Graduation Project
 
MSC in SLT
 
Name of Author: SU
 
Date of Submission:
 
Name of Graduating Project Supervisor: Roger Middleton
 
A Study on Cross-cultural Management of Multinational Hotels in China
 
This graduating project is an independent work under the guidance of my supervisor. In addition to the content which has been marked reference or quote, this project does not contain any other personal or collective works which have been published.
 
Oath of personal nature of work I, SU Man, declare that this research work is under the guidance of my supervior and . All parts of this work has not been previously submitted for any course or degree. Uses made within this dissertation of works of other authors in any form (e.g. ideas, figures, text, tables, websites, etc.) are properly acknowledged at their point of use in the dissertation. A complete list of the references employed is included.
 
Signed: SU Man
 
Date: 20/11/2011
 
Abstract
 
As the rapid development of globalization, and China’s hotel industry, a large scale of multinational hotel groups are attracted to China wishing to get more profits. Howerver, there are still some obstacles when managing a multinationa hotel in China. Culture shock is the problem that every multinational hotel experiences at first. In this thesis, the author try to analyze the cross – cultural problems in – depth by using some scholars’ research findings and different methodologies. After the causing factors have been discovered, the author try to raise some strategies to, at least, decrease the cross – cultural problems. It is useful for the multinational hotel management in China, because many Chinese researches and theories are borrowed to illustrate the problems thoroughly, especially in China’s current specific situation.#p#分頁標(biāo)題#e#
 
Key Words : Cross –cultural mangament; the Multinational hotels; cross – cultural communication; cross – cultural training
 
List of Tables
 
Table 2.1....................................................................................................................... 9
 
Fig.4.1......................................................................................................................... 32
 
Fig.4.2......................................................................................................................... 40
 
Fig.6.1......................................................................................................................... 47
 
Fig.6.2......................................................................................................................... 54
 
Table of Contents
 
1.Introduction................................................................................................................................................... 1
 
1.1Research Background and Purpose....................................................................................................... 1
 
1.1.1 Hotel Management Model Research background........................................................................ 1
 
1.1.2 Hotel Management Model Research Purpose............................................................................... 1
 
1.2 Research content and methodology...................................................................................................... 2
 
1.2.1 Historical Evolution Method............................................................................................................. 3
 
1.2.2 Archival Research............................................................................................................................... 3
 
1.2.3 Method of Comparative Analysis................................................................................................... 4
 
2. A Review of Business Context and Theoretical Background in Hotel Management 4
 
2.1 Hotel Management Model Research Situation.............................................................. 4
 
2.2 International Hotel Developing Situation Analysis........................................................................... 6
 
2.3 China hotel industry Development Analysis................................................................. 7
 
2.4 Opportunities and Challenges of China Hotel Industry................................................ 10
 
2.5 Summary.............................................................................................................. 14#p#分頁標(biāo)題#e#
 
3. Theories Concerned about Researching Hotel Management Model...................... 15
 
3.1 Theory of the Division of Labor............................................................................... 15
 
3.2 Reengineering the Corporation................................................................................ 16
 
3.3 Property Right Theory and Coase’s Theory of Property............................................. 17
 
3.3.1 Overall Cost Leadership Strategy.......................................................................... 18
 
3.3.2 Differentiation Strategy...................................................................................... 18
 
3.3.3 Focus Strategy.................................................................................................. 19
 
3.4 Summary.............................................................................................................. 20
 
4. The Domestic and Foreign Typical Hotel Management Mode Analysis.............. 21
 
4.1 Four Season Model................................................................................................. 22
 
4.1.1 Four Season Business Context............................................................................. 22
 
4.1.2 Operation Philosophy of Four Season.................................................................... 23
 
4.1.3 Management Features of Four Season.................................................................. 23
 
4.2 Marriott International Management Model............................................................... 25
 
4.2.1 Marriott International Business Context................................................................ 25
 
4.2.2 Marriott Management Method............................................................................ 25
 
4.2.3 Marriot International’s Management Philosophy.................................................... 26
 
4.2.4 Marriot International Market Segmentation........................................................... 27
 
4.3 Starwood Hotels and Resorts Model.......................................................................... 28
 
4.3.1 General Information of Starwood......................................................................... 28
 
4.3.2 Starwood Hotels and Resorts Marketing Position..................................................... 29
 
4.3.3 Starwood Group Competition Advantages............................................................. 30
 
4.4 Shangri-La Hotel Group Management Model............................................................ 30
 
4.4.1 General Information of Shangri-La Hotel Group..................................................... 30#p#分頁標(biāo)題#e#
 
4.4.2 Shangri-La Development and Investment.............................................................. 31
 
4.4.3 Shangri-La Management Philosophy.................................................................... 32
 
4.5 Jinjang International Management Model................................................................. 34
 
4.6 Zijinhua Hotel Model............................................................................................. 36
 
4.7 Summary.............................................................................................................. 39
 
4.7.1 International Hotel’s Network.............................................................................. 39
 
4.7.2 Brand Advantages of International Hotel Groups.................................................... 39
 
4.7.3 Collective Management of International Hotel Group.............................................. 40
 
4.7.4 Enterprise Culture of International Hotel Group...................................................... 41
 
5.Comparison Analysis of International Hotel and State-owned hotel....................... 42
 
5.1 Mission Statement of International Hotel and State-owned Hotel.......................................................... 42
 
5.2 Service Quality International Hotel and State-owned Hotel.................................................................... 44
 
5.3 Competition Methods of International Hotel and State-owned Hotel.................................................... 45
 
5.4 Hotel Management of International Hotel and State-owned Hotel......................................................... 46
 
6.Conclusion and Recommendation................................................................................................. 47
 
6.1 Corporate governance structure......................................................................................................... 50
 
6.1.1 Application Range of Property Rights Quit strategy................................................................... 51
 
6.1.2 The Meaning of the Property Rights Quit Strategy..................................................................... 51
 
6.1.3 Methods of the Property Rights Quit strategy.............................................................................. 51
 
6.1.4 Reform the Hotel Organization Structure..................................................................................... 54
 
6.2 Market Position Strategy....................................................................................................................... 55
 
6.2.1 Definition of Economy Hotel.......................................................................................................... 55#p#分頁標(biāo)題#e#
 
6.2.2 Development Strategy of China Economy Hotel....................................................................... 56
 
6.3 Management Style................................................................................................................................... 61
 
7.Limitation..................................................................................................................................................... 63
 
8.Reference...................................................................................................................................................... 65
 
Chapter One INTRODUCTION
 
1.1 Introduction
 
“You cannot transport a culture, but you can indeed translate it, that is, take into account and adapt to the local environment.”
 
- Giovanni Angelini, CEO and Managing Director of Shangri-La Hotels and Resorts (Hamdi 2006)
 
As the economic globalization sweeps across the world and joint-venture enterprises have become a popular form of business, cross-cultural management plays a key role to the success of enterprises. After joining WTO, China’s economy is booming and is drawing more and more attention of various countries and regions around the world, as a result of which, more and more multinational corporations (MNCs) have entered China and established their business in Chinese open market. While many multinational corporations have achieved great success in their business in China, cultural conflicts arising in their association with Chinese partners and Chinese staff have become a major obstacle in their management for greater success and benefits in Chinese market. Meanwhile, traditional management theories adopted by and practiced in these MNCs have been challenged by Chinese culture, which is a cultural phenomenon that should be paid enough attention by the MNCs, especially by those multinational hotel groups who are seeking greater market in China.
 
During the process of management of multinational hotel groups in China, they are facing such a question: how to deal with cultural conflicts and how to reduce misunderstanding caused by cultural conflicts among employees with different cultural backgrounds? There seems to be two approaches to such problem when two different cultures come into contact: cultural exchange and culture hybrid. For multinational hotel groups, what they need to learn to deal with the crises of management caused by cultural conflicts is to progressively strengthen cultural exchange with local people, effectively implement the concept and practice of cross-cultural management and fully adapt to the local environment, which is the guarantee to achieve their strategic objectives in business.
 
1.2 Objectives of the Research
 
According to the current situation of MNCs as far as cross-cultural management illustrated in the Introduction of the paper is concerned, the research on cross-cultural management has a certain theoretical and practical significance.#p#分頁標(biāo)題#e#
 
First of all, from the angle of multinational hotel, this thesis will focus on the research of current situation of cross-cultural management of the foreign multinational hotels in China by adopting modern theories put forward by well-known scholars and professors in the field of cross-cultural management, home and abroad, who have provided a theoretical basis for this paper. The purpose of the research is to provide some practical concepts and feasible approaches to cross-cultural management of multinational hotel groups in China. Although the development of multinational hotels in China has reached a mature stage, the multinational hotels still face some problems arising from cross-cultural communication. Therefore, it is necessary to provide some suggestions to the management of multinational hotels so as to help hotel managers avoid empiricism and adopt some appropriate measures in order to avoid cultural conflicts so that foreign multinational hotels in China will broaden their business in Chinese market and maximize their benefits.
 
The thesis will deal with the issues of cross-cultural management of foreign multinational hotels in China from such aspects as the current situation of multinational hotel groups in China, the characteristics and stages of multinational hotels’ development in China, elements of success of cross-cultural management, the causes of the problems of cross-cultural management, and, finally, the approaches to these problems.
 
1.3 Methodology
 
Research methods such as comparison, database, survey and case study will be used to analyze the problems. By adopting comparison, it is to lay particular emphasis on the analysis of internal cultural differences in hotels so as to help multinational hotels to establish their own corporate culture, creating a unique management mode suitable to multinational hotels against cross-cultural background. Meanwhile, a large scale of secondary data through investigations will give a strong support to the analysis. The paper will also carry out the method of survey in the forms of questionnaires and interviews conducted on the employees of multinational hotels in order to obtain enough supportive data. Case study drawn from multinational hotels in China will help to prove that cross-cultural communication is the key element that can decide the success and the failure of the development of cross-cultural management. Obviously, such combination of quantitative and qualitative methods of research will ensure that the research conducted in this thesis will achieve its objectives as expected.
 
1.4 Structure
 
This thesis is divided into five parts. The first part is Introduction that pictures the background and the importance of the research, the methodologies the author will use, and the framework of the whole thesis.
 
The second part is the Theoretical Basis, or literature review, in which several important theories in this field are generalized, such as Hofstede’s theory, the X, Y, Z theory and Learning Organization Theory, etc., which will play important roles in the analysis.#p#分頁標(biāo)題#e#
 
The third part is Methodology, in which four methods are adopted and the theoretical framework is designed to clarify the clue of the main part of this paper. Meanwhile, according to this framework, the author will extend the procedure of methodizing.
 
The forth part is Empirical Analysis, which includes the current development of multinational hotels in China, the dimension to the different developing stages, diagnosing the current problems of management in multinational hotels through analysis of the cases of success or failure of the multinational hotels in China.
 
The last part is the Conclusion. Through analysis, the thesis thus draws the conclusion that, by forming an appropriate concept of corporate culture in the multinational hotel management through positive and effective cultural communication, it is essential for multinational hotels to build an outstanding cross-cultural management team so as to achieve the localization of the product and marketing, completing the cross-culture training system and paying great attention to the effect of encouragement in the cross-culture management.
 
