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Case Study: Ritz-Carlton & Malcolm Baldrige National Quality Award

Case Study:  Ritz-Carlton & Malcolm Baldrige National Quality Award
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  • 0:00 Setting the Bar
  • 1:48 Baldrige Criteria
  • 2:55 Deserving the Award
  • 3:27 What Makes…
  • 4:50 How Ritz-Carlton Compares
  • 6:25 Lesson Summary
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Lesson Transcript
Instructor: Yuanxin (Amy) Yang Alcocer

Amy has a master's degree in secondary education and has taught math at a public charter high school.

In this lesson, you'll see how the Ritz-Carlton qualified to receive the Malcolm Baldrige National Quality Award. Learn the seven criteria that are required for the award.

Setting the Bar

In every industry, there is a leader that sets the standard that the others in the industry aspire to achieve. In the hotel industry, the Ritz-Carlton Hotel Company has perennially been setting that standard to the envy of its competitors. As a result of its outstanding reputation, Ritz-Carlton received the Malcolm Baldrige National Quality Award, also known as the Baldrige Award, in 1992 and 1999. Only one other company has won the award more than once, and the Ritz-Carlton is the only company in the hotel industry to win the award. In this lesson, we will look at the requirements of the award, and then analyze in-depth why the Ritz-Carlton won the award.

The Baldrige Award actually became a law in 1987 when Public Law 100-107 was signed by Congress on August 20. It is named after Malcolm Baldrige who was the Secretary of Commerce from 1981 to 1987 when he died in a rodeo accident. The purpose of the award is to encourage American businesses to increase in both the quality of leadership as well as quality of service to customers as this also helps businesses to grow.

Each year, 18 awards are given, three to each of the following business categories:

  • Manufacturing
  • Service company
  • Small business
  • Education
  • Healthcare
  • Nonprofit

The President of the United States personally presents this award to the businesses that qualify each year. The National Institute of Standards and Technology (NIST), a part of the United States Commerce Department, is in charge of the award, and the American Society for Quality is the department that administers it.

Baldrige Criteria

The Baldrige Award requires businesses to show achievement or improvement in these seven areas.

  1. Leadership: This includes how the managers lead the company as well as how the company helps lead the local community.
  2. Strategy: The company needs to show how it strategically plans its directions.
  3. Customers: How the company maintains strong and lasting customer relationships.
  4. Measurement, analysis, and knowledge management: The company shows how it acquires the data needed to function as well as to determine performance.
  5. Workforce: How the employees and staff are involved and empowered.
  6. Operations: The company shows how it creates, manages, and makes its operations and key processes better.
  7. Results: How satisfied customers are with the company. How its finances, suppliers, partners, human resources, governance, and social responsibility measure up to the competition.

Deserving the Award

As mentioned earlier, Ritz-Carlton received this award in 1992 and 1999. In its applications for the awards, Ritz-Carlton showed how the business promoted excellence in both quality of leadership as well as quality of service. But it was not just on paper that Ritz-Carlton showed its excellence. During site inspection, the NIST examined if the business really did meet all the required criteria. Ritz-Carlton received stellar marks on its site inspections.

What Makes Ritz-Carlton Special?

The name Ritz-Carlton itself is synonymous with quality and luxury. As of 2017, it operates 91 luxury hotels in 30 different countries. You can find them in the United States, in Mexico, in China, and in Egypt, among other countries. It has 40,000 employees which are thoroughly trained. In 1991, a survey of employees showed that 96 percent were fully aware that excellent guest service is a priority for the hotel, showing the hotel's excellence and quality in leadership. Furthermore, the motto for the corporate business is ''ladies and gentlemen serving ladies and gentlemen.'' When problems arise, workers are given the right to do whatever is needed to satisfy the customer. Other employees, no matter what their job, are required to provide help if asked by fellow employees in solving customer issues.

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