...This proposal addresses the issues of guanxi neglect 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...
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...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 or relationships of its employees. Guanxi is a relationship that exchange favors and mutual benefit of each other (Chen,2002). Guanxi practice was integral part of many businesses and organizations in China.RDH was famous for its overstaffing...
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...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, focused more on the security of its employees and not the hotel’s profit margin. The state negotiated new management hoping to drive increased revenue (Grainger, 2008). Currently, the RDH had a great reputation. “Since the early 1095s it had enjoyed a...
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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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...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 another individual that will eventually repay back the favor. Guanxi presents doors of trading benefits (Tsang, 1998). ------------------------------------------------- Key...
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...1. What mistakes did the HI team make? a) HI team ignored the Guanxi practices that RDH had 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 b) Employing staff more than needed in the name of modernization. c) 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. They did not think about any other alternatives. d) They totally ignored Nu Fu travel agency that in the past provided many customers and banquet regarding them cheap to think about. They did not thought about the relation that RDH had with Nu Fu travel agency which consequently resulted in loss of business when the competition was at peak. e) Fang, one of the oldest member of Chinese management team left taking share and industrial contacts with her and the HI team just let her go. f) They did not care about the Chinese culture, the emotions of staff members who had worked there for long time. g) They behaved rudely and showed no respect when they asked all the disqualified staff to collect they their payroll and leave all of a sudden. Nor did they thank them for their loyal service for so many years. h) The hotel was not making money but the HI team didn’t care. But instead they presented budget report for more expense. i) Fortune lied to himself by admitting each day was a struggle...
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...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 planned economy era to market economy era. By these needs, the provincial government identified Hotel International as an organization to take over management of the RDH and help realize the hotel’s potential. In 1999, Mr. Paul Fortune, from Austria, had taken over as the manager of the hotel. He brought in significant changes to the hotel. But unfortunately, the changes he brought in turned out to...
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...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 of the hotel's business. In his Era, employees used to got salaries in time and there was a job security as compared to other hotels. There were many facilities provided to employs like providing tea breaks, leaving the premises during office hours. Some managers even conduct private business. In 2001, provincial government realized that there was a decline in the potential...
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...Session 1. What makes Google Googley? The case highlights how the strategy and business model of Google have been supported by various aspects of organizational behavior, such as structure, talent, culture, and leadership. In this way, it fits very well with the guiding framework of OB that we have adopted for the course. The major aspects of the case concern the company’s unique combination of organizational elements and how this configuration has given the firm a strong and vibrant culture that is now threatened by growth. The doubling of the company’s size has put the entrepreneurial spirit and ethos of the firm in danger, and the narrative of the case, Kim Scott, joined in 2004 and has seen how the company has changed. The vision and energy of the founders is obviously apparent in the case and the ability to recruit, develop, motivate, and retain first class talent from its early days through to its major corporate status is a strong theme. The attraction to the firm is about the mission and ambition of the corporate values and purpose, as well as the personal freedom within the company, highlighted by the practice of allowing employees one day per week to pursue their own projects. Google, according to the founders, `is not a conventional company; we do not intend to become one’. Google’s key levers for managing culture are: Recruitment • Highly intelligent, not necessarily experienced college graduates from major schools and `smart friends’ • Experience...
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...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 process in order to ensure the successful implementation of the changes. Promoting effective communication...
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