Chapter Two THEORETICAL FOUNDATION
 
In today’s business, internationalization is the tendency in that many companies try their best to cooperate and merger with foreign ones in order to open up new markets and maximize benefits. But problems arising from cross-cultural conflicts may jeopardize businesses, because “There is indication that communication between two people from different backgrounds could be misled. It is said that your culture origin defines the adopted manners with other human and does modify your attitude towards other people in an organization. ” (Mead, 1990)
 
This chapter reveals studies and scholarly opinions about the cross-cultural management and the importance of communication and management style. This chapter is divided into two sections. Section one is the definition of culture and its necessity in the cross-cultural management. It’s worth noting that the market economy of China’s market has its own characteristics derived from its traditional culture, which remains socialist in ideology permeated with Western values. Hofstede’s five dimensions theory is the necessary theory contributing to the research which the author presents. Section two demonstrates some foundational theories about hotel management. Enlightened by these theories, cross-cultural problems in multinational hotels can be solved with a strong theoretical backup.
 
2.1 Culture And Cross – cultural Management
 
2.1.1 Culture Concept
 
According to Neal, “The debate on the subject of the nature of culture and its implication has a long history. And it’s been part of a sociological, historical, and anthropological argue about the relation among individual action and society.”(Neal, 1998) And the anthropologist Edward B. Taylor offered a broad definition, emphasizing that “that complex whole which includes knowledge, belief, art, morals, law, custom, and other capabilities acquired by man as a member of society” (Tayor, 1889)#p#分頁標(biāo)題#e#
 
Lee & Vuillan summarize culture in such a way that “Culture in these days represents a blockade of communication; thus, no culture is specific and international managers now have ascertained that there is no sealed statement. The main reason is derived from country analysis where results have found the following above:
 
• Not all citizens in a country are identical
 
• Difference within countries is bigger
 
• Similar values unites group from different countries” (Lee & Vuillan, 2004)
 
It is crucial that we should regard culture as a chance, a challenge in a different and brand-new market for individual and collective success. All these opinions are related to Hofstede who defines that “Culture is more often a source of conflict than a synergy. Cultural differences are a nuisance at best and often a disaster.” (Hofstede, 2004)
 
2.1.2 Antecedent Variables: Political Ideology
 
We should take China’s specific condition into consideration, especially the influence of Communist ideology (Fan, 2004), Ralston and colleagues (Ralston, Gustafson, Cheung, & Torstar, 1993; Ralston, Holt, Terpstra, & Yu, 1997).
 
2.1.2.1 Maoism
 
As the chairman since the founding of the People’s Republic of China in 1949, Mao Zedong has his own thoughts of leading his people which is a combination of Marxism-Leninism and the puritan communism. “During Mao’s era, people sacrificed their youth, family life and material comfort for the benefit of the country” (Hung, Gu, & Yim, 2007). “The pursuit of fashion and consumerism was firmly criticized.” (Zhao, 1997a) What Maoism has brought to us is the low physical needs and refusal of foreign products as well as foreigners in China, which can be one of the reasons why cultural conflict arises in such field when foreigners come to do business in China.
 
2.1.2.2 Deng’s Theory
 
As the leader of the 2rd generation, Deng Xiaopeng said that people should not support Maoism without their own thoughts and interpretation. “If an ideology cannot feed people up, this is definitely not a good –ism, so economic development must be put at the first priority.” (Deng, 1978) And in his famous “cat theory”, he made his point of view that, we don’t need to bother what color of a cat is when the cat catches a mouth. Deng’s theory encouraged people to pursue wealth and there is no humiliation when you do that, because everyone is equal. “The fruit of economic reform was measured in terms of material betterment in the society and higher revenue for households.” (ZHAO, 1997) After that, Chinese people have begun to form a concept of material consumption which they feel proper.
 
2.1.3 Cross-cultural Management
 
Cross-cultural management, also known as “trans-cultural management”, is a kind of management method about how to embrace the culture from subsidiary’s nation, how to overcome the reverse cultural shock, and how to create unique business culture, hereby reforming a highly effective management process under the circumstance of globalization.#p#分頁標(biāo)題#e#
 
The purpose of cross-cultural management is to design achievable organizational structure and management system in mix-culture environment, seek corporate objective beyond cultural conflict during management process, and maintain code of conduct for employees from different cultural backgrounds. Accordingly, it could maximize the controlling and utilization for potentiality and value of the enterprise. Only when the MNCs conduct successful cross-cultural management, are there possibilities for the corporations to provide smooth functioning, to enhance the competitiveness, and to enlarge their market share.
 
2.1.3.1 Cultural Dimensions
 
The cultural dimensions theory is created by Geert Hofstede, an influential Dutch anthropologist. This theory exerts the most significant influence on cross-cultural management, and throws light on the international management research. The first revilement of the theory is in his book Culture’s Consequences (Hofstede, 2001a), which focuses on the values in the workplace with strong cultural influence. As a result, he built a mode emphasizing four primary dimensions in the culture: Power Distance (PDI), Individualism (IDV), Masculinity (MAS) and Uncertainty Avoidance (UAI). Later, during 1980s to 1990s, based on the researches of different culture, he added Long-Term Orientation (LTO) as the fifth dimension.
 
Here are the values of different countries and areas in five dimensions in Fig. 2.1 . The size of the value represents different characteristics in different cultures. And we can use this analysis to improve cross-cultural communication with other countries efficiently (Waldman, 2006). For the MNCs, in-depth analysis into the differences in five dimensions, not only of their own, but also of the target country, would be helpful in understanding the existence of cultural conflicts, developing the specially adapted products, and serving the local consumers.
 
CountryPower DistanceIndividualismMasculinityUncertainty/
 
AvoidanceLong Term Orientation
 
Australia3690615131
 
Brazil6938497665
 
Canada3980524823
 
China80206630118
 
East Africa6427415225
 
Germany3567666531
 
India7748564061
 
Japan5446959280
 
Singapore742048848
 
Thailand6420346456
 
U.K.3589663525
 
U.S.4091624629
 
Table 2.1 the Value of Different Dimensions in Some Countries
 
Power Distance:
 
According to Hofstede, “Power distance is the extent to which less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally” (Hofstede, 2001b). From Fig. 2.1, we can see that China, India, Singapore and Brazil are the countries with high power distance under hierarchy. Reversely, countries like the U.K., Germany, Australia and Canada pay much attention to people’s equality, have a low power distance. The country with the highest value of power distance illustrated in the figure is China where the power distance is far larger than you can imagine, as Confucianism, the important component part, emphasizes hierarchy, full respect and obedience to the seniorities, the protection and commiseration to the junior ties.#p#分頁標(biāo)題#e#
 
CharacteristicsTips
 
High Power Distance? Centralized enterprises
 
?Hierarchy
 
?Lack of liberty ?Admit the leadership
 
?Push you to win
 
Low Power Distance?Compliment
 
?People are treated equally ?Group work is more important
 
?Feel as a participant
 
Table 2.2
 
Individualism & Collectivism:
 
Individualism means the degree of people’s care about the group people, grouped target, or their own targets. In Hofstede’s study, Germany, U.S., U.K get higher scores in Individualism, and China is on the opposite. What Western countries put in the first place is Individualism, and Western people regard pursuing personal benefits as proper and right. But in China, being selfless and, as a Chinese proverb goes, doing everything for other’s benefits and nothing for one’s own is what our culture cherishes---the collectivism. We should be always ready to give up our personal benefits before collective interest.
 
CharacteristicsTips
 
High individualism?Privacy is highly paid attention to
 
?Feel excited when facing difficulties?Appreciate achievements
 
?Avoid talking about
 
people’s privacy
 
? Welcome different arguments
 
Low individualism?Compatible
 
?Internal improvement is more important?Makes people feeling comfortable and compatible
 
?Respect tradition
 
Table 2.3
 
Masculinity:
 
“Masculinity (high MAS score) is the preference for an aggressive and dominant attitude, while a culture with a low MAS score, femininity, tends towards modest behavior. MAS also is an indication of the emotional gender roles in a culture, a high MAS score indicates distinct gender roles, while a low MAS score indicates overlapping roles” (Hofstede, 2010). In figure 2-1, the same score China gets as Germany, U.S. and U.K. in this dimension shows the high masculinity in Chinese culture, full consideration of successful career and the material prosperity. Japan has the highest score, meaning masculinity is the general value in their perusing of culture. Relatively, the scores of Thailand and Brazil are lower, but lower masculinity means higher quality of life and better interpersonal relationship.
 
CharacteristicsTips
 
High Masculinity
 
?Having a very clear boundary between men and women
 
?People likes to be treated distinctively
 
?Suggest people not to talking about emotions
 
Low Masculinity?Woman likes to be more important
 
?Grander female should be highly respected?No discrimination of gender#p#分頁標(biāo)題#e#
 
?Avoiding the inequality of job
 
Table 2.4
 
Uncertainty & Avoidance:
 
These relate to the degree of bearing ambiguity and threat of uncertainty. Japanese has a capability of tolerance to the extreme with a high score in this dimension. They belong to the high level of uncertainty and avoidance. However, China’s lower score shows the low level of uncertainty. People with high level of uncertainty and avoidance like to take a risk in his life, and feel fully confident about his future, while countries with low degree of uncertainty do contrariwise.
 
CharacteristicsTips
 
High Uncertainty
 
& Avoidance
 
?Strict rules and regulations in business
 
?Structures is very in need
 
?Things should be the same
 
?Clarify your ideas
 
?Pay much attention to every details in your work
 
?Often use body language to express yourself
 
Low Uncertainty
 
& Avoidance
 
?Not too formal working behavior
 
?No particular attitude when facing changes?Avoiding strict regulations
 
?Hiding your real thoughts or sensibility at work
 
?Hands up when you have doubts
 
Table 2.5
 
Long term orientation:
 
“Long Term Orientation stands for the fostering of virtues oriented towards future rewards, in particular perseverance and thrift. It’s opposite pole, Short Term Orientation, stands for the fostering of virtues related to the past and present, in particular, respect for tradition, preservation of ‘face’ and fulfilling social obligations” (Hofstede, 2001). From the figure below, we can clearly figure out that China and Japan belong to the long-term orientation type, while Germany, U.S., U.K. are short-term orientation type. Chinese managers look into the future and set up long-term goals when they deal with strategy managing issues, even sometimes sacrificing short-term benefits to accomplish their final goals.
 
CharacteristicsTips
 
Long-term
 
Orientation
 
?Family is more important than the society
 
?In one family, the seniors have more power
 
?Intense work ethic?Personal adaptability should be paid more attention
 
?Do nothing having the possibility of “lose face”
 
Short-Term
 
Orientation
 
?Results are more important than process
 
?Having a bottom price
 
?Having a clear boundary about the society ?Everyone should be equal
 
?Doing things decisively
 
Table 2.6#p#分頁標(biāo)題#e#
 
Through the five dimensions analysis of different countries, it might be easier to estimate and choose proper countries with different cultures for investment. With the analysis of different cultures, it is undoubtedly simpler to solve cross-cultural management problems. When implementing the cross-cultural management in multinational hotels in China, the first thing is to figure out the differences of five dimensions between China and investing countries. And according to those differences, proper niche targeting measures can be chosen to reduce cultural conflicts, to achieve goals of multinational hotel management.
 
2.1.4 Integration-Assimilation Theory
 
Integration-Assimilation Theory is put forward by Professor YU Wenzhao and some of his students at East China Normal University. What this theory concerns is transferring the multi-value into a core value agreed upon by all the employees and sticking to this core value until all the stuff accept it. Integration means, based on the mutual understanding and seeking a common ground while reserving differences, an optimal combination of internal and external sources when managing the MNCs, and transfers the multi-value into a new core value. Assimilation explains that once you understand the core value of your company, you should spread it as a common value among other employees. The Integration-Assimilation process can be divided into four stages: exploration phase, collision phase, integration-assimilation phase and innovation phase.
 
