This case looks at the take over the Roaring Dragon Hotel (RDH) which is located in south west China, and was one of the original three star hotel and is a state owned enterprise. RDH is very rich in culture and the employees relied on their guanxi or connections. Having secured employment, RDH employees felt excited and very proud (Grainger, 2008).
The RDH management practiced a planned economy which basically gives the government total control over everything from distribution and pricing, although planned economy can provide stability, but can also limit growth and advancement. Although the market economy was slowly developing, the RDH was not concerned with growth, different management styles, profit or even declining in popularity.
In 2008 the provincial government was concerned that potential of the RDH was not being realized and needed modernization. Hotel International (HI) was hired to take over the management control and the old manager would be a liaison to the hotel board. The new management soon realized that the take involved massive changes in the RDH organizational culture, in which case meant mainly focusing on redundancy, cultural sensitivity, and communication.
The new type of management from HI was drastically different, more professional, structured and strict. In under a year the HI had place its strict system of control that reduced job security, took away family atmosphere, and either laid off or drove employees away along with their connections in which RDH had relied on. The takeover was not going as planned; the RDH continued to have low occupancy rate and losing money (Grainger, 2008).
The Review on Motivation Factors Of Management Level Of Hotel Employees In Hong Kong
Hong Kong is famous for the hotel industry, and many people want to work in this industry. However, what really attract them to work for the hotel? Previous study shows that for the Asian countries such as Hong Kong, Japan the money is their primary goals for working. (Lam 2001 p.157). In different culture, they have different goal they are aim. As the Asian have a higher expect for the money as ...
As the changes occurred, the RDH needed massive sums of money to simply to continue to operate and stay open. The co-owner Erhi T and the new management from HI had different styles of management and different expectation when the RDH should turn a profit, which left the parties with two different sets of expectations.
Conclusions and Recommendations Although the HI had a good strategy in place to implement the changes in the RDH, they were not thought out very well because of the culture differences, the new management just did not understand the guanxi and how it generated the business that the RDH did have, so the transition to new management was just not effective enough to generate a profit as hoped for. The HI management should have educated themselves better about the Chinese culture and the how the planned economy worked for so long for them, slowly implemented changes that were necessary for the growth of the RDH in the growing market and to become a five star hotel.
