improving communications hotel international (1)

Improving Communications: Hotel International and the Roaring Dragon Hotel

Improving Communications:

Hotel International and the Roaring Dragon Hotel

Ima Student

Sullivan University

MGT 510


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).

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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 long, colourful history and reputation

as the region’s premium guesthouse” (Grainger, p. 1).

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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

friendships (Yunxia & Allee, 2007).

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

hotel’s decline in popularity, revenue, or in delivering quality

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Status Benefits Security


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

uncertain and untrustworthy. This caused a deep division

separating organizational cultures between RHD and HI (Grainger,

2008).

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

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Redundacies

Revenue

Performance


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 hotel’s

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).

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

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HI RHD

Relationships

Benefits

Family

Efficiency

Profit


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).

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HI Management

RDH Employees

ContractorsCustomers

Public


Wank, D (1999) asserted, “guanxi practices have played an

important role in China’s 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).

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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.

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