Integration-Assimilation Theory is a cross-cultural management theory specific to the situation in China. According to this theory, when carrying on their own advanced managing model, MNCs should firstly take China’s actual situation into consideration. By obtaining a full knowledge of Chinese culture, MNCs can combine Chinese culture with diversified cultures and achieve a harmonious situation within the enterprises. Besides, MNCs such as multinational hotels ought to embrace the fast changing markets, facing up to the challenges from the multi-valued employees as well as multi-valued cultural background when they are doing management in China. What’s more, the capacity of active assimilation of changeable markets and organization of fresh information and new changes is also required of MNCs.
 
Under the guidance of Integration-Assimilation Theory, MNCs’ cross-cultural management in China can be separated into four important phases. The first is exploring phase. During this period, a general study of Chinese cultural background is necessary, and MNCs ought to initiate an Integration-Assimilation proposal according to Chinese current situation. The second phase is Collision phase, which, on the basis of respect for different cultures, recognizes the conflicts among different cultures and then works out a cross-cultural managing system with Chinese culture for MNCs. The third period is integration-assimilation period which aims to establish a corporate culture with a core value and form a common aspiration of multinational hotels. Meanwhile, maintaining and adjusting the managing system is as important as building the core value. In the last period -- Innovation period, MNCs need to include the advantages of China’s hotel management in their managing system, thereby creating a brand-new culture of multinational hotel management.#p#分頁標(biāo)題#e#
 
2.2 Fundamental theories on Multinational Hotels
 
Our research on the cross-cultural management of multinational hotels in China should be based on the hotel management theories, and we ought to attach importance to fundamental principles as well as superior managing qualities so that to form a reliable theory about hotel management. Theories derived from Scientific management (Taylor, 1911), Human Relations Movement (Mayo, 1933), Need Hierarchy Theory (Maslow, 1943) and Linear programming and Queuing theory (Erlang, 1909) are all the theories that have certain significance to the hotel management. Research on the cross-cultural management of multinational hotels should choose an appropriate theoretical system in combination with cross-cultural management theory. Besides, it’s most desirable that this combination be innovated and applied neatly, such as X, Y, Z theory and Learning Organization theory.
 
2.2.1 X, Y, Z Theory
 
X theory and Y theory are created by Douglas McGregor, a MIT professor, and Z theory is created by Dr. William Ouchi, an AJA scholar. All these three theories are derived from humanism as well as various characteristics of human beings.
 
X theory “assumes employees are physically lazy and will avoid work if they can and that they physically dislike work. As a consequence of this, management believes that workers should to be closely supervised and comprehensive systems of controls developed. A hierarchical structure is required with narrow span of control at each and every level. Based on this theory, employees will show little desire without an enticing incentive platform and will avoid responsibility whenever they can. If the directorial goals are to be met, theory X managers depend heavily on threat and force to gain their employee's fulfillment” (McGregor, 2001). Under the guidance of X theory, hotel managers can make decisions without employees’ participation. But, the weakness of this theory is that it lacks independence and flexibility of service, the result of which is probably the changeability of manager’s requirements and the employee’s farness when they face their superiors.
 
Y theory states that “management assumes employees may be go-getting and self-motivated and work out self-control. It is believed that employees get pleasure from their mental and physical work duties. To them, work is as natural as play. They have the ability for innovative problem solving, but their talents are underused in most organizations. And the satisfaction of doing a excellent work is a strong inspiration” (McGregor, 2001). According to his theory, employee’s suggestions are probably taken into consideration when managers make decisions, which is a so-called “participational management”. Managers and employees are working in a harmony, and cooperating with each other, which leads to manager’s lessened work pressure and employee’s more passion and higher creativity.#p#分頁標(biāo)題#e#
 
In Dr. William Ouchi’s Z theory, “employees want to build cooperative relationships with their employers, peers, and other employees in the firm; for this they have need of high degree of support in the form of securing employment and facilities for development of multiple skills through training and job revolving, they values family life, culture and traditions, and social institutions as much as material achievement, they have well – developed sense of dedication, moral obligations, and self-discipline, and they can make cooperative decisions through consensus” (Ouchi,1981). However, the omnipotent managerial approach does not exist. Under this theory, hotel managers should bring flexible approaches into effect when dealing with different employees in different situations, which is so-called a people-oriented approach. Only in this way can the initiative of the employees be brought into full play, which will make employees feel independent and display their potentials, and finally achieve their goals.
 
To sum up, X, Y, Z theories break through the traditional concept that mainly emphasizes the type of organization, rules or methods. The theories put the value of business culture and the hotel’s cultural construction in the first place. Meanwhile, employees’ style of work and corporate spirit is paid much attention.
 
2.2.2 Learning Organizations Theory
 
Table 2.7 Process of Integration-Assimilation
 
From above figure, we can find that Organizations Theory focuses on the researches on how enterprises adapt to new forms of economy and market operational environment, on how to improve the competitiveness of enterprises, as well as on the way to extend the life circle of enterprises. American scholar Peter Senge developed this theory in his book Learning Organization in 1990. He stated that “Learning organizations are organizations where people repeatedly expand their capacity to produce the outcome they truly want, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to see the whole together ”(Senge, 1990). The five disciplines are: Personal mastery, Mental Models, Shared Vision, Team Learning and Systems thinking.
 
Personal mastery is the spiritual basis of Learning Organization Theory. Only when people constantly are fully aware of the strengths and weakness of themselves as well as the changes in the outside world, build up a new goal and work hard at it can people exceed themselves and confront with the future. Mental Models, as a corporate culture and the diverse theories, demand people to develop hypothesis, concepts, and ideas so as to find an appropriate method to form correct judgment of the world before taking actions. Shared Vision is “A learning organization’s employees all share a common vision. Personal goals must be in sync with the goals and vision of the organization” (Senge, 1990). As to the forth Principle: Team learning, “The significance of conversation and group discussion. For a team to learn, they must be in sync and get to harmony” (Senge, 1990). With the last principle, “Systems thinking: Organizations are a system of interrelationships. To turn out to be more fruitful we need to analyze these relationships and find the problems in them. This will agree to an organization to reduce the obstacles to learning” (Senge, 1990) a company functions in strict system, where every inner factor is closely interrelated and interacted with each other. As a consequence, creating a Learning Organization Theory needs to be systematically considered and analyzed. When these five principles are integrated and put into practice in the management of enterprises, efficient cross-cultural management of the multinational hotels can be achieved and greatly improved.#p#分頁標(biāo)題#e#
 
This theory regards enterprises as the subject of learning, the supposed form of management. Once a company intends to be an organization that attaches great importance to learning, it should develop a learning environment within the company, motivate staff’s learning enthusiasm and strengthen employees’ thinking ability. After that, this company stands a good chance to be a sustainable, highly efficient, flexible and humanized organization. The benefits of using this theory are guiding employees’ for further personal development and help them to form positive attitudes towards life and work. On other hand, as far as the company is concerned, this theory can help it to reinforce the competitive power of enterprise.
 
This thesis intends to take this theory as the basis for the theory of the research on cross-cultural management of multinational hotels, not only because it can provide a learning environment within multinational hotels, but also advocates breaking through the traditional norms and making a reform in management so that a company can manage flexibly under the different cultural backgrounds.
 
Chapter Three METHODOLOGY
 
The major research method adopted in the research is qualitative method, including comparison, case study, literature study and survey are methods what I use. However, during the process of gathering data, there are still some limitations.
 
3.1 Theoretical Framework
 
Table 3.1
 
3. 3 Subject
 
Globalization is becoming a tendency of our time, which is even more obvious in service industry. As an unavoidable issue, the problems brought about by cross-cultural communication are the most urgent ones in multinational hotel management, especially in China. When employees of different nationalities and different cultural backgrounds work together, cross-cultural conflicts may arise. If managers fail to deal with the problems in a proper way, it would be a catastrophe to the management. Thus, providing some concepts and approaches to the problems of cross-cultural conflicts is the main concern of this thesis.
 
3. 4 Scientific Ideal
 
3.4.1 Purpose of the Research
 
Descriptive Research
 
Generally, there are four types of research: descriptive research, exploratory (rational) research, analytical (explanatory) research and predictive (causal) research. (Saunders et al., 2007) Descriptive method is about to illustrate a phenomenon or proposition through describing data and features. This thesis is designed and developed to anlyze factors which may cause the cross – cultural problems overwhelmingly by this method.
 
3.4.1 Logic of the Research
 
?Deductive or Inductive Research
 
Table 3.2 Deductive Approach
 
Deductive Approach is a process of general principle to a specific result. This method is generally based on some scientific theories, from which we may get different topics that may interest us. Only after a quantitative analysis has been done, a final result of this analysis can be achieved. Sauder et al (2009) pointed out that a feature of Deductive approach is that a large scale of samples is required so that relevant resources are summarized. This approach is included in this thesis by using a relatively simple survey to analyse the factors that may cause the cross-cultural problems.#p#分頁標(biāo)題#e#
 
Table 3.3 Inductive Approach
 
Table 3.3 shows a clear process of how inductive approach works. When we use inductive approach, the first thing is to have a large scale of observation. Based on the data collected, the next step is to make hypothesis. Then, with the help of literature study and observation, the theory that reflects one’s ideas can be gained. In this thesis, inductive research approach is the first choice. A qualitative data has been collected through some cases of success and failure on the cross-culture management of multinational hotels in China and other useful methods which will be discussed later. According to these scientific data collected, new theory about the cross-cultural problem might be formed. The strength of this method “lies in establishing probability.” (Harvey, 1995)
 
3.5 Process of the Research
 
?Quantitative & Qualitative Methods
 
There are two researching methods, one is quantitative method, and the other is qualitative method. Generally speaking, quantitative method is aiming at a statistical result through some specific research. One of characteristics of quantitative method is that information usually is expressed by data. For example, when we do a research about the popularity of multinational hotels in China, we should do a questionnaire. From the result of this survey, 70% people think it is a good idea to develop more multinational hotels in China. This number of percentage is a kind of information we need to strongly support our theory about the importance on the cross-cultural management when more and more multinational hotels enter the market of China. We need to notice that the object of quantitative research must be an objective, independent one. Stevens (1946) developed Level of measurement, in which there are four scale types: Nominal scale, Ordinal scale, Interval scale and Ratio measurement. According to this theory, we need to verify the scale type when analyzing the data collected. Thus, a questionnaire has been used in this thesis to verify and extend Hofstede’s cultural dimensions theory.
 
Qualitative research is an analyzing method from the internal regulation of one subject based on social phenomenon or contradictions. This method aims at making a deep understanding of potential motivations and reasons. The feature of this method that distinguishes from quantitative method is that statistical models and regression analysis are not necessary. But, pure qualitative method without a statistical analysis may tend to be more general and subjective. Only when qualitative method is conducted according to quantitative analysis can we get a higher level of conclusion from qualitative method. When we conduct practical research, these two research methods are supposed to be used together. In this thesis, chief method used is qualitative method together with other methods. In consideration of the subject: cross-cultural management of multinational hotels in China, a thorough analysis of the topic is carried out so as to find out the factors influencing cross-cultural management by descriptive methods, which prove to be more effective，while case study and literature study can be applied to look for details for this subject which will be introduced in next section.#p#分頁標(biāo)題#e#
 
3.6 Gathering Data
 
3.6.1 Primary or Secondary Search
 
In this section, four research methods will be introduced, namely, Comparative approach, Literature study, Case study and Survey. With these four methods, this thesis has done a better job in data analysis. Descriptive method like comparative approach, literature study and case study belong to qualitative method, while survey that provides specific statistics can be regarded as quantitative.
 
