Riding the typhoon: the HR response to the economic crisis in Hong Kong

Abstract

The financial crisis that hit Asia in 1997 was the economic equivalent of a typhoon. It came suddenly, leaving much destruction in its wake, in the form of bankruptcies and business closures, retrenchment, wage cuts and ultimately high unemployment. Much has been written about the financial, economic and social ramifications of the crisis. This paper takes a critical look at the human resource practices adopted by an industry that appears to have been particularly affected by the subsequent economic downturn – the hotel industry. We consider how managers responded to the economic turbulence by confronting the apparently dichotomous pressures of tightening structure and managerial control, on the one hand, and the need to permit the flexibility that would facilitate change and innovativeness, on the other. Findings from a sample of hotels suggest that, while managers recognize the need to allow flexibility that would foster employee creativity, there remain deep-seated cultural and other factors that militate against such flexibility. This casts doubt on the organizations' ability to generate and sustain employee creativity and a climate in which employees can respond to unexpected challenges as they struggle to satisfy equally unusual customer demands.

Keywords:

• Asian crisis
• Hong Kong
• human resources
• hotel industry
• structure
• flexibility