...(ACESA) Guanxi Neglect at the Roaring Dragon in South-west China: The demise of an International Management Contract Stephen Grainger1 University of Western Australia ‘guanxi neglect – neglecting opportunities to show respect towards guanxi relationships’ Abstract This paper introduces the concept of guanxi neglect through a case study that describes the takeover of a formerly Chinese managed hotel by a western based, international hotel management company. Specifically, it covers the cultural conflict that occurred for employees trying to adapt from the former Chinese relationship (guanxi) based planned methods of hotel management to that of the more market oriented, management company. Conclusions that are drawn highlight cultural characteristics and issues that companies taking over or approaching joint-ventures with SOEs, are advised to be aware of. In recent years, the hotel business environment in south-west China has undergone significant changes. China’s opening-up has encouraged an outbreak of new hotel construction and property speculation as companies and investors hope to cash in on the domestic and international exposure of the unique region. Prospects for growth in the number of tourists and investors visiting the region in the future were good. 1 Correspondence to: Stephen Grainger The University of Western Australia Perth, W.A., AUSTRALIA Email: sgranger@arts.uwa.edu.au Grainger, S., ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise...
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...Introduction The Roaring Dragon Hotel has been the first four star hotel in the southwest part of china. Being a state owned enterprise (SOE) with a long and colorful history, it was the region’s premium guesthouse for visiting government officials, dignitaries and guests. (Grainger, 2008) Background The hotel was fairly successful in the planned economy era. However, the hotel started experiencing difficulties after a market economy begun to develop in the region in year 2000. The market economy brought about increased competition and thus requiring establishment to increase their efficiency in order to compete. This meant that change had to take place within the Roaring Dragon Hotel. The provincial government hired Hotel International (HI) to modernize the hotel ways of operation (Grainger, 2008). Problems HI team ignored the Guanxi practices that RDH has been maintaining for so long and which is also one of the main reason of their success. Consequently it resulted in loss of critical industrial contact. Rather than making a smooth transition, HI team changed the management into strict and demanding environment. Any employee who fails to meet the demand had to leave. Opportunities Involving employees in the change process enhances the chances of success. Employee involvement creates ownership of the process by employees, thus increasing support for the changes (Jones & Aguirre, 2004). Recommendations The establishment needs to prepare its employee for the change...
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...Sullivan University | Roaring Dragon Hotel: Intercultural Communication | Bader Ali | | | 10/25/2015 | This is a proposal for the Roaring Dragon Hotel case study. It Includes an Executive Summary for the whole paper starting from introduction down to the conclusion. This will also include out-sourced researches to help clarify the dilemma of lack of communication along with the ignorance of Guanxi. | Executive Summary: In this proposal, you will read briefly about the history of the Roaring Dragon Hotel and where does it stand in its industry. There will be emphasis on how relationships, Guanxi, were a major source of income and interest. This proposal will focus on the setback of internal cultural communication in the hotel and how it affected the hotel’s evolution. The hotel decided to grow, from a 3 star to a 5 star hotel. A foreigner team of specialists were requested for the change procedure. The team was not made aware of the culture they are stepping foot in; add to that, they did not speak the language. The Management excused themselves from explaining to the foreigners what inner value does their employees hold; Guanxi. The employees were not told about the change and its phases. The employees did not understand the language of the outsiders nor their unfairly perceived actions. The evolution team should have invested some time in researching the culture of China, the culture of the hotel, and its business routine. The management members must...
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...Executive Summary This paper proposes the implementation of self-directed teams (SDTs) in the Roaring Dragon Hotel (RDH) in south-west China after the termination of the contract with Hotel International (HI). This proposal will detail the advantages of implementing SDTs in an environment that is influence by guanxi networks in order to increase guanxi influenced and as a direct result increase profits. Self-Directed Guanxi Teams Introduction The provincial government decided to hire an international organization to manage the RDH, to develop the hotel into a five star quality hotel, and to increase the profits of the hotel. Hotel International (HI) was the organization selected and after various financial and culture problems, the provincial government terminated the contract within six months and reinstated the former General Manager Tian Wen. Background The Roaring Dragon Hotel spiraled into financial decline within six months after Hotel International took over of management and failed to, as Grainger (2008) stated, “help realize the hotel’s potential” (p.2). HI installed a new general manager and hired eight professionals to manage the transition. HI managed to reduce the hotel staff, began renovations but could not increase profits as they were hired to do. HI failed to communicate properly to the staff and could not retain employees crucial to conducting business in the region. At the end of six months, HI’s contract was terminated and the hotel’s management...