3.6.2 Literature study
 
Unlike primary data, this kind of data is gathered and analyzed based on existent knowledge like statistics, pictures, letters, symbols and other kind of secondary data. So we can consider this method as a time-saving and money-saving method. It is very suitable when doing comparison or trend study. The author has done a plentiful documentary review and accumulated some relevant books, newspapers, journals from such sources as Pompidou library, Francois Mitterrand Library and ESC-Rennes Médiathèque and from some websites like EBSCO and Emerald, the main search engine students used at ESC-Rennes business school. In this thesis, a large amount of relevant statistics and data have been collected aiming at understanding the current state of development of multinational hotels in Chinese market. Based on this essential background research, this thesis is able to precede the analysis of factors influencing the cross-cultural problems. Undoubtedly, this method of gathering data does provide a strong support for the research approaches.
 
3.6.3 Survey (Questionnaire & Interview)
 
Survey research is an effective method for gathering data needed in research by choosing a group of people at random for an open questionnaire or structured interview. By analyzing the statistics gathered from questionnaires and interviews, it is possible to obtain useful information needed in the research. The characteristics of this method are the randomicity of samples, design of questionnaires and reliable quantified data. There are several typical modes of questionnaire, such as telephone, mail (by post), online survey, personal in-home surveys, street intercept survey, and hybrids of the above methods (Mellenbergh, 2008).
 
This thesis chooses the workplace intercept survey in six multinational hotels in different cities in China, two in the east, one in the south-east, one in the south, and two in the central part of China. As China has a vast area, only when we conduct a comprehensive research that may cover various parts of China can we obtain precise and objective statistics and relatively rich information relevant to the profound analysis. In this thesis, some conclusions have been worked out by sixteen questions that have been carefully designed. As a descriptive research, this thesis aims at analyzing the factors that affect cross-cultural management and illustrating this directional phenomenon in China’s market. The reason why a high-level scientific analyzing method such as SPSS is not used is that researches like exploratory research (focus on the relation between two different objects), analytical research ( focus on the reasons and relation) or predictive research (the analyzed results is the most important) are more helpful and practical for obtaining and using specific statistics. The process of the designing this questionnaire is:#p#分頁標(biāo)題#e#
 
Literature Review ? Questionnaire Draft ? Discussion ? Pilot Test ? Final Questionnaire.
 
Based on the literature study theory, those questions are designed to analyze the current situation in cross-cultural management in multinational hotels in China. Through a discussion and pilot test on this questionnaire, the final draft of questionnaire comes out with carefully designed questions that cover relevant issues needed in the research. By calculating the proportion of each option, an option with the highest proportion can be the most appropriate answer for each question, the result of which will be included in this thesis. And this relative objective point can be concluded as a proportion for this dissertation. Using questionnaire is targeting in the problems aroused in the internal hotel, many employees are asked questions in order to get a support of relevant data
 
Another survey mode is telephone / E-mail interview. Different from questionnaire, the data is gathered in this way by interviewer. Generally, this method can get a high rate of recovery of answer up to 80%. During the interview, people observe the interviewees behind the scene. This is a process of language-irrelevant but subtle-neglected information obtaining which differ from questionnaire. They firstly propose the conclusion related questions, and guide interviewees to reply. As no same answers might be gathered, the result of the interview would be highly objective, practical and reliable. This frequently used quantitative method will be conducted in such a way: eight employees will be chosen for interview, four by telephone and four by e-mails. By asking them various predesigned questions, the interviewers may find out the possible reasons why cross-cultural problems in multinational hotel especially in China arise. After those answers have been collected, a thorough analysis can proceed.
 
3.6.4 Comparative approach
 
It is a research and judgmental method aiming at finding out similarities among people, their qualities and differences. According to one certain standard, this method uses two or more things to make a comparison to explore the regulation and special rules. The first thing that researchers should figure out about comparative approach is what subjects they want to compare, and for what purpose. When typical cases are used, people always accepeted them naturally. Once readers are familiar with those cases, they naturally and easily accept the author’s reasoning about that subject. So using some cases from journals, newspapers, and books usually has a convincible effect for the researchers to illustrate their intentions and their ideas and statements. The subjects that will be compared in this thesis are the differences and similarities of different cultures among staff in hotels. When this method is used in this thesis, a particular emphasis is laid on the internal cultural differences in hotels. Multinational hotels ought to establish their own corporate culture based on those comparisons and figure out efficient management mode.#p#分頁標(biāo)題#e#
 
3.6.5 Case study
 
Case study is a method that “are analyses of persons, events, decisions, periods, projects, policies, institutions, or other systems that are studied comprehensively by one or more methods. ”( Tomas, 2001) This method provides researchers with a clear clue about something complicated, and broadens the former researcher’s perspectives. Case study method is used very frequently when doing researches on the description of factors which may influence the cross – cultural problems, the management of an enterprise or the development of some social phenomena. At present, case study is a descriptive method, an observation process under the guidance of theoretical framework. People can easily choose one kind of case study method, they want to use in practice. According to some well-known scholars like Robert E. Stake, when doing a case study, the researcher needs to follow these six steps:
 
o Find out the subject you want to research
 
o Choose the cases that you think is necessary and the methodology you need to analyze
 
the problems of your chosen subject
 
o Get ready for the data collection
 
o Start gathering data
 
o Analyze the data gathered
 
o Write down your analysis
 
In the field of hotel management, there are many cases of success and failure that can be used as sources for analysis and reference, which will be helpful to form a solid theoretical extension for the research in this field. From case study, it is possible to find out the factors contribute to the success of cross-cultural management of a multinational hotel, as well as the factors that result in the failure.
 
3.7 Limitation
 
No matter what method you choose, there are still some limitations. Take literature study as example, the information collected in this way may not be sufficient, even out of date. Therefore, it is essential that other analyzing methods need to be included.
 
As far as survey is concerned, the result may not be so objective, even partial, as only a very small number of people are recruited for survey. Meanwhile, the design of questionnaire may not be very scientific, which may result in insufficient feedback and even wrong information. As far as interviews are concerned, they take relatively longer time and much manpower and higher expenditure, and cover very narrow proportion of people. As far as the respondents are concerned, they may not submit their authentic answers to some sensitive or personal questions, which would make interviews less effective than other methods. When taking the method of case study, it requires good judgment and comprehension of the researcher, in that suitable cases may not be so easily found to illustrate the researcher’s ideas and statement.
 
Chapter Four EMPIRICAL ANALYSIS#p#分頁標(biāo)題#e#
 
4.1 Present Situation of Cross-Cultural Management of Multinational Hotels
 
Economic globalization promotes economic activities of international enterprises on a world-wide scope. Under such situation, multinational hotels also search for the optimal target markets around the world. With stable and fast economic development, China has become an ideal market for hotel business and attracts a many multinational hotel groups to set up their hotel chains in China with capital management as a major form and capital expansion pattern as a form of supplement. Through entrusted management, franchising and other non-capital expansion modes, multinational hotel business is flourishing, winning remarkable profit and bigger market share. However, as far as management is concerned, owing to cultural diversities and different management concepts, the multinational hotels in China still face problems arising from cross-cultural management. In this chapter, analysis focus on the development statue and stage of multinational hotels in China and sums up the experience and problems caused by implementation of cross-cultural management, which will serve as basis for the measures put forward in the following part.
 
4.1 The Current Statue of Multinational Hotel’s Development in China
 
4.1.1 Multinational Hotels Keep Increasing
 
Since China opened its door to the world, nearly 30 multinational hotel groups have entered China to set up their hotels in various cities in order to achieve so-called brand effect by practicing their scientific management modes. Up to 2008, there are altogether 52 international hotel and 72 hotel brands in mainland China, totaling more than 600 hotels with multinational management. ACCOR, Starwood, Marriot and InterContinental are among these international hotel groups. Figure 4 – 1 lists the change of quantity of these four famous international hotel in China in recent years that showing a surge in the number of multinational hotel and the world first rank Intercontinental Hotels doubled its’ new hotels within four years.
 
Hotel
 
Group
 
Year
 
InterContinental
 
ACCOR
 
Starwood
 
Marriot
 
Total
 
200435392040134
 
200678472929183
 
200887694831235
 
(Collected by author) Table 4.1
 
This table shows that the number of the hotels under these four international hotel groups in China has increased from 134 in the year 2004 to 235 in 2008, which is a remarkable trend, and the number is still increasing.
 
After 2008 Beijing Olympic Games and 2010 Shanghai EXPO, most multinational hotel groups have made specific plans for their large-scaled development in China. Take the above-mentioned four hotels as example. As a high-leveled hotel, the Intercontinental Hotel plans to increase the number of their hotels to 215 in China at the end of the year 2011. Accor also plans to increase its number of hotels to 195 in mainland China, Hong Kong and Macao in the year 2011. Sheraton plans to increase its number of hotels to 120 before 2012 in China, while Marriot plans to increase their number of hotels to 60 at the end of 2012. Even though global economic environment is changing in an unfavourable way, China is still regarded as one of the most potential markets in the world for multinational hotel development.#p#分頁標(biāo)題#e#
 
4.1.2 Gradual Matureness of Expansion Modes
 
The expansion patterns of multinational hotel groups of various countries are different, which can be divided into two major categories: capital expansion and non- capital expansion. The capital expansion mode of multinational hotels is characteristic of direct investment, merger or acquisition, holding or shares, while non-capital expansion mode includes rental, franchise, commissioned by the management and strategic alliance. Capital operation mode of early multinational hotel groups, such as Hilton, Sheraton, etc. achieve expansion through the purchase of real estate. But in the 1990s, more and more hotel groups preferred franchising and commissioned and other non- capital expansion mode.
 
In the future, multinational hotel groups will choose suitable expanding mode according to their target market positioning as well as business advantages and business philosophy. Multinational hotel groups’ expanding modes in China have different characteristics which can be summarized as: franchise mode as major, entrust management as a supplement, belt endowment management as development trend (CHEN, 2005). At the initial stage of foreign investment of multinational hotel groups, unfavourable investment environment of Chinese market made multinational hotel groups choose the mode of non-capital operation for expansion in China, by which they do not need to build hotels to expand group dimensions or use low cost to obtain profit from management, thus reducing the operation risk in China. Therefore, at this stage, entrust management has become one of the major methods for the international hotel groups International hotel groups such as intercontinental, Hilton, Marriot were only offering service of hotel management to other hotels.
 
