Roaring Dragon Hotel
Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies
Australia (ACESA)
Guanxi Neglect at the Roaring Dragon in South-west China:
The demise of an International Management Contract
Stephen Grainger1
University of Western Australia
‘guanxi neglect – neglecting opportunities to show respect towards guanxi relationships’
Abstract
This paper introduces the concept of guanxi neglect through a case study that describes the takeover of a formerly Chinese managed hotel by a western based, international hotel management company. Specifically, it covers the cultural conflict that occurred for employees trying to adapt from the former Chinese relationship
(guanxi) based planned methods of hotel management to that of the more market oriented, management company. Conclusions that are drawn highlight cultural characteristics and issues that companies taking over or approaching joint-ventures with SOEs, are advised to be aware of.
In recent years, the hotel business environment in south-west China has undergone significant changes. China’s opening-up has encouraged an outbreak of new hotel construction and property speculation as companies and investors hope to cash in on the domestic and international exposure of the unique region. Prospects for growth in the number of tourists and investors visiting the region in the future were good.
1
Correspondence to:
Stephen Grainger
The University of Western Australia
Perth, W.A., AUSTRALIA
Email: sgranger@arts.uwa.edu.au
Grainger, S., ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an
International Management Contract. '
-1-
Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies
Australia (ACESA)
The Roaring Dragon Hotel, was a famous 40 year old-Chinese SOE. In the second half of
1999 an international management company set about transforming the culture within the hotel from a Chinese
Australia (ACESA)
Guanxi Neglect at the Roaring Dragon in South-west China:
The demise of an International Management Contract
Stephen Grainger1
University of Western Australia
‘guanxi neglect – neglecting opportunities to show respect towards guanxi relationships’
Abstract
This paper introduces the concept of guanxi neglect through a case study that describes the takeover of a formerly Chinese managed hotel by a western based, international hotel management company. Specifically, it covers the cultural conflict that occurred for employees trying to adapt from the former Chinese relationship
(guanxi) based planned methods of hotel management to that of the more market oriented, management company. Conclusions that are drawn highlight cultural characteristics and issues that companies taking over or approaching joint-ventures with SOEs, are advised to be aware of.
In recent years, the hotel business environment in south-west China has undergone significant changes. China’s opening-up has encouraged an outbreak of new hotel construction and property speculation as companies and investors hope to cash in on the domestic and international exposure of the unique region. Prospects for growth in the number of tourists and investors visiting the region in the future were good.
1
Correspondence to:
Stephen Grainger
The University of Western Australia
Perth, W.A., AUSTRALIA
Email: sgranger@arts.uwa.edu.au
Grainger, S., ‘Guanxi Neglect at the Roaring Dragon in South-west China: The Demise of an
International Management Contract. '
-1-
Proceedings of the 15th Annual Conference of the Association for Chinese Economics Studies
Australia (ACESA)
The Roaring Dragon Hotel, was a famous 40 year old-Chinese SOE. In the second half of
1999 an international management company set about transforming the culture within the hotel from a Chinese
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