Roaring Dragon Hotel: A second attempt at modernization
Place of Publication
School of Business and Law
The Roaring Dragon Hotel (RDH) was constructed in south-west China in the 1950s as a state owned enterprise (SOE) and was viewed as a premier guest house for visiting dignitaries and officials, Communist party members, and guests. As for many SOE hotels at that time, historically the RDH had the characteristics of overstaffing, archaic work practices and technology, unsystematic production systems and a dysfunctional motivation system unrelated to performance. In 2000, the RDH board and provincial government made their first attempt at modernizing the hotel, but the internationalization process failed due to a number of problems including the collision between cultural characteristics like guanxi and mianzi. A disastrous outcome caused the provincial government and RDH stakeholders to lose heart, momentum and the motivation to modernize. After 2000, as the Chinese market economy continued to develop, a number of human resource problems emerged at the RDH. Solving these problems became a priority. Six years later, the RDH board and new joint venture owner had recovered enough confidence to attempt the service standard upgrade for a second time. In 2005, the global company, Premium Hotel Services (PHS), was contracted to complete the task and found that the quality and retention of older employees, increased turnover of younger staff, and Chinese economic policies were impeding progress. How can the Premium Hotel Services and RDH solve these problems so the hotel can emerge as a five-star operation?