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...Introduction: The Roaring Dragon Hotel is located in China. Mr Wen has decided to expand this hotel in order tp change this 3-star hotel to a 5-Star hotel. And hence he hired a consulting firm to evaluate this hotel from top to bottom. Unfortunately the results were shocking to Wen. He came to know that his employs were lazy and inefficient. They have confirmed that there is no way to change this hotel to a 5 Star without firing more than 600 employs and should spend more investments on the infrastructure. He understood that the employs if the hotel were doing their personal business and taking long breaks for Tea and were reading news paper and also leaving without finishing their shifts. Background : There was a 3-star hotel in South West China named, The Roaring Dragon Hotel which is initially under State Owned Enterprise. It had a colorful history and reputation as the region's premium guesthouse in 1950s. There is a vast market development in the region, but management couldn't get grab that opportunity to increase the reputation of the hotel. And also they didn't bother about the profits. Many people are hired from Government Department through Guanxi or connections . Due to this, there was a decline in popularity and income. The state officials have decided to hire Hotel International and transferred all the ownership of The Roaring Dragon Hotel . Tian Wen is a General Manager in 2000 and having minimum concern about the development and expansion...
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...Must Read: The Underlying Principle behind the Proposal and Presentation A proposal serves the purpose of selling an audience on something. It attempts to sway a group of people to your way of thinking. A proposal is not a term paper or a study strict. It’s supported by studies but isn’t a study in itself. It has to be structured in such a way that the reader can easily read and quickly process the information. Oftentimes the proposal is accompanied with a presentation. So, the reader will have to do double-time when it comes to information processing. Let me share with you a recent presentation horror story: A company salesperson came to my organization trying to persuade us to buy the product they were pitching. The product was a fairly good product but the pitch was horrible. The proposal was written like a study. The font was much too small and the line spacing was much too close. Additionally, the slide presentation had no pictures to set the mood and the presenter read from the slides… boring! This happens much too often. The "A" Paper example is a good proposal structure that has been used in business by me and other instructors that are business veterans. Please print out the example and follow its basic format. If you have problems creating text boxes or proper alignments please get assistance from the library staff or a friend. Changes here and there are OK. The presentation should contain between 8 to 12 slides and to be accompanied by a one-page executive briefing...
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...Improving Communications: Hotel International and the Roaring Dragon Hotel Ima Student Sullivan University MGT 510 Executive Summary This proposal provides a roadmap toward improving communications between the Hotel International (HI), a global hotelier, and the management control of the Roaring Dragon Hotel (RDH), one of the original three-star hotels in southwest China and a state owned enterprise (Grainger, 2008). Failure to recognize cultural norms and the relationship between employees, customers, and contractors will result in dramatic failure of modernization and an effective business plan (Grainger, 2008). Introduction: Management Control Takeover The management control takeover of the Roaring Dragon Hotel (RDH), one of the original three-star hotels in southwest China had a direct impact on the hotel’s employees, its popularity among current customers, and generating profit. RDH is a state owned enterprise located in southwest China by Hotel International (HI), a global hotelier (Grainger, 2008). McNally (2011) observed, “Over the past thirty years China has witnessed a gradual transition towards a capitalist political economy with an emphasis on capital accumulation, market competition, and international economic integration” (p. 1). Background: Deployment of Corporate Governance and Global Marketing The provincial government was concerned that the hotel would not meet their potential and needed modernization. The current general manager, Tian Wen...
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...Roaring Dragon Hotel: Good Management Qualities Executive Summary This proposal provides a detailed analysis on the good management qualities of organization. The proposal addresses problems and challenges faced by management due to difference in culture. Roaring Dragon Hotel (RDH) was state owned hotel in southern part of China and guanxi was integral part of RDH and its business. RDH was facing a tough competition from its competitors who had more westernized corporate oriented culture. The main issues of RDH management responsibilities; understating the different culture, employees, customers, market trends and effectively executing the good management qualities are addressed in the proposal. By understanding and acclimatizing to the different cultures is the new way to develop management skills effectively is suggested. This method eliminates any unwanted miscommunications within the team and provides a platform to understand the how employee works in different cultures and thereby increasing the productivity of the organization. Introduction: RDH & Guanxi Roaring Dragon Hotel (RDH) was one of the most famous and esteemed three star hotels in the southern part of china in 1960’s. It was considered as the state owned enterprise (SOE). RDH was famous for its Guanxi practice. The business basically depended on the connections...
