Company background
Fairmont Hotel in Dubai is a part of Fairmont Hotels & Resorts which owns hotels and modern city centers in the different areas of the world, from Hawaii to New York and as far as Bermuda. The Group also owns luxury hotels with historical architecture and resorts such as the Fairmont Miramar Hotel Santa Monica and the Fairmont San Francisco (Fairmont, 2016). Fairmont Hotel’s mission is to transform guests’ stay into memorable and exciting but turning moments. Its vision is to be a growing organization providing a value-oriented, local experience not only in the UAE but in all areas of the globe (Fairmont, 2016).
Its philosophy is to provide hospitable service, which is local in nature and international in application but memorable in its context. The Fairmont experience allows the guest to feel welcomed and valued through excellent quality-oriented service. They are considered landmarks since they have been there since the development of cities and metropolitan areas when the word “modern” was still at its infancy (Fairmont, 2016).
The Fairmont Group traces its roots to the Fairmont San Francisco, founded by Nob Hill (Fairmont, 2016). The hotel became a place for impressive parties, state visits, and political meetings. The word “Fairmont” became a popular term for high-society personalities, which made it a luxury brand. Fairmont has its other brand names that include “The Fairmont Banff Springs, The Savoy,” and so forth. Famous celebrities, movie actors, and well-known world personalities could not just pass through San Francisco without having a visit to Fairmont.
Historical events transpired at The Fairmont, such as the pre-war meetings of British Prime Winston Churchill with U.S. President Franklin D. Roosevelt, or the signing of the Draft UN Charter in 1945 (Fairmont, 2016). In times of war and peace, The Fairmont hotel was there to serve world personalities and even war victims.
The Fairmont merged with Canadian Pacific Hotels in 1999, forming the largest and leading luxury hotel organization with more than sixty hotels and properties worldwide. The new organization with a new brand name, Fairmont Hotels & Resorts, continues to aim for growth to offer excellent service to its millions of guests and patrons throughout the globe (Fairmont, 2016).
SWOT Analysis of Fairmont
Strength
Strength comes from the company’s luxury hotels, resorts, and properties. The firm describes itself as “the most storied hotel” and “classic” because it owns old vast hotels, olden castles, high function halls, beach resorts, and modern facilities. It offers the first-class service from a dedicated workforce, which undergoes regular training and development. Fairmont has a long tradition of quality service.
Weakness
Turnover is a weakness because of the kafala system. Migrant workers complained of the loss of passports. Human resource development has to be enhanced but there is a lack of cooperation with proper authorities and management is at the mercy of citizens.
Opportunity
Opportunity relies on the hotel’s properties and popularity. Celebrities and guests add to the brand’s value. With a strong organizational structure and a dedicated force, the company can succeed further as a business organization.
Threat
There are many competitors offering a similar product or service. The company has to deal with this by improving service and products. The problem is the new entrants offering more value-added service.
PESTLE Analysis of Fairmont
Political
Fairmont is the pride of the UAE and has contributed to the country’s growth. The kafala problem has already been dealt with. A law has been passed eliminating the kafala and Fairmont can cooperate with the authorities in the enforcement of the law.
Economic
Since its founding as a business organization and the start of the UAE’s economic boom, the company has helped improve the economic condition of the country by providing jobs for local and foreign labor.
Sociological
Fairmont has a deep influence on society since its founding and the establishment of major cities in the United States and the Middle East. The UAE is also in the process of a transformation, from being a primarily ethnic community to a modern society and heavily influenced by foreign culture introduced by tourists and migrants. Fairmont has a large role to play in this transformation.
Technological
Hotels and resorts are affected by technological change, such as information technology (IT), computers, and the internet. Communication within Fairmont is enhanced by mobile telecommunications, emails, and video conferencing. Employees and managers of Fairmont are trained to effectively operate gadgets and computers.
Legal
Fairmont conforms to the legal parameters of operating and maintaining hotels and restaurants. As mentioned earlier, the problem of law enforcement with regards to the kafala issue continues to affect human resource development. But it does not mean Fairmont is violating UAE laws. Legal businesses in Dubai and the UAE are conforming to the bounds of the law.
Environmental
As part of its corporate social responsibility, Fairmont management is committed to good governance, transparency, and accountability, and recognizes its responsibility to the community by preserving the environment and protecting the ecosystem. Management sees to it that its operations do not enhance climate change by preserving water, reducing carbon emissions, and effectively managing waste disposal (Fairmont, 2016).
