Euro Disneyland - Cross-Cultural Issues in International Management - Case Study Example

Individual Case Study Analysis on Cross-Cultural Issues in International Management: Euro Disneyland This paper is submitted by: [Client’s Name] Submitted to: [Professor’s Name] In partial fulfilment of the Course Syllabus in [Subject] [Date] For a business organization operating at a global scale, like Disneyland, the need to understand cultural differences within its workforce and between its workforce and the external stakeholders is of utmost importance. As Disneyland pursued stronger strategic expansions, it was surprised to find major losses in its first year of operation (Luthans & Doh, 2009). There are a lot of factors that can explain why such loss occurred for a company as strong and as stable as Disneyland –strategic plans that fail, unrealistic expectations, etc. One of the most important realizations of Disneyland as to why such loss occurred is the inability of the company to understand the big difference between the European culture (particularly the French culture) and the American culture. This paper will attempt to explain the differences between French and American cultures using Hofstede’s cultural dimensions and Trompenaars’ National Levels of Culture. Hofstede’s Cultural Dimensions The five categories are: small vs. large power distance index, individualism vs. collectivism, masculinity vs. femininity, uncertainty avoidance, and long vs. short term orientation. These cultural dimensions serve as a demonstration that cultural groupings affect the behaviour of societies and organizations across time and space (Hofstede, 1997). Power distance is the degree of inequality among the people in a certain racial community that they perceive normal; Individualism vs. collectivism is the degree by which people feel they have to take care for, or be taken care of, by their immediate relatives; masculinity vs. femininity is the degree by which gender dominates in a particular culture; uncertainty avoidance is the degree by which the people in a country prefer structured or unstructured situations; and long vs. short term orientation is the degree by which the people of a certain country promotes values that have long term or short term effects on their lives. Trompenaar’s National Levels of Culture Like Hofstede, Trompenaars labelled national cultures into four main strata which include the family, the Eiffel Tower, the guided missile and the incubator (Martin & Karen, 2002). The family describes the degree of personal relationships found in cultures. Americans are less personal when dealing with other people whereas French prefer a personal level of relationship in the workplace. The Eiffel Tower is a symbolism for the bureaucracies found in certain cultures. French culture is more bureaucratic and puts strong emphasis on the different levels of the social structure. American culture on the other hand places strong emphasis on the flatness of organizations, preferring a more direct interaction between people in the organization than going through different channels. Guided missile is a relationship in the corporate setting where everyone is independent from each other and where social divisibility simply does not exist. Incubator is the corporate culture where managers are expected to fulfill their needs and at the same time express themselves. Incubator is where the relationship is both egalitarian and personal (Martin & Karen, 2002) Main Cultural Differences between US and France For simplicity, this paper will evaluate the cultural differences between US and France on three social aspects – patriotism, relationships, and values. Americans boast of their country as the melting pot of cultures and knowledge. They are proud of their ability to hold together their country despite heavy influences from various cultures and practices. The French on the other hand are highly conservative and overly protective when it comes to their socio-cultural identity with a very strong inclination to collectivism compared to Americans who scored high in individualism index. French people in general expect outsiders to conform to French values unlike Americans that easily accepts diversity (Hofstede, 1997). Both French and Americans are very open when it comes to their relationships. While Americans flirt with the opposite sex, the frequency of flirtations and flattery is incomparable to French who views flirtations and flattery (on women) as a part of the daily routine. French considers Americans rude for they perceive the brashness and candidness of Americans as the lack of proper social etiquette. French follow strict rules on social graces and even on the most mundane of all activities whereas Americans are carefree of what they do as long as their words and actions are within the legal boundaries (Hofstede, 1997). Evaluation of Euro Disneyland’s Failure When Disneyland began its operations in France, its execution of the business strategy is flawless but the business strategy itself is flawed in many places. In the context of differences in culture, three of the mistakes made by Euro Disneyland which have made strong negative impacts on the company’s performance in France are the