Ritz-Carlton Hotel: Analysis of Leadership and Management Strategies

This report analyzes the Ritz-Carlton Hotel in Shanghai, focusing on leadership and management during organizational change. It examines the hotel's corporate culture, the advantages and disadvantages of appointing foreign managers, and the leadership characteristics of the General Manager, Mark de Cocinis, in addressing employee attitude issues. The report evaluates organizational systems and resources, including the influence of leadership on gender, diversity, and culture, as well as employee perceptions. It explores leadership styles, ethical perspectives, and strategies for managing internal and external stakeholders. The report covers transactional leadership, ethical behavior, and the hotel's approach to work motivation, satisfaction, company loyalty, and multi-ethnicity. It also analyzes differences and similarities in business leadership concerning gender dynamics, diversity, and culture, highlighting strengths, weaknesses, advantages, and disadvantages of each area.

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Executive Summary
According to the case study, in September of the year 2001, the Ritz-Carlton Hotel in the
city of Shanghai in China got the top awards in the survey of Asia’s Best Employers. The case
study examines the actions taken by the general manager of the hotel to create a satisfied and
active employee at the Ritz-Carlton Hotel. The case study could be utilized to discuss the effect
of satisfaction of the staffs on the satisfaction of the customer. The issue of retaining well-
qualified, service-oriented and English-speaking staffs in the labour market of Shanghai has also
been analyzed in the case study. This report will evaluate the case study of Ritz-Carlton Hotel.
It will examine the concepts of leadership and management during the organizational change of
the hotel. It will also evaluate the organizational systems of the hotel and business resources at
the time of organizational change. The leadership styles and ethical perspective in the hotel will
also be examined.

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Table of Contents
Introduction.................................................................................................................................................3
Task 1 – Concept of Leading and Managing Change..................................................................................3
1. Corporate Culture of the Ritz Carlton Hotel Company........................................................................3
2. Advantage of Appointing Foreign Managers.......................................................................................4
Disadvantage of Appointing Foreign Managers......................................................................................4
3. De Cocinis’ approach to the attitude problem of young Chinese Workers..........................................4
4. Three Leadership Characteristics of De Cocinis’ in Managing Change at Ritz Carlton.......................4
Task 2 – Organizational Systems and Resources to Business Transformation............................................5
2.1 Three Areas of Differences or Similarities in Business Leadership...................................................5
(i) Strengths and Weaknesses in each of the three areas –...................................................................5
(ii) Advantages and Disadvantages......................................................................................................5
2.2 Influence of Leadership in Change Management.........................................................................6
 Gender, Diversity and Culture.....................................................................................................6
 Perceptions from Leadership and Staffs.......................................................................................6
2.3 Corporate Culture..............................................................................................................................6
Work Motivation.................................................................................................................................6
Satisfaction..........................................................................................................................................7
Company Loyalty................................................................................................................................7
Multi-ethnicity.....................................................................................................................................7
2.4 Presentation.......................................................................................................................................7
Task 3 – Leadership Styles and Ethical Perceptive......................................................................................7
3.1 Three Leadership Styles facilitating Organizational Change.............................................................7
3.2 Leadership adapted by Management..................................................................................................8
One Advantage....................................................................................................................................8
One Disadvantage................................................................................................................................8
3.3 Ethical Leadership.............................................................................................................................8
Two examples of Workplace Scenarios...............................................................................................9
Three Ethical Behaviors to Implement................................................................................................9
Two Strategies to Manage the Relationships with Internal and External Stakeholders........................9
Conclusion.................................................................................................................................................11
References.................................................................................................................................................12

