on an an-nual basis. In addition, it uses a standardized, outside audit for itskitchen and food and beverage. One of its suppliers also does audits onthe hotel’s cleanliness.
Business Results
Hotel A: The general manager of Hotel A stated that the owner ismainly focused on the financial results of the hotel. However, the busi-ness results category of the 2002 MBNQA uses a composite of fourbusiness performance areas (namely, customer-focused results, finan-cial and market results, human resource results, and organizational ef-fectiveness results) to assess company performance so that “strategiesare balanced and that they do not inappropriately trade off amongimportant stakeholders, objectives, or short- and longer-term goals”(N.I.S.T., 2002). This lack of emphasis on creating and balancing valuefor all the stakeholders is likely to negatively affect the overall perfor-mance of the hotel in the long-term.
Hotel B: According to the general manager of Hotel B, leaders at hishotel are definitely held responsible for both quality and financial per-formance. The hotel constantly tries to offer the best style of leadershipwith a clear vision to continuously improve the hotel’s performance asit relates to profits and quality. Therefore, he argued, leadership is a sig-nificant factor that drives the business results and is directly related tothe hotel’s performance in various dimensions including customer-fo-cused results, financial and market results, human resource results andorganizational effectiveness results.
In fact, the general manager is held responsible by the company todrive these results as part of the “big five objectives” for the company’sgeneral managers. That is, one of the big five objectives requires that allthe performance scores of the hotel be improved year over year, and partof the incentives are tied to the improvement of these scores.
Hotel C: The general manager of Hotel C also argued that the six fac-tors discussed above are strongly related to the business results of hishotel. For instance, the long-term nature of the hotel’s supplier relation-ships enabled it to get better pricing than other hotels, which resulted inlower costs. In addition, because of its commitment to customer feed-back, the hotel has higher retention rates than its competition, which ismeasured by the guests’ intent to return rates.
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DISCUSSION AND SUMMARY OF RESULTS
All three hotels stated that leadership played a significant role in theirorganizations to a certain degree. Strategic planning emerged as one ofthe toughest factors to implement. In fact, the general manager of HotelA stated that the strategic planning involved in transforming his hotelwas one of the most difficult challenges they had ever faced. This diffi-culty has most likely arisen due to the apparent lack of mechanismsneeded to implement effective strategic planning. Such mechanismswere more entwined with the strategic planning processes of Hotel Cproducing better quality results. Hotel B hopes that its new Six Sigmaprogram will help the company reinvent its strategic processes forbetter alignment with other key factors.
The information we gathered from the interviews showed that guestand market focus is probably the strongest area of the three hotels. Allthree hotels allocated their resources to gather information about guests’requirements and satisfaction with the products and services they re-ceived. Even Hotel A that does not have as much of a quality focus asthe other two hotels and compromises on the implementation of certaincritical factors such as HRM, tracked its performance in the guest satis-faction area meticulously.
Our findings showed that all three hotels are aware that you can onlymanage what you measure. Thus, they all developed systems to collectdata and information in various areas pertaining to their operations.They also track defects in various areas.
Our study also showed that Hotels B and C seemed to utilize their hu-man resources more effectively than Hotel A. However, the manager ofHotel B argued that his company’s previous attempt to implement TQMwas not successful in that it did not drive the behavioral sides of the orga-nization. The new Six Sigma initiative, on the other hand, was expectedto be more successful, because all the top managers attended the Six Sigmatraining program, where they received training specifically on making pos-itive changes on the behavioral aspects of the organization.
Hotel A has not been HRM focused until very recently, but it hasstarted putting more emphasis on this factor. However, the generalmanager stated that they still have a long way to go before their HRMpractices can be compared with those organizations that have sophisti-cated HRM practices. Of course, it is also necessary that the attitude ofthe hotel’s owner toward these issues change. As mentioned before, hisonly focus was the hotel’s financial results. Financial results are defi-nitely an important consideration. However, he should also understandthat allocating sufficient resources to the training and development of
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his employees also has a big potential to affect the financial results ofthe hotel positively in the long term.
As far as process management is concerned, the three hotels claimedthat they managed their processes effectively. However, the systemsthey had in place to manage these processes were not as well-designedor complex as in many other quality-conscious companies.
Since we did not have a big sample to conduct variance analysis, wewere not able to assess the extent to which the six factors discussedabove affect business results. However, the general managers of HotelsB and C did specifically tell us during the interview that, according totheir tracking and performance measurement systems, these six TQMfactors were positively related to business results in their companies.
