Roaring Dragon Hotel is a three star that once had the repute of an outstanding service provider in the market, but later lost this reputation due to poor management. The initial management practices at RDH were based on planned economy. However, failure to change these management practices to fit the expanding economy led to declining popularity and hence declining income of the company. The initial plan to salvage the company was made by the provincial government and involved replacing the hotel’s management with an international management by HI through Paul Fortune.
The strategies undertaken by Mr. Fortune to salvage the company included changing of the organization’s culture to an international organizational culture and employee training among other strategies. Everything seemed to be on the right track until some of the organization management declined requests from important clients claiming that their offer was too cheap to accept. The blunder led to loss of valuable clients despite warning from other managers on the consequences. As if this was not enough, many employees who were dissatisfied with the new working conditions left to work for new companies. Since most of the working connections came from the employees, the company lost a considerable market share. Replacement of old employees with new and young employees also worked to increase the hotel’s disadvantage. In addition to this, laying off of workers without notice decreased the hotel’s popularity among the citizens. What followed after this chain of events was increased operating expenses and decreased revenues. Finally, the new management was replaced with the old management, which showed some improvements few months after reinstatement.
According to Kakabadse, Banke and Vinnicombe (2004), managers have to know how to lead, and must also understand employees behavior in order to accomplish organizational goals. In addition, experienced managers must wisely steer organizations towards change (Nelson & Quick, 2011). Based on these facts, the initial problems at the Roaring Dragon Hotel were poor management through bad leadership and failure to steer the Roaring Dragon Hotel towards change.
Originally, Roaring Dragon Hotel was a three-star hotel with a long-term reputation as the best guesthouse in the region. Although the hotel did not have qualified managers at first, the newly appointed manager failed to address initial problems in an effective manner and the correct order.
Since the most pressing issue was steering the organization towards change, Fortune would have started by solving this problem before everything else. However, Fortune started by changing the organizational culture without investigating the effects of this option. By steering the Roaring Dragon Hotel towards change, the hotel would have developed international recognition and more revenues. After that, it would have been easy to neutralize the strength and effects of current organizational culture. The process of driving the organization into a multi-national organization needed to be carried out together with employee motivation. Unlike the new management, the old management would have convinced employees on working hard to benefit the organization than the new management. However, employees felt that the new management was taking advantage of them since most of the top managers were foreigners.
After a successful introduction and maintenance of the organization in the domestic and international market, the next step would have been to change management in a gradual manner. Since this was a delicate strategy, it should have been done after being sure that laying off of old employees would not cause havoc in the organization.
According to the case study, employees were employed on the basis of the strength of their connections. Most employees had their relatives at the business, which meant that the business was linked to family ties. Such practices were products of poor organizational culture, which had spread for a long time in the company. Since the culture had to be uprooted from the roots, gradual change of old employees was necessary. To accomplish this, the company needed to have clear employment policies that were against employment through connections. In this strategy, the organization should have kept employees that were familiar with the regional business activities. By doing this, the organization would have made sure that it was in hold of both domestic and international market.
Since an expansion without much operation costs leads to higher revenues, the decision to expand the business premises should have been the last strategy to undertake. However, the organization had started the expansion project without considering the amount of revenues at hand and how to cater for expenses that would be incurred. As a result, the project failed, prompting the government to intervene by funding the project. Eventually, the government had to replace Fortune and his employers from the project by replacing the old management.
Based on the arguments presented by Kakabadse, Banke and Vinnicombe and evidence from the case study, Fortune is not a good leader. Kakabadse, Banke and Vinnicombe argue that good leaders are those that relate well with their followers. In addition, good leaders are those that have a strong position powers, works towards employee motivation and approaches cultural differences with delicacy when exercising his control (Kakabadse, Bank & Vinnicombe, 2004).
Based on researchers’ information, the Roaring Dragon Hotel is still in operation. In 2000, the provincial government tried to reinstate older employees since they found their quality better than those of new employee (Grainger, 2012).
In conclusion, the initial problems faced by the Roaring Dragon Hotel were related to poor management and organizational leadership. The person appointed to solve these problems failed since he did not implement his managerial and leadership skills in the right way andin the right order. Because of this, the new manager lacked to display the qualities of a good leader, and also left the organization in a worse situation than it was before his appointment.
References
Grainger, S. (2012). Roaring Dragon Hotel: A Second Attempt at Modernization - Harvard Business Review. Harvard Business Articles. Retrieved September 24, 2013, from: http://hbr.org/product/roaring-dragon-hotel-a-second-attempt-at-modernization/an/W12392-PDF-ENG
Kakabadse, A., Bank, J., & Vinnicombe, S. (2004). Working in organisations. Aldershot, Hants, England: Gower.
Nelson, D. L., & Quick, J. C. (2011). Organizational behavior: science, the real world, and you (Eighth ed.). Mason: Cengage Learning.
