Roaring Dragon Hotel

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“Roaring Dragon Hotel” is a case study about the company culture change and conflict by taking over of a former Chinese management hotel by a western international hotel management company. Corporate culture is the total sum of the values, customs, traditions, and meanings that make a company unique. Corporate culture is often called "the character of an organization", since it embodies the vision of the company’s founders. The values of a corporate culture influence the ethical standards within a corporation, as well as managerial behavior. So it is not easy to change the corporate culture in short time.

In 2000, 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. In planned economy era, they don’t need to compete severely, so they were very relaxed and didn’t have motivation to work harder. Many businesses were done by guanxi, so there was much corruption. 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.

After taking over by HI, there were many changes in RDH and employees should have to adapt them to the changes and most of them experienced severe conflict. When it was Chinese Hotel, it was relationship (family) based and focused on harmony among the people and guanxi was very important and the people with guanxi were treated well. The atmosphere was relaxed, friendly and supportive. Now it is contract based and guanxi is not important any more. Efficiency and effectiveness is important. The atmosphere is no more friendly and there was much depression.

I think there were some major issues in the process of change. 1) Guanxi was neglected. Guanxi is very important in Chinese culture and business. Especially Government guanxi may help to facilitate business transactions, reduce bureaucratic pressures, and help to gain customers. By neglecting guanxi, they lost critical business opportunities and also lost some important guanxi holding staffs. It could affect on the future business. 2) The take-over process was initiated and managed by new GM and expatriate managers. Also they didn’t put much effort on communicating with former Chinese managers. They can’t understand their culture and the employees. Also employees didn’t think that they were respected by new managements. 3) HI viewed that all the former things needed to be changed, so they neglected prior business network also like the case of Nu Fu agent. 4) HI wanted to change the culture into a professional group of dynamic employees ,but they made young people with relative short period of service redundant since it was cost effective than older people with long period of service redundant. I think it is a short-term view since young people relatively are easy to adapt to new culture and also easy to be motivated. 5) HI didn’t explain the reason why the change is necessary and why the employees should adapt to the changes. Especially for the redundancy program, they didn’t explain why the employees should leave the hotel, so both the redundant employee and remaining employees feel depressed, it was more severe since the Hotel was very relationship based. 6) The downsizing was not effective. HI executed downsizing without consideration of their culture. Chinese people are very concerned about their face. However the process of downsizing didn’t show any respect about the employees’ service. Also HI didn’t care about losing the competitive employees, so they lost many young competitive employees to other hotels. Overall I think the process was done with short-term view, even-though it takes long time to change the corporate culture....
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