An analysis of each hotel’s TQM practices shows that they are atthree distinct phases of the quality journey. This pattern emerged whenwe looked at the use of the individual TQM factors at each hotel, as wellas each hotel’s past experience with formal quality programs. It appearsthat the longer the quality initiatives are in place, the more sophisticatedthe implementation of each TQM factor is. Since Hotel A never hada formal quality initiative, its application of the six TQM factors isweaker compared to the other two hotels. However, the general man-ager is aware of his hotel’s weaknesses and attributes the lack of the ini-tiatives to the lack of resources and the focus of the top management onshort-term financial results.
Hotel B did have a formal TQM initiative in the past, but it was notimplemented successfully. Currently, the hotel is attempting to achieveits desired quality results through a new initiative, Six Sigma. However,due to its previous exposure to TQM, the hotel has more advanced qual-ity systems in place than Hotel A even though the impact of these sys-tems on the bottom-line has not been realized to the hotel’s satisfaction.
On the other hand, Hotel C has implemented TQM successfully andbelieves it has all the needed quality systems in place to drive the organi-zation forward. More importantly, a culture of quality is embedded in thehotel. Thus, one could view the three hotels’ experiences as representa-tive of successive stages in the creation of a quality-focused organization.
IMPLICATIONS OF THE STUDY
The findings of the study provide important pointers to hotel manag-ers in terms of implementing TQM practices as a strategic tool to gaincompetitive advantage. Some of the important lessons include the fol-lowing:
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• As evidenced by Hotel C’s experience, quality initiatives must becomprehensive and include everyone within the hotel if they are tobe successful.
• The active role and commitment of top leaders are needed. Theunwillingness of Hotel A’s owner to view quality initiatives as along-term investment and his intense focus on short-term financialresults served as an impediment to the development of strong qual-ity systems at the hotel.
• As Hotel C’s experience shows, the successful implementation ofTQM can be very effective in driving the human resource resultsdesired at a hotel such as employee involvement and empower-ment. For instance, encouragement of employee involvement indecision-making had a positive contribution to the hotel’s strategicplanning process.
• The study shows that the six TQM factors are not independent ofeach other and they must be aligned together for successful results.This is exemplified by Hotel C, which improved its human resourcepractices such as employee involvement and instituted extensiveemployee training. These in turn enabled employees to provide use-ful input in the development and deployment of strategies.
• The importance given to guest focus and information and analysisfactors was apparent in all three hotels. These factors form thebackbone of a TQM system at a hotel company. However, theproper working of this system is still dependent on the commit-ment of top management and the successful linking of these fac-tors with strategic plans.
• The study also showed that the process management practices ofthe three hotels are not as complex as other quality-consciousmanufacturing or service companies, where tools such as qualityfunction deployment is used extensively for product or service de-sign. Hence, more emphasis should be placed on this factor.
• Overall, the MBNQA criteria that were used to analyze the TQMpractices of the three hotels appear to be suitable to hotels. As thetwo two-time MBNQA winner Ritz-Carlton did, the MBNQA cri-teria can be used as a guide by other hotels to implement TQM suc-cessfully and achieve superior performance.
The study also has implications for researchers. It adds to the body ofknowledge about quality management in the hotel industry, which hasnot been tackled sufficiently before. Since this was a case study, it en-abled us to gain more detailed insight into the hotels’ TQM-related
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practices. However, one disadvantage of case studies is that the resultscannot be generalized to the whole industry because of the small samplesize. Therefore, future studies should conduct large-scale surveys whoseresults can be more generalizable to the hotel industry. These studiesshould also include other hotel segments and examine whether differ-ences in TQM factors exist across these segments. In addition, rigorousstatistical analyses could be conducted to test the effect of TQM factorson hotels’ business results.
Future studies should also be more holistic in nature in the analysis ofTQM practices. However, more focused empirical studies could also beconducted with special attention given to strategic planning and processmanagement in the hotel industry within the context of TQM. Suchstudies have so far been scarce in the literature.
CONCLUSIONS
There is a lack of quality management research in the hotel industry.In addition, most of the quality management studies conducted in thehotel industry so far have taken a nonholistic approach to the implemen-tation of TQM, mostly focusing on the HRM aspect of TQM. This studyattempted to fill this void in hotel quality management research.
The study indicates that MBNQA framework could be a useful guidefor quality improvement in the hotel industry given that the award crite-ria are suitable to hotels’ framework of business. Even though Ritz-Carlton’s winning of this award twice has been widely publicized, thereis still not much information in the literature as to whether other hotelshave also taken similar initiatives and where they stand. Future studiesshould explore these issues in more detail for further advancement ofquality management in the hotel industry.
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RECEIVED: 01/15/03REVISIONS RECEIVED: 03/11/03
SECOND REVISIONS RECEIVED: 04/11/03ACCEPTED: 04/21/03
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