Emerald Emerging Markets Case Studies

Values-based organization – Ritz Carlton Abu Dhabi Hotel

Khaleel Ibrahim Alsabbagh Syed Zamberi Ahmad
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 Values-based organization – Ritz Carlton
Abu Dhabi Hotel
Khaleel Ibrahim Alsabbagh and Syed Zamberi Ahmad
Khaleel Ibrahim Alsabbagh
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and Syed Zamberi Ahmad
are based at Management
Department, College of
Business Administration,
Abu Dhabi University,
Abu Dhabi, United Arab
Emirates.
Disclaimer. This case is written
solely for educational purposes
and is not intended to represent
successful or unsuccessful
managerial decision making.
The author/s may have
disguised names; financial and
other recognizable information
to protect confidentiality.
DOI 10.1108/EEMCS-06-2013-0115
Introduction
Providing exceptional customer service has become one of the key differentiators for
organizations to achieve competitive advantage. Although most companies strive to achieve
customer satisfaction through their services, only some have succeeded in redefining the
business with their unique customer service, such as Southwest Airlines, SAS, Nordstorm
and Volvo (Bacon, 2004). In addition to these companies, there is the Ritz Carlton Hotel,
which has reshaped the service industry by empowering each employee to satisfy the
customer (Bacon, 2004). The ‘‘fuel’’ that empowers employees is the strong values-driven
culture of the Ritz Carlton. The values are embedded in the Ritz Carlton Gold Standards
which are discussed in this case study.
Ritz Carlton history
Nowadays, the statement of ‘‘the customer is never wrong’’ is commonly used in the context
of management and customer service. However, this statement was first mentioned by
‘‘César Ritz’’, who is the Founder of the Ritz Carlton and known as the ‘‘King of Hoteliers’’ and
‘‘Hotelier to Kings’’. This provides us with some insight into the Ritz Carlton Hotel as a
customer focus company. The history of the Ritz Carlton Hotel can be divided into four main
phases.
Phase 1 – the era of the Founder Cesar Ritz 1898-1918
The name Ritz Carlton Hotel name was derived from the Founder Mr Cesar Ritz, who was
born in 1850. He managed to open his first Ritz Hotel in Paris in 1898 and then in London in
1905 (Michelli, 2008).
Phase 2 – the establishment of Ritz Carlton Investing Company
Ritz’s wife Marie (Plate 1) allowed the name of Ritz to be franchised, with the establishment
of Ritz Carlton Investing Company by Albert Keller, with the name Ritz Carlton being used
for other hotels in Europe and the USA (Michelli, 2008). Under the new company, the
expansion in the USA started with the opening of the Boston Hotel in 1927, which set new
standards of luxury which continues to the present (Michelli, 2008). Then, it was followed
by the opening of other hotels in other US cities, namely Philadelphia, New York City and
Atlantic City.
Phase 3 – Ritz Carlton expansion 1983-1995
In 1983, the Ritz Carlton trademark and Ritz Boston Hotel was bought by William B. Johnson
who capitalized on the brand of Ritz Carlton and managed to expand it in the USA and
internationally to 40 hotels by 2000 (Michelli, 2008).
VOL. 3 NO. 6 2013, pp. 1-6, Q Emerald Group Publishing Limited, ISSN 2045-0621 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 1
 Plate 1 The Founder Cesar Ritz and his wife Marie-Louise Ritz in photo dated 1888
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Source: http://commons.wikimedia.org/wiki/File:C%
C3%A9sar_und_Marie-Louise_Ritz_1888.jpg

Phase 4 – Marriot acquisition 1995 till date

Presently, the Ritz Carlton Hotel Chain is a subsidiary of Marriott International, after it took
over a 49 and 50 percent share in 1995 and 1998, respectively. Though the Ritz Carlton is a
subsidiary of Marriot, it has its own management.

There are currently 81 Ritz Carlton hotels operating in 26 countries worldwide. The 81st Ritz
Carlton Hotel, which opened in March 2013 in the city of Abu Dhabi, the capital of United
Arab Emirates, is explored in this case study.

Ritz Carlton Abu Dhabi, Grand Canal

The initial plan for the hotel, when the contraction project started, was that it be operated by
J.W. Marriot, but it was changed to Ritz Carlton at a later stage (Broomhall, 2012). Due to
revisions to the design of the property, delays were encountered which pushed the starting
date to September 2012 (Broomhall, 2012). There was then further delay and the hotel
opened in March 2013 (Gulfnews, 2013).