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...Improving Communications: Hotel International and the Roaring Dragon Hotel Ima Student Sullivan University MGT 510 Executive Summary This proposal provides a roadmap toward improving communications between the Hotel International (HI), a global hotelier, and the management control of the Roaring Dragon Hotel (RDH), one of the original three-star hotels in southwest China and a state owned enterprise (Grainger, 2008). Failure to recognize cultural norms and the relationship between employees, customers, and contractors will result in dramatic failure of modernization and an effective business plan (Grainger, 2008). Introduction: Management Control Takeover The management control takeover of the Roaring Dragon Hotel (RDH), one of the original three-star hotels in southwest China had a direct impact on the hotel’s employees, its popularity among current customers, and generating profit. RDH is a state owned enterprise located in southwest China by Hotel International (HI), a global hotelier (Grainger, 2008). McNally (2011) observed, “Over the past thirty years China has witnessed a gradual transition towards a capitalist political economy with an emphasis on capital accumulation, market competition, and international economic integration” (p. 1). Background: Deployment of Corporate Governance and Global Marketing The provincial government was concerned that the hotel would not meet their potential and needed modernization. The current general manager, Tian Wen,...
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...Introduction: The Roaring Dragon Hotel is a three-star hotel that is located in the southwest part of China. Since the 1980’s the state-owned-enterprise has enjoyed a long colorful history and reputation as on of the regions premium hotels. The at the office which is in another city. On average Mr. Wen shows up at the hotel once a month. In 2002 he decided that it was time to expand their hotel and make the jump to a five star hotel. Wen hired a consulting company to conduct an evaluation of his hotel from top to bottom. Everything from the service to the procedures was included in the evaluation. He also wanted to make sure that his employees would be able to make the jump to a premium hotel. The results of the evaluation were shocking to Mr. Wen. The results showed that his staff was lazy and incompetent. There was no way that he would be able to make the transition to a five star hotel without firing most of the six-hundred employees or spending a large amount on re-training the existing ones. It was found that employees were reading newspapers, drinking tea, conducting personal business and even leaving the premises while on the clock. Background: Roaring Dragon Hotel with long colorful history needed change since the market economy was slowly developing in the region and so they need competitiveness to compete with other local hotels and also with international hotels. They need new paradigm and new practices and mind set. It is the big change from...
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...at Chinese based hotel Roaring Dragon Hotel (RDH), a state owned enterprise that was taken over by an International management called Hotel International (HI) to arrest the declining resources of the RDH and how the employees faced the cross culture difference trying to adapt to the new modern practices set by HI. Initially RDH was a guanxi based hotel where social connections were important which led to poor efficiency in its business and when HI took over RDH to modernize the hotel, employees faced a lot of resentment due to new cultural adoptions, communication differences and redundancy. HI oversaw why guanxi was very important in that area and success in any business lies in appreciating the differences of both cultures and perform business accordingly. This case is a perfect example of how not to conduct International business in guanxi based organizations. Introduction The Roaring Dragon Hotel (RDH) is a state owned enterprise which started in 1950s. It mainly conducted business based on guanxi until the Provincial government felt that the Hotel’s potential was not used properly and the management conducted business carelessly. So, the government decided to have an International Management company take over RDH to change the organizational culture prevailing at RDH and to increase the profits of the hotel or improve the quality of service that other competitors provided and also maximize the performance of the employees. For this they invited Hotel International (HI)...
