Improving Communications: Hotel International and the Roaring Dragon

Hotel

Improving Communications:
Hotel International and the Roaring Dragon Hotel
Ima Student
Sullivan University
MGT 510

Improving Communications: Hotel International and the Roaring Dragon

Hotel

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).

Improving Communications: Hotel International and the Roaring Dragon

Hotel

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 hotels 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 hotels 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 long, colourful history and reputation
as the regions premium guesthouse (Grainger, p. 1).

Improving Communications: Hotel International and the Roaring Dragon

Hotel

Improving Communications: Hotel International and the Roaring Dragon

Hotel

Problem: Organizational culture

There was a deep division separating the organization cultures of
RHD and HI. The HI business strategy and environment went
against the current guanxi-based or influence-based organizational
culture. Guanxi is the Chinese word describing personal bonds or
connections that Fan, (2002), believes is essential for establishing
Chinese business. The culture at RDH promoted social business
relations, drinking and eating etiquette, exchanging gifts and
donations for favors. RHD employees have a strong psychological
need associated with receiving and giving perks that is tied their
self-identification. These interpersonal relationships with each
other and customers are relatable to both partnerships and

Improving Communications: Hotel International and the Roaring Dragon

Hotel
friendships (Yunxia & Allee, 2007).

Status

Benefits

Security

In addition, RDH employees were excited to work for the hotel

because it showed they had achieved status based on the strength
of their social connections. RDH was not as worried about the
hotels decline in popularity, revenue, or in delivering quality
service standards. RDH also had a long nepotistic history tied to
the guanxi culture (Grainger, 2008).
HI considered the networks of influence irrelevant and changed
non-productive behaviors. New performance standards were
enacted and employees unwilling to meet these new standards
were fired. HI also began processing scheduled redundancy
program. Once a place considered as secure employment, became

Improving Communications: Hotel International and the Roaring Dragon

Hotel
uncertain and untrustworthy. This caused a deep division
separating organizational cultures between RHD and HI (Grainger,
2008).

Redundac
ies
Revenue
Performa
nce

Another concern was the lose of important contracts. Nu Fu Travel

was unsatisfied with the new pricing stuctures and canceled all
future tours. This caused a reduction in revenue and also made
competition look more favorable for unhappy employees. The

Improving Communications: Hotel International and the Roaring Dragon

Hotel
conditions at RDH continued to deteriorated with the loss of
industry contacts and guanxi connections (Grainger, 2008).

Opportunities: Satisfied Employees & Success

HI has the business strategy to promote efficiency in the hotels
domestic management style and processes, thereby increasing
income and popularity if they recognize the risk of alienating the
current organizational culture. A healthy balance should be
addressing all the concerns from both parties (Grainger, 2008).

HI

RHD

Roberson wrote, people form personal intentions to achieve a

variety of desired outcomes, and are satisfied with their job to the
extent that they perceive these goals will be successfully attained
(2009). By improving communications, HI has the opportunity to

Improving Communications: Hotel International and the Roaring Dragon

Hotel
promote efficiency and improve processes at RDH with the help of
the employees.

Recommendation: Open Communications

HI should give special consideration to address changes in culture
and conditions within RDH with open communications between HI
management, RDH employees, contractors, and the public
(Grainger, 2008). Addressing concerns and anticipating current
customers needs and expectations will help the gradual transition
towards a capitalist political economy with an emphasis on capital
accumulation, market competition, and international economic
integration (McNally, p. 1). Communicate changes, train new
employees, inform contractors, and especially listen to your
customers and the public (Grainger, 2008).

g
a
IM
H
n
P
lic
b
u
y
p
E
D
R
s
C
m
o
t
r
e

Improving Communications: Hotel International and the Roaring Dragon

Hotel
Wank, D (1999) asserted, guanxi practices have played an
important role in Chinas capitalist transition, making them an
indispensable element of any conceptualization of Chinese
capitalism (as cited in McNally, p. 7). Friendship, trust, honesty,
reciprocity, and care are the basis of guanxi practices (Yunxia &
Allee, 2007). Western influences offer a more direct and open
communication style. By nurturing relationships already
established and identifying critical industry contacts, HI can
positively establish themselves in the China market (McNally,
2011) (Grainger, 2008).

Conclusion: Merge Corporate Ideal and

Current Practices
HI will need to improve communications between management,
employees, and the public to address the networks of influence that
are essential to Chinese society by finding compromise instead of
forcing the corporate model (Yunxia & Allee, 2007). Overtime,
HI will be able to merge the corporate ideal with the current guanxi
practices (Grainger, 2008).

10

Improving Communications: Hotel International and the Roaring Dragon

Hotel

References:
Fan, Y. (2002). Questioning guanxi: Definition, classification and
implications. International Business Review, 11, 543-56.
doi: 10.1016/S0969-5931(02(00036-7
Grainger, S. (2008). Roaring Dragon Hotel. Western Ontario,
Canada: Ivey Publishing.
McNally, C. (2011). China's changing guanxi capitalism: private
entrepreneurs between leninist control and relentless
accumulation. Business & Politics, 13(2), 1-29.
doi:10.2202/1469-3569.1339
Roberson, L. (1990). Prediction of job satisfaction from
characteristics of personal work goals. Journal of
Organizational Behavior, 11(1), 29-41 Retrieved from
Business Source Complete.
Yunxia, Z., & Allee Mengzi, Z. (2007). Understanding guanxi
(connections) from business leaders' perspectives.
Business Communication Quarterly, 70(3), 385-389.
Retrieved from Business Source Complete.

11