The rationale for adopting TQM
Goetsch and Davis (2014) argue that people will always seek what is introduced with quality in life. Quality can be sought in almost all aspects of daily living: as people buy grocery items, dine in a restaurant, check-in a hotel, or purchase an automobile or appliances. What people know about quality influences their purchase decision. Goetsch and Davis (2014) further state that one way of determining quality as perceived by consumers is that of a restaurant scenario: customers want good service, quick response, perfect food preservation, fine restaurant atmosphere, and a low price. These factors will certainly influence the customers’ decision to dine in that restaurant and come back later as a form of loyalty.
Customers will want more of a product or service because of quality (Goetsch & Davis, 2014). Total quality may be broader in context as it includes outcomes and aspects like people providing quality service and the applied process.
Goetsch and Davis (2014) based their definition of quality according to how W. Edwards Deming, a pioneer of quality management, defines it: the manufacturer produces a quality product if he is proud about it, and poor quality for him/her means closing shop; for the plant manager, quality would mean meeting the product requirements and the quantity sought of the product, and the manager should have continuous learning about the product and the manufacturing process.
Quality management is defined as an integration of achieving and maintaining quality excellence through the use of continuous process improvement and avoidance of product defects in order to meet customer expectations (Flynn, Schroeder, & Sakakibara as cited in Guion, 2010). Total quality management as a strategy of redefining any goal, process, or people and guaranteeing that appropriate thing are performed at the right time to attain organizational objectives (Chartered Quality Institute, 2016).
TQM is an effective thought-oriented process to change the behavioral attitude of the organizational members and make essential changes in the existing operational procedures to provide the expected outcome. TQM includes a system of tools, training mechanisms, and practices that focus on increasing customer satisfaction (Anderson, Rungtusanatham, Schroeder, & Devaraj, 2007).
Fairmont is an implementer of TQM and the concept and requirements of ISO 9000. This is what makes Fairmont a luxury brand. However, like other organizations that can be considered as offering excellent service Fairmont has many challenges and is continuing to deal with these challenges.
Systematic approaches to quality improvement can be achieved with TQM methodologies. Organizational quality objectives, type of industry, and culture often influence the effectiveness of the quality management program (Lee & Chang, 2001). TQM is an approach to establishing a fundamental business strategy (Cheng & Choy, 2007). In an effort to provide quality products and services in globally competitive environments many organizations have invested great amounts of time and resources in establishing and maintaining quality management programs such as TQM. Although quality management has been well established in manufacturing sectors, it has grown in popularity with non-manufacturing sectors such as the hospitality industry (Guion, 2010).
Sadikoglu (as cited in Guion, 2010) defines TQM as a holistic approach to enhance a company’s products and services, including people and processes, and the work environment to attain customer satisfaction and higher profits. TQM is a firm’s way of achieving a level of differentiation from other firms, customer satisfaction, branding, and costs savings in relation to waste management minimization (Ravichandran as cited in Guion, 2010). Studies have shown that TQM has improved operational performance and enhanced cultural adaptation (Leonard & McAdam as cited in Guion, 2010).
Fairmont’s core competencies
As provided in the introduction to this essay, Fairmont is synonymous with luxury hotels. Its geographic location in the UAE and in other countries is an aspect that defines its quality. Fairmont is ten minutes away from The Dubai Mall, believed the world’s largest mall, and Burj Khalifa, another Dubai landmark being the tallest building on earth. Nearby is another large shopping mall, the Mall of the Emirates. But more than this are Fairmont’s core competencies that refer to quality.
The company’s core competencies include a trained and effective workforce which is a combination of local and migrant workers, an organization that is multicultural, luxury hotels and resorts of historical value, restaurants with exquisite food and menus, and modern facilities and properties that are real landmarks.
In the hospitality industry, some major players have found that the benefits of TQM still could not preserve the company from market uncertainties, but core competencies are there that need an appropriate application of TQM and ISO 9000 standards. It is a must that the ISO 9000 should develop the core competencies, otherwise the brand will lose its “flavor”.
