Roaring Dragon Hotel: Problems Adapting to the Chinese Market Economy

Between 1999 and 2017, the Roaring Dragon Hotel (RDH) evolved from a state-owned enterprise (SOE) into a modern, market-driven 5-star accommodation provider, experiencing a combination of market economy and privatization forces. Its initial operations under the new status progressed from the poor performance and management practices of China’s planned economy to a portfolio of operational and strategic reforms that saw it become semi-privatized in 2005, and a fully privatized 5-star accommodation provider by 2017. On the surface, this model of evolution would make any Chinese national proud. However, what was perceived from the outside did not necessarily reflect what was occurring within. Market evolution had produced complex challenges related to employee loyalty, competition, internal resistance to change, promotion prospects, management, and the continuation of questionable practices. What changes should management make in the second half of 2017 to continue the hotel’s transition to a modern global hotel, turn around its declining revenue, and improve its competitive outcomes?

This case can be used in undergraduate and MBA courses in international business, business in China, international human resource management, and entrepreneurship. Students working with this case will have an opportunity to<ul><li>identify and analyze methods of changing cultures within an organization;</li><li>understand the importance of relationships in the Chinese workplace;</li><li>identify methods of motivating, producing, and maintaining excellent performance from employees in a cross-cultural environment;</li><li>propose successful methods of succession; and</li><li>discuss the strategies and mechanisms used by senior managers to achieve success.</li></ul>

• Reform, China, problems, Hotel, strategy