Failure to recognize cultural norms and the relationship between employees, customers, and contractors will result in dramatic failure of modernization and an effective business plan (Grainger, 2008). There was a deep division separating the organization cultures of RHD and HI. The HI business strategy and environment went against the current guanxi-based or influence-based organizational culture. Guanxi is the Chinese word describing personal bonds or connections that Fan, (2002), believes is essential for establishing Chinese business. The culture at RDH promoted social business relations, drinking and eating etiquette, exchanging gifts and donations for favors. RHD employees have a strong psychological need associated with receiving and giving “perks” that is tied their self-identification. These interpersonal relationships with each other and customers are relatable to both partnerships and friendships (Yunxia & Allee, 2007).
HI will need to improve communications between management, employees, and the public to address the networks of influence that are essential to Chinese society by finding compromise instead of forcing the corporate model (Yunxia & Allee, 2007). Overtime, HI will be able to merge the corporate ideal with the current guanxi practices (Grainger, 2008).
HI should give special consideration to address changes in culture and conditions within RDH with open communications between HI management, RDH employees, contractors, and the public (Grainger, 2008). Addressing concerns and anticipating current customers’ needs and expectations will help the “gradual transition towards a capitalist political economy with an emphasis on capital accumulation,