“Fairmont The Palm, Dubai” is the recognized presence of Fairmont Hotel & Resorts in the UAE, but there are many branches and facilities in Europe and North America that represent the brand (Fairmont Dubai, 2016). Services and products are considered the result of ISO 9000 and TQM implementation. This includes fine and exquisite food and five-star service quality, factors stated in the Deming explanation of quality (Goetsch & Davis, 2014).
Dining at Fairmont allows the guest to experience a kingly service, with a choice of six five-star class restaurants and salons that allow guests to savor a culinary experience all tailored from the expertise of Arabian, European, and South American chefs. The kitchen’s design is based on a culinary classic but truly international; the tastes range from Arabian to Brazilian and to purely American and European; the lounges in the hotels can allow the customer to experience several classically-inspired pastries and savories; and much more (Fairmont dining, 2016).
Fairmont’s services and products meet the requirements for quality as defined by Deming (as stated in Goetsch & Davis, 2014), but there are challenges and criticisms Fairmont has to deal with, which will be discussed in the proceeding sections.
ISO 9000 and TQM
The ISO 9000 series of standards was formed along with Malcolm Baldrige National Quality Award and European Quality Award, which are all about certification standards. The well-structured requirements enable the firm’s top management to provide quality rather than the so-called “philosophy” or the endless processes of TQM (Gotzamani & Theodorakioglou, 2006). The series itself provides a benchmark for total quality management.
Some studies found that the standards’ relevance and impact towards total quality management have been somewhat contradictory and their conclusions state that its contribution may be sometimes positive, negative, or neutral, as the results depend on the way it is implemented by the company concerned (Carlsson & Carlsson; Stephens; Taylor as cited in Gotzamani & Theodorakioglou, 2006).
The success or failure of ISO 9000 does not rely on the suitability of the requirements but on the organization’s capability and willingness to adopt the principles correctly. Mere application of the requirements for the sake of certification and not providing appropriate total quality management system for the short and long terms will not bring success and good results. The optimism of the standards is brought about by the successes and improvement in
- internal organization and operation,
- interactive communicative processes through well-defined roles and responsibilities,
- quality improvements and relative quality costs,
- customers’ positive feedback and developed trust and confidence due to enhanced product performance (Gotzamani & Theodorakioglou, 2006).
The key principle of TQM is based on the successful accomplishment of the highest level of quality management across all essential aspects of business, including customer satisfaction through optimum service delivery (Antony, Leung, Knowles, & Gosh, 2002). TQM’s successful implementation depends largely on the implementation of quality management principles across all departments. Hence, one of its greatest strengths lies in the integration of all business systems to improve quality, improvement of service delivery in cost-effective ways, and achieving the highest level of customer satisfaction (Antony et al., 2002).
ISO 9000 series encourages a well-structured mechanism to implement the quality principles and the requirements provide a clear focus and emphases on the quality system, quite opposite to the ambiguous and general terms and principles of TQM (Gotzamani & Theodorakioglou, 2006). Despite the current application and benefits of TQM, there are circumstances where TQM fails to succeed when implemented.
There are instances where statistical analysis and self-diagnosis are difficult and can be difficult to apply. Antony et al. (2002) studied the barriers that prevented the successful adoption of TQM and they found factors like poor planning, lack of managerial commitment, reduction of human resource or cost-cutting measures, use of inappropriate aspects of implementation, or lack of knowledge of the customers’ needs. As a whole, ISO 9000 standards enable organizations/firms the capability to adopt an effective TQM system, provided the organizations commit themselves to get the necessary results (Williams as cited in Gotzamani & Theodorakioglou, 2006).
Authors have conducted surveys on the relationship between ISO 9000 and TQM and found that the standards’ most important contribution focused on the aspect of “process management”. This involved the systematic methods of documentation and effective ways of conducting critical processes and product quality. ISO 9000 also provides for effective monitoring and use of valuable data, although suggestions for this particular process were concentrated on monitoring and maintaining quality data and only a few steps for processing and evaluation for decision-making and quality enhancement (Gotzamani & Theodorakioglou, 2006).
Other important contributions refer to the category in connection with treating customers, particularly in relation to complaints acceptance and processing for quality improvement. However, this contribution was not as valuable as the other TQM classifications. In the context of supplier relationships, a strong contribution of the standards was the increase in quality’s significance, particularly in the significance of cost and time in looking for suppliers. But there was very little improvement in “product design,” particularly in the product and process requirements, and in the whole concept of the product testing and inspections before the product is coursed to the supply chain until it reaches the customer (Gotzamani & Theodorakioglou, 2006).