following: (a) The lack of thorough understanding of the French Culture. Disneyland viewed its expansion to Europe as another excursion in the American soil owing to the fact that it was able to attract a large volume of French visitors in its Disneyland in US and because Europeans were among the biggest fans of Walt Disney’s animations (Luthans & Doh, 2009). It failed deliberately to implement a thorough analysis on the potential impact of the cultural differences between an American company and a French crowd on the performance of the organization. This failure to take into account the important cultural consideration has led to its major losses in its first year of operation. Because of the lack of understanding of the cultural considerations between France and America, the organization has made a series of wrong decisions, particularly in terms of the (b) training and interaction of its workforce with the French and American audiences and (c) the entertainment and presentations it has prepared to satiate the curiosity of the crowd. The workforce has unknowingly presents a huge problem as their interactions with the European crowd have elicited negative feedbacks and nasty remarks from the picky and overly sensitive French. Moreover, the French did not find the entertainment entertaining and were left unfulfilled after their first visit. As a result, the general audience did not feel very much comfortable and happy with Euro Disneyland which then translates to the inability of the organization to meet its financial targets. Learning from the Case Study This huge failure of Disneyland in Europe highlighted some simple management facts. First and foremost, organizations operating on a very diverse stakeholder must be able to understand the cultural uniqueness of the stakeholders and bank their strategies from this understanding. An organization that gains a thorough understanding of its target market will be able to position its strategies towards what would make the target market interested to what the company offers. Second, it is necessary for organizations to sort out the differences between and among cultures in order to reduce the possibility of tension or misunderstanding. As was seen, Disney’s inability to sort out the cultural differences led to unhappy customers and financial losses. Workplace Diversity Cultural diversity in the workplace is the gathering of individuals coming from different racial and cultural backgrounds, working together towards a common goal (Garrow & Hirsch, 2008). Because the social issues in the workplace related with workforce diversity can be broad and complex, organizations that are able to understand the context of workplace diversity, explore this context, and synthesize this context to its advantage has a high likelihood of succeeding in diverse and highly competitive external environments. A diverse workforce opens avenues for learning (Mowday & Sutton, 1993). Many organizations view workforce diversity as an advantage simply because the organization will become more exposed to various racial cultural perspectives, allowing the organization to create effective strategies in dealing with equally diverse external clients like customers and suppliers (Salas et al, 2004). Since diversity is not fully understood and only very few companies were able to take full advantage of the features of diversity, the disadvantages of diversity have been well cited and elaborated (Child, 1975). First and foremost, workforce diversity introduces unwanted tension to the social functions of the organization. Since individuals comprising a diverse workforce came from different cultural and racial backgrounds, differences in opinion are common and conflicts frequently occur (Freyman, 2003). These conflicts almost always lead to inefficient and unproductive behaviour towards work which could cost a lot to the organization in the long run (Pyor et al, 2009). Conclusion Disneyland assumed that its successes in making Disney a huge part of the American mainstream would work in exactly the same way in French soil. Apparently the strategy did not work as expected. Disney did not have a strong grasp of the context of diversity, or a thorough understanding of the French culture. From the theories laid down by Hofstede and Trompenaars, it is very clear that America and France are found on both ends of the cultural strata with France being almost the exact opposite of USA in Hofstede’s index and Trompenaars’ levels. It is for the lack of understanding of the cultural differences between the two countries that caused Disney’s failures. The company attempted very hard to assimilate its American culture to the French people which the French people deliberately resisted. Moreover, the attempt of Disney to integrate its concept of entertainment to the French culture has led the French people to repel the very concept of Disney. References Child, J.1975 "Managerial and organizational factors associated with company performance--part II: A contingency analysis." Journal of Management Studies, 12: 12-27 Freyman, J. (Sept 2003). "Global Politics and the Politics of Globalization" Choice: 47-26. Garrow, V. and Hirsh, W. 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