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...Introduction The Roaring Dragon Hotel, one of the reputed three star hotels in South West China had a very bright and successful period since 1950. By 2000, there was increase in competition and management has never bothered to review its policies, and this probed a concern in to hotel business. Back Ground Due to competition and lack of policy reviews in the hotel management, there was sign of decline in business. So the board decided to change the tradition Chinese management to international management by giving contract to Hotel International Company. The company came up with new harsh rules and amendments to make the hotel professional and profitable. The changes in rules and regulations impacted the employees severely in the hotel. Problem The new management observed most of the employees are from long term, old and incapable of performing duties according to the demand. So, the management decided to trim the employee’s strength and hire fresh legs to increase efficiency. They conducted strict trainings and observed them on notice periods, offered redundancies to employees etc. Since many are guanxi employees, they hold many contacts with the government and other business, as they left the job they also took away many long term trusted customers of the hotel. Opportunity Major employee satisfaction could be fulfilled and communication gap could be reduced among employees and management, which results in efficient working of the hotel. Since hotel was already in to...
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...Introduction: During 1952’s, the Roaring Dragon hotel (RDH), a state owned enterprise (SOE), was one of the three-star hotel in China. In 2001, looking at the decreasing potential of RDH, the provincial government decided to modernize it. For that, Hotel International (HI) organization was selected considering its international reputation, brand name and credentials (Grainger, 2008, p.1). Background: Paul Fortune, the GM appointed by HI had aimed to bring the quality services, professionalism and efficiency in the Chinese employees who could produce the HI standard of excellence at the hotel (Grainger, 2008, p.2). Problem: RDH management was not actively planning any strategy to overcome the economic crisis. There were no effective customer satisfaction policies. HI managers were lacking in building an effective relationship with the hotel employees. Opportunities: HI managers should have respected Chinese culture and should have been more focused on RDH history. They had a good opportunity to understand the culture and should have encouraged Chinese employees to participate in decision-making process in order to improve employee performance. They failed in utilizing the best use of customer relationship. Studies have shown that a good customer-oriented behavior, in an organization ensures a tremendously positive impact on its performance (Kim, 2008). Recommendations: Managers should have provided training to the hotel employees to meet the international standards and...
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...Introduction : A three star hotel located in china , considered bringing foreign experts to upgrade it into a five star hotel. Did the strangers make any new friends ? however , they applied some effort. Background : The surrounding economy was on a slow incline, yet the RDH ignored any revenue or reputation decline along with avoiding new activities. They were aware but unconcerned about producing high profits (Grainger, 2008). Problem : Compromising in relationships, between people and between businesses forms a stronger Guanxi connection, which the new GM didn't value . Cui Fang , told the GM (As cited in Grainger,S.(2008) ) "if he refused the offer he would be effectively excluding HI from any future bookings..."(Para.18). Fang then left taking with him plenty of profitable friends of the business (Grainger, 2008). Opportunity : As one staff stated (As cited in Grainger,S.(2008) ) "once friendly and supportive atmosphere no longer existed"(Para.30).Employees and managers could've used their Guanxi to benefit the organization, if only they felt valued enough. Recommendation : A saying in china ( as cited in Dou & Li, (2013) ) " once stranger, twice acquaintance, while thrice friend " (P.904),which is crystal clear. It could've been the best combination of foreign international experts and local Guanxi relationships , to form a highly competitive market. Yet the HI believed their expertise is sufficient.Gunaxi allows a member to offer a favor to a business or...
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...The Roaring Dragon Hotel is a three-star hotel that is located in the southwest part of China. Since the 1980’s the state-owned-enterprise has enjoyed a long colorful history and reputation as on of the regions premium hotels. The General Manager Tian Wen is not an assertive manager. Many times he will be at the office which is in another city. On average Mr. Wen shows up at the hotel once a month. In 2002 he decided that it was time to expand their hotel and make the jump to a five star hotel. Wen hired a consulting company to conduct an evaluation of his hotel from top to bottom. Everything from the service to the procedures was included in the evaluation. He also wanted to make sure that his employees would be able to make the jump to a premium hotel. The results of the evaluation were shocking to Mr. Wen. The results showed that his staff was lazy and incompetent. There was no way that he would be able to make the transition to a five star hotel without firing most of the six-hundred employees or spending a large amount on re-training the existing ones. It was found that employees were reading newspapers, drinking tea, conducting personal business and even leaving the premises while on the clock. The article I read is asking how can these things happen without anybody noticing? I think this happened because of several reasons. Firstly, I believe that their culture over there has a lot to do with it. While I don’t agree with the employee’s behaviour, I...
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