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Introduction
The report will analyze concepts of leading and managing organizational change. It will
also evaluate the organizational systems and business resources during organizational change.
The leadership styles and ethical perspective will be examined. The report is based on the case
study of Ritz Carlton Hotel of Shanghai. The Ritz Carlton Hotel of Shanghai is situated in
Nanjing Road beside the Huangpu River and The Bund. The hotel offers luxurious
accommodations in important retail areas of China along with an indoor swimming pool and a
spa. The hotel has a convenient business center, 24-hour facility of room service and a 24-hour
service of front desk.
Task 1 – Concept of Leading and Managing Change
1. Corporate Culture of the Ritz Carlton Hotel Company
 Core values – They show their values of responsible business through
policies on human rights, employment, supply chain, environment and in the conduct
they support and expect of others. They believe that their success as a global hospitality
company is grounded in their values demonstrated each day through their world-class
service and culture.
 Beliefs – They believe that to take care of a customer, one should first take
care of those who take care of the customers. Employee's satisfaction delivers high
service value to the customers to satisfy them. And satisfied customers, in turn, create
profits and sales for the organization.
 Ethical Standards – Its code of business ethics provides staffs and
managers with full guidance on the right way to conduct business on laws relating to
unfair competition, political and commercial bribery, and abuse of purchasing power,
political contribution and more (Piehler, Hanisch & Burmann, 2015). Their business
ethics program reinforces the importance of the ethical responsibilities of the company.
 People Management Approach – The senior management of the
company undertook management of quality. They know that as a service company, the
quality of its end product was only as good as the people providing it. So, it only recruits

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the right kind of staffs, but also give them the necessary inputs to allow them to provide
excellent service.
2. Advantage of Appointing Foreign Managers
As Ritz Carlton is an international company, hiring locals can be extremely
difficult. An expert have a set of professional knowledge, which make them the best
candidate for the position. International employees can help the company to achieve its
business objectives and boost the performance of the company on an international level
(Tavitiyaman, Weerakit & Ryan, 2014).
Disadvantage of Appointing Foreign Managers
International staffs come at a higher price due to transport and higher allowances,
relocation packages, and visa sponsorship. Higher foreigners might cost two to four times
higher than local employees. The language barrier is also one of the main disadvantages
to recruit foreign employee.
3. De Cocinis’ approach to the attitude problem of young Chinese Workers
The attitude problem of the young Chinese workers in Ritz Carlton Hotel was solved by
the Mr Mark de Cocinis’ approach, who is GM of the hotel. The use of internal strength is one of
the examples which has analyzed the attitude issues of the workers and gained trust among the
workers. Another example is that he was able to attract, improve and retain the highly trained
Chinese workers and delivered best customer service, gain profits and increase the growth of the
hotel (Leung, Bai & Erdem, 2017). The third example is that Mr. Mark de Cocinis has personally
interviewed each staff and built a personal relation with them.
4. Three Leadership Characteristics of De Cocinis’ in Managing Change at Ritz Carlton
 Empowered the staffs- By empowering the staffs, they are more accountable,
they accept the responsibilities. Empowered staffs can even be more proactive and recognize
when there are small problems that need to be solved. This prevents small problems from
turning into big issues. Staffs will more be trusted and valued, and they tend to be more
engaged (Chen, 2015). Employees who are more engaged are more likely to use
discretionary effort for the growth and the customers.
 Motivation- Great leaders know how to motivate their staffs in change
management for the improvement of an organization. Leaders at Ritz Carlton continuously

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seek opportunities to improve and innovate the experience of the company. An organization
promotes learning through personal development plan. Senior leaders support the change of
any kind in the work environment and support their employees by providing a campaign to
face the changes.
 Engaging the staffs- The more organizational staff accept and understand the
want for business change, the more positively they will response to the change process.
Leaders engage staffs in the change process to establish clear points for their discussion.
Leaders help staffs to make a good transition using session of discussion to allow staffs to
share their feelings about the changes.
Task 2 – Organizational Systems and Resources to Business Transformation
2.1 Three Areas of Differences or Similarities in Business Leadership
Differences in business leadership can be classified with the help of various areas like the
dynamics of gender, culture of the concerned workplace and diversity.
(i) Strengths and Weaknesses in each of the three areas –
Leadership by gender dynamics will help in evaluating the growth of the firm by
promoting only one particular type of gender that is male or female. The weakness of this areas
is that both the males and females do not find the right and equal opportunity to execute and
show they're taken with the workplace.
Leadership by diversity will help in encouraging many initiative ideas from various
employees, and this is one of the strengths of the firm (Huertas-Valdivia, Llorens-Montes &
Ruiz-Moreno, 2018). Its weakness is that many of the conflicts are often taken place due to the
diverse culture of the employees.
The third area of leadership that represents the culture showcase its strengths by
increasing the effectiveness and efficiency throughout the workplace by having appropriate
culture. One of the weakness is that if the culture remains inappropriate, then it can hamper the
overall work process of the firm.
(ii) Advantages and Disadvantages
Few of the advantages are:

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Business leadership by culture helps in enhancing the cooperation and collaboration
among the employees which enhances the overall culture of the firm. The use of the diverse
culture of the organization will promote in generating new and innovative ideas from the
concerned employees (Safavi & Karatepe, 2018). Gender dynamics will facilitate the
empowerment of women and men in various workplaces as required.
Few of the disadvantages are:
It has been seen that diversity many times gives rise of conflicts among the employees.
The differences in gender lead to various biased decisions based on a particular gender. The
prevalence of inappropriate culture may hamper the execution of the business procedures of the
concerned firm.
2.2 Influence of Leadership in Change Management
 Gender, Diversity and Culture
The HR managers have taken more initiatives to appoint more and more female staffs in
the company. The hotel is strict on hiring the right people. Though the candidates with the
correct qualifications are preferred, currently the HR managers are paying more attention to the
candidates with high capability so that they fit with the reliable service culture of the company.
The HR managers are giving significance to the organizational culture of strategic importance
(Asif, 2015). The HR managers of the hotel are also currently selecting candidates with diverse
skills and knowledge and training them the technical needs of specific jobs.
 Perceptions from Leadership and Staffs
The hotel has implemented many new HR practices. As for example, all the 300
employees have to learn one new thing each day and time has allocated mainly at the beginning
of each shift so that the staffs could do it (Hodari, Turner, Sturman & Nath, 2018). The HR
managers have to submit the daily reports to the Head of the Department. The learning may be
regarding the operations of another department, the whole tourist sector or new products in the
company. The HR managers of the hotel have implemented more new strategic staffing
initiatives to retain the productive staffs and reduce the turnover expenses.

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2.3 Corporate Culture
Work Motivation
The hotel believes that the motivation of the employees begins with the correct selection
method. The selection method of the hotel helps them to recognize the staffs those who are
already encouraged (Cusumano, 2015). Each staff is motivated to go beyond their limitations and
build unique, impressive and personal relations with their customers. The staffs of the hotel are
reorganized and rewarded according to their skills. The rewards motivate the staffs of the hotel.
Satisfaction
The employees are quite satisfied as they are regularly rewarded for their jobs. The hotel
understands its staffs, and they are provided with better equipment so that the staffs could build a
positive and useful corporate culture. A better knowledge of the tools will help the hotel to know
their employee's demands. It will lead to the satisfaction of the employees. The satisfied staffs
provide high service value and lead to the satisfaction of the customers (Román & Martín, 2016).
Company Loyalty
The loyalty of the hotel works on some particular values like informing staffs about their
duties, and allowing them to master the needs of their job (Lee, 2016). It also involves producing
concepts to improve the quality of their productivity, and continuously train them through their
managers on various tasks.
Multi-ethnicity
The culture of the hotel is influenced by various cultures which consist of cultures of
various areas of China, cultures of many nations of Asia and cultures of western nations (Sun,
Tong & Law, 2017).
2.4 Presentation
Task 3 – Leadership Styles and Ethical Perceptive
3.1 Three Leadership Styles facilitating Organizational Change
 Transactional leadership- It leaders work according to the predefined modes of
operation and concerned about ensuring continuity in the day to day function, makings sure
of continuous operations by establishing process and systems in place and focused towards
achievements of set goals (Sotiriadis & Varvaressos, 2016). It implies short-term rewards due

