Privatization of the Tiger Leaping Guest House in Nanjing, PRC

The Liang family, experienced family hoteliers in China, had to leave the mainland under the pressure of the forces of Chairman Mao and the Communist Party of China in 1949. They resettled in Taiwan, resumed their hospitality business and now, two generations later, have returned to Nanjing to find that their family’s old guest house has been allowed to run down and deteriorate as a Chinese state-owned enterprise (SoE). They repurchase the old guest house with the intention to redevelop it. How will they deal with this privatization and the inevitable bureaucracy of purchasing, demolishing, and rebuilding the old guest house? How will they convert the existing SoE human resources (trained under planned-economy conditions) into dynamic employees operating in the market economy, while being sensitive to the cultural characteristics and challenges of this mainland Chinese workplace? With more than 6,000 Chinese SoEs still being targeted for privatization, this case is very relevant and provides a real-world opportunity for students to exercise their research, analytical, international management, entrepreneurial, and cross-cultural management skills.

This case is best used in a unit after the topics of international human resource management, culture, and international management have been covered. Such positions may include 1) as a closing case in an international management unit of study, 2) as a human resource management case in an international human resource management or international management unit of study, 3) as a challenge in an entrepreneurial unit of study, or 4) as a mid-unit or closing case in a strategic management unit of study.

• Cultural Customs
• Privatization
• Cross-cultural Management
• Human Resource Management
• Hotel China