Three Mistakes Made by Disney Management in Managing Euro Disneyland - Case Study Example

Cross-Cultural Negotiation and Management 1. Introduction Walt Disney created a world of fun and fantasy through his cartoon characters and the development of theme parks. Initially in California and then Florida, the American theme parks have grown into a series of theme and entertainment centres that even become a big success in Japan. However, in 1992, the icon of American popular culture underperformed significantly when it expanded to Europe, with the development of Euro Disneyland just outside Paris. The following section discusses some of the cultural differences between the United States and France and the way Trompenaars research influences our understanding of these diversities. It will also talk about the three mistakes made by Disney management in managing Euro Disneyland and the lessons they should learn from the experience. 2. Some of the main cultural differences between the United States and France The most widely used framework for understanding national and organisation cultures was developed by Geert Hofstede. He identified five dimensions by which national and organisation culture can be described- Power distance, individualism, masculinity, uncertainty avoidance, and long-term orientation (Palmer, Cockton, & Cooper 2007, p.65). The United States, with reference to these dimensions, has high individualism (91%) or IDV ranking (Hofstede 2009b, p.1). This implies that the Americans are more individualistic, self-reliant, and care more for themselves and members of their family. Countries with IDV such as the United States give importance to employees’ personal life and emphasised emotional independence from the company. Individual initiative is socially encourages and individual decisions are considered better that group decisions. The level of individualism will affect the level of employees’ willingness to comply with organisational requirements and in high IDV countries, employees are expected to look after their own interests (Young & 1996, Nie p.95). The United States uncertainty avoidance index received the lowest ranking for the five dimensions and it is suggestive that Americans, unlike the French with almost 80%, are open to any opinion and tolerate various ideas, thoughts, and beliefs. In addition, the United States’ power distance or PDI, compared to France with nearly 65% and the world average of 55%, is way below at 40%. This means that the American society, compared to the French, has a more stable cultural environment provided by greater equality and shared interaction across power levels (Hofstede 2009b, p.1). Although relatively individualistic at 79%, the French and other Europeans who scored high on uncertainty avoidance index are more conscious, emotional, and are not tolerant to opinions that are dissimilar to what they believed (Hofstede 2009a, p.1). According to Johnson (1996, p.59), a high UAI is a phenomenon where a culture feel threatened by uncertain or unknown situations. The index measures the extent to which people tend to be challenged by ambiguity and less inclined to take risks. To avoid or counter such challenges, these people developed beliefs and institutions that would provide them with uniformity and formalised structures particularly in the workplace. Interestingly, France has a high score and is renowned for its rigid bureaucratic structures and formalised work processes (Stredwick 2005, p.452). The major cultural difference between the United States and France as shown by Hofstede’s study is the fact that the Americans are more confident and open minded. In the in-depth study of Euro Disneyland by Luthans & Doh (2009, p.234), the French were found to be inherently suspicious, culturally restrained, and unbendable. The French perceived their culture as superior and humility is difficult even in the face of political and economic reality. 3. Ways Trompenaars’ research on organisation culture help explain cultural differences between the United States and France Although Trompenaars focused on different aspects of culture, such as how different cultures accord status to members of their cultures, the varying attitudes toward time and nature, and differing attitudes toward time and nature, and so forth, his overall conclusions are quite similar to those of Hofstede. Trompenaars explain that the five value orientations greatly influence our ways of doing business and managing as well as our responses in the face of moral dilemmas. Every country faces problems with relationship to other people and an excessively emotional and neutral culture like the French cannot easily relate to others (Trompenaars 1999, p.674). The North Americans are “universalist” and according to Trompenaars, they think that the strong source of moral reference is the common rules and responsibility. In addition, they perceived their standards as the correct ones thus others should follow. In contrast, the French belongs to the “particularlist” where bonds in relationship is more important that the rules (Trompenaars 1999, p.672). Trompenaars study helps us understand that cultural differences between America and France exist due to the effects of opposing cultural dichotomies such as universalism and particularlism, individualism and collectivism, specific and diffused cultures, external and internally oriented cultures. 4. Three Operational Mistakes of Euro Disneyland Management Euro Disneyland is a well-known and vivid example of cultural mismatch on an international scale. One of the biggest mistakes of Disney management was in naming the park. The French according to Capodagli & Jackson(2001, p.110) are enormously proud of their country and their culture, and they greatly resented the lack of a French identity in the ‘Euro Disney’ name. Disneyland theme parks have been successful and profitable in the United States and in Japan because the American style of doing business worked. However, this was not the cause of Euro Disney in the early years. Europeans did not accept or understand the American way of doing business, nor did they like it. These cultural differences created some hostility because the Disney executives failed to do preliminary research, approaching France as though it were a foreign market similar to Japan (McPhail 2006, p.72). They tried to ‘clone’ (Abrahamson 2004, p.32) its Disney theme park formula and did not carefully examine why and how Disney theme parks work so well in the United States and Japan and why they would not work, uncustomized, in a European context. Critics according to Young & Nie (1996, p.91), perceived the Euro Disney as too American and not European. The French were reluctant to embrace the American popular culture unlike the Japanese that were eager to accept the Americanised theme park and were fascinated by American culture. This proves how cultural differences can affect the success or failure of global operations. There is always a need to interact particularly with suppliers and employees different cultures. Value, attitudes, customs, ritual, and other cultural elements can all have significant impact on the interaction. Understanding cultural difference may considerably smooth the operation of a business by reducing unnecessary cultural barriers (Young & Nie 1996, p.92). 