Roaring Dragon Hotel

A second attempt at modernization

Introduction

 40 years old Chinese State owned enterprise and one of the first 3 star hotels
in south-west china.
 Good reputation as a premium hotel.
 Fading popularity when hotel management was changed to and international
organization Hotel International (HI) Group.
 HI failed to understand Chinese cultural factors and failed to establish good
work environment and employee-management relationship.
Background

 Went through a series of changes to survive and fit through competitive

environment in 1999.
 In 2001 Government decided to give the management of RDH to Hotel
International (HI) group to improve overall quality of service, performance,
brand name and reputation they were providing the customers for over 40
years span.
 This leaded to difficulties with employees and was the root cause in
degrading its glory and reputation.
 Due to the management changes, hath began the downfall of Roaring Dragon
Hotel.
Main Problems
Cultural Norms (Guanxi and Mianzi)

 "Guanxi" and "Mianzi" are important features of the Chinese etiquette that is
sometimes sweep business aside.
 Which was trusted more than the institutions and laws.
 This resulted in adverse effect to the development of cliques by older
employees.
Economic Policies

 The increase in the turnover of younger staff was due to the developing
market in China.
 This allowed employees to switch jobs easily as well as their migration from
one city to another.
Conflict of Attitudes

 The complacent attitudes of the younger generation showed towards working

and SOE.
 This resulted in decline in value of services that were rendered to the guest
of an accredited 5-star enterprise which is defacing.
 Employees were uncomfortable working under a non-mandaring speaking
management.
Management

 RDH’s management system was reluctant and obsolete to adapt to the trends
in the hotel industry.
 This resulted in a decline in RDS’s overall competitiveness and profit.
 They were ignorant about the profits and improving the service standards.
 On the other hand they paid more attention to maintain the Guanxi with
government and tried to satisfy their requirement.
Staffing

 The decision of replacing the old section of the hotel lead to inappropriate
overstaffing and recruitment.
 This will result in increasing the cost of human resources and influencing overall
profit.
 Recruitment of younger employees and reducing the older employees was
attempt they made assuming that young employees could give energy to the
company.
 They forgot about the strong connection and responsibilities the older and
experienced employees can offer.
 Younger employees will work for themselves and work with their own
convenience disregarding the organization in most of the cases.
Undertrained staff

 The staff seems not well trained.

 Those untrained staffs affected the image and service quality of RDH.
 RDH established the training program which was in order to upgrade the
quality of employees which was short-term program.
 And some employees only trained for several months
Opportunities and Recommendations

 HI organizations needed to understand cultural differences and interest into

their account and consider building a good relationship with their employees.
 They must provide the trainings to keep the motivated and aware of the
international standards.
 Motivation for employees to understand the responsibilities of their work.
 HI should research into Chinese business culture and emphasize the
importance of Guanxi so that they could focus on the history of RDH and
emphasize the fact that it is historical place.
 Make a cooperative and consistent team to lead RDH management.
 Employ translators to break language barriers.
 Establishing reward system to reward employees based on performance and
behavior.
Conclusion

 This case study exemplifies the importance of managerial studies and how
important it is to follow good HR practices.
 The conflict between new management and old management are well known
issues in organizations around the globe, but they can be addressed and
rectified as soon as possible.
 Thus by following good HR practices and managerial studies, any organization
could succeed.