As the market environment of China's hotel industry has become mature and favorable for franchised management, multinational hotel groups took up management mode of franchise for expansion, which combines both the advantages of the hotel operation and management on the Chinese side and world-famous brands of managing mode and network systems of multinational hotel groups. With this management mode, joint-venture hotels can reduce operating costs, create their own brand image, and thus offer better service and reasonable price. Therefore, the major multinational hotel groups have gradually increased the number of franchised hotels in China. Take Intercontinental Hotel as an example. Initially, delegated administration mode was used in the hotels in China. But in April 2007, when the first franchise program of Holiday Inn Express was launched in China, the main mode of expansion in China is mandatory administration and franchise as a supplement. Those two operating modes have a proportion as high as 95%, while funds management and other modes are less than 5%. China's stable market environment has enhanced the confidence of the management of multinational hotels for further development in China. The fact that rewards from investment of hotels in China is higher than the world average has pushed international hotel management to try bringing capital management into it. For example, Shangri-La Hotel Group adheres to direct investment and direct management, while other multinational hotel groups favor equity investment. At the end of 2007, the United States Days Inn (China) announced that China’s first “hotel hosting center” has chosen to invest in new hotels in China, which means that multinational hotel management in China has changed from a simple business mode to a capital management business mode.#p#分頁標(biāo)題#e#
 
4.1.3 Wider Range of Areas
 
Expansion of multinational hotels has gradually shifted from first-class cities to second-class and third-class cities ever since they stepped into Chinese market. A priority given to central cities with economic prosperity or cities of rich tourist resources is still the best choice for the expansion of multinational hotels. However, footprints of international management hotels have arrived in second-class and third-class cities. With a certain proportion, those hotels expand to second-class and third-class cities step by step.
 
Hotel GroupNo. of New Added HotelsNewly Added Hotel BrandsCity
 
InterContinental15Crowne Plaza Hotels & Resorts, Holiday Inn ExpressShanghai, Chengdu, Beijing, Qingdao, Xiamen, Taiwan, Wuhan
 
Wyndham Grand Plaza8Howard Johnson,
 
Hawthorn SuitesShanghai, Chengdu, Yinchuan, Changhchun
 
Marriot3Ritz-Carlton, RenaissanceBeijing, Guangzhou, Ningbo
 
ACCOR11Sofitel, Ibis, Pullman, NovotelBeijing, Shanghai, Hangzhou, Sanya
 
Srarwood5Hilton, Westin, MeridienBeijing, Huizhou, Wanning
 
(Collected by author) Table 4.2
 
As illustrated in Table 4.2, the range of distributions of multinational hotels is widening. Sustained by economic growth and both domestic and international tourists, first-class cities like Beijing and Shanghai support the development of top-level multinational hotels in order to meet the demands of ever-increasing high-level business and vacation tour. At the same time, some multinational hotels are planning to expand their investment in China, and the competition among service industry gradually extends to Chinese inland market.
 
Classify of CityGDP (1 Billion RMB)Representative City
 
First – class City>750Shanghai, Beijing, Guangzhou, Shenzhen
 
Second – class City350 – 750Suzhou, Chongqing, Hangzhou, etc.
 
Third – class City200 – 350Jinan, Zhengzhou, Changsha, Ha’erbing, etc.
 
(WORLD HOTEL Magazine) Table 4.3
 
Table 4.3 shows three kinds of cities as representatives of mainland China according to the GDP. According to the standard, ACCOR Group (ranked the fifth universally in 2008) has its new hotels in such first-class cities as Beijing, Shanghai and Guangzhou, second-class cities as Hangzhou, Wuhan, Chengdu, Dongguan and Ningbo, etc. as well as third-class cities as Changsha, Changchun and Wenzhou. Locations of subsidiary hotels of ACCOR Group range from first-class cities like Beijing and Shanghai to second-class cities like Suzhou and Chengdu, from eastern coasts like Shangdong and Jiangsu to mid-western inland areas like Anhui and Sichuan. In addition, Sheraton Group has opened hotels in Changshu, Huizhou, Wanning and other cities. The overall trend is that development of multinational hotels shifts gradually to second-class and third-class cities, which shows an expansion of the layout of new hotels.#p#分頁標(biāo)題#e#
 
4.1.4 Brand Development Becomes Mature
 
4.1.4.1 Mature Brand System and Multiple Brands
 
With the development of multinational hotels in various cities in mainland China, brand system of multinational hotels have also become mature, with the development of single brand to multiple brands. For example, InterContinental Group has launched many brands, such as Crown Plaza, Intercontinental, Holiday Inn and others; Marriott group has changed its development strategy from pushing out the Marriott brand to current introduction of all brand, both include high-level hotels of Ritz-Carlton, such as Carlton, Marriott, and Renaissance, and mid-lever hotels such as Courtyard, New century, and the Ramada. Accor Group has introduced such brands as Sofitel and Novatel to China and then brought three-star hotel brand Mercure in. Many hotel groups have brought their different grades of sub-brands into China.
 
4.1.4.2 Development From Middle-Level to Economy and Ultra-luxury
 
Currently, the strategy of multinational hotels in China is to maintain the stable development of middle-end and high-end hotels and emphasize the development of economic and ultra-luxurious hotels so as to have a bigger market share. For example, after their market research, InterContinental and Accor Group have launched Express Holiday Inn, Ibis and other economic hotel brands in Chinese market. Famous American economic hotel chains groups like Super 8 and Amersino have also launched their hotel business in China. While paying attention to economic hotels, multinational hotel groups also launched ultra-luxury hotel brands in China, hoping to build their flagship hotels here. For example, Grand Hyatt Beijing is the second Grand Hyatt brand hotel managed by the Hyatt Group after Grand Hyatt Shanghai Jin Mao Hotel. Four Seasons Hotel Shanghai becomes the first hotel opened in China by the world-famous Four Seasons. The establishment of those luxurious hotels indicates multinational hotels are focusing on upgrading their hotels and stretching the development of product line.
 
4.1.5 Prominency of Monopoly
 
The total number of rooms of a hotel has become the criterion to judgment the degree of monopoly of a multinational hotel in different regions of the world. Hotels, an international authoritative magazine, has released The Globe Hotel Group Top 300 in 2008, top 10 of which are listed in Table 4.4.
 
Ranking (2008)Hotel GroupRoom No. (2007)Room No. (2008)Hotel No.(2007)Hotel No.(2008)
 
1InterContinental585,094619,8513,9494,186
 
2Wyndham550,576592,8806,5447,043
 
3Marriot537,249560,6812,9993,178
 
4Hilton502,116545,7253,0003,265
 
5ACCOR461,698478,9753,8713,982
 
6Choice452,027472,5265,5705,827
 
7Best Western308,636305,0004,0354,000
 
8Starwood274,535284,800897942#p#分頁標(biāo)題#e#
 
9Carlson146,600151,0779691,013
 
10Hyatt135,001114,332721375
 
(Resource: Hotel. 2009 (6)) Table 4.4
 
Table 4.4 shows the eleven multinational hotel groups in China are the top-10 in the shortlist of the Globe Hotel group 300. Through the comparison of Table 4.4 and Table 4.5, it can be seen that Chinese hotel groups are overmatched by multinational hotel groups. Jinjiang International Hotel Group, domestically ranking the 1st in China, ran 465 hotels in 2008 with 80164 rooms, while Intercontinental Hotels Group, the world’s number one, ran 4186 hotels in 2008, 8 times larger than Jinjiang. It number of 619851 rooms is over 7 times more than that of Jinjiang. As world’s first-rank hotel, and also the first hotel group that entered Chinese market, Intercontinental Hotels Group registered 69 hotels in China during 24 years from 1984 to 2008. The data shows that the multinational hotel groups have a strong momentum in development in China and an outstanding monopoly tendency.
 
Ranking (2008)Hotel GroupRoom No. (2008)Room No. (2007)Hotel No.(2008)Hotel No.(2007)
 
13Jinjian80,16468,797465380
 
21Home – Inn55,578-471-
 
34Shangri – la 27,98726,4345855
 
38Jianguo Hotels & Resorts
 
20,58314,0006860
 
43Viking 19,26814,0965850
 
48jinling18,07514,8977364
 
50Barony Hotels&Resorts Worldwide
 
16,369-56-
 
59Green Tree Inn14,4819,17013178
 
60Guangdong14,34214,3425151
 
64HNA Resort
 
13,62812,6664641
 
83New Century Tourism Group11,017-33-
 
(Resource: Hotel. 2009 (6)) Table 4.5
 
4.2 Development Stages & Characteristics of Multinational Hotels
 
4.2.1 Stage Division
 
From the moment when multinational hotel groups entered Chinese market, culture has begun to influence all aspects of cross-border hotel business. For detailed analysis of cross-cultural management mode adopted by the multinational hotels in China, this thesis makes use of integration & assimilation theory, which was put forward by Professor of management psychology Yu Wenzhao of East China Normal University and his students. According to Prof. Yu, cross-cultural management of multinational hotels in China is divided into three stages: exploration period, collision period, and integration & assimilation period. Fig. 4.1 shows different stages of cross-cultural management and presents evolutionary situation of cultural conflict in these three stages.
 
Fig. 4.1
 
4.2.2 Characteristics Analysis
 
In each stage of cross-cultural management, the attitude of the staff facing heterogeneous culture is different according to the different degrees of internal cultural conflict in multinational hotels. By analyzing characteristics of each management stage of the multinational hotel, we can find how they take appropriate strategies to deal with cultural conflict in different management stages so as to have a successful transition into the integration period.#p#分頁標(biāo)題#e#
 
The exploration period is a stage that Chinese and foreign cultures come into contact. When a multinational hotel has started its business in China, different cultures clash, making all the staff feel curious and excited about the heterogeneous cultural phenomenon and the management mode. However, they care little about cultural differences brought about by their colleagues of different cultural backgrounds. As the result, Chinese employees show great interest in the mode and concept of foreign management, while foreign workers will highly appreciate the management style with Chinese cultural characteristics. In such friendly situation, cultural differences are handled with tolerance.
 
The collision period is the stage that Chinese and foreign cultures repel each other. Through a brand-new phase of alien culture, the initial mutual attraction is gradually replaced by disappointment, frustration and defeat, owing to different life and values and concepts of staff under different cultural backgrounds. At this stage, especially for the foreign employees (expatriates) who have been sent to work in China, they may feel isolated and helpless because of the lack of understanding of Chinese culture and unfamiliar living environment. Their assignment may fail if the expatriates can’t get through this stage.
 
The integration period is the stage of complementary advantages that Chinese and foreign cultures co-exist. At this stage, the multinational hotels tend to adopt all kinds of measures to reduce cultural conflicts and strengthen the mutual understanding of different cultures for both Chinese and foreign staff, providing cross-cultural training to their staff so as to find out their own strengths and weaknesses of different cultures. Thus a situation of complementary advantages is formed through communication. Recognizing the existence of cultural diversity in the multinational hotels helps Chinese and foreign staff obtain the common value and corporate culture. The ideal state of integration period is a formation of unique corporate culture and management mode which is suitable in China’s national conditions.
 
4.3 Situation Investigation and Mode Analysis
 
4.3.1 Current Situation of Cross-cultural Management
 
In order to thoroughly analyze current situation of multinational hotels’ cross-cultural management in China, six transnational hotels have been selected as samples for the survey of the employees, which aims to study on the multinational hotels’ cross-cultural communication, training, and corporate culture. Geographical distribution of the six transnational hotels in China is: 2 hotels from Beijing and Shanghai respectively, 1 hotel from Shenzhen and Jinan respectively. 132 out of 150 copies of questionnaires distributed are collected, with 115 valid questionnaires, accounting for 77% of the total.
 
4.3.1.1 Ineffective Cross-cultural communication
 #p#分頁標(biāo)題#e#
It can be seen from Fig. 4.2 that the communication between Chinese and foreign staff is not satisfactory because of cultural differences, in that good communication is only 12%, while basic communication accounts for 56%, little communication accounts for 29%, and totally disable communication accounts for 3%. As for the reason, language barriers and cultural differences are important factors for the cross-cultural management.
 