The opening of the Abu Dhabi Ritz Carlton Hotel provided jobs for 480 candidates to be
considered as ‘‘ladies and gentlemen’’ rather as mere employees. Although the third Ritz
Carlton Hotel in the United Arab Emirates, is the largest Ritz Carlton Hotel (Plate 2) in the
world, and in a built up area which has 102 buildings and an area of 230,000 sq m
(Broomhall, 2012). Its unique design is essentially renaissance architecture. The opening of
the hotel was a major event, or as described by Lynn Gervais, Director of public relations, ‘‘a
unique experience’’ (Underwood, 2013). During this experience, there were more than 100
trainers from other Ritz Carlton hotels or the corporate Ritz Carlton company, who conducted

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PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 3 NO. 6 2013
 Plate 2 Ritz Carlton – Abu Dhabi Grand Canal Hotel

Source: www.ritzcarlton.com
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both practical and situational training (Underwood, 2013). However, the most important part
of this opening ‘‘experience’’ was to ensure that the values and culture are enforced.

Values driven organization through Gold Standards

The Ritz Carlton’s success in setting an exceptional level of service is attributed to the
leadership and to the workforce. It is the only company with no employees, as it hires only
‘‘ladies and gentlemen’’. Hence, the selection of potential candidates was thoroughly
scrutinized to ensure that they are appropriate for the roles of ‘‘ladies and gentlemen’’. The
General Manager of the Portman Ritz Carlton Hotel in China, Mark DeCocinis, stated that:
The key starts with selecting the right people. Our selection focuses on talent and personal values
because these are things that can’t be taught. Our culture is special, and we can’t expect to bring
someone into this culture if they don’t have the same values and purpose (Yeung, 2006).

Those personal values are translated into specific forms of behavior. Consequently, this has
made Ritz Carlton one of the successful organizations, which focuses on employee behavior
and makes it part of its strategy, which enables it to achieve competitive advantage over
other organizations (Bacon, 2004). This strategic direction of focusing on exceptional
service and behavior as a competitive driver has resulted in the Ritz Carlton receiving many
awards over the years. During the countdown opening of Abu Dhabi Ritz Carlton Grand
Canal Hotel, the representative of HotelierMiddleEast.com stated that ‘‘it was the staff that
caught my imagination rather than the product itself, it is quite a statement’’ (Oakley, 2013).
Bob Kharazmi, the Ritz Carlton Global Officer worldwide operations, also stated that ‘‘We
strongly believe we are not a hotel company, we are a company that creates lifetime
memories’’ (Underwood, 2013).
This Ritz Carlton service leads to customer satisfaction where Bob Kharazmi stated ‘‘it is the
Ritz-Carlton service that will keep guests coming back’’ (Oakley, 2013). This service has also
created a competitive advantage for the Ritz Carlton Hotel. As explained by Kharazmi:
That part of the service separates luxury from non-luxury. I think that is what separates
Ritz-Carlton, which puts a whole lot of energy behind creating those moments for our guests.
That’s what we try to create in this ten days and going forward (Oakley, 2013).

The secret to the exceptional service is the leadership of Ritz Carlton and the emphasis on
values and culture. Bob Kharazmi emphasized during the pre-opening ‘‘experience’’ of the
Abu Dhabi Ritz Carlton, that focusing on the value and culture of the company is what Ritz
Carlton does so well, and ensures that the vision of the company is understood by each
employee (Oakley, 2013). He continued that:

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VOL. 3 NO. 6 2013 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3
 So once they understand the expectation, once they understand the culture of the company, we
teach them the emotional part of the service. The emotional part of the service is touch and feel, is
smiling, is complying with needs of the guests, it is the soft side of the interaction, it is the personal
side of the interaction, and then they get trained on the technical side (Oakley, 2013).

This is reiterated by Ned Capeleris (The Manager of Bahrain Ritz Carlton), who was one of
trainers during the Abu Dhabi Ritz opening. He stated that ‘‘We create a culture and keep it
alive. For the opening of a new hotel, we spend ten days putting the body and soul into it’’
(Underwood, 2013). He said all of that is explained in the credo card (Plate 3) (Underwood,
2013).

Apple adopted the same idea of a ‘‘credo card’’ when it opened its Apple Retail Store. The
question is, ‘‘what is in this ‘credo card’ which is so special that Apple copied it from Ritz
Carlton?’’ It is a small card (roughly credit card size) which the ‘‘ladies and gentlemen’’ must
carry with them constantly. It is explained as:
The word credo translates as a statement of beliefs or aims which guide someone’s actions, and
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everyone – from the hotel manager to the person whose job it is fold the linen (Underwood, 2013).

‘‘It includes the employee promise, motto (we are ladies and gentlemen serving ladies and
gentlemen), three steps of service, the credo and 12 service values’’ (Underwood, 2013). In
addition to the ‘‘credo card’’, which Apple embraced, it benchmarked five ideas from Ritz
Carlton (Gallo, 2012) which are:
1. warm welcome;
2. expect and achieve the customer needs;
3. warm farewell;
4. own the relationship; and
5. reset the internal clock and empower employees.
Gallo (2012) explained that ‘‘the Ritz-Carlton techniques will help you build customer loyalty,
regardless of what business you’re in’’.

