Roaring Dragon Hotel: A Second Attempt at Modernization

The Roaring Dragon Hotel (RDH), a Chinese state-owned enterprise (SOE), was under pressure to become a profit generating 5-star hotel due to the continued development of the Chinese market economy. As for many SOEs, the RDH was overstaffed, filled with archaic work practices, internal cliques, unsystematic production systems and a dysfunctional motivation system unrelated to performance. During modernization, a number of human resource management problems became increasingly evident; solving these problems had become a priority. In 2000, the RDH’s provincial government and stakeholders made their first attempt at modernizing the hotel by hiring a globally renowned company to undertake the upgrade. The disastrous outcome caused the provincial government and stakeholders to lose heart, momentum and motivation until six years later. A new joint venture owner and the RDH board recovered enough confidence to attempt modernization for a second time. They contracted Premium Hotel Services (PHS) to undertake the second attempt at improving operations. The PHS found the quality of older employees, increasing turnover of new staff and policies emerging from the continuing evolution of the Chinese economy were now presenting problems never confronted before at the RDH. How could the stakeholders solve these problems and have the RDH emerge as an internationally recognized five star, commercially viable hotel?

This case is ideal for use in the fields of international business, business in Asia, international human resource management and change management. It can be used as:<ul><li>A major written assignment in the second half of a unit.</li><li>A group discussion workshop conducted in class over a minimum 90-minute period.</li><li>A homework exercise where students return to the following class to discuss their findings and compare their strategies.</li></ul>

• Human resource management
• SOE
• market focus
• guanxi mianzi
• Western business
• China