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to the positive relationships between peers can influence their perception on the company and
implicitly the corporate takeover that is ongoing.
 Transformational leadership- Leaders of transformational are the real
champions of change. They focus on the increasing motivation of the employees and connect
staffs sense of self with industrial values. It also focuses on employee weaknesses and
strengths and enhances their capabilities and their commitment to industrial goals, often by
seeking their buy-in for decisions. Leaders give more importance to the development of
teams and make sure about the fulfillment of day to day industrial work.
 Strategic leadership- It is a practice in which executives using styles of
management develop a vision for their industry the enables it to adapt to or remain
competitive in a changing technological and economic climate. Strategic leaders can use the
vision to encourage staffs and departments, develop among them a sense of direction and
unity to apply change within the company.
3.2 Leadership adapted by Management
Transformational leadership style has been adopted by the new management of Ritz
Carlton Hotel. This leadership style has helped to bring organizational change in the hotel. It has
carried necessary and positive change in the hotel with the aim to transform the hotel (Xu, Ye &
Chan, 2018). The transformational leadership and the organizational change support one another.
One Advantage
The transformational leaders of the hotel help in retention of the staffs more often than
any leadership style. They also assist in retaining more customers of the hotel. The
transformational leadership look for fulfilling the needs of the hotel and at the same time satisfy
the personal needs of the leaders of the hotel.
One Disadvantage
The lack of open communication among the leaders and employees of the hotel is the
disadvantage of the transformational leaders of the hotel. Open discussion makes the hotel
realize their mission and vision of their hotel. If the employees of the hotel observe that
communication is not taking place, then they will lose interest in their jobs.

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3.3 Ethical Leadership
As a manager of the Ritz Carlton Hotel ethical leadership could be applied in the hotel, as
it might help the staffs of the hotel to create good relations with the leaders of the hotel on the
basis of respect and belief. The staffs believe that leaders will maintain their commitments
towards them as well as towards the objectives of the hotel. The ethical leaders of the hotel have
to identify that by providing examples, create a workplace environment which promotes
productivity, and not the distractions of the employees by scandals and corruption (Oh, Kim &
Yang, 2016). When the employees and the leaders gain trust for one another, they could
concentrate on their work and complete it in time. They could also ask for help when required by
them and solve their business issues.
Two examples of Workplace Scenarios
One example is the use of differentiation method where the hotel with the help of the
leaders tried to be ethical in the industry on a large scale which is based on the values of the
customers. This has become possible as a relation has formed between the employees and the
leaders.
Another example is the use of long-term orientation of China by the leaders so the staffs
could establish long-term relations with the employers of the hotel. The leaders are also
interested in setting long-standing ties with the staffs and constantly try to motivate them in their
Three Ethical Behaviors to Implement
Honesty – The leaders have to be honest and open about their relationships in the hotel.
They should not intentionally mislead or cheat others by misrepresentations, false statements,
incomplete truths, selective errors, or any other methods (Wang & Chung, 2015).
Loyalty – The leaders have to be trustworthy, show fidelity and commitment to the
employees and hotel by the alliance in hardship, support and dedicate towards their
responsibility. They should not practice or reveal confidential information for personal benefit.
Respect – The leaders should show respect towards the employees and employers of the
hotel in the context of dignity, rights and privacy of all those who will be involved in the
decision-making process (Chathoth, 2016). They should treat every person equally in the hotel
with respect irrespective of gender or race.

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Two Strategies to Manage the Relationships with Internal and External Stakeholders
 Communication- There are different forms of communication methods used like
verbal and non-verbal methods of communication. Therefore, to strengthen the relationship with
the internal and external stakeholders, the use of latest communicational techniques needs to be
used which can communicate the exact message to them without any discrepancies.
 Managing risks- The management needs to be re-structured to manage the risks
associated with the stakeholders so that their trust can be retained and the relationship can be
made stronger. For this, various risk management approaches can be significantly adopted like
Risk sharing, Risk retention, risk transfer, avoidance, combination, loss control, and separation
(Weldon & Chang, 2004).

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Conclusion
The report had considered the Portman Ritz-Carlton Shanghai: Asia's Best Employer as
the case study. It had evaluated the concepts of leadership and management during the
organizational change of the hotel. It had also analyzed the organizational systems of the hotel
and business resources at the time of organizational change. The leadership styles and ethical
perspective had also been reflected in the context of transformation in the Ritz Carlton Hotel.
The significance of the ethical leadership in the hotel has been considered, along with the three
ethical behaviours of the leaders to be implemented in the hotel. Two strategies for managing the
relations with internal and external stakeholders had also been analyzed.