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The case study of the Roaring Dragon Hotel in China addresses ethical issues and cross-cultural differences and sensitivities. According to (Grainger, 2008, P.1) the Roaring Dragon Hotel was a state-owned enterprise with a good reputation and history. The staff at the hotel lacked competency, motivation, ambition and accountability. There was a culture of corruption where the employees received significantly better pay and additional benefits (Grainger, 2008, P.1). The quality of service at the hotel was poor and popularity levels were declining. Nepotism was practiced with the prevalence of guanxi or private connections through which employees secured employment (Grainger, 2008, P. 1).
When the new management at Hotel International started operating the RDH with Paul Fortune as the GM, they had to improve the systems and practices of running the hotel by introducing service quality and accountability (Grainger, 2008, p. 2). It was difficult to lead the old over- staffed management which lacked satisfactory skills, education, motivation and consciousness of quality. Many of them were opposed to change which interfered with their relaxed culture and their job security and they transferred to other hotels (Grainger, 2008, p. 3). When the Hotel International decided to make redundancies, communication and conflict resolution issues arose. The Chinese workers complained about the way they were sent off. Chinese culture values courtesy and the saving of face. They preferred the Chinese management over that of HI (Grainger, 2008, p. 5).
Realizing and understanding cultural differences can help avoid conflicts and reduce the risk of failure. Favorable practices that consider the intercultural and intra-cultural aspects of markets and societies should be taken into account in order to achieve harmony and compatibility in business partnerships and mergers. Before changing the management at the RDH, Fortune and his colleagues should have first accommodated the old staff workers. They could have learnt from them about the Chinese culture of doing business. This could have helped in avoiding the business declined at the RDH and the termination of the contract (Grainger, 2008, p. 5 & 6).
There is booming economic growth in the Asian-pacific region. This has led to many foreign investors especially from Europe and America seeking opportunities for potential expansion and growth. There have been partnerships and joint mergers with local small scale companies and large-scale government-run enterprises. These companies should look for business strategies that help them compete better with other local and international rivals.
Grainger, S. (2008) Roaring Dragon Hotel. Ontario: Ivey Management Services.