4.1 Strict Appearance Code Disney leaders failed to anticipate the uproar over grooming and dress requirements for associates, including appropriate undergarments, and they did not recognise the potential for conflict between individuals of different nationalities. Failure to fully appreciate and respond to cultural differences helped to create a disastrous early period for Euro Disney. Knowing a country’s unique culture is vital to the success of an American company as cultural misunderstandings whether unintentional, can be very destructive but EuroDisney management, even in the pre-hiring phase, showed ignorance of the French culture. For instance, the Disney’s dress code, an idealised American appearance, was not appreciated by the young European employees since it’s difficult for them to adhere as they are not Americans. More importantly, they believed that this requirement stripped them of their individuality and as a result, the French took the matter to court and dubbed Euro Disney as “cultural Chernobyl” (Abrahamson 2004, p.32; Luthans & Doh 2009, p.234). Euro Disney is seen as another product associated with American culture. It is another element of Americanisation perceived by the French, resembling the marketing of Coca-Cola in the 1940s, as a threat to the French of way life (Ritzer 1998, p.74). 4.2 Alcohol Ban Another failure of the Disney that is relevant to cultural differences, is disregarding the European custom of drinking wine with lunch. Since alcoholic beverages are not served in California, Florida, and Japan theme parks, they did not bother to research on the pros and cons of selling alcohol at Disneyland Paris. Since the French considered “wine with a meal is God-given right” (Luthans & Doh 2009, p.235), the French rebelled against the no-alcohol policy and stayed away in droves (McPhail 2006, p.74). Quality service failure according to Green et al. (2004, p.94) is exacerbated and can result in not only negative and emotional responses from customer but also in cultural conflicts. Therefore, the key to quality services in the international market is an appropriate blending of global, national, and local cultures, of globally and locally valid service qualities. 4.3 Failure to consider the local cultural context Disney failed not only to understand eating habit, but also failed to understand that the Europeans were unlikely to spend the whole of their holiday period at a theme park, preferring to dip in and out for just a day or two to experience the rides and other attractions (Palmer, Cockton, & Cooper 2007, p.64). More importantly, the management failed to consider the local cultural context and the reality that “different cultures have different of personal space” (Luthans & Doh 2009, p.237). For instance, the French do not like the idea of queuing thus other foreign guest are having problems. Another is treating local work contractors as foreigners in their own land by using English in their ads to invite French contractors to bid. The Disney management attempted to execute a strategy involving efficient operations and exceptional customer service in its theme park but failed to understand some social and workplace norms that produced a less friendly approach to guest in the park. According to Simon & Bos (2002, p.267), understanding and managing diversity is not just a solution to conflict, economic stability, and sustainability but the only ethical way and the best practical solution. 5. Lessons the company should learn about dealing with diversity Disney must learn that some culture and society are far tougher and more resilient than they are sometimes given credit for. They should realise that Europeans are very much different from Americans thus exporting American culture to France, is nearly impractical. Euro Disney’s early efforts to impose the Disney home culture in its training of workers for its Paris theme park is a good example how the company misread French working culture. Diversity encompasses gender, culture, personality, sexual orientation, religion, ability, race, social status, and host of other differences, thus to ensure that the organisation meet the requirements, they must tackle important challenges, globalisation, workforce diversity, and ethical behaviour (Nelson & Quick , p.58) Based on the Euro Disney experience, they first lesson they should learn is to respect other culture’s individualism and privacy. The strict appearance code for instance, is “an attack on individual liberty” (Luthans & Doh 2009, 236) for the French. The second lesson they should learn, is to accept the reality that cultural diversity exists and alcohol ban is not applicable to everybody. Finally, they should realise that different cultures have cultural aversions and individuality that they should not break. 6. Conclusion Disney theme parks are a big success in several locations including Japan. However, the management underestimated the significance of understanding cultural diversity when they built and operated the first Disney theme park in Europe. The French has a high UAI and they should realise that exporting American culture to France is not an easy task. The French are culturally restrained and they cannot be seduced to embrace a second culture. The five cultural difference that affect work-related attitudes are individualism versus collectivism, power distance, uncertainty avoidance, masculinity versus feminity, and time orientation. Some culture and society are very much different and therefore an American company like Disney should always bear in mind the reality that to succeed in foreign land, they should know how to manage cultural diversity effectively. Managers must take a proactive approach to managing diversity so that differences are values and capitalised on. 7. Bibliography Abrahamson E., 2004, Change without pain: how managers can overcome initiative overload, organizational chaos, and employee burnout, Harvard Business Press, US Capodagli B. & Jackson L., 2001, The Disney Way: Harnessing the Management Secrets of Disney in Your Company, McGraw-Hill Professional, US Green N., Maxwell G. 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