ISO 9000 necessitates that the organization should adopt procedures to ensure that quality is continuously applied and assessed and necessary remedial actions are provided whenever faults are pinpointed. These defects should be noticed and remedied early to reduce operational time and cost. This is also applicable in terms of service deliver – shorter time means less cost (Chris, 2007). The standards also lead to improved customer service which further shortens the time for customers to take orders. The total time in service delivery and order taking is known as the operating cycle (Eskew & Jensen as cited in Chris, 2007). This means that the implementation of ISO 9000 shortens the operating life cycle.
Requirements for improving Quality
Methodology
This study used questionnaires to draw first-hand information from employees and supervisors/managers of “Fairmont The Palm, Dubai”. The aim of the research was to explore how Fairmont used core competencies, which include human resources, organizational knowledge, and management strategies to improve quality management and service. Other objectives of the research were to examine the organization’s problems pertaining to quality management and to determine the management’s and employees’ knowledge and skill about ISO 9000 and total quality management (TQM).
The present study used a sample of five employees, four supervisors, and one manager who provided data and information regarding services (e.g. room complementary and facilities, restaurants) and their training and skill in the different tasks pertaining to hospitality (e.g. receptionist, cleaner/janitorial job, room service, etc.) and hotel and restaurant management. There was a total of 10 questions for employees, supervisors, and managers, which dealt with the different aspects of quality service and hotel and restaurant management.
As a whole, the participants were cooperative and they provided honest responses to the questions which described the negative and positive results of ISO 9000 and TQM implementation. The employees can be categorized as chefs (2), house cleaners/janitors (2), and one receptionist. The general manager was in charge of the entire operation but he reported directly to the CEO; the supervisor reported directly to the general manager.
On the question about ethical consideration, the participants were informed that the research/study was for purely academic purposes and their identity and responses to the questions would be considered strictly confidential.
Interview questions
- Demographic Questions
- Please state your name, age, educational background, and nationality.
- How long have you been employed with Fairmont The Palm, Dubai?
- Questions for managers and supervisors
- What are your programs related to total quality management (TQM) that have helped improve Fairmont’s strategic management?
- What performance measures you undertook that can tell Fairmont’s strategic management improved?
- What management mechanisms and corresponding processes helped Fairmont attain their goals and mission successfully?
- What are the leading factors that are critical for the success of the quality program of Fairmont?
- Please describe the appropriate organizational culture that has aided in the successful implementation of TQM in your organization?
- What policies have been adopted by the company in order to operate ethically, the role of managers in implementing those policies, and the relevance of ethics to quality management?
- What policies and programs have been adopted by the company in order to achieve a motivated workforce and to satisfy employee needs?
- What mechanisms or programs adopted by the company to build partnerships with other organizations (suppliers, partners) and your respective employees to improve quality?
Implementation plan with justification
Fairmont has implemented quality management and ISO 9000 but there are things left unresolved and there are also some aspects already implemented but needs some modification. Human resource development has been dealt with continually because, as stated, the issue seemed to complicate when Fairmont deals with kafala. As a background, Fairmont’s employees complained about their passports being confiscated.
This was resolved when management gave back their passports and promised that the matter would not happen again. Another complaint about the kafala is that new employees who came from other companies and were transferring to Fairmont could not be taken because their passports were in the hands of their former employees. Fairmont management did not want to make a large issue about the matter, instead, Fairmont made representations with the former employer and the problem was solved.
The kafala system (sponsorship) has always been a problem for policymakers and governments of the UAE and other GCC countries. This system has been in effect in the UAE and GCC countries since local employment cannot address the labor capital and the required labor and management skills of the growing economy. The UAE government has implemented the concept of “Emiratization,” which focuses on providing employment opportunities to Emiratis.
Unemployment is common among the young populace and economic growth relies on the strength and expertise of foreign workers. The UAE is not exempt from the Arab Spring, the Middle East youth activism which started in 2011 and is still continuing up to this day. The people’s clamor for local employment and the growing unrest led to the implementation of a quota system for Emirati employment and to protect Emirati employees (Cummings, 2013). All this affects business and the service quality of the hospitality industry.