Plate 3 Abu Dhabi Ritz Carlton Hotel employees raise their ‘‘Credo Card’’ during the ten
days countdown official opening of the hotel

Source: http://arabianindustry.com/

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PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 3 NO. 6 2013
 Concluding remarks
The ownership of Ritz Carlton has changed through the years, but its services to customers
have always been exceptional, and created special moments in the lives of its customers.
This can be attributed to the ‘‘ladies and gentlemen’’ (employees) who go the extra mile to
provide those remarkable services and moments. However, this extraordinary customer
service is underpinned by the organization values of the Ritz Carlton, as set out in its Gold
Standards. Ritz Carlton has set an example for other organizations, such as Apple which
benchmarks their services and experience with customers. The challenge is now for Abu
Dhabi organizations in both the private and public sectors to benchmark their customer
service with the Ritz Carlton.

Case study questions

Q1. Will other organizations benchmark their services with the Ritz Carlton in Abu
Dhabi?
Q2. Apple has adopted the idea of the ‘‘credo card’’ for its employees from Ritz Carlton.
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Keywords: Q3.
United Arab Emirates,
Corporate culture,
Q4.
Organizational value,
Ritz Carlton Hotel
Will other organizations in Abu Dhabi do the same to ensure employees are living
the values and culture of the organization?
How do organizations ensure that the level of services provided to customers is a
competitive advantage?
Can the Ritz Carlton ‘‘way’’ of treating customers be replicated in other private and
public sectors in Abu Dhabi?

References
Bacon, T. (2004), ‘‘You are how you behave: customers can’t be fooled’’, Journal of Business Strategy,
Vol. 25 No. 4, pp. 35-40.
Broomhall, E. (2012), ‘‘Abu Dhabi’s Ritz Carlton delayed until September this year’’, 23 February,
available at: http://arabianbusiness.com/abu-dhabi-s-ritz-carlton-delayed-until-september-this-year-
446685.html
Gallo, C. (2012), ‘‘How the Ritz-Carlton inspired the Apple Store (video)’’, Forbes, available at:
http://forbes.com/sites/carminegallo/2012/04/10/how-the-ritz-carlton-inspired-the-apple-store-video/
(accessed 20 June 2013).

Gulfnews (2013), ‘‘Luxury hotel chain Ritz-Carlton opens first Abu Dhabi property’’, Gulfnews, 12 March,
available at: http://gulfnews.com/business/tourism/luxury-hotel-chain-ritz-carlton-opens-first-abu-
dhabi-property-1.1157190
Michelli, J. (2008), The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer
Experience Courtesy of the Ritz-Carlton Hotel Company, McGraw-Hill, New York, NY.
Underwood, M. (2013), ‘‘Ritz-Carlton Abu Dhabi: access all areas to a five-star mini city’’, The National,
11 March.
Yeung, A. (2006), ‘‘Setting people up for success: how the Portman Ritz Carlton Hotel gets the best from
its people’’, Human Resource Management, Vol. 45 No. 2, pp. 267-275.

Further reading
Nixon, N.W. and Rieple, A. (2010), Luxury Redesigned: How the Ritz-Carlton Uses Experiential Service
Design to Position Abundance in Times of Scarcity, The Design Management Institute, Boston, MA.

About the authors

Khaleel Ibrahim Alsabbagh is a DBA candidate at the Abu Dhabi University, United Arab
Emirates. He has experience in project management and social science management, and
holds an MBA degree from the American University in Dubai (2007) and a bachelor degree
in Civil Engineering from University of South Carolina (1996). He is currently working in the

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VOL. 3 NO. 6 2013 EMERALD EMERGING MARKETS CASE STUDIES PAGE 5
 Human Resources Department at Abu Dhabi Airports Company. His current research
interest is the impact of organizational behaviour.
Syed Zamberi Ahmad holds a PhD from the Hull University Business School (HUBS), UK. His
research interests include firm evolution and growth strategies including alliance, market
entry and internationalisation strategies of SMEs and multinational firms. His research
interests also focusing in the areas of entrepreneurial management, entrepreneurship
education and small- and medium-sized business strategies. He is currently an Associate
Professor of International Business and Entrepreneurship Management at College of
Business Administration, Abu Dhabi University, United Arab Emirates. Prior to entering
academia, he had several years’ industrial experience in international banking and treasury
of several reputable banks in Malaysia. Dr Ahmad had served several universities in
Malaysia, Yemen, and Saudi Arabia. He can be contacted at: Management Department,
College of Business Administration, Abu Dhabi University, Abu Dhabi, United Arab Emirates
(UAE). Syed Zamberi Ahmad is the corresponding author and can be contacted at:
drszamberi@yahoo.com
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PAGE 6 EMERALD EMERGING MARKETS CASE STUDIES VOL. 3 NO. 6 2013