Roaring Dragon Hotel

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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
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Some recalled ‘if your relatives or your friends knew that you were working in Roaring Dragon, you would be admired’, ‘it was a good work unit - danwei’, and ‘you were lucky if you worked there’3.
The original Hotel was a four-storey, rectangular, grey structure built in 1960 in a dull
Russian style. By 1993, the provincial government had funded a new extension and the Hotel now consisted of two parts: the old four-storey section joined by a modern sixteen-storey extension perched on a hill behind the old Russian. There was a contrast in the standard of accommodation. Room rates were cheaper in the old section and so it attracted Chinese visitors searching for quality economy accommodation. Visiting government officials and higher-end customers on the other hand felt more comfortable in the newer and naturally more expensive section. There were two guarded entrances to the Hotel, one on each level. A series of stairways, elevators and a warren of banquet rooms, hallways, storage areas, offices, cafeterias, and a laundry untidily connected the two buildings.

Reflection on a 1993 Experience
The Roaring Dragon was a Chinese managed SOE until the opening of the new extension in 1993 when the provincial government decided to contract an international company to manage the Hotel with the objective of improving the quality of customer service. KYZ Corporation was identified as a suitable international management organisation and was
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