The problem is that migrant workers get exploited. Workers in the Middle East have reported employment problems, particularly with regards to the kafala system. The kafala is applicable to all migrant workers in the UAE and it particularly affects hotel workers and employees, including managers and supervisors, who are mostly under a contractual basis. Migrant workers are given a two-year contract, renewable after two years.
Ordinary workers such as drivers, laborers, domestic helpers are greatly affected by the kafala system due to the small salary and few benefits they get, and the rather large amount they give for the kafala, which is approximately $500 to $1000 (Migration News, 2012). The kafala allows the local population to be responsible for the migrant workers.
Fairmont has responded to the government’s call to observe the quota system and employ as many local applicants, but the problem is the lack of qualified Emirati to fill the managerial and skilled employment. Fairmont has an effective management team and specially-trained employees, like chefs, supervisors, HRM graduates who come from prestigious universities in Asia and the United States.
Kafala is a problem for Fairmont because citizens could confiscate the passports of migrant workers. Although this has been corrected by the government by making it an offense to confiscate migrant workers’ passports, there are still some violations. Workers can now transfer their sponsorship and the government now protects workers’ rights. Human rights groups have complained of employer violations and the persistence of labor violations since laws are not religiously implemented (Malit & Youha, 2013).
On the other hand, labor relations also influence private sector performance. This refers to laborers’ rights and the disagreement between management and labor unions on the right to picket and hold an area in or around the vicinity of Fairmont The Palm, Dubai. A government ruling questioned the right of the labor union to picket inside the shopping center, citing that there was an effective means of communication with the Fairmont management and that is at the shopping center entrances (The Labor Law Journal, 2001).
Without questioning this particular decision, whether bias or not, it is clear that this affects quality management and the relationship between labor and capital. When there is a problem with labor relations, employee performance is also affected. Labor relations problems and short-term contracts affect human resource management and the organization cannot get the necessary employee commitment as employees do not have the security of tenure (Connell & Burgess, 2013).
One of the participants acknowledged that the way to lead is to be creative and follow the Standards’ requirements. Fairmont Dubai has been ISO certified and this allowed the hotel to attain a competitive advantage against all its rivals. More than that, management should be creative and be able to activate the team all the time. The manager leads the team but there are also other sub-teams that enhance the ISO 9000 requirements leading to TQM. The management team must be able to provide “an extra kick,” copying the good things in the past but creating more excellent steps all to satisfy customers (Hotelier MiddleEast.com, 2016).
The kafala issue can be resolved and will not be a problem anymore if Fairmont can start the initiative of having dialogues with other employers and organizations. Even though it is a legal issue since the UAE government has already outlawed the practice of employers keeping the migrant workers’ passports, there still has to be citizens’ actions and cooperation. A wider information campaign is needed on this aspect.
The UAE government has implemented measures to enhance public and private sector cooperation. For example, the state has developed career programs to enhance local talents and to improve their chances of promotion in the industry they are employed. Fairmont can actively take part in this endeavor by providing training and development (T&D). It can be noted here that Fairmont does not have a concrete T&D program for the different tasks of employees assigned in the different sections/departments of Fairmont.
There are training facilities and new employees are only trained in-house; there are no other additional programs. Fairmont should provide an appropriate amount for T&D to enhance services in the kitchen, janitorial, and reception. While the menus for the restaurant are adequate, the chefs are not providing menus. The chefs need more training and should be sent to other branches in North America and Europe.
The majority of the participants of the interview noted that the kitchen, janitorial, and reception need improvement. These complaints are about the various tasks in the departments. Sometimes the personnel is performing multi-tasking: for example, an employee performing a clerical job in the office also performs janitorial work. An employee who has taken leave has not returned for work. This employee should have a substitute. The problem is that there is a lack of personnel, which is a function of the human resource department.
According to a participant of the survey, despite the fact that Fairmont is a luxury hotel some of the facilities are inadequate to provide quality service for valued customers. ISO 9000 provides for the proper checking and maintenance of facilities, particularly in the kitchen, restaurants, and corresponding facilities like washrooms, reception areas, offices. However, the participants in the survey revealed that these functions are not properly done. It is right to recommend here that the tasks and functions of the different departments should be checked by the supervisors who report the matter to the General Supervisor. The chefs should be assisted by personnel knowledgeable in the different menus and cooking. Receptionists and public relations personnel are also lacking.
References
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