Fig. 4.2 The Effect of Communication
 
Fig. 4.3 shows that 21% of the workers surveyed have a strong desire to communicate with foreign staff, 55% of the total is willing to communicate, 19% of the staff think contacting with foreigners should depend on the, and 5% of the staff don’t care about cultural communication at all! Combined with the data in Fig. 4.2，it is really discouraging to find that the majority of the staff surveyed are not so willing to communicate with people from different cultures.
 
Fig. 4.3 The Degree of Communicating
 
The targets of the survey shown in Fig. 4.4 are Chinese workers working in multinational hotels in China. Fig. 4.4 shows that 51% of the Chinese employees hope to improve foreign language skills through communication, and 40% think the exchanges could develop relationships with colleagues and their superiors, while 9% take cultural communication as a means for superiority and promotion. On the whole, the primary purpose of communication of both Chinese and foreign workers is to improve their language skills and form harmonious relationships with their colleagues and superiors.
 
Fig. 4.4 The Purpose of Communication
 
Fig. 4.5 reflects the language use in cross-cultural communication in multinational hotels. The number of people using English is as high as 61%, in that English is the most extensive tool when the staff communicates with each other. Another 37% of employees communicate in Chinese, indicating that foreign workers are eager to learn and use Chinese to get a deeper understanding of Chinese culture. Only 3% of the people being investigated use other languages.
 
Fig. 4.5 Communication language being used at work
 
4.3.1.2 Training as An Important Means For Dissemination of Cross-cultural Information
 
It can be seen from Fig. 4.6 that training is the most important way to provide the staff with heterogeneous cultural information, which occupied by 70.18%, indicating that the training system is essential in cultural transmission. Followed by 56.14% of investigators prefer to get information of different cultures through books. Then the service practice accounted for 42.11%. The last 31.58% was informed by superiors or colleagues.
 
Fig. 4.6
 
Fig. 4.7 shows the contrast status of corporate cultural training and communicational training between Chinese culture and Western culture. The first two columns on the left indicate whether the transnational hotels carry out corporate cultural training or not. 87.72% of respondents gave a positive answer while the answer of 12.28% of respondents was negative. On the other hand, the two columns on the right show whethermultinational hotels launch communicational training between Chinese culture and Western culture. 52.63% of the respondents said the companies have the relevant training, but 47.37% of them gave a negative answer. The data illustrates that the multinational transnational hotels pay less attention to cross-cultural communicational training.#p#分頁標(biāo)題#e#
 
Fig. 4.7 The Comparison of Business Cultural Training and Training Courses of Chinese, Western Cultural Communication
 
4.3.1.3 Further Integration of Corporate Culture with Local Culture
 
Increasing the participation of the employees in setting up policies and principles of multinational hotels can improve the hotels’ cohesion, which is also a manifestation of the degree of hotels’ business cultural development. From Fig. 4.8, we may find out that the staff surveyed has never played a part in the formulation of hotels’ policies and principles, which is up to 65%. On the contrary, 20% of the respondents said they occasionally partake in the management, while 15% of them were frequently involved in it. The statistics below shows that the multinational hotels have failed to effectively encourage their staff to be involved in the hotel’s management.
 
Fig. 4.8 The Staff’s Participation of Decision-Making
 
Fig. 4.9 shows that the workers in multinational hotels think that self-realization is the most important element of career satisfaction. The employees who think the self-realization is the most important thing in the work account for 66.67%. 35.09% of the respondents believed that a harmonious relationship with colleagues could bring about career satisfaction while 10.53% of them paid much more attention to the relationship with leaders. Another 8.77% viewed outstanding performance as an essential source of fulfillment. This shows that Chinese employees in the multinational hotel have aspirations for self-realization, and they don’t treat excellent performance as the highest standard of success.
 
Fig. 4.9
 
Fig. 4.10 shows the different attitudes of the respondents of multinational hotels towards Chinese and Western festivals. Most of the respondents in multinational hotels think highly of Chinese and Western festivals, accounting for 58%. The respondents who attach more importance to Chinese festivals account for 29%, compared to 13% of those who pay more attention on Western festivals. It illustrates that the multinational hotels have made adjustments according to Chinese customs and traditions.
 
Fig. 4.10 Different Attitudes towards Chinese & Western Festivals
 
Fig. 4.11 shows that the majority of multinational hotels attach importance to recreational activities in order to enhance the cohesion of the hotel staff and enrich their life. 40% of the respondents participate in recreational activities several times annually, while 33% of them attend monthly. But there are still 20% and 7% respectively of the employees said the hotels seldom or had never held recreational activities.
 
Fig. 4.11 Frequency of Participation in Company’s Recreational Activities)
 
4.4 Experience of Successful Cross-cultural Management
 
Many multinational hotels have successfully established themselves in China with their abundant capital and advanced management. Successful cross-cultural management lies in the establishment of “win-win” management concept and harmonious business culture, while the reasonable management of local employees is the key element to the success of cross-cultural management. Scientific training and salary systems are the security measures indispensable to the practice of cross-cultural management.#p#分頁標(biāo)題#e#
 
4.4.1 “Win-Win” Management Concept as Prerequisite
 
To a multinational hotel, establishment of the concept of joint venture for the promotion of management is optional to fulfill its business goal. The majority of Chinese multinational hotels attach more importance to the good cooperative relationship with the owners or co-owners, and the establishment of excellent images of the enterprises and the brands, which is the basis to achieve good cross-cultural management. For example, as the only owners’ association of hotels (International Association of Holiday Inns, IAHI) acknowledged world-wide, Multi-continental Hotel Group not only strives to strengthen the communication and exchange with their owners and legally and reasonably protects the benefits of the country, owners of the hotels, its staff and customers, but also seeks to strengthen the communication and cooperation between the company and the owners, discusses the common issues of management, feeds back the owners’ comments and suggestions to the headquarters, in order to reach consensus of both owners and management and to achieve “win-win.” With the “win-win” concept of both parties, a harmonious atmosphere both inside and outside the hotels would appear. On the one hand, multi-national hotels need to learn and to understand Chinese culture, forming a conscience of understanding of and respect to it. On the other hand, they need to cast aside their sense of racial superiority and their prejudice towards the local culture, establishing joint goal that entails more tolerance and creativity for management and development. When the “win-win’ concept has permeated the thinking of entire staff of the hotels, the local staff would be willing to combine their personal goals with that of the business of multinational hotels so that there is a guarantee to the success of cross-cultural management of multi-national hotels.
 
4.4.2 Harmony as the Basis of Business Culture
 
The establishment of business culture is the basic element of success of multinational hotel business management. In his article Creation of Business Culture—The Everlasting Element of the Life of Enterprises, Chinese scholar Wei Jie defines business culture as “value concept that an enterprise believes in and puts into practice.” When a multinational hotel operates its business in such a complicated environment that features a big staff, multi-nationalities and multi-cultures, corporate culture acts as the intrinsic motivator that integrates its staff and promotes its development. With cohesive value concept as the core of harmonious business culture, the establishment, propaganda and learning of core value concept is able to improve the efficiency of communication within a multinational hotel, form strong cohesive force and guiding principles of all the teams and staff, and provide basic orientation and business guide for the survival and development of the hotel.#p#分頁標(biāo)題#e#
 
It is vital for multinational hotels to show respect to Chinese culture and understand it in Chinese market so that they can find out the advantages of Chinese and foreign cultures and combine them to establish corporate culture in the hotels. For example, as a famous brand of economic hotel chains under Wyndham Hotel Group, Super 8 Hotel has been striving to create its corporate culture that integrates into Chinese culture since it entered Chinese market in 2004. The core value concept of Super 8 Hotel is: loving China, people-oriented, honest, innovative, and fair. Another example is Hilton Hotels Corporation, which has its core value concept of Industrious, Self-confident, and Smiling, with which, Hilton Hotels Corporation has established its own culture of consensus by eliminating the attitudes of exclusion brought about by different cultures and by reducing culture conflicts.
 
4.4.3 Localized Talents as the Key Element
 
The supply of excellent talents for the market and the policies of Chinese government are the exterior conditions for the localization of talents in multi-national hotels, while cost reduction, avoidance of cultural conflicts, stability of staff, strengthening the communication with different various departments are the inner forces that can promote the development of the hotels. Localization strategy not only includes employment of local people as ordinary workers who may develop certain degree of loyalty to the hotel, but also includes employment of local people as administrators, which is more important to a multinational hotel. Since local administrators have same cultural background from ordinary workers, it is possible for them to communicate with the workers in a thorough way, which can better avoid the cultural diversity and conflict brought about by multicultures and carry out administrative activities smoothly (Lu, 2009). A case in point is the InterContinental Hotels Group which actively carries out the strategy of Localized Talents for the purpose of changing the concept of talents within the Group and attracting more local staff. The hotel management not only pays attention to how much its staff contribute to the hotel, but also pays more attention to how to help its staff to grow and become more promising in their career. InterContinental Hotels Group expects to create progressively its image of brand among its staff so as to attract more excellent talents to join the group through its unique corporate culture and retain them by providing them with more space for personal development and advantageous resources.
 
The advantages of localization of talents lie in, firstly, that local staff can better understand the consuming psychology and habits of Chinese customers, help the hotel immersed with Chinese culture more quickly, and discover the management pattern that is characteristic of Chinese culture. Then, localization of talents is the inevitable result of most optimum distribution of resources, in that comparatively low cost of human resources in China promotes the process of exploration of localization of talents for multinational hotels. Because of this, multinational hotels have successfully trained a group of local staff and administrators, from whom the ones with excellent performance are made key administrators.#p#分頁標(biāo)題#e#
 
4.4.4 Cross-Cultural Training as Guarantee
 
The purpose of cross-cultural training in multinational hotels is to prevent and relieve cultural conflicts originated from multi - cultural contacts in multinational business management, establish harmonious working environment based on mutual understanding and trust, strengthen team spirit and cohesion so as to achieve their objectives in international business of the hotels. It is the guarantee for raising core competitiveness and business success of the multinational hotels. The hotels have developed their complete sets of comparatively mature training system and operational mechanism during the process of development, especially their content in cross-cultural training has become more and more extensive, which includes not only foreign language learning and cultural cognition, but also the aspects of effective communication, cultural sensitivity, and approaches to cultural conflicts Cross-cultural training of the staff has become an indispensible and important part of the strategy of business development.(FAN, 2003)
 
The cross-cultural training pattern has becoming diversified, in that the training has developed from its original lecturing as the main method to such co-existing methods as seminars, scene simulation, on-line training, etc. Most multinational hotels groups have their own training system and training centers, with large amount of funds. For instance, Hilton Hotel Group has set up advanced on-line university, providing over 100,000 courses which cover various fields of hotel business as well as cultural elements. The innovative training method adopted by Hilton is effective in constantly breeding and motivating its staff, who provide outstanding services all over the world. In addition, in order to improve the quality of the staff and reduce costs, many multinational hotels are striving to cooperate with the universities and colleges of hotel management so as to obtain relevant guarantee in their storage and the improvement of quality of human resources.
 
4.4.5 Salary and Welfare as Motivators
 
Salary and welfare are directly associated with the personal benefits of the staff. Therefore, if the staff of both host country and home country is treated fairly in pay and welfare, the relations of both parties will become more coordinative, the sense of cooperation and consensus will increase, and work efficiency will improve accordingly so that strategic objectives of multinational hotels will be achieved.
 
For example, economy hotel chain Super 8 in the implementation of the salary system in China gives priority to efficiency, taking into account fair distribution principle, while pay structure is proceeding from job characteristics, performance, and profits, which are taken as the main evaluation indexes, not by diplomas, academic titles, credentials, qualifications, or seniority. It also implemented the employee stock ownership plan, allowing the employees to share the profits of the enterprise. The example of Super 8 reveals that transnational hotels are gradually establishing and perfecting the pay system. Given the current situation that most senior managers of transnational hotels are held by expatriate officers so as to reduce the mobility of expatriate, reducing expatriate remuneration gap, the hotels will considerably increase the pay and benefits. As far as Chinese staff is concerned, multinational hotels mostly take the environment of the Chinese market as a reference to determine the pay and benefits of the local staff in accordance with the standards set up by the hotel headquarters. But multinational hotels have gradually achieved their goal of replacing expatriate senior managers with Chinese senior managers through various channels such as recruitment, training, internal promotion, so as to reduce the costs of human resources.#p#分頁標(biāo)題#e#
 
4.5 Issus Analysis of Multinational Hotels Exerting Cross-cultural Management in China
 
4.5.1 Communication Disorders Affect Management Efficiency
 
Cross-cultural communication means communicating behavior among people from different cultures. Good communication helps multinational hotels deal with cultural conflicts, build up mutual understanding and trust, improve hotel management efficiency in a better way. Managers of multinational hotels are aware of the importance of cross-cultural communication by upgrading communication efficiency among hotel managers, owners, employees as well as customers. However, cultural diversities still cause misunderstanding, contradiction and even conflicts. Reasons for hotel management communication preclusion and low efficiency of management are mainly previously presumed mistakes and linguistic communication impediments.
 
A previously presumed mistake is “when an individual from a group interacts with an individual from another group, he or she is inclined to make a concrete hypothesis over the criteria, judgment and thinking process. And when the hypothesis fails to be accurate, misunderstanding and invalid communication appear” (JI, 2009). After entering China, managers of multinational hotels conduct their communication behavior on a basis of previous hypothesis. If this hypothesis stems from an intensive comprehension of Chinese national conditions, the communication can go smoothly; or vice versa, cross-cultural communication impediments come into being. Hypothesis failures arise principally from three aspects: 1. assumptions that Chinese have the same mind-set and behavioral manner; 2. beliefs in “first impression” that causes cognitive obstacles; 3. biases on Chinese culture and thoughts that Chinese culture is “bad” and a resultant cultural superiority. If managers run management in China according to this subjective and irrational previous hypothesis, multinational hotels are bound to confront communication trouble with ever descendent management efficiency and even management failure.
 
For instance, Marriott International and Panglin Company (a Chinese enterprise) merged in 1977 to set up Marriott Panglin Hotel. But before long the two parties split up and their cooperation almost ended up in a lawsuit. According to one expert’s analysis, “many of Marriott’s operations were done ignorant of China’s national conditions, those deeds led to their failure in cooperation.” For example, the U.S. Marriott insisted that all decoration materials be imported from the U.S. while the Chinese counterpart maintained that domestic building materials did not differ from imported ones and the cost was much lower. Due to Marriott’s egoism, Chinese proprietors found it hard to deal with problems arising from such disputes and could not bear burden of increasing cost of capital, which results in their final split-up. In this case, Marriott’s false hypothesis towards China’s national conditions, their adherence to traditional and egoist management without any consideration to China’s national conditions and benefits of proprietors are the root causes for the failure of this cross-cultural management.#p#分頁標(biāo)題#e#
 
In addition, linguistic communication impediment is another factor that lessens the effect of communication and management efficiency. Linguistic communication is comprised of oral linguistic communication and non-oral linguistic communication. English is currently most used language around the world. In China, to communicate proficiently with oral English is one of a manager’s essential skills. However, cultural and individual diversities are still causing frequent oral communicating obstacles and misunderstanding. And since capacity of English of first-line employees in multinational hotels varies, communicating problems thus often occur. On the other hand, if two employees with different cultural backgrounds don’t understand each other’s language, their different values for spatial distance and different meanings of body language, non-oral linguistic communication impediment may appear. For example, Chinese people tend to be reticent and wouldn’t talk too much in a conference or a negotiation. This quality may be interpreted as sensation, agreement, protestation or reservation. But people from English countries who are not familiar with the cultural characteristics of Chinese people under such circumstances may always feel embarrassed and even insulted.
 
4.5.2 Cultural Conflicts Cause Failure in Management
 
Cultural differences exist where people from different cultures stick to their own values and norms, which result in various attitudes and behaviors towards particular things (FEI, 2006). Different cultures have their own judgment systems. Cultural differences exist because people from different cultures have different cultural traditions, thinking modes as well as ways of communication (SONG, 2007).
 
There are advantages and disadvantage of cultural differences, which do not lead to cultural conflicts directly. Differences between cultures can infuse fresh ideas and new thoughts into an enterprise; the fusion of the advantages between cultures can help to expand markets. But cultural differences have a negative impact on molding of hotel culture and implementation of management measures. Once hotel managers cannot take suitable steps, cultural conflicts may occur and then management stops operating smoothly.
 
4.5.2.1 Cultural Difference Leads to Cultural Conflicts
 
China has a very long history, where traditional customs and concepts are deeply rooted in its culture, permeating every field and level of its society and guiding people’s behavior. Chinese people cherish team work and harmony, attach great importance to human relations, show great respect to authority, and advocate persistency, collectivism and equalitarianism. In character, they are conservative, less aggressive, less outspoken, and less sociable. These features of Chinese culture are not familiar to foreigners. That’s why managers in multinational hotels have difficulties in understanding the ideas and behaviors of Chinese employees, which results in ineffectiveness in management.#p#分頁標(biāo)題#e#
 
Different thinking modes are the evidences of culture differences, and they differ from person to person, which is more remarkable for people from different cultures. Besides, since people working in a multinational enterprise come from heterogeneous cultures, their cognitive attitudes, habits of dealing with things as well as their points of views or reaction vary considerably due to disparateness of their thing modes. Nevertheless, managers in multinational hotels often fail to implement certain managerial rules and principles when they are negligent of thinking modes of Chinese employees.
 
As cultural differences often result in cultural conflicts, foreign administrators find it hard to communicate with people from heterogeneous cultures, and misunderstanding between Chinese and foreign managers, employees and customers tend to occur. Therefore, when multinational hotels seek to open up new markets, they frequently avoid those countries and regions which are completely different in thinking modes, attitudes and habits. That’s why ACCOR, a world famous large multinational hotel group with subsidiaries everywhere in France and North America, has set up very few hotels Africa and Asia (LI, 2008). This is a reflection of the effects of different social cultures and marketing environments on the layout of hotels, for ACCOR always gives priority to host countries with similar cultural characteristics to its own country when planning expansion in foreign lands so as to guarantee their chances of management success.
 
4.5.2.2 Cultural Conflicts Increase Management Costs
 
Measures for smoothening cultural conflicts entail an increase in management costs in multinational hotels, which also means increase of risk in management and problems. First of all, cultural conflicts may come from business partners within the cliques. During the process of contract management or a franchise, multinational hotels often differ in such aspects as management rules and implementation of responsibility, authority and interests of the brand system from proprietors or partners. If the divergence continues to exist on a long-time basis, risk of cross-cultural management grows. Once the gap between the management of a multinational hotel and their Chinese partners goes unabridged, eventually the multinational hotel will be faced with a failure and the cooperation will end up in court. Part of Marriott Hotels’ annual report of the year 2008 is “Our developmental strategy relies on the third-part proprietors or managers. However the future plan made together might not have been promising. We could not commit to the third-part proprietors or managers that we would continue or be able to cooperate, prolong or sign a new protocol.”
 
Second, conflicts from the employees in a multinational hotel and the market environment are a key problem confronting managers in cross-cultural backgrounds, as the phenomenon of multi-cultures exists in a multinational hotel. The reality of cultural difference will bring about culture clashes. But if these slight frictions between cultures are neglected by hotel managers, hidden danger of “culture cliques” will arise, whose concern is merely about their own interests, which will result in greater cultural conflicts and sabotage the objectives and philosophy of the hotel management. On the other hand, consumption patterns and customer psychology of people from different cultural backgrounds vary greatly in the host country, which calls for comprehensive market research on local customers before opening up a new market. If there are conflicts between market research, product design and service held by a multinational hotel and local consumption culture, a boycott from customers will emerge. If the products and service do not meet the demands of the market from an angle of culture, their competitiveness will be largely lessened and consequently the multinational hotel will suffer greater management risk.#p#分頁標(biāo)題#e#
 
To solve the problems arising from cultural conflicts, an enterprise needs to spend a large sum of money to conduct market research, train its administrators and employees, carry out effective communication with the community, and reshape its product lines, etc., which will unquestionably raise cross-cultural management costs. To solve the problems caused by cultural conflicts among employees, a multinational hotel would appoint some expatriate administrators to help in the management the hotel so that the hotel can stay internationalized and in a high level of management. This requires that all expatriate managers meet high criteria of capability and quality, which would surely add up to the costs of training and developing talents. If the extra costs exceed the financial budget of a multinational hotel, it will be difficult for the multinational hotel to conduct effective management, let alone obtaining a profit.
 
4.5.3 Issue of Talented Managers Becomes a Bottleneck
 
4.5.3.1 Unbalance of Supply and Demand of Talents
 
At present, positions of senior managers in a multinational hotel in China are mostly assigned to people from home country or a person from a third country. This indicates a short supply of Chinese senior administrators, which has been a bottleneck that restrains multinational hotels from implementing a strategy of “localization of talents” (YAN, 2007). Talented senior managers with rich experience in market operation and relatively professional quality are badly needed. The reason is that relatively low professionalization of China’s hotel management talents has produced comparatively few talented senior managers who are creative, communicative, imaginative, challenging, efficient, and ambitious. Great unconformity between position and ability exists among hotel professional managers. Lack in reserve of prominent local hotel management talents makes it hard to effectively carry out cross-cultural management strategy for the multinational hotels in China.
 
4.5.3.2 Shortage of Cross-cultural Management Ability
 
China’s hotel managers fail to meet requirements of hotel industry market not just in terms of their amount, their ability to make decisions, flexibility in management, creativity as well as cross-cultural management capacity not satisfactory as well. Although some Chinese managers are to a certain degree familiar with the style and philosophy of Western hotel management, they still lack working experience in a multinational hotel and a full knowledge of foreign culture. Consequently they do not hold a strong concept and consciousness about cross-cultural management. Therefore, it is hard for them to work with foreign partners or to adapt themselves to the management team in a multinational hotel, which influences cross-cultural management efficiency.
 
4.5.3.3 Mistakes on Selection of Expatriate Managers
 
An expatriate manager is someone who works in a multinational hotel run by a hotel group from another country. A mistake on dispatch of expatriate managers will lead to high costs in multinational hotels, which include direct loss of income of those expatriates, training expense as well as arrangement expense and an indirect loss of cooperative relationship between multinational hotels and host countries. Finally, it may result in the failure of cross-cultural management of a multinational hotel. According to an American study, failure to adapt to foreign culture and work style is the chief reason for American expatriates’ failure in doing multinational work. When a multinational hotel is carrying out cross-cultural management, an improper selection of expatriate managers may damage the group’s interest, and in turn, unsuccessful experiences of management of an expatriate will affect his or her career development. Thus it is crucial for the management of a multinational hotel to find suitable expatriate manager in a rational and wise way.#p#分頁標(biāo)題#e#
 
4.5.4 Training Systems Are Not Perfect
 
Even though there has been an increase in cross-cultural training awareness of training content, and training methods have been improved, there are still a lot of problems in cross-culture training system that need to be perfected.
 
4.5.4.1 Insufficient Dynamics in Training
 
Cross-cultural training appears alongside with the rapid development of multinational corporations in the world. How to carry out cross-cultural training to the employees in the field of psychological, emotional, ideological concepts so as to eliminate cultural conflicts and improve employees’ motivation is a challenge imposed on multinational hotels. The cross-cultural training of many multinational hotels is lacking sufficient investment and adequate dynamics. Emphasis on the job skill training for the expatriates and managers but ignoring cross-cultural training and the training of Chinese employees and general staff are the misunderstanding of multinational hotels. Multinational hotels are supposed to improve the comprehensive intellectual qualities of employees, such as the ability in coping with cultural conflicts, the skills of cross-cultural communication, and identification of hotel corporate culture.
 
4.5.4.2 Ignoring Evaluation of training Effectiveness
 
Training development planning involves the purpose, methods and impact assessment. Feedback on and assessment of the effects of cross-cultural training are important process in cross cultural training programs. If there is no effective and sustainable system for cross-culture training it will be impossible to achieve the result of cross-cultural training and there is no way to improve the cross-cultural training. In addition, if training is not associated with performance management, it is impossible to make the employees attach adequate importance to the training, which may not encourage the demand for training, and the effect of training will be affected when there is no full preparation for training. At the same time the lack of analysis of return on investment in cross – cultural training programs will also result in short – lived cross-cultural training program.
 
4.5.5 Poor Effect of Motivation
 
The employees of multinational hotels have a multicultural background, the diversity of which requires more flexibility in carrying out motivation measures towards the employees, which, in turn, will affect the application of incentive policies.(ZHAO, 2007b) Because of the different values, the employees’ requirement for incentives and motivation methods varies. Some employees from certain countries regard salary, quarterly awards and options as the key factors of motivation, while some employees attach more importance to promotion and performance. If multinational hotels fail to come up with multilevel incentives according to cultural background of internal staff, they will not be able to arouse the enthusiasm of the majority of workers to form stronger team cohesion.#p#分頁標(biāo)題#e#
 
Employees of different cultural backgrounds may produce different responses to the same incentives. The incentive methods that are effective in some cultures may have limited impact in another culture. (Heming, 1994) Multinational hotels tend to follow the incentive methods effective in their own countries to practice multinational operations. This singular approach which is not suited to the situation in China is normally not recognized by the Chinese employees, its incentive effect is not obvious, and may cause waste of costs as well as the loss of the employees. For example, the management of Ritz-Carlton Hotel under Carlton Group follows the incentives effective in Western management: they single out excellent worker every month, and give special awards to those employees with excellent performance. However, these measures are very effective as expected in Ritz-Carlton Hotel in China. For instance, some worker has been awarded the First-Class Card because of his good job, which is supposed to be great incentive to his work as far as Western idea of incentives is concerned. However, the next day’s performance of the worker was not as excellent as he was supposed to be, which puzzled the administrators. The reason for this is that the Chinese attach great importance to the collective ideas and values, and worker did not like to be alienated from other employees because of the award. Therefore, following former incentive methods in management in China may not lead to effective result as expected.
 
Chapter Five Implementation & Conclusion
 
5.1 Implementation for Multinational Hotels in China
 
Whether a multinational hotel can bring the cross-cultural management into effect, whether they can avoid cultural conflicts, whether they can eliminate the cultural differences, are the important factors that should be taken into consideration when a MNC runs business in a foreign country. From a macroscopic view, to guarantee the positive orientation of development, it is necessary to build up a proper concept of cross-cultural management. Beside, it is necessary to carry out practice in interpersonal communication. Microscopically speaking, hotel managers ought to find some effective measures for cross-cultural management based on the employees’ development level and the hotel’s development stage. Several countermeasures are suggested for better cross-cultural management in multinational hotels.
 
5.2.1 Proper Concept on Cross-cultural Management
 
People need to take the cultural differences seriously and enhance the deeper understanding of cultural differences if hotel managers want to improve the cross-cultural management (Luthans et al, 2008), as the root cause of the cross-cultural problems is cultural conflicts. Only when foreign managers get a deeper understanding of Chinese culture, can they find effective solutions to such problems. According to Hofstede’s cultural dimension theory, Chinese cultural has following characteristics: a hierarchy society with high power distance; more collectivism; higher masculinity; high uncertainty & avoidance and long-term orientation. Therefore a manager should base their analysis on the Chinese culture for possible solutions to relative problems.#p#分頁標(biāo)題#e#
 
5.2.2 The Establishment of Service Culture Based On Mutual Respect
 
In China, people advocate the system of seniority in that those people with power are highly respected, while in some developed countries, people advocate the principle that “everyone is equal”, which means that employees with different cultural background have a right to be treated equally. For example, there is a motto of one employee in RitzCarlton hotel that: “We are ladies and gentleman serving ladies and gentlemen.” Such concept is a reflection of spirit of equality that has permeated the society of developed countries with a highly developed civilization.
 
5.3 The Necesity of Positive and Effective Cross-Cultural Communication
 
5.3.1 The Improvement of Your linguistic Competence
 
As the precondition of cross-cultural communication, being a positive listener is essential. In China, people always listen to others carefully while they have a talk, and try their best to understand the meaning and intention of other people. Even though they have different or even opposite opinions, they prefer to say them ambiguously so that their foreign colleagues may be misled, thus causing misunderstanding. Therefore, it is important for the foreign managers to learn more about Chinese people so as to figure out the differences in the communication. For efficient communication, more attention should be paid to the mastery and improvement of a second language, especially speaking and listening. Generally, English has become a major work language around the world, and is the major tool of communication for the staff speaking different languages. English training programs are necessary, where English teachers can help employees learn and improve their English. Once employees are able to communicate freely with foreign colleagues, they can get to know each other’s culture better.
 
5.4 The Construction of Excellent Managing Team on Cross-Cultural Issues
 
5.4.1 The Training of Chinese Managing Talents
 
Only when the majority of hotel managing talents obtain clear ideas of cross-cultural management can the hotel industry meet the growing demand of professional hotel talents by practicing the strategy of “Localization of hotel talents”. It is necessary for China government to establish a high-level “Talent cultivation plan”, focusing on development of compound talents. When learning the hotel management knowledge, the first thing this cultivated talents need to learn is the different management modes and strategies home and abroad so that they are always fully prepared to encounter people from different cultures.
 
5.4.2 The Selection of Excellent Expatriate
 
When selecting an expatriate manager to China, Chinese culture should be considered. Expatriate having a similar managing style like Chinese managers is probably the “wanted”. Here are some features that qualified expatriate are needed: having a certain scale of knowledge about Chinese culture; having a support from his family; good managing capability; great adaptability; advanced communication skills; a certain experience overseas and suitable characteristics.#p#分頁標(biāo)題#e#
 
5.4.3 Team Optimizing
 
Culture integration of employees with multi-cultural backgrounds is the priority of a team optimizing while sincere cooperation of the team members creates excellent team. So faced with the cultural diversity, it takes longer time to cultivate a common cultural awareness, and better strategies to perfect the management team are needed.
 
5.5 Conclusion
 
With the development of global economy, the power of multinational hotels is growing. The problems of cross-cultural conflicts are brought about by cross-cultural management of multinational hotels. The research on this subject is helpful to the efficient and successful management of MNCs. However, the problems arising from cross-cultural management due to cultural differences are holding back the speed of the development of multinational hotel groups. Thus, the research summarized in this thesis displays positive theoretical and practical significance. By using cross-cultural management theories and basic hotel theories as the theoretical support, through the analysis of the development of multinational hotels in China, this thesis discusses the development stages of multinational hotels and summarizes the characteristics of each stage. Then, by using literature study, collecting data and statistics, the author summarizes the experience and problems of multinational hotels’ development in China, and proposes some suggestions based on the existing problems. The problems can caused in cross – cultural management when managing a multinational hotel are: Communication disorders, cultural conflicts, inappropirate managers, training systems and poor effect of motivation. But, in this thesis, some research finding may have some enlightened founctions. There are four aspects that hotel managers should pay attention to: establishing some proper concepet, even building a business cultural concepet is the rule No. 1. Then, service culture needs to be established only when mutural respect is formed. Thirdly, positive and effective cross – cultural communication is very necessary. So employees ought to improve their language skill, especially English language. Finally, and also the most important one, an excellent managing team focusing on cross – cultural issues is needed. Only having such a managing team, employees can be guided corretly to complet their tasks.
 
From the angle of cultural differences to do the research, there may be some limitations about the research vision. The propositions in this thesis may not be appropriate for all the multinational hotels, so the rationality of those propositions still needs to be verified by later practice. Meanwhile, there are still some problems are not being discussed or analyzed because of the limitation of the author’s capability. The author will continue this subject research in the future studies, and look forward to the advice and guidance from scholars and experts.
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Appendix
 
Questionnaire
 
1. What is the investment pattern of the hotel you work?
 #p#分頁標(biāo)題#e#
A. Foreign investment
 
B. Domestic investment
 
C. Joint – venture
 
D. Other
 
2. What is your position?
 
A. Server
 
B. Junior manager
 
C. Middle – leveled manager
 
D. Senior manager
 
3. What is your educational level?
 
A. Below junior school
 
B. High school
 
C. Bachelor
 
D. Master or above
 
4. Have you ever participant in the decision on the hotel’s major principles and policies?
 
A. Always
 
B. Often
 
C. Seldom
 
D. Never
 
5. What is the origin of your satisfaction of your career? ( multi choice)
 
A. Outstanding performance
 
B. Have a good relation with managers
 
C. Have a good relation with colleagues
 
D. Realize self – esteem
 
6. What is the recruitment method in the hotel you work? ( multi choice)
 
A. Employment agencies
 
B. Talent faire
 
C. University recruitment fair
 
D. Head – hunting company
 
E. Internet
 
F. Other’s recommendation
 
G. Application
 
H. Other
 
7. By which method can you get the cultural information about other countries? ( multi choice)
 
A. Books
 
B. Training organized by my hotel
 
C. Practice
 
D. Told by manager and peers
 
E. Other
 
8. Is there any training about business culture in the hotel you work?
 
A. No
 
B. Yes
 
9. Is there any training course ever taken in the hotel you work?
 
A. No
 
B. Yes
 
10. Does the manager in the hotel you work know the local culture?
 
A. Very familiar
 
B. Basic knowledge
 
C. Not very familiar
 
D. Not at all
 
11. Are you willing to communicate with foreign colleagues in your work
 
A. Very
 
B. A little
 
C. Depends
 
D. Not at all
 
12. What is the main reason you communicate with foreign colleagues? (multi choice)
 
A. Improve my English
 
B. Have a good relation with manager or peers
 
C. Superiority complex
 
D. Good at promotion
 
13. Which language you use when you communicate with foreign colleagues?
 
A. Chinese
 
B. English#p#分頁標(biāo)題#e#
 
C. Other language
 
14. Do you understand each other when you communicate with foreign colleagues?
 
A. Absolutely
 
B. Basic
 
C. Not very
 
D. Not at all
 
15. What is the attitude towards both Chinese and Western holidays of the hotel you work?
 
A. Prefer Western holidays
 
B. Prefer Chinese holidays
 
C. Like both
 
D. Dislike both
 
16. Does the hotel you work hold recreational activities?
 
A. Monthly
 
B. Annually
 